House of Commons
Friday 26 February 2010
The House met at half-past Nine o’clock
[Mr. Speaker in the Chair]
Debt Relief (Developing Countries) Bill
I beg to move, That the Bill be now read a Second time.
I am delighted to move the Second Reading of a Bill which, though small, is enormously significant for people living at the sharp end of some of the most acute poverty in the world. I do so on behalf of my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), who has been a great champion of debt relief. Unfortunately, he is unable to be here today owing to serious illness. He has done the cause of fighting world poverty a great service by making debt relief the subject of his private Member’s Bill, and I am sure the whole House wishes him a speedy recovery.
The Bill will hugely benefit some of the poorest people and countries in the world. It will prevent commercial creditors, some of them secretive private investment funds, from free-riding on the generosity of the British taxpayer. It will enable poor countries to concentrate funds on much needed new schools, hospitals and other direct services, instead of having to pay unsustainable levels of their Government revenues to service international debt.
The Bill strengthens the UK’s commitment to debt relief. This country can take pride in the pioneering role that our Government have played in developing the international initiative to end developing country debt. The Bill takes the logic of public sector debt cancellation into the private sector, and it sets out for the financial services industry some limits to the dealings in which the industry can engage in developing country debt.
One of the results of the credit crunch is public anger about some of the activities of the financial services industry. Profiteering on the back of the debt of some of the poorest people in the world is perhaps the most objectionable activity of all. By passing the Bill, we as a Parliament and as a society will be setting boundaries and saying, “No further.”
There has been much speculation about the number of financial institutions that will be affected by the provisions of the Bill, and about whether it will cut across the rights of a wide range of investors. That is not the case. The financial institutions that are likely to be the most sharply affected are the so-called vulture funds—companies that buy up the sovereign debt of the poorest countries on the secondary markets, often at highly discounted prices, and then try to recover the full amount, plus costs and fees, through the courts—often, unfortunately, through the UK courts.
Many of those funds do not participate in debt relief, and by litigating for full repayment of their debt, they reduce the effectiveness of the international debt relief programmes of the UK, our international partners and responsible commercial creditors, and make less effective the very large amounts that the Government and other donors provide in aid for developing countries.
Will the hon. Lady join me in applauding the television coverage which has shown that some of those vulture fund people take their names off their doors when they are asked what they are doing? They ought to be as embarrassed about going to the High Court to try to enforce their claims as they are anxious to hide from the cameras and the media.
The hon. Gentleman is right about the operation of the funds. That is why my private Member’s Bill dealt with issues of disclosure and transparency. I congratulate the media: television and some national newspapers have highlighted such activities and brought them much more into the public gaze. They have done us all a great service and presented us with a challenge by saying, “These are the facts. What are you as a Parliament and as a Government going to do about them?”
I am a great supporter of the Bill, as I think all Members are, and my hon. Friend and our hon. Friend the Member for Denton and Reddish (Andrew Gwynne) are doing a great service to the developing world by bringing it forward. Does my hon. Friend the Member for Northampton, North (Ms Keeble) agree, however, that we need international action too? We, in just one country, cannot solve the problem. Does she agree also that if we pass the Bill today we will show that the UK again leads the world in dealing with developing world debt?
My hon. Friend is absolutely right—there is a need for international action. A Bill has been introduced in the United States, and I have met the Congresswoman who is taking it through. We also need to talk to other European jurisdictions to ensure that similar action is taken there. Importantly, however, action must start somewhere, and if it starts in this country that is fine, particularly given the global role of our financial services industry and the fact that our courts are often, unfortunately, the locus for action. In reality, we make a start and then look to the rest of the world to follow, as my hon. Friend said we have done on other issues.
The actions of the vulture funds are profoundly damaging, as hon. Members have said. Their world is opaque, and it has been hard to track their activities without the assistance of investigative journalists. To deal with my hon. Friend’s point, I must note that a World Bank survey has reported a total of 54 actions by vulture funds since 2002, about one fifth of which have been brought in the UK. The problem is ongoing, and last year’s World Bank survey reported 14 active or unresolved law suits by commercial creditors worldwide. They include cases against Ethiopia, Sierra Leone and the Democratic Republic of the Congo.
Two well-documented court cases deserve particular mention: those brought against Zambia and Liberia. In the 1970s Zambia was provided with a loan to buy some tractors, but by the late 1990s it was unable to pay back all the money. The country was in the process of trying to find a settlement with the creditors when the Donegal International fund purchased the debt for a knockdown price of $3.3 million in 1999. The fund proceeded to pursue Zambia through the UK courts for the full amount of the debt, plus interest and fees, demanding an astonishing $55 million in total. The courts awarded $15.5 million, five times the amount that the fund paid for the debt.
In November last year, two commercial creditors took a case to the High Court against the Republic of Liberia for a debt that also dated back to the 1970s. In that instance, on an original loan worth $6 million, the funds were awarded $20 million. Not surprisingly, the President of Liberia has spoken out this week in support of action against the vulture funds.
Although those numbers may sound paltry when compared with the billions that have been won and lost each day during the credit crunch in this country, or, indeed, with the amounts that are at stake when a football club goes down, they are enormously significant to countries such as Zambia and Liberia. The $15.5 million awarded against Zambia would have been enough to pay for 30,000 primary school places. The $20 million awarded against Liberia represents an astonishing 5 per cent. of its Government’s entire annual budget. In that country, the average income per person is less than half that of the “dollar a day” acute poverty target.
Mr. Justice Barton, who presided over the Liberia case, said:
“The only issue raised is plainly a sad one, that Liberia is a poor country, and cannot afford it.”
Indeed, it is poor, because the average income per person in Liberia is $170, while roughly two thirds of Zambia’s 12 million people live on less than $1 a day. That unscrupulous activity not only damages the economic growth of those developing countries, but undermines UK and international efforts to reduce the unsustainable nature of their debts. The Government have been at the forefront of driving through debt cancellation for some of the poorest countries, with the heavily indebted poor countries—HIPC—initiative. That is an international programme, but much of the original thinking and drive for it came from this country.
The scope of the programme has been extraordinary. Since 2000, $117 billion has been committed globally to debt relief for countries through the HIPC and multilateral debt relief initiatives. Some $9.7 billion has come from the UK. The lion’s share of the debt cancellation— 94 per cent.—has come from the public sector, and it has been successful. Since 2001, the 35 post-decision-point HIPC countries have increased their spending on poverty reduction from $6.4 billion to $26.7 billion.
In Tanzania debt relief has helped to increase the number of children in primary school by more than 50 per cent., and helped to build almost 2,500 new primary schools. Mozambique has more than tripled its poverty reduction spending from $792 million to more than $2 billion, contributing, for example, to a decrease in infant mortality from 147 deaths per 1,000 live births in 1997 to 100 per 1,000 live births in 2008. That is still far too high, and much higher than the rate in this country, but at least the trend is downward.
Debt cancellation has not been entirely a public sector programme, but concerns about the Bill have been raised because the idea has been put about that commercial debt is a new inclusion in the debt relief programme. However, commercial creditors have, notably and laudably, contributed to the debt cancellation, writing off debts because there was no realistic proposition of being able to collect them, out of concern for the impact of debt on the economic growth from which investors hope to benefit, or out of a genuine desire to be part of one of the most progressive movements in the world—the debt cancellation programme.
Some 6 per cent. of debt cancellation, about $4.5 billion, has come either in commitments or in reality from commercial creditors, so the principle of the cancellation of private or commercial sector debts as part of the HIPC programme is already well established. In fact it could be said that the Bill enshrines in legislation existing best practice in the commercial and private sector. It consistently applies to the private sector the principles that already apply to public debt cancellation.
I shall briefly set out the Bill’s provisions, although we will consider them in more detail in Committee. The scope of the legislation, in terms of countries covered, is more modest than the provisions in the ten-minute Bill that I introduced last year on the same subject. It would be good to extend the Bill, but it is absolutely right to look at the HIPC countries and use the provisions that already operate in that area for the cancellation of some remaining commercial debts.
Clauses 1 and 2 define the debts to which the Bill applies. Basically, it confines the debts to those that are either included or expected to be included under the HIPC programmes. They are the debts of the 40 most heavily indebted poor countries in the world, including Afghanistan, fragile African states such as Somalia and the Democratic Republic of the Congo, and countries that have been torn apart by conflict, poor governance, and poverty. It also includes five countries that have yet to reach decision point under the HIPC programme: the Comoros islands, Eritrea, Somalia, Sudan and Kyrgyzstan.
My Bill sought to include a wider group of low-income countries, but there is a logic to restricting the legislation to the debts of HIPC countries and a fairness in treating all debt equally. Creditors will still be able to litigate for the recovery of their debts, so they will still retain their legal rights to debt recovery, but they will be able to do so only within the limits that the World Bank and IMF consider sustainable—the internationally agreed rules on the calculation of what is acceptable for debt recovery.
Clauses 3 and 4 reduce the proportion of those debts to be recovered to the level corresponding to the HIPC initiative. Those amounts are assessed internationally and there is a set assessment procedure, so the amount will not be at the discretion of one Government or another Government. A respected and established process for reaching the amount is already in train. Clause 5 applies those terms to judgment debts, and clause 6 creates an incentive for debtors to negotiate settlements to repay their debts on terms compatible with the HIPC initiative, by excluding from the scope of the legislation debts in respect of which the debtor has failed to do that.
Much of the discussion of the Bill in recent days has focused on the presumed restrictions that it introduces on the activities of private investors. However, as I have said, the Bill does not outlaw the proper pursuit of debt; it seeks to ensure that creditors cannot pursue payment beyond the level assessed as sustainable by the IMF and the World Bank. The overall goal, of course, is to reduce the relevant country’s debt ratio to sustainable levels. The Bill provides safeguards for commercial creditors by promoting a negotiated settlement between them and the debtor countries, by excluding debts in respect of which the country concerned does not offer to settle on terms consistent with the initiative.
Finally, the Bill promotes fairness among creditors. The vulture funds that successfully take indebted countries to court can do so and make profits only by free-riding on the relief provided by British taxpayers, our international partners and other, more ethical, commercial creditors. As it stands today, the Bill is the result of solid consultation by the Government and a lot of hard work by the voluntary sector. It began with the work of the Jubilee Debt Campaign and included, in the Treasury, a consultation that reported recently.
What lies behind the Bill is economic realism as well as fairness to the British taxpayer, poor countries and other commercial creditors who already participate in debt relief. The reality for any country that reaches a HIPC process is that its debts are unsustainable and it has little or no prospect of ever repaying them in full. The initiative makes for the orderly management of the debt and reduces it to a level considered repayable. However, the process is fair and economically equitable only if all parties partake in the relief. The Bill would ensure that that happened and that the rogue vulture funds that are currently completely outside the law would be brought within the scope of internationally agreed procedures for managing developing country debt.
I pay particular tribute to my hon. Friend the Member for Denton and Reddish, for whom I am taking this Bill forward today; I am sure that he would have wanted very much to be here. I thank other colleagues in the House and the staff and supporters of the Jubilee Debt Campaign, who have been relentless in keeping this issue in the spotlight over the months and years. Their work and campaigning has provided the public space for the whole process of debt cancellation, which has been so important.
Mr. Speaker, you were one of the sponsors of the previous Bill, and I am sure that you would want to see this measure get on to the statute book before the election. I very much hope that we will get the time necessary for the Committee stage, and be able to complete Report and Third Reading in the little time left to this Parliament.
There is a strong body of support for the Bill right across the House; the Opposition have been extremely important in respect of the main thrust of the arguments behind the Bill. There is equally strong support outside this building for ending the unsustainable levels of debt that have for so long paralysed the efforts to end world poverty.
I am delighted to have this opportunity to speak in support of the Bill. I start by offering my sympathy to the hon. Member for Denton and Reddish (Andrew Gwynne), a geographical neighbour of mine who, like me, serves part of the borough of Stockport. I wish him well. I know from my conversations with him that he takes the Bill very seriously. He will be most disappointed not to be here as we, I hope, wave it forward on its way in the next hour or two.
I congratulate the hon. Member for Northampton, North (Ms Keeble), whose original ten-minute Bill first brought the issue to the attention of the House. I was happy to sponsor that Bill, and I am equally happy to sponsor this Bill today. Not having stepped back fast enough, I am also speaking on behalf of the Liberal Democrat party. I am happy to record my party’s strong support for the Bill, which it sees as an important and practical, although small, way of assisting some of the poorest countries in the world—and, more importantly, the millions of poor people who will benefit when this legislation comes into force. As the hon. Member for Northampton, North said, this Bill is in some ways a little more refined than her ten-minute Bill, and it is none the worse for that. It is ready for implementation, subject to whatever is said in Committee.
I should make a disclaimer. As my constituents know, I am a stout defender of animal welfare. However, I should make it clear that international financial vultures are not included in my view of what should be protected by the House. I have served on the International Development Committee for the past year or so. Although I thought I already knew about some of the key issues, it has been an eye-opener to have seen the work done in many heavily indebted countries to tackle poverty and make a reality of the millennium development goals.
It is absurd that a great deal of work should be put in by non-governmental organisations, governmental organisations and multilateral donors to tackle the millennium development goals, to bring improvements to health and education and alleviate poverty in poor countries, while people operating from anonymous offices in financial centres around the world are exploiting the UK courts to take back some of the money that has been so hard won and negotiated so carefully for the purposes of poverty alleviation.
It is a particular cause of concern—anguish, even—for those of us who serve in the UK Parliament that the UK courts should have opened the door to all that and had a relaxed approach to such cases. That has made the UK one of the most—if not the most—favoured places for those anonymous financial experts to wreak their damage. As has already been mentioned in an intervention, those people do not seem to have too much shame, but they have enough to want to avoid the transparency that goes with full public disclosure. I welcome the fact that the Bill will tackle that issue as well.
My remarks will not be extensive. The Bill is a necessary measure to close a loophole that most people probably do not believe could ever have existed in the first place. The Bill is well crafted and quite modest. I hope that it will get a very fair wind very quickly and that, not for the first time, what the House does on the issue of poverty reduction at an international level will be picked up in other parts of the world.
There are other centres of financial services and court regimes and, if the loophole is shut here, those anonymous financial experts will no doubt start to look elsewhere in greater numbers than before. We already know that the United States legislature is looking at parallel proposals. I hope that this morning will start a domino effect that will end up closing, at worldwide level, this ridiculous loophole and redirecting income streams that were always intended to alleviate poverty in poor countries back to those countries without further delay.
It is a pleasure to speak on Second Reading of the Bill. I add my words to those of the hon. Member for Hazel Grove (Andrew Stunell) in wishing the hon. Member for Denton and Reddish (Andrew Gwynne) well, and I congratulate the hon. Member for Northampton, North (Ms Keeble) on her long-standing interest in the matter and on presenting the Bill so effectively this morning. She is absolutely right that there is a cross-party consensus and real concern about debt. We believe that the Bill is extremely well intended and addresses an important issue, and we are grateful for the opportunity to examine it closely to see what we can do about the problem. In our view it should have an opportunity to go to Committee, and we hope that it will have a fair wind, to use the words of the hon. Member for Hazel Grove.
I should explain the Conservative party’s long-standing interest in debt relief. I know that there is consensus on the matter, but it is worth pointing out that our interest has long existed. In 1988, the Conservative Government negotiated the Toronto agreement to reduce debt payments by a third, and in 1990 they negotiated the Trinidad terms to reduce them by two thirds. In 1996, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), as Chancellor of the Exchequer, was much involved in the heavily indebted countries initiative to write down debts by 80 per cent. In the course of those initiatives, the Conservative Government unilaterally wrote off virtually all Britain’s aid loans— £1.2 billion-worth, which was the single biggest contribution to easing the debt crisis. I pay tribute to the current Government, too, for their work in building on that, and there is consensus on supporting debt relief.
It is perhaps worth my saying a word or two about why we believe that debt relief is so important. I make a comparison with what happens in market economies, in which individuals and companies can write off bad debts and start again. Countries cannot do that in the same way. Their debts cannot be written off automatically through bankruptcy or a voluntary liquidation regime, so they remain. They are incurred by impoverished countries, usually as a consequence of corrupt and incompetent rulers, but repaid by the population, who are both blameless and impoverished.
It would be interesting if the Economic Secretary could say something about the Government’s position on sovereign debt work-out mechanisms. I know that they were raised at the Doha financing for development conference in November and December 2008, at which there was an attempt to find a fair mechanism for developing countries that could not repay their debts. I would be interested to know what the Secretary of State for International Development has done to pursue that matter.
Individuals and companies in this country have a mechanism by which, subject to preferential treatment for particular entities, the pain can be shared among all their creditors, who each get a proportion of the debt repaid to them. Developing countries do not have that mechanism. Some creditors may voluntarily waive their rights, as certain countries have done. As the hon. Member for Northampton, North pointed out, a substantial number of commercial lenders have also done so. However, others continue to claim repayment of debt that cannot be afforded, and as I have said, there is no liquidation or administration procedure available. In many respects, one could describe the Bill as attempting to find such a mechanism, to prevent creditors that refuse to participate from benefiting from a free ride. I say that because countries could not repay any of their outstanding creditors without the steps taken by some of them to waive a substantial proportion of the debt. We need fairness for creditors, whether Governments or commercial lenders, who have taken a view that they will not pursue the full amount, which makes available funds that the more ruthless creditors can pursue.
A central point is the effect that the Bill would have on developing countries. The hon. Lady mentioned Liberia, which is topical given the judgment at the end of last year and given that it featured heavily in the “Newsnight” report on the matter last night. It is clearly grossly unfair on the people of such a country, who are deeply impoverished, to find a substantial part of their Government’s budget taken up in repaying aid over which they had no control and no say. That is at the heart of the Bill, and we share the concerns that drive it. We will support its Second Reading today.
Although there is cross-party consensus, that should not prevent the House from examining various points in the Bill closely. The responses to the Treasury’s consultation document raise a number of important points that we should consider with due care and attention. That is why it is proper that we have Committee stage, and I hope that the Government will be able to find time to ensure that that happens.
There are essentially two big issues to consider, and although the Bill is not contentious, it raises fundamental questions. The fact that there is a consensus is all the more reason to scrutinise it properly. I turn first, because it is perhaps the simplest and quickest argument to summarise, to the fact that the Bill clearly affects contractual rights—that is the intention behind it. By and large, we in this country take a view that contractual rights should be respected. Contracts provide certainty, are part of our tradition and are one of the reasons why English law is a favoured choice of system throughout the world. It has clearly been to the advantage of the UK that we have a system that provides such certainty. Alongside the tradition of respecting the sanctity of contracts, we have the terms of the European convention on human rights, which of course are now protected by the Human Rights Act 1998. They include the protection of the right to property under article 1 of protocol 1 to the convention.
The Government argue in their response to the consultation document that there are compelling policy reasons why contractual rights should be overridden, and to a large extent I have made the same argument in my remarks, as have other hon. Members. However, we should go into this matter with our eyes open. We should be aware that the Bill would disturb contractual rights, which has certain consequences. The Government say that the ECHR arguments can be overcome because there are compelling policy reasons. I do not dispute that, but it is right that we have an opportunity to debate such reasons in detail.
I am sure the whole House would agree with the hon. Gentleman on the importance of maintaining our historical commitment to the enforcement of honest and fair contracts. However, the honesty and fairness of the contracts is in question—the point put to the House is that the contracts are unfair and lopsided, because one party to them has no power whatever to mediate the process. In that situation, human rights legislation kicks in to protect the powerless.
My point is that the Bill would disturb contractual rights, but the argument is that there are compelling reasons why it is right to do so. The hon. Gentleman articulately sets out that case. I am not disagreeing with him in any way, but merely stating that it is right that we examine the argument closely. I will come back to the essence of what he is saying in a moment, but he has led me to my second point, which Members on both sides of the House and the Government, in their role of developing the legislation, are keen to address.
The central question is whether the measure will benefit developing countries. I am not arguing that it will not, but the argument that there would be certain spillover costs was put by a number of respondents to the Treasury consultation, and it is right to examine it. Essentially, the argument is that the Bill could create uncertainty. There may be a perception that further legislation will restrict creditors’ ability to reclaim their debts from heavily indebted poor countries and other developing countries more generally. That would have the consequence either of reducing the number of creditors that are prepared to lend to developing countries, or at the very least of making borrowing more expensive. The Treasury is very conscious of that argument and acknowledges throughout the documents it has produced—the response to the consultation and so on—that debt relief measures could increase risk premiums and make it harder for developing countries to borrow responsibly.
The counter-argument is that the Bill is carefully targeted and calibrated to prevent that in two ways. First, it focuses on historical debt, meaning debt contracted before commencement. No future debt will be affected, so when developing countries attempt to borrow in future, contracts will be unaffected, so there will be no risk premium. Secondly, the Bill is targeted at the public debts of the regimes of HIPCs, not those of all developing countries.
We first need to debate the question whether those qualifications are the right ones. One could approach that in two ways. First, one could argue that the measure is unduly restrictive. Why apply it only to HIPCs?
I am not aware that there is. I stress that that argument was not mine, but that of a number of respondents to the consultation. It is not for me to speak for them, but I suspect they would say that there is a difference between a voluntary waiving of rights, and a compulsory waiving of rights brought about by legislation that means essentially that certain debts are unenforceable. There is a distinction, but the hon. Lady might be right to say that debt relief measures so far—she was right to acknowledge the considerable steps taken by commercial lenders in addition to those taken by Governments and international organisations—have substantially reduced the burden on impoverished countries. The Bill might well not affect premiums, but it is right that we explore the matter.
I was saying that the Bill could be criticised for being too prescriptive. Why is it targeted only at the public debts of HIPCs and not those of developing countries more widely? The alternative argument is that the Bill will not do the job because it will create uncertainty for creditors of developing countries, whether HIPCs or otherwise. To be fair, in paragraph 2.30 of its response to the consultation, the Treasury states:
“Predicting the scale of any negative spillovers from legislation is very difficult in advance of legislation.”
I am not claiming to know the answer, but given that the Treasury acknowledges uncertainty, we need to examine the arguments closely.
My hon. Friend will obviously have seen the evidence given to the Government consultation by the Alternative Investment Management Association. Does he accept that that association represents practitioners rather than theoreticians, and that we should take seriously its concerns about the provisions?
It is true that practitioners’ responses—across the board—to the Treasury consultation raise concerns, and it is right that the House hears and explores those arguments and takes a view on them. I am also conscious that some respondents—I am not saying that they are right—were of the view that they had not been properly engaged in the process and that there was insufficient consultation at an earlier stage. I would be grateful if the Minister responded to that argument. To what extent did the Treasury engage emerging markets creditors to assess spillover costs? I note that the impact assessment produced by the Treasury does not put a monetised cost on that. The essential argument why it does not make such an assessment, which is set out in paragraph 2.30, is that all arguments put forward for spillover costs are based on markets assuming—or at least contemplating the possibility of—a significantly increased risk that the Government will in future enact legislation different from that being introduced. It is worth acknowledging, as the hon. Member for Northampton, North rightly said, that this Bill will not cause an increased risk premium, but it could cause concern that a precedent has been set and further measures will be taken.
None of us would dissent from the idea that the legislation should be properly and thoroughly scrutinised in Committee, but can the hon. Gentleman tell us whether his party would support the enactment of legislation broadly along these lines to deal with this particular problem? That is something that the House needs to know, bearing in mind the very short time frame that we have to deal with matters in this Parliament.
We will support the Bill’s making progress to Committee today. It is for the Government to provide time for the Committee stage, but we hope that they will provide adequate time for scrutiny. We do not believe that it is right to circumvent the normal parliamentary process when dealing with these important matters because if we get this wrong, it will be the developing countries who suffer. It is not our fault that we are doing this only a few weeks before the end of this Parliament, and if we do not have time to give the Bill proper scrutiny, it is regrettable. However, it is important to do it properly.
I hope that the hon. Gentleman does not mind my pressing him a little. I accept the point that he makes, but he has expressed a wish to be sitting on the other side of the House in three or four months’ time, so it would be helpful to know whether, in that case, he would support a Bill in similar terms—subject to discussions in Committee on this Bill—to put it on the statute book without further delay.
We support measures to address this matter, for the reasons that I have been outlining. Questions still need to be answered to ensure that this Bill is the right approach, and I hope that we will be able to resolve those issues in Committee in the next few weeks.
The concern is that the Bill will set a precedent for future legislation, although the Government are clear that that is not the intention. As the hon. Member for Hazel Grove pointed out, we want to be on the other side of the House in a few months’ time, and we would want to ensure that any measures that we took were very carefully targeted.
We all have a responsibility to be careful about the language that we use in this debate. Most of us instinctively feel that it is wrong for rich western financial institutions to seek to enforce debts against poor African countries. But I would also make the tough-minded but pragmatic and realistic point that this Bill is rightly carefully targeted and the Government—we support them in this—do not believe that there is a broad principle that rich western financial institutions should never be able to enforce debts against poor African countries.
I hope that that position is supported across the House, because if we ever expressed our views in that way, it could easily be interpreted as suggesting that the Bill could be extended in future. We have to make the realistic point that if we were to accept that broad principle, financial institutions would not lend to developing countries, and that would be a huge disadvantage and place enormous restrictions on the potential for growth of developing countries. In some quarters, that point may be controversial, but it is right to express it explicitly to provide some reassurance that the Bill is carefully targeted and very restrictive in some respects, and should not undermine confidence in future. It is helpful to the success of the Bill to make that point explicitly and I hope that all parties will agree. I make that point partly in reference to an earlier intervention by the hon. Gentleman.
We recognise that this measure needs to be calibrated correctly, and that raises various questions. I have highlighted the two principal restrictions—it only applies to HIPC countries and to debts that have already been entered into, and it is entirely retrospective in that sense—but I have some other questions that I would like the Minister to address if he has an opportunity. The group that attracts most ire—as the hon. Gentleman and the hon. Member for Northampton, North said—is the vulture funds. They are the institutions that have bought up the debt in secondary markets at a low price and then sought to enforce it. This issue was covered on “Newsnight” last night, and I expect that many hon. Members will have seen that. It is worth noting that, according to the impact assessment published by the Treasury, of the £145 million that is identified as being of benefit to the HIPCs that will be affected by this legislation, some £78 million relates to original creditors, not the vulture funds. Assuming that every creditor that is not an original creditor is a vulture fund, that means that £67 million of debt has been bought on the secondary market.
Those who responded to the Treasury consultation unanimously believed that no distinction should be made between original creditors and those who bought the debt on the secondary market, but this issue is worth exploring given that public concern is focused on vulture funds. One can see, morally and ethically, why that is the case, but perhaps the Minister could explain why the Bill does not focus specifically on vulture funds.
The Treasury methodology used to produce the £145 million figure has been criticised. A previous consultation paper produced by the Treasury stated that the amount that the HIPC countries would benefit by was £254 million. There were arguments that that methodology was wrong, out of date and failed to address several points, and the Treasury acknowledges, in the response to the consultation paper, that it
“remains true that any estimate of the effect of this legislation attempts to quantify an intrinsically uncertain process.”
That flags up a degree of uncertainty, and I hope that we have an opportunity to explore that point.
I would also like to touch on a question that other hon. Members have mentioned: will other countries follow suit? Our principal concern is the impact on developing countries, but there could be a commercial knock-on effect for the UK, were contracts simply to use a different form of law—for example, New York law. Whether that happens partly depends on what happens in other jurisdictions, so can the Minister shed some light on progress in other countries? We have heard about what is happening in the US, but it would be interesting to know whether the Government can provide more detail on the likelihood of this legislation coming into effect in the US. That would help the House.
It is important that we get the Bill right. It is an attempt to address an important issue, and everybody wants to reduce the debt that these impoverished countries face. Equally, however, I am sure that nobody here wants to make it harder, or more expensive, for developing countries to raise funds. The legislation is designed to help. We want to ensure that it does, and we wish it well.
I would like to start by putting it on the record that the Government fully support the Debt Relief (Developing Countries) Bill, introduced by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne). He has decided to introduce a serious and worthwhile measure, and I would like to join other hon. Members in expressing my sadness that he could not move the Second Reading in person. I wish him a speedy recovery. I am also grateful to my hon. Friend the Member for Northampton, North (Ms Keeble) for so ably opening the debate in his place. We are fortunate that someone with her expertise and commitment to this issue could do so, and I would like to pay tribute to her work over a considerable period on the issue of debt relief. I also pay tribute to the commitment of my hon. Friend the Member for Denton and Reddish.
Several private Members’ Bills this Session have been substantial and constructive pieces of legislation, but I am confident in saying that few, if any, have given the House the opportunity to progress a Bill as beneficial as this one. It was not a hard decision to support a Bill that will protect the debt relief that is vital to the development of the world’s poorest countries by preventing it from being exploited and diverted. It will do so efficiently and fairly, respecting legitimate commercial rights, and will ensure that the aid and debt relief funded by UK taxpayers will be used effectively to tackle global poverty. I also welcome the support for the Second Reading from both the Conservative and Liberal Democrat Front-Bench Members. Importantly, the provisions in the Bill are carefully targeted, and I think that both sides of the House recognise that.
I shall explain in more detail our reasons for supporting the Bill. As the House will be aware, several factors led many of the world’s poorest countries to build up debts that they had no realistic prospect of fully repaying, and by the 1990s this burden of debt was clearly a barrier to renewed development for those countries. Partial and piecemeal refinancing of their debts had proved insufficient, which is why, in 1996, the heavily indebted poor countries initiative for debt relief was established. HIPC provides a comprehensive framework for the debt relief that all creditors need to provide to reduce eligible countries’ debts to sustainable levels. Forty countries with a total population of more than 600 million, but an average income per person of just $530, qualify for the initiative, due to their high level of poverty and unsustainable debts.
The World Bank and the International Monetary Fund jointly administer the initiative and monitor each country’s progress. When a country meets the conditions for decision point on the initiative, those organisations assess the country’s total external debts and calculate the percentage reduction required from all creditors to reduce the debts to an economically sustainable level. The HIPC initiative expects that all creditors—bilateral, multilateral and commercial—will provide this percentage reduction fairly and equally, doing what is financially necessary.
At decision point, the World Bank and the IMF also agree with the country a set of reforms that it will undertake to direct the extra resources, from which it benefits through debt relief, towards tackling poverty and catalysing economic growth. Once the country achieves those triggers, it reaches completion point—the point at which all creditors are expected to have reduced their debts to the set level. With sustainable debt levels, a track record of macro-economic stability and a strategy being implemented to reduce poverty, countries completing the HIPC initiative are much better placed to continue their development.
The HIPC initiative is providing considerable success. Countries that have completed it have achieved higher rates of economic growth, maintained lower inflation and fiscal deficits and similarly improved their relative performance compared with other low-income countries. It is sustained economic growth that offers the surest underpinning for lifting people out of the poverty that continues to affect much of the countries’ populations. Of course, development is never a simple story, but the recent progress of, for example, Tanzania, Ghana and Rwanda shows the real contribution that debt relief can make.
Completing the HIPC initiative also triggers additional debt relief that goes beyond the aim of reducing debts to a sustainable level and further increases the resources freed up for the development. The UK is one of several countries that completely cancel all debts owed to the Government at completion point. At Gleneagles, in 2005, the UK won international agreement for the multilateral debt relief initiative that completely cancels debts owed to the IMF and the main multinational development banks. Together those initiatives are so far worth $117 billion in debt relief for the 40 heavily indebted poor countries. It is an achievement that the UK has led the world in bringing about, and all of us in the House should feel proud of it.
The benefits of debt relief, however, could, and should, be even greater. Most commercial creditors recognise that, aside from considerations of tackling poverty, the heavily indebted poor countries are unable to repay debts in excess of the percentage reduction expected under the HIPC initiative, and they agree voluntarily to reduce their debts accordingly. However, a small minority of creditors instead seize on the opportunity presented by the debt relief provided by others and sue the Government of the country for debts often contracted decades ago, and which have accumulated interest and arrears.
If a company cannot meet all its obligations to creditors, insolvency law brings about a fair and efficient resolution by requiring that all creditors receive repayment of an equal proportion of their debt. No analogous system exists for countries, as the hon. Member for South-West Hertfordshire (Mr. Gauke) noted when he said that there was no sovereign system of liquidation or insolvency. I do not think that we would want a system of liquidation for a country, but it is important that we have something comparable to an insolvency regime for countries that get into massive debt. That is what we are trying to do with the Bill.
It is currently legally possible for a creditor to free-ride on the debt relief that others provide, enforce its claim for full repayment and siphon off for commercial gain some of the resources that would have been used for poverty reduction. Hon. Members have spoken of how they see this practice as morally unjustifiable, and I agree with them, but I would also like to emphasise that allowing this free-riding to continue would perpetuate an economically unjustified and inefficient market failure. As the money that is diverted includes the development assistance funded by UK taxpayers, I have another strong reason, as a Treasury Minister, to support action in this area. That is an important point that I would want Members in all parts of the House to recognise.
For those reasons, the Government have already taken a range of steps to limit the problem. Many commercial creditors are happy to be repaid whatever proportion of their debt they remain entitled to, consistent with providing relief under the HIPC initiative. The World Bank’s debt reduction facility organises operations to buy back debts eligible for relief at the deep discount corresponding to HIPC initiative terms, and then to cancel them. The UK supports and, with other donors, funds such operations, which can be very effective. Last April the facility brought back and cancelled 97.5 per cent. of Liberia’s eligible commercial debt, for only 3 per cent. of its face value of $1.2 billion. I want to say something more about Liberia in a minute, because it was referred to by a number of hon. Members.
High-quality legal advice for heavily indebted poor countries is also important, to help them defend claims and avoid problematic terms in new borrowing. For that reason the Department for International Development has committed £5 million to fund the new African legal support facility. The value of good legal advice was illustrated by the case of Donegal International Ltd v. Zambia, where our funding for legal advice helped Zambia reduce its liability by around $40 million. Also, a number of claims brought by litigating creditors can be reduced if fewer responsible creditors sell on their claims. We have won support for commitments not to sell on claims, from 19 members of the Paris Club of creditor Governments, the European Union and signatories to the UN’s Doha declaration on financing for development.
Despite the success of all those measures, a problem remains. It is a problem of a small minority of commercial creditors that continue to litigate and recover sums greatly in excess of that which is compatible with the debt relief that heavily indebted poor countries can expect. The best information on the scale of the problem comes from the World Bank’s annual survey of heavily indebted poor country Governments. The most recent survey, in 2009, reported 14 active or unresolved law suits worldwide, with a total value of $1.2 billion. More new cases continue to be brought. Rates of litigation since 2002 indicate that around a fifth of such cases are heard here in the United Kingdom.
I cited Liberia as an example of the success of voluntary buy-backs, but as hon. Members have recognised, in November the High Court gave judgment for $20 million against Liberia, in a claim brought by two commercial creditors against the country, allowing them to seek to enforce full repayment in the United Kingdom. In Liberia, a country with an average income per person of just $170 and where 13 per cent. of children die before their fifth birthday, all the resources that its Government should expect are vital. I find the actions of commercial creditors morally repugnant. Only legislation, in the Bill before us today, can prevent such free-riding under UK laws and in UK courts by a small minority of unscrupulous commercial creditors. By passing the Bill, I believe that we can help to protect Liberia, Ethiopia, Sierra Leone, the Democratic Republic of the Congo and the other heavily indebted poor countries facing litigation.
I want to address some of the comments made by the hon. Member for South-West Hertfordshire about the Bill. He principally raised the issues of contractual rights and whether the Bill would actually benefit developing countries. There is certainly an interference with contractual rights, as he notes, but we believe that this is morally and economically justified. I shall say something about the compelling reasons for that in a moment. I strongly believe that the Bill will benefit developing countries. Indeed, if one asks developing countries, they, too, will say that the Bill will be helpful to them. The hon. Gentleman also raised what might be called the “thin end of the wedge” argument, which is that the Bill might set a precedent and that people might go further. I want to address that too, as well as commenting on the position of original creditors, to which he also referred.
Will the Minister also address the point raised by both the hon. Member for Hazel Grove (Andrew Stunell), the Front-Bench spokesman for the Liberal Democrats, and the Conservative party spokesman about the effect of other countries not following suit? That is an important issue if the money is being transferred elsewhere.
I will indeed address that point, as well as the sovereign debt work-out mechanism, which the hon. Member for South-West Hertfordshire also raised. On that issue first, as I think he is aware, the Government supported the IMF’s original proposal for a sovereign debt work-out mechanism in the early part of this decade. The proposal did not receive international consensus at that time. As a result, there has not been a renewed international proposal following the Doha declaration. That is why the Government have instead prioritised consulting on and supporting measures through legislation, which is why we are pleased to support the Bill before us today. We believe that it can build on the successful HIPC initiative and be implemented quickly.
The hon. Gentleman raised some specific points about contractual rights. I understand that some people take the view that the Bill is an unjustified interference with property rights. I recognise that that was not what the hon. Gentleman, who speaks for the Opposition, was saying, but he raised that point as an issue and a matter of principle. I hope that I have made clear the economic arguments for all creditors to provide the relief assessed as necessary in the HIPC initiative, and explained why free-riding is inefficient and inequitable. It is important to recognise that the vast majority of commercial creditors already voluntarily reduce debts in line with the initiative, so they will be completely unaffected by the legislation. As the hon. Gentleman said, the Bill is carefully targeted and calibrated. It includes a clause that specifically provides an incentive to debtors to negotiate settlements of their debts on terms compatible with the HIPC initiative, thereby helping the process. It is also worth noting that the typical market value of the debts that will be affected is around or below the level to which creditors will remain entitled under the Bill.
On contracts, as the House will be aware, the Government have already taken what steps we can, within the existing legal framework, to help developing countries with debt relief. What is proposed in the Bill is limited to a tightly defined stock of existing debts of the poorest countries in the world. It balances preventing creditors from extracting excessive repayment with an incentive to help them to recover the part of their debt that they can expect to be repaid. In this case, the need to stop the resources that the UK and others provide through debt relief being diverted from poor countries justifies reducing contractual rights. It is not the case that contracts would be torn up; rather, creditors will not be able to pursue payment beyond the level assessed as sustainable by the IMF and the World Bank.
Legislation not infrequently has some effect on the value of existing contracts. Although this is more unusual, there are precedents for legislation that changes existing contractual and other property rights. For example, I was responsible for leading on the Banking (Special Provisions) Act 2008 and the Banking Act 2009, both of which provide, in limited and defined circumstances, for powers to transfer the shares in, or property of, a bank to another person. Such a step should be taken only if there is a compelling public policy case for doing so, which we believe there to be in this instance. I hope that the Bill will receive its Second Reading today and that we can accelerate it through Committee, but I do not expect passing it into law to result in any significant impact on the UK’s competitiveness for financial services.
The commercial debt relief expected under the HIPC initiative is less than 0.1 per cent. of the total debts of developing countries. The proposal is limited to a fixed stock of debt that has already been contracted, and it is clear that it will have no impact on new lending.
So what does the Minister say about the comments of the Alternative Investment Management Association, which states:
“The proposed legislation would damage the reputation of English law and make the City of London less hospitable to investors”?
Does he discount that as irrelevant?
I do not discount it as irrelevant. The association is entitled to its view, but I do not happen to agree with it. I have a lot of time for investment management—more so than many people in this House or in the country generally. It performs a vital function in ensuring that economies can get the finance they need in order to grow. I always consider carefully the views of associations that represent such companies, but I do not believe that what they are saying in this instance reflects the true situation. We are talking about a very small number of transactions overall.
The Bill introduced by my hon. Friend the Member for Denton and Reddish has been carefully calibrated, and the Government want to ensure that English law retains its status as a preferred choice of law for finance, and that the City retains its status as a leading financial centre. There is nothing in the Bill to jeopardise those aims in any way. I believe that the concerns about it have been overstated. Those expressing them do not necessarily object to the targeted measures in the Bill, but they say that they would not want them to go further. This point was raised by the hon. Member for South-West Hertfordshire when he spoke of the danger of setting a precedent. I do not see it in that way. In giving our support to the Bill, we have been careful to say that it needs to be carefully targeted and that we need to be cognisant of the legal position.
The best analogy that I can provide is that of the debate on the hunting ban. At the time, many people argued that if we banned hunting, the next step would be to ban shooting and fishing. The legislation that we passed, however, has not been the thin end of the wedge, and we have seen no subsequent measures to ban shooting and fishing. Those who put forward those arguments were wrong to do so and, similarly, those who say that supporting this carefully calibrated Bill will open the door to a far more extreme Bill that would jeopardise Britain’s long-standing reputation as a leading financial centre have just got it wrong. It is not like that.
I cited the Banking Act as an example of a situation in which exceptional circumstances and compelling reasons—in that case, the need to ensure financial stability—allow contract law to be interfered with. In general, however, the presumption has always been in favour of the sanctity of contractual law. We are not tearing up contract law by supporting this Bill; far from it. We are ensuring that there will be fair treatment for all creditors when some of the debts of a HIPC country are being pursued by a small minority of unscrupulous creditors.
Does my hon. Friend accept that the arrangements relating to the wind-down of banks that were required as a result of the credit crunch—which led to criticism from Opposition Members—were necessary because the public could not continue to underwrite the UK banks’ losses in an unsustainable way? There is a similar argument for initiating an orderly wind-down of the debts of developing countries. Again, this would protect the interests of British taxpayers, who are having to underwrite those losses as well.
My hon. Friend is right. She is not only an expert in debt relief but a distinguished member of the Treasury Committee, and she has followed these matters closely.
I used the Banking Act as an example in my argument about contractual law. It was exactly because there were compelling policy reasons that we enacted that legislation. That is why we acted in that instance, and I strongly believe that there is an equally compelling public policy reason to support the measures in this Bill, to which my hon. Friend the Member for Northampton, North has spoken so eloquently today.
The hon. Member for South-West Hertfordshire raised a point about creditors. Some people argue that they should be able to choose whether to participate in the arrangements, rather than being forced to do so. That would not happen in the case of a company insolvency, as we have discussed, and I hope that I have made the case that it would be unfair if one or two creditors were able to operate as free riders when everyone else had decided to participate in the initiative.
I believe in providing debt relief, on development and moral grounds. There is also a strong economic argument for full participation. HIPC debts cannot be substantially repaid without debt relief, and the HIPC initiative aims for all creditors to provide the level of debt relief that will return those debts to sustainability. The example of insolvency law is directly relevant here. Because there is no equivalent to insolvency for countries, they are vulnerable to the small number of unscrupulous creditors who refuse to participate in the necessary reduction of debt that has been agreed by sovereign member states, as well as by all the other international lending institutions and most other commercial companies that have made loans to the country in question.
This is a classic free-rider problem in economic terms, and the situation is being exploited by vulture funds. The Bill is designed to stop that happening. Debt relief is funded by the UK taxpayer, and I am enormously proud of what we have done in the United Kingdom in that regard. Without action, however, our efforts risk being undermined by the small minority of unscrupulous commercial creditors, with that money being diverted to investors.
The hon. Member for South-West Hertfordshire is right to mention that this is not just about vulture funds, given that the legislation as drafted also refers to the original creditors. He is also right to say that roughly half the debts in question stand in the name of the original creditors.
The key aim of the Bill, as I understand it, is that all creditors provide debt relief as expected under the HIPC initiative; it does not discriminate between so-called vulture funds and more typical commercial creditors. The purpose of the legislation is to tackle unacceptable behaviour rather than certain types of fund. Once there has been wide agreement on debt relief and the necessary reductions, I think it just wrong for any creditor to be able to turn around and say, “Well, we are not having that; we do not agree to that,” when everybody else has, and then to seek to pursue the full commercial debt.
I am clear that creditor rights are vital to smoothly functioning financial markets and they should be altered only in exceptional circumstances. That, however, is what I think this Bill does—these are exceptional circumstances because the international community has come together to agree to debt relief as a solution to what has been a decades-long debt crisis. It has commanded support from all the major creditor countries and from very many commercial creditors. Governments have taken the steps they can to reduce the problem without legislation, but although it has been reduced, the problem remains. A piece of legislation tightly targeted at a fixed and limited stock of historical debt owed by the poorest countries provides an important means of tackling the problem.
As Members will be aware from reading the Bill, future lending is explicitly excluded from its scope, which is fundamentally right. To address directly the point raised by the hon. Member for South-West Hertfordshire, the main argument of those who say that the Bill will not benefit developing countries rests on the assumption that commercial lenders will be put off making them loans in future. It cannot be clearer in the Bill—it was also clear from what my hon. Friend the Member for Northampton, North said when she introduced it—that future lending is explicitly excluded from the Bill’s scope. I thus see no reason why the Bill should affect future lending. In providing a solution to the problems of vulture funds and of creditors acting in what I believe is an unscrupulous way, it provides a real and tangible benefit to countries affected by having their debt pursued in the UK courts.
That brings me to the question raised about what other countries are doing. My hon. Friend the Member for Northampton, North has had meetings in the United States to discuss proposals for legislation, but it would not be right for me to speculate on the chances of such legislation passing through Congress. It remains the case that what we are doing in the UK is leading the way internationally, just as we have led the way in many aspects of the debt relief agenda over the past 10 or more years. We can be proud of that. It is nevertheless helpful if other countries produce similar legislation in their jurisdictions, and we want directly to encourage and support other countries to do that. The fact that the US is considering the issue at various levels is very welcome news, as it is obviously a major jurisdiction when it comes to the enforcement of debts. We would like other countries to follow the UK’s lead, as I said.
Let me conclude by repeating that the UK can rightly be proud of its international leadership in this area. The debt relief initiatives that we have introduced have played a key role in helping to lift millions of people out of poverty and to lay the foundations for sustained development in 40 of the world’s poorest countries. Part of the benefit that should result from the Government’s support, however, is being diverted by a small minority of unscrupulous commercial creditors that seek to extract full repayment rather than participate in the HIPC debt relief initiative. The Bill will prevent that from happening under UK law enforceable in the UK courts, ensuring that all creditors participate in reducing debts to a sustainable level. That is the moral thing to do, but it is also economically logical and will make more effective the development aid that we all, as taxpayers, fund.
The reasons for supporting the Bill are compelling, and I am glad to be able to do so today. I hope that Members across the House will join me in helping to make the Bill law by agreeing to its Second Reading today.
I shall not divide the House on Second Reading, but I would like to put on record some of my reservations and concerns about the Bill. I do not think that the Minister has adequately addressed the concerns expressed by investment managers about the Bill’s impact on the ability of countries suffering from substantial indebtedness to be able to obtain commercial support in the form of loans in future.
One example, which has already been cited, is what happened in Zambia. The Romanians supplied agricultural equipment to the Zambians and expected them to pay for it. I imagine that the Zambians would have had resources from grant moneys and overseas aid from other countries to enable them to purchase that agricultural equipment, but they defaulted on the debt. Ultimately, the entitlement to the debt was transferred to another organisation, which then sought to obtain a judgment against the Zambian Government. If the Zambian Government are to be allowed to get that equipment without paying anything for it, it surely defies common sense to suggest that, with no effective guarantee that the loans would ever be repaid, many people across the world would in future queue up to provide agricultural equipment backed by commercial loans to countries such as Zambia. That is one of the fundamental problems with this well-intentioned Bill.
I am also very concerned about the retrospective nature of the Bill. We are talking about organisations that have obtained judgments in our courts, only to find that Parliament, at the behest of the Government, is seeking to intervene to prevent those judgments from being enforced either in whole or in part against the judgment debtor. That can be justified only in the most extreme circumstances, and I do not think that the Government have set out those extreme circumstances.
Consequences flow from that. First, there must be a big question mark over whether the Bill’s provisions are compliant with the relevant articles of the European convention on human rights. We know from the background material that leading counsel’s opinion is that the existing provisions would be contrary to the ECHR. The Minister has not been able to assure us that the concerns of leading counsel in that respect have now been allayed as a result of anything the Government have done, so I regard that issue as still very much at large, and think that it is highly debatable whether the Bill is compliant with the ECHR, for the reasons I have set out.
If the Government’s argument is that there are compelling reasons justifying the unusual stance that has been taken, my argument would be that those reasons are less compelling in respect of retrospection, where judgment has already been obtained for the debts. If we take a look at the detail, we see that this legislation could be applied in various ways. The Government have chosen the most wide-ranging interpretation—and therefore, in my view, the most oppressive interpretation. It is also potentially the most inimical to the British system of justice, because the following is bound to happen: whereas at present many of these international contracts are drawn up in accordance with the provisions of English law and then are justiciable in the British courts, if we are unable in future to demonstrate some consistency in how we organise our legal affairs in this country, potential creditors will engage in forum shopping and make sure that the contracts are drawn up in law other than English law and that the forum where they are determined are courts other than the British courts. That would undermine our system of justice. As a result of history, we have, in London in particular, an international forum for resolving international disputes by both arbitration and litigation, and that provides employment to a lot of people. Anything that is done that, unwittingly or otherwise, has the consequence of undermining that very important part of the British economy can only be bad news.
I therefore have strong reservations about the Bill on the basis of human rights and because I think the law of unintended consequences could apply. At a time when our country is teetering on the brink of losing its triple A rating as a result of the extraordinarily reckless way in which the Government have managed our national finances over the past few years, it ill behoves us to start saying that we do not think people who have incurred debts as a result of commercial transactions should be liable for them. Government-to-Government lending is a completely different issue; that is a matter, ultimately, for the taxpayers of the Government who have been doing the lending and who decide not to pursue the repayments. However, in terms of commercial loans in the private sector, the consequences of the Bill’s measures will be dire in the extreme, and will ultimately prove to be to the detriment of third-world countries.
My heart goes out to the people of heavily indebted poor countries. They are heavily indebted because, for the most part, their leaders have been corrupt. We need only take a look at the leaders of Liberia and other countries. Many of them have substantial funds in, for instance, Swiss bank accounts. For such countries that are essentially corrupt, we seem, in effect, to be saying that we should indulge that corruption by writing off these debts, even when they have been incurred as a result of commercial transactions.
I hope that this matter is looked at in much greater detail in Committee. There must not be a knee-jerk reaction, when people say, “Well, this sounds like a good idea; let’s go ahead with it.” Instead, we should take a careful look at the consequences that would flow from the Bill in its current form.
The hon. Member for Christchurch (Mr. Chope) has talked about some of his concerns about the Bill. They are shared by others, but they are not well founded or substantial, and I shall deal with them in the course of my remarks.
First, let me say a few words about the general point of the Bill. When the history of these times is written, I am sure that one of the great movements that will be noted is the great flood tide of international opinion in favour of ending global poverty. The response to the Ethiopian famine of the 1980s grabbed public attention in a way never seen before, and harnessed public opinion across the developed world. The formulation of the millennium development goals, with their targets for creating a better world, have been worked through national Government and international organisation mechanisms to produce real change. The Make Poverty History campaign motivated the public in the richest countries in the world to force our leaders to commit to ending the scandal that gives a child in Africa a fraction of the life expectancy of a UK child, not to mention the very much lower chances of getting an education, health care, a job or even—tragically, in this day and age—enough to eat each day. As well as the issues of increasing aid, of improving trade and of governance—about which the hon. Member for Christchurch is absolutely right—an important aspect of this world opinion has been the understanding that a poor country cannot develop if it is shackled by debt, and that is what this private Member’s Bill addresses.
Governments have already taken steps to write off debt—the hon. Gentleman referred to that—although some countries do not subscribe to the consensus view on that, so there is still work to do. Consideration must, for instance, be given to the situation for countries such as China; its investments in Africa and how those are working should be addressed. There has also been genuine progress on the cancellation of public debt, and I talked about that in my earlier speech.
This Bill deals with the rest of the commercial debts. It deals with the creditors who will not voluntarily, either out of normal commercial interest or for ethical reasons, engage with the debt cancellation process, and who remain outside the international consensus and the international mechanisms for dealing with developing country debt, instead aggressively pursuing the debts at the expense of the poorest people in the world. Therefore, the Bill addresses a small part of a very big picture.
That is an account of the broad idealism that has driven everyone who has been involved in the whole movement to address debt cancellation and world poverty, but the hon. Member for South-West Hertfordshire (Mr. Gauke) drew our attention to the Bill’s details, and he was right to do so because they need to be looked at. He identified three big issues, but I counted four. I hope his maths improve if he is to find himself on the Opposition Treasury Front Bench.
No, not the Treasury Front Bench. The Opposition need to be numerate as well as our own, very numerate, Minister.
Of course, contractual rights are an issue, but I think the Minister dealt with some of the key points. Remarks were made about the need for orderly wind-downs and orderly management of debts. There are arguments on that, and also on the trade-off between the contractual rights of people who hold debts and the public purse, which has to fund public services at the same time. That trade-off has been of acute concern here in the UK, and it also reads across to issues to do with debt management on the international stage.
However, this measure involves not just a whimsical ripping up of contracts, but the pulling of vulture funds—the outriders of capitalism, as it were—into a complex, internationally agreed process that calculates how much such countries can afford to pay and then makes arrangements for that amount be paid, while providing the necessary due legal process. So this is not an irrational, whimsical or illogical process but part of internationally agreed—and debated to death, probably—procedures and mechanisms.
The hon. Member for Christchurch said that the situation is different if the relationship is Government to Government, but one problem is that we cannot divide off the public and private sectors in this area—or, indeed, elsewhere. Government-to-Government relations for dealing with the debt cancellation that we have undertaken are underwritten by the British taxpayer, and I see no reason why such an arrangement, which is working in a constructive way at our constituents’ expense, should be ripped off by firms that decide they are not going to play ball and are going to do something different. Of course, the debts that are being pursued most aggressively—the hon. Member for South-West Hertfordshire raised this issue—are bought on the secondary market. I am not sure, but I think the Romanian debt was a Government debt that was then bought on the secondary market, so the divisions that the hon. Member for Christchurch referred to cannot be quite so neatly drawn.
The hon. Member for South-West Hertfordshire also dealt with human rights. Human rights compliance obviously has to be written off or dealt with in the legislation, and that issue will be looked at in Committee. He also raised the question of who this measure will benefit and whether it will benefit developing countries, which is a big issue. Various figures were mentioned, and the one that I have been working on is £1.2 billion, which is the amount currently in process. It can almost be argued that that figure is too small. I think it is about the size of the RBS bonus pot, so from that point of view it is not a vast amount of money to legislate for. However, as has been discussed throughout consideration of the Bill, it is money that is intended to tackle some of the worst poverty in the world, and what it can buy in the way of services in countries where services are needed is absolutely massive.
The figure of £145 million that I quoted comes from the Treasury’s own impact assessment and is the transfer from the creditors to the HIPC states. I quoted that figure because it is the Government’s own estimate, rather than the £1.2 billion that the hon. Lady quoted.
I think the £1.2 billion is the amount currently in the process of being sued for in all the actions that have been referred to. So the amount that the HIPC countries will be deprived of if the Bill is not enacted is about £1.2 billion—[Interruption.] Okay, but it would make a very significant difference in terms of what it could buy in the way of services for the countries concerned, so this legislation would be effective.
On the risk premium, one argument is that although the measure might provide this little bit of money to developing countries—£145 million, or whatever it is—because it will increase the cost of credit for those countries, in the long run it will be damaging. That view has also been put forward by some commentators in their submissions, but it is not well founded for several reasons. The measure will certainly increase the risks for the vulture funds—and a good thing, too. If it discourages them from taking actions that are unacceptable, or denies them the opportunity to make cheap money at British taxpayers’ and developing country populations’ expense, then we should recognise, as my hon. Friend the Minister said, that those are the morally repugnant activities that it is intended to prevent, while allowing for orderly wind-downs.
As is clear in the Bill and as my hon. Friend the Minister pointed out, future debts are specifically excluded, and rightly so, because the Bill deals with the HIPC process, which relates to historic debt. Therefore, the Bill will not increase the risks for the future. However, there is a much bigger issue. The hon. Member for Christchurch talked about the appalling track record of some developing countries, and about Government corruption, Swiss bank accounts and so on. The thing that will really encourage proper investment and the proper handling of debts and credit in developing countries is their having sound, growing economies, good governance, strong institutions and all the other things required for stable growth in the long-term. That is what will give investors the greatest confidence, and it is precisely what the HIPC process is designed to bring about, as my hon. Friend the Minister said. It is not just a question of saying, “Oh dear, these people can’t pay their debts. They are a basket-case—we are going to write the debts off.” It is about deciding how we handle the development process for these historic debts, which have shackled such countries in a terrible way and left them vulnerable to exploitation by the vulture funds, so that they can build more secure futures. That is precisely what responsible, ethical, sound investors would want to see happen in these countries, and this Bill is part of achieving just that.
It is really important that this Bill gets through all its stages and on to the statute book, and I am very grateful for the support of the hon. Member for Hazel Grove (Andrew Stunell). We obviously could not get through all the stages today because, rightly, it needs scrutiny and discussion and people need to see that happen so that they can be reassured. However, we do need to get it through before the election and time is limited, so I hope we can get Government time for Committee stage, and Opposition support for that. I urge my hon. Friends who are the business managers, and the hon. Member for South-West Hertfordshire, to ensure that that happens, because there is a further issue at stake: the credibility of this House and of our processes.
What the many people who have a burning passion for and interest in this subject will have heard this morning is that there is a real economic logic to the proposals in the Bill. There is also an ethical imperative; indeed, I think this is the first time I have heard a Minister describe something as morally repugnant—certainly a Treasury Minister talking about financial activities. The Bill is therefore receiving stronger ethical support and a stronger push from the Front Bench than many other things do. It would also probably be supported by some 90 per cent. of the financial services industry, which operates in a completely proper way and has been involved in the writing off of some of the debts of such countries.
I think that people want the Bill to get on to the statute book, and they have not turned up here to object to it. With the distinguished exception of the speech by the hon. Member for Christchurch, who has a track record of ensuring that he puts the awkward questions—and rightly so—people will have heard that there is huge support for this legislation from all the parties, and that is unusual. They will say, “Well that’s funny; everybody agrees with it, and everybody says that it is a good idea and that they want it to happen—so why hasn’t it happened?” That is why it is important that if there really is a political consensus on getting this measure on to the statute book—and sooner rather than later, because things take time to get up and running again after an election—we take the opportunity to do it. This is not a matter of the political arguments, because we have been through them all and they have pretty much been won; this is a matter of the political will to manage the process. I very much hope that in the remainder of this Parliament this will all be achieved. I commend the Bill to the House and I hope that people will support its Second Reading.
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).
Sustainable Communities Act 2007 (Amendment) Bill
I beg to move, That the Bill be now read a Second time.
I have great pleasure in presenting this Bill which, as the House will note, is a short amendment to the Sustainable Communities Act 2007. That Act, and therefore this amendment to it, is the product of an extraordinary grass-roots movement that brought together two significant forces, both of which are as relevant today as they were three years ago: a concern that the sustainability of town and country life was being imperilled by myriad changes, gradually leading to a loss of facilities, large and small; and a sense of frustration that people were powerless to do anything to change the situation. This short Bill builds on both those sentiments.
I wish to outline briefly what the Bill is about and then remind the House of the forces that brought the 2007 Act into being. I hope to demonstrate what has happened since then: how early progress in implementing the provisions is encouraging and why, therefore, this short amending Bill is helpful and timely. I then propose to look in rather more detail at this Bill’s provisions and I shall, of course, be pleased to respond to concerns or queries from the House about them.
My first task is to acknowledge that I stand on the shoulders of a number of giants who were responsible for the passing of the original legislation and who remain in close contact with the process of carrying out its intentions. At grass-roots level, Local Works remains the driving force of the campaign to revitalise local community through this effort in what might be termed “the new democracy”. The House should acknowledge an extraordinary coalition of interests that has come together to support Local Works. The coalition includes the Federation of Small Businesses, the Campaign to Protect Rural England, the National Federation of SubPostmasters, Age Concern, Help the Aged, the Woodland Trust, the National Federation of Women’s Institutes and the Campaign for Real Ale, to name just a few. Any idea or concept that can bring together so many people, not simply to pursue an abstract ideal, but to make something work in practice, has to be worthy of serious recognition.
Local Works sees its manifestation around the parliamentary estate mostly in the person of Ron Bailey, who is known to many of us. His hard work and his knowledge of parliamentary procedure are of immense benefit to us all, and I am very grateful for his help in putting together the background work for today’s Second Reading debate. May I also acknowledge the help and support that some of the original parliamentary drivers of the legislation have given? In particular, I should mention my hon. Friend the Member for Ruislip-Northwood (Mr. Hurd), and the hon. Members for Falmouth and Camborne (Julia Goldsworthy) and for Stroud (Mr. Drew). That powerful all-party coalition has also sponsored my Bill—their names are among others—so the House can see instantly that the Bill has attracted the all-party backing that was crucial to the passage of the Sustainable Communities Bill.
Once again, the leadership and efforts of Local Works have inspired an early-day motion. Early-day motion 143 has attracted some 348 signatures, which constitutes more than 50 per cent. of the Members of the House and a significantly higher proportion of Back Benchers, as can be seen once Government Members who are not able to sign such early-day motions are taken out of the equation. The motion reads as follows:
“That this House notes the success of the Sustainable Communities Act 2007 as the first step towards building a bottom up democracy; further notes the enthusiasm shown by local authorities across England in deciding to use the Act, with 100 councils having already used that process and a further 50 councils having stated their intention to do so at the next available opportunity, showing that nearly half of all councils wish to use the Act's process in the future; notes also the genuine cross-party support that the original Act commanded; and so supports the provisions of the Sustainable Communities Act Amendment Bill introduced in Session 2008-09 which would extend the 2007 Act by ensuring that the process of involvement established by the Act becomes an on-going process rather than a one-off event, by involving parish and town councils and their county associations in the process and by empowering citizens to petition their councils to use the Act if they are not already doing so.”
This Bill builds on that early-day motion, which is well supported by Members of all parties.
The 2007 Act, which the Bill seeks to amend, had its Second Reading debate in this House on 19 January 2007. In moving that the Bill be read a Second time, my hon. Friend the Member for Ruislip-Northwood said:
“The Bill will make the Government more responsive to an issue that arouses genuine passion and concern—the problem of community decline in Britain. It will push the Government to go further in giving real power to local authorities and the people whom they serve. That is the only path to delivering sustainable communities that will stand the test of time.”—[Official Report, 19 January 2007; Vol. 455, c. 1037.]
As the House of Commons Library research paper helpfully reminds us:
“The driving force behind the Bill was Local Works, a pressure group representing a sizeable coalition of organisations. The campaign began following the publication of studies by the New Economics Foundation entitled Ghost Town Britain. These highlighted, in particular, the decline in numbers of corner shops, grocers, banks, post offices and pubs which meant that communities and neighbourhoods no longer had easy access to ‘such essential elements of both the economy and the social fabric of the country.’”
That brief précis can do little justice to an extraordinary series of meetings that had taken place around the country and engaged the interest of Members of Parliament of all parties. They found a vibrancy in both defending local communities and challenging the forces that had changed them, in some cases radically, which people feared they were powerless to stand against. While recognising the institutions of democracy in this country upon which we all rely, particularly local and national Government, the campaign expressed an unease that the modern working of these institutions seemed to leave communities and people behind. What was needed was a new way of engaging with them, which would not circumvent their democratic powers or those of local authorities, but would complement them by suggesting a radical process for the presentation and consideration of ideas.
On 12 July 2007, Lord Marlesford said, in moving that the Bill be read a Second time in the other place, that
“the campaign had to take a view on what we were seeking to achieve in place of ghost town Britain. The answer must be sustainable communities. Bearing in mind our starting point, that clearly meant the reversal of the decline in local economies, services and communities highlighted in the reports that I mentioned. But sustainable, healthy communities should also be environmentally sustainable. They should be inclusive and encourage citizen participation; otherwise they will not be sustainable as communities. Hence, the four limbs were: promoting local economic activity, the environment, social inclusion, and citizen involvement. What is certain is that this problem will continue unless action is taken to stop it.”—[Official Report, House of Lords, 12 July 2007; Vol. 693, c. 1565.]
The principal aim of the Act therefore was to promote the sustainability of local communities, which meant encouraging the improvement of economic, social or environmental well-being. The mechanism of delivery would be for local communities to work with their local authorities, following the invitation of the Secretary of State, to make proposals that would contribute to promoting local community sustainability. These proposals, which, by definition, would be drawn from a wide range of groups and organisations interacting with their local councils in an innovative way that is typically described by many of us who are involved as bottom-up rather than top-down, would go on to be evaluated by a selector. That selector became the Local Government Association, which would use its skills, expertise and experience to draw up a shortlist of proposals to offer to the Secretary of State. It would then be the Secretary of State’s job to come back to explain what he or she would like done with the proposals and how they might be implemented.
A further radical part of the Act was to require transparency in detailing what public money came into a local area through the publication of local spending reports. That would enable the public to see at a glance exactly what was being spent in an area, what was committed and what might be deemed to be discretionary and could therefore be transferred to a different area of community priority. We will return to these local spending reports, perhaps, a little later.
It was a considerable success for my hon. Friend the Member for Ruislip-Northwood to get that Bill passed. It had initially met with some scepticism from the Government, but through the honest and patient work of the hon. Member for Oldham, East and Saddleworth (Mr. Woolas), when he was at the Department for Communities and Local Government and, in particular, of his then Parliamentary Private Secretary, the hon. Member for West Ham (Lyn Brown)—I am delighted to see her in her new place as a Whip on the Government Front Bench—a constructive relationship was formed that enabled the Government eventually to support that Bill once it had been through Committee and the process of refinement that that involves.
The practical impact of all that was that the right hon. Member for Salford (Hazel Blears), then the Secretary of State for Communities and Local Government, issued an invitation on 14 October 2008 to local authorities inviting them to make such proposals as were suggested in the Act. The process was thereby triggered and 100 local authorities submitted proposals in the first round. All in all, 301 proposals were submitted, and of these, 199 were shortlisted by the LGA in its role as selector. They are being considered by DCLG, but no decisions have yet been made.
The bare figures are only one part of the story, however. A number of different sources provide testimony to the impact not only of the original campaign but of the Act on local communities that have been stimulated to take part in the process that originated in the legislation. I shall quote from some of them.
Councillor Keith Mitchell, chairman of the LGA selector panel, said after the first round:
“It is great to see so much enthusiasm from councils, ready to expand their responsibilities to do everything they can to make life better for their residents and we would expect nothing less.
The proposals which have been submitted are practical responses to specific local conditions, plans which councils are uniquely placed to be able to generate and upon which they can act. Unsurprisingly the recession is a strong theme as councils look to continue their efforts to offer support to local businesses and vital assistance to local people…Innovative projects will be created in many parts of the country as a result of these ideas and some will no doubt be rolled out more widely where they are shown to have the potential to improve things on a larger scale.”
Let me give one or two particular examples.
A Hackney resident was delighted to find, after he had worked with local residents groups and made a suggestion to Hackney council, that his proposal had been submitted to the LGA and shortlisted, and that it is now before the Secretary of State. His idea was subtly to change the planning rules for betting shops—Hackney currently has the highest concentration of betting shops in the country. A Wiltshire librarian, Mr. Brian Purvis, suggested increasing the tax on chewing gum to help to cover the expense of clearing it from the pavement. His proposal, one of 20 shortlisted by his county following the introduction of the Act, has reached the LGA’s shortlist.
Evidence also shows that councils have made positive efforts in the first round to involve under-represented groups. For example, in Islington the proposals went to a newly formed panel for consideration. The panel included residents from groups with which councils had traditionally struggled to engage, as well as forum members of such groups. It included a blind resident, a resident with learning disabilities and a resident—with an interpreter—who spoke English as a second language. Another example was the “Making Chorley Smile” panel, which included a range of people of varying ages, gender, ethnicities, residence and employment status. Paul Scriven, the leader of Sheffield city council, said of the first draft proposals from Sheffield’s citizens panel:
“This is the first time anything has been endorsed by the council’s cabinet that has been drawn up by local people rather than the other way around. It’s so refreshing.”
Let me give two or three more examples from different parts of the country. South Hams district council suggested that Government and local authority housing and planning requirements should be amended to allow private individuals and non-profit groups to build affordable homes for their own use. Teignbridge district council suggested that the Government should acknowledge the role of community land bank trusts and ensure involvement at a local level in future housing development. Liverpool city council suggested that post offices should not be closed until the local co-operative development office has been given the time and training budget to see whether an increase in capacity could result in local people taking over the management of the premises. Bearing in mind what my Front-Bench colleagues were saying last week about the co-operative principle, which I am delighted to see is alive and well on these Benches, the idea that groups of people can come together and put forward such a proposal seems a good thing.
May I give another excellent example of that? The Government sought to close a series of rural post offices in my constituency, but there was uproar in the local community. Essex county council was sensitive to the needs and demands of local people and gave the extra financial support that was needed for a short period of time effectively to give those post offices a second chance. The community said that they wanted to use them, so Essex county council said, “Okay, we will give you another x months.” More people then went in and made a post office sustainable whereas it once had not been.
My hon. Friend cites an admirable example of local community involvement provoking a change to what might otherwise have happened. The Sustainable Communities Act has allowed more of that to be engendered around the country and has given people the sense that they have some power.
Let me digress for a moment before I come to the substance of the Bill. This has all posed serious issues for those of us in representative positions. We have taken it for granted for a long time that we do this job—people come to us, we make the decisions, we organise, we tell people what to do. When there is enormous trust and a clear bond between those who are elected and those who elect them, that is fine. However, experience in recent years has shown that that bond has been more difficult. We have seen the numbers of people voting at local council level decline steadily. We have had our own issues with the number of people voting in general elections in recent times and, of course, we have had the issues in relation to the authority of this House, which are too well known and painful to bear repeating. So to create a mechanism that encourages people to engage with their local authorities and with Government in a new way has been refreshing and exciting. My hon. Friend the Member for Braintree (Mr. Newmark) illustrates how something can happen as a result of that positive engagement, and this new Bill is coming along to keep that going. I shall return to that point in a moment.
I shall give one or two other examples of local authorities making use of the proposals under the Act. Hackney borough council suggested the introduction of wider powers for councils to reflect residents’ views and influence the shape of local high streets, where the concentration of particular kinds of businesses can mean that the needs of local people are not met and local communities cease to be sustainable. Planning is an issue that has surely crossed all our desks at various times, when local communities seem, almost to a man and woman, to be against a particular proposal or have some particular idea, yet for some reason in planning law those views are not taken into account. Inspectors’ decisions always seem to follow a line that the community cannot follow, and people wonder why their voice is the least heard voice in the entire process.
As a final example, the Bristol city council panel proposed amendments to the Local Government and Housing Act 1989 to support the employment in local authorities of young people and people with learning difficulties. Thus, a range of ideas has been presented under the original Act.
With all that in the pipeline, what need is there for the Bill? Successful though the previous Bill was in becoming an Act, there were one or two areas where, on reflection, more might have been done to fulfil the objectives behind the campaign and the Act. This Bill seeks to redress those omissions. Rather than wait for settled practice to surround the Act and an amendment to be made to it at a later stage, I, together with those who signed the early-day motion, which I remind the House is a majority of its Members, and campaigners outside believe it would be helpful to make changes now, before the procedures associated with the Act become set.
At this point I should mention a technical matter. The long title of the Bill needs a short amendment. The House will be aware that the purpose of the long title is to ensure that when the Bill is drawn up in more detail at a subsequent stage, all the various elements have been captured at the time of First Reading. What is unusual today is that I hope to take the Bill through all its stages in the Commons at one time. Accordingly, I wish to give notice that should the Bill go into Committee, I will move a short manuscript amendment which, I believe, is available on the Floor of the House. It proposes that in line 1 of the long title, the words from “2007” to the end of line 3 should be left out.
The amendment is designed with two aims—first, to remove the word “town”, as legislation does not make specific mention of town councils. They are considered to be akin to parish councils, for which statutory definitions exist. Secondly, the amendment would knock out the word “expenditure”, as there is no expenditure involved in the Bill. Both the Table Office and the Clerks have been informed of the proposed manuscript change.
The substance of this short Bill is twofold. The intention behind the original Act was not to engage the interest of the community for a one-off round of proposals, which would then be subjected to scrutiny and eventual decision. It was, rather, to involve the public in a process with their local authorities and government, but no specific provision was made in the original Bill for a continuing process, despite the intention. This Bill seeks to achieve that. It therefore requires the Secretary of State to specify the date on which an invitation to make new proposals by way of a second round should be issued. This notice must be given by 1 January 2011, as set out in clause 2(2).
We have got where we are today following negotiation with the Department for Communities and Local Government and with the Under-Secretary of State for Communities and Local Government, the hon. Member for Stevenage (Barbara Follett), who is here today. I thank her and her officials who assisted her in arriving at this point. Those of us promoting the Bill have not got everything that we sought at the outset, but we have come to what we think is a realistic estimation of what can be achieved, and we are grateful to the Minister and her officials for assisting us to get to this stage.
We believe we have a clear understanding that under clause 2, where we suggest in proposed new section 5B the power to make new regulations, this will allow for further proposals to be made in future and those regulations will be used to create the continuing process that we are looking for, having got one new starting date included in the Bill. I am particularly encouraged by the comments made by the Secretary of State in the House on 26 January:
“I see no reason why the Act will not form a permanent part of the local-national relationship in this country.”—[Official Report, 26 January 2010; Vol. 504, c. 667.]
Although the Bill contains only the date for the second round, we fully envisage that proposals will come forward for future rounds through the regulations and that they will make provision for that.
In support of this part of the Bill, the Local Government Association says in its briefing for the debate:
“The LGA Group supports the content of the proposed legislation. Councils supported the introduction of the original Sustainable Communities Act in 2007, recognising the unique opportunities it provided them to bid for additional tools to tackle issues specific to their locality. The LGA is specifically supportive of the proposals within this Bill to introduce a further round of submissions. This will remove some of the uncertainty which currently encompasses the future of the current round of proposals.”
Councillor David Shakespeare, the leader of the Conservative group on the LGA, said:
“It is vital that this process”—
he was referring to the process initiated by the original Act—
“is continued . . . This new Bill will mean that the ‘proposals to government process’ ushered in by the 2007 Act will continue: a date for this and a stated ongoing process are essential—otherwise enthusiasm will turn to yet more cynicism about local political involvement.
Action is needed, anything less will send another negative signal to voters and lead to further withdrawal from activity.”
Councillor Richard Kemp, the leader of the Local Government Association’s Liberal Democrat group said:
“It is crucial that the…process is ongoing, so that the involvement and engagement can continue. The Amendment Bill will ensure that the Act’s process is ongoing.”
Others who supported the original Act through Local Works have also made their support clear.
My hon. Friend has kindly quoted the Local Government Association’s support, and earlier he referred to the campaigners, but will he inform the House of the main campaigners and pass on our gratitude to them for their success with both the original Act and this Bill?
Indeed. I made a reference to the campaigners at the beginning of my speech, but I am happy to reiterate it. Local Works drew together a wide variety of bodies that campaigned for the legislation, and there was a substantial list, which I shall briefly repeat: the National Federation of Small Businesses, the Campaign to Protect Rural England, the National Federation of SubPostmasters, Age Concern, the Woodland Trust, the National Federation of Women’s Institutes and the Campaign for Real Ale—the one that we all cite, because anything that keeps CAMRA on our side is exceptionally good news. I also referred specifically to Local Works, and to Mr. Ron Bailey for his indefatigable work in promoting the legislation.
For my hon. Friend’s benefit, I must also say that, at each and every stage, everyone who is represented by a national organisation or title draws their strength from what has been going on right the way through at a grass-roots level. He will know the efforts that have been made to support his local hospitals, which were under threat from the processes that the Department of Health initiated. A strong local community came together in Worthing, looked at the availability of finance and thought, “Is this something we could get into in future so that, when the totality of spending in an area is considered, we might have some say even on these very big decisions?” The scope of the 2007 Act has yet to be determined, but my hon. Friend will have particular experience of working with and, indeed, leading local opinion in his area when confronting a national decision on which local people have said they deserve a voice. To an extent, this debate is a reflection of that happening throughout the country.
Another key proposal in my Bill is to refer more specifically in the process to parish and, by implication, town councils. The involvement of parish and town councils was very much in the minds of the promoters of the original Bill, but their role was not stated explicitly and became lost in the proceedings. The determination of such councils to be more explicitly involved has influenced our negotiations with the Minister and DCLG, and it is reflected in the regulations under proposed new section 5B of the 2007 Act.
I have some 50 parish councils in my constituency, together with the town councils of Arlesey, Stotfold, Biggleswade, Sandy and Potton. No Member who engages regularly with their local parish and town councils can doubt their effectiveness or their involvement in so many matters that affect the daily lives of the communities that we seek to represent. I meet my local parish and town councils regularly, either individually or more often as groups, to discuss subjects ranging from traffic, crime, planning and how to care for the most needy in their area, to unemployed youngsters.
I have parish councils that wish to take advantage of the new processes in order to enhance their status, and others that are content to remain as they are, and have been for many years. When I was approached about the Bill, I felt particularly strongly that their involvement with proposals that emerge from their communities should be more explicitly stated. On behalf of such councils I am pleased that that has been recognised by the proposed regulations in the Bill, and by the Minister’s comments during our discussions.
I shall again cite proceedings in the other place, quoting two comments that show the importance of parish councils not only to this House but elsewhere. On Second Reading in the other place, Lord Cameron of Dillington said:
“I was sorry to see that the earlier intention of giving more direct control to parish councils got squeezed out in the Bill’s passage through the other place, and that it is now the principal councils that have control. However, I am glad that they are specifically obliged to have regard to parish plans. One of the biggest bugbears of parish councils is that, having gone through the often rigorous process of devising a parish plan, they then find that no one in authority pays any attention to it. As your Lordships will be aware, parish councils have all too little control over the future of their community, either in terms of planning decisions or meaningful spending powers. Anything Parliament can do to help in that respect is most welcome.”—[Official Report, House of Lords, 12 July 2007; Vol. 693, c. 1573.]
I have a final quote from the other place. The late and much lamented Lord Bruce-Lockhart noted:
“I support the noble Lord, Lord Cameron. Devolving to parish councils is extremely important.”—[Official Report, House of Lords, 12 July 2007; Vol. 693, c. 1574.]
That endorsement from Sandy Bruce-Lockhart for parish councils is particularly important; hardly anyone in either House of Parliament was more respected in local government circles than Sandy Bruce-Lockhart, who understood the workings of local government and devoted his life to it in an extraordinary way. I appreciate this chance to pay a brief tribute to him. He spent most of his life at the other end of the local government spectrum; it is particularly important that he should have recognised the importance of parish councils.
Having set out the basic provisions of the Bill, I should help the House by indicating some of the stimulus behind bringing forward the Bill at this point. As I said, those promoting the legislation at grass-roots level saw the need to continue their efforts and have strongly supported the process of saying that more needs to be done. Quotes from some of the people whom Lambeth borough council involved with the original processes show that this matter is not just for aficionados and those in the know; it gets right down to those involved at the grass-roots level. Julian Kirby, a Lambeth resident, wrote to his council:
“I am pleased to see you’re already asking for ideas re the next round of the Sustainable Communities Act. Unfortunately my input is going to be negative, though I stress this is not aimed at the council.
As you may know, central government have not yet announced a date for a second round. Until they do is there any point in asking for involvement for residents? Why would residents want to get involved when we don’t even know a timetable or a process for submitting more ideas?
Whilst I was excited to see this Act become law I am now worried that it will just be a one off.”
Well, Mr. Kirby, it will not just be a one-off because our determination and the determination of your council, the House and the Minister is that that should not be the case. I have just given an example of how at absolute grass-roots level people know about the Act and want it to move on. The National Association of Local Councils, which supports parish and town councils, is particularly keen, on behalf of the hundreds of parish councils and their thousands of members, for the Bill to be taken forward.
In view of the late point of the parliamentary process at which the Bill is being introduced, I hope that it might be possible to complete all its stages here today. I fully appreciate that that is an unusual request, and it is one that I would not normally be part of. However, I want it to happen for three particular reasons.
First, as I have said, there is a need for the Bill, as set out by those campaigning for it and those who see the need for amendment now. Secondly, and particularly importantly, the principles of the original Bill were extensively argued in this place a very short time ago. The original Act started as a private Member’s Bill that went through all its stages, with a great deal of discussion, and with amendment and reflection. The amendments that I propose today do not involve any new principle that has not already been discussed extensively by the House.
Thirdly, before we reached Second Reading there was extensive consultation, with the support of Local Works and others, with all colleagues in the House. On more than one occasion, I have made available to colleagues the original draft of the Bill and the subsequent draft, with a clause-by-clause description inviting the comments of colleagues. I was prepared to deal with concerns as and when they came up. I have tried to be as transparent as possible in these relationships, to enable us to contemplate taking the Bill through all its stages today. I appreciate how unusual that would be and how unusual it would be for the House to allow it.
So there we are. This is a relatively simple two-clause Bill. It deals principally with the opportunity to keep the Act going, to assure the public and councils that it was not a one-off, to provide for regulations proposing its further continuation, to place the importance of parish and town councils more in the Act and more in the mind of the Government, and to allow the possibility of regulations on petitioning councils that do not wish to take part in the process, so that their local communities might also feel engaged and involved.
The Bill comes with the hope that we might be able to take it through all its stages today, because of the shortness of time left in the Session and given the explanations offered to the House three years ago when the Act was originally considered and the processes that we have undergone since then to make people aware of what it is about. It has the support of the majority of the House, as expressed through the early-day motion, and of those outside, so I hope that it will go forward.
I will not detain the House long, because there is broad consensual support for the excellent work of the hon. Member for North-East Bedfordshire (Alistair Burt) and others. That work has involved not just colleagues in the House such as my hon. Friend the Member for Falmouth and Camborne (Julia Goldsworthy) but, as the hon. Gentleman demonstrated, a huge number of outside bodies from CAMRA down that support the amendment to the 2007 Act.
The Act has already led 100 councils to put forward more than 300 issues, which demonstrates how important it is for local involvement. The Bill would encourage the development of the Act in an important way, by creating the rolling, ongoing programme that my hon. Friend the Member for North-East Bedfordshire described, by involving parish and town councils—that would be particularly important in rural areas such as Herefordshire—and, as he said, by allowing citizens to petition their local authorities to ensure that they take part. I am sure that all parties support those sensible suggestions.
I hope that we will be able to take all stages of the Bill today. The most important thing about the Bill is that it would increase the engagement of local people in the democratic process, and surely the House should support wholeheartedly anything that can do that. I add my support and that of my colleagues.
It is always a pleasure to follow the hon. Member for Hereford (Mr. Keetch), who was having trouble projecting his voice. None of us was expecting to be called to share our thoughts with the House so soon, but I will make quick progress.
I begin by paying warm tribute to my hon. Friend the Member for North-East Bedfordshire (Alistair Burt) for having been successful in obtaining a high placing in the private Members’ Bills ballot and for his generous, sincere and erudite speech. He outlined the progress of the 2007 Act through the House, and he took a cross-party, consensual approach to it and to his Bill. It is appropriate for me also to pay tribute to all the Members who were responsible for the original Act, including the hon. Member for Falmouth and Camborne (Julia Goldsworthy), with whom I cross swords from time to time, the hon. Member for Stroud (Mr. Drew), who sometimes ploughs a lonely furrow on the Labour Benches, and of course my hon. Friend the Member for Ruislip-Northwood (Mr. Hurd), whose Bill became the 2007 Act.
As has been said, the Bill is straightforward. It would require the Secretary of State to invite local authorities to submit a further round of proposals to be considered under the 2007 Act, and publish regulations regarding the future process, and the extension of the qualifying organisations that make proposals under the Act beyond local authorities.
It would be apposite briefly to look at the main parts of, and the process and rationale behind, the 2007 Act, which was made up of 10 sections and a schedule. The Act added the word “sustainable” to the term “community strategy” and put into legislation the duty for local authorities to consider the long-term sustainability of the communities they serve, which was already central to their thinking, and how local services and plans contribute to that sustainability. Specifically, it created a duty for the Government to produce a local spending report that details for each local authority area the amount of public money spent by all relevant central, regional and local agencies on services and projects in a given period.
The idea, as initially proposed in the Conservative party policy document, “The Permissive State”, was that local authorities would be allowed to make recommendations on the allocation of any relevant spending in their areas by drawing up a local spending plan, but the Act is more circumspect, albeit a similar outcome could be achieved through section 3, which invites
“local authorities to make proposals which they consider would contribute to promoting the sustainability of local communities”
and states that
“a proposal may include a request for a transfer of functions from one person to another”
following consultation with partners. The Act also states that the local authority must
“establish or recognise a panel of representatives of local persons”
to be consulted on a proposal.
It would be remiss of me not to mention the wider context of the Act. My party, if elected to government, is committed to legislating for a power of general competence, which was promised by Labour before and after the 1997 election. That power synthesises with the ethos and philosophy of the Act and the Bill.
There is consensus on the Government’s piloting of, and strong support for, Total Place—it is supported not least by the Treasury. Total Place ties neatly into local spending reports and the philosophy behind the Bill and the Act. It is important to see the Bill in that context—it is not necessarily a partisan issue.
I concur with my hon. Friend the Member for North-East Bedfordshire on the public meetings that have been held. My meeting, which was extremely well attended, was held at the Great Northern Hotel in Peterborough in April last year. There was lots of interesting debate and argument—and good will—and a willingness and strength of feeling on the part of the community to facilitate action by my local authority, Peterborough city council, and to get the maximum number of people involved.
My note of caution is that I am not entirely convinced that every Government Department is as committed as it should be both to the Act and to Total Place. I shall name a guilty party: the Department for Work and Pensions, which spends a significant amount of public money at local level, is not necessarily fully on message with that agenda.
With that caveat, I shall make some progress. As my hon. Friend said, local policy proposals have been extremely successful. There are a few concerns, but the Local Government Association is generally considered to have been successful in its important role as a national selector, assessing and shortlisting councils’ proposals. That function has been successfully carried out and has drawn support from the four major party groups in the LGA. We know that the LGA reported on 5 August 2009 that nearly 300 proposals had been submitted by some 90 different councils. My hon. Friend mentioned the comments by Councillor Keith Mitchell, chairman of the selector panel, which were very positive.
According to the LGA, the next phase of implementing the Sustainable Communities Act 2007 will start in earnest in the next few months. The Government are required to reach agreement with the LGA as selector on which proposals to implement. The DCLG has not yet formally announced the format and timetable for this process, and a parliamentary answer on 4 February 2010 revealed:
“The Government are consulting the Local Government Association in its role as selector under the Sustainable Communities Act 2007 and are seeking to reach agreement on which of the 199 short-listed proposals should be implemented. Many of the proposals are complex and raise significant practical issues but the Government are anxious to make progress as quickly as possible on those proposals that offer practical benefits and new ways of meeting local needs.”— [Official Report, 4 February 2010; Vol. 505, c. 531W.]
The LGA is lobbying for two key commitments. The first is for the process to be completed in a timely and effective manner, and the LGA would like the process to be completed by the Easter recess. The second is that the process should provide genuine opportunity for dialogue and negotiation. We would like a process that involves face-to-face dialogue at both senior official and member/ministerial level. It might be appropriate for the Minister to address that particular point when she responds to the debate.
We have heard of the excellent community-based initiatives and proposals put forward by a wide range of councils, and I shall not detain the House by rehearsing all of them again. They include authorities as varied as South Hams district, Hackney borough council, the excellent Conservative council in Hammersmith and Fulham, Southampton city council, Herefordshire county council and Bristol city council, which have all put forward eye-catching, forward-looking and progressive proposals.
We have also heard about the organisations that have been responsible for driving forward the political will through the sometimes complex layers and checks and balances of our legislative and political system to get this on the statute book and get these proposals taken seriously. The proposals will have a demonstrable impact on the quality of life for many thousands, if not millions, of our constituents, so I pay tribute to those organisations.
My hon. Friend the Member for North-East Bedfordshire mentioned the early-day motion tabled by the hon. Member for Stroud in November last year, and it is worth mentioning that very few early-day motions attract so much support. All parties share a commitment to the issue, because it affects not only rural and suburban areas, but urban areas such as my constituency. The advantage of the legislation is that it is flexible and can be adapted locally. It is also dependent on the policies, strategies and behaviour of local councillors, who are directly responsible. So not only is there top-down pressure from the legislation and the responsibilities on local authorities, but community-minded people will put gentle pressure on their elected councillors to facilitate this progressive change. As we know, 346 hon. Members have signed the early-day motion.
The LGA is concerned about the proposed measures allowing the Secretary of State to publish regulations on the procedure for making proposals. Such regulations are likely to set out increased prescription around consultation, engagement with parish councils, and petitions, as well as cause confusion over the form, content and timing of proposals. According to the LGA, the resource implications for local authorities of participating under the Sustainable Communities Act should not be underestimated.
Many authorities have set up new consultation panels, run events and commissioned work to ensure that communities were genuinely involved in the process and to give hard-to-reach groups an opportunity to have their say. In addition, significant officer time is used to research and develop proposals to the level of detail required for them to be considered viable. The LGA argues that increased prescription would, first, threaten to derail the innovative practice that has emerged under round one around community engagement and consultation and, secondly, risks tying the process up in red tape. One of the strengths of the current process is the implicit acknowledgment that local councils are best placed to determine how best to engage with local communities and determine the content and form of proposals.
To summarise: let us not throw the baby out with the bathwater and be too prescriptive in establishing a national template on what is best for everyone in terms of consultation and engagement with local community groups, and let us trust local authorities to be responsive to local community groups in respect of that consultation. We must work on the basis that they all want to achieve the best end result and objective. Of course, in the less than benign financial situation in local government at the moment, anything that puts cost pressures on local authorities from a top-down Whitehall perspective cannot be a good thing. I am sure that the Minister would not argue with that.
Finally, I shall make some brief comments about my own party. We will be supporting the provisions in the Bill, and again I welcome the comments of other hon. Members. I know that my hon. Friend the Member for Braintree (Mr. Newmark) will bring to bear his expertise on this issue, if he is fortunate enough to catch your eye in the next few minutes, Madam Deputy Speaker. In our local green paper, “Control Shift”, published in February last year, we wrote:
“The main purpose of the Sustainable Communities Act is to enable local governments to identify money spent in their area by central government agencies and then (after consultation with local people) to recommend ways in which it could be spent better by redirecting it to local priorities. The next Conservative government will work not just within the letter of this new law, but also within its spirit”.
It also stated that
“we will operate the system set up by the Act to ensure that, when local people have a particular priority, central government money is directed towards fulfilling that priority wherever possible.”
We also support the extension of the Sustainable Communities Act to parish councils.
The Bill is commendably short, but it is extremely important and builds on the solid and firm foundations that we established in the 2007 Act. My hon. Friend the Member for North-East Bedfordshire touched on the important—almost existential—point that to rebuild the faith and trust of people in this country in their elected representatives, they must believe that their views, thoughts and priorities can be translated into real, progressive and forward-looking change. This Bill plays an important part in that process, and on that basis, Her Majesty’s Opposition are delighted to give it their strong support.
In the dying days of this Parliament, we are all keen to leave the country in a better condition than when we first entered the House, and many hon. Members have hopes of pushing through Bills that will leave a lasting legislative legacy. However, the Sustainable Communities Act 2007 (Amendment) Bill, which we are debating today, really does offer the chance to embed historic change in the system of decision making in this country.
The 2007 Act, which today’s Bill seeks to amend, was an important benchmark towards building a bottom-up democracy and a clear repudiation of the centralised Whitehall diktat that we have endured for so long. Now, with the benefit of hindsight, we have the opportunity to add some important finesse to the 2007 Act, which was truly empowering. Indeed, it was nothing short of revolutionary, when we think of what it means for people up and down the country. Participation, not consultation, was its watchword, with communities able to draw up local sustainability strategies that suit the residents, and both to halt community decline and embed local sustainability for the future. That is government by the people, for the people.
The Act was passed because of cross-party consensus. The Bill benefits from similar backing. Indeed, early-day motion 143, which it might help to quote at some length, shows just how strong that sentiment is, and also shows the hard work done by Members of all parties to get us to where we are today. To reiterate what my hon. Friend the Member for North-East Bedfordshire (Alistair Burt) said, it is worth stressing the key points of that motion, which says:
“That this House notes the success of the Sustainable Communities Act 2007 as the first step towards building a bottom up democracy”.
That emphasis on a bottom-up democracy is key. The motion
“further notes the enthusiasm shown by local authorities across England in deciding to use the Act, with 100 councils having already used that process and a further 50 councils having stated their intention to do so at the next available opportunity”—
I gave my hon. Friend an example of that from Braintree council—
“showing that nearly half of all councils wish to use the Act’s process in the future; notes also the genuine cross-party support that the original Act commanded; and so supports the provisions of the Sustainable Communities Act Amendment Bill introduced in Session 2008-09 which would extend the 2007 Act by ensuring that the process of involvement established by the Act becomes an on-going process rather than a one-off event,”—
this is key—
“by involving parish and town councils and their county associations in the process and by empowering citizens to petition their councils to use the Act if they are not already doing so.”
Early-day motion 143 has been signed by 346 hon. Members, and a pretty diverse mix they are too. At the last count, of the three main parties we had 62 Liberal Democrat signatories, 134 Labour signatories and, just edging into the lead, 138 Conservatives.
The Bill not only has that wide-ranging support in the House; it also benefits from a groundswell of public support. A whole spectrum of groups, from the Countryside Alliance and the Federation of Small Businesses to Age Concern and the Local Government Association, can all see the importance of the Bill that my hon. Friend is taking through its Second Reading today. If we cannot get a Bill through with that much support, from all parts of the House and from outside it, surely that prompts the question: what private Member’s Bill can we get through? If the Government fail to support the Bill today, it will send a negative signal to voters: that political involvement locally is something that this Government just shy away from.
Before I look at the Bill—and, naturally, the Act that it seeks to amend—I would like briefly to outline why I am standing in support of it. I am a firm believer in localism. The residents of parish and town council areas in my constituency all want to take responsibility for improving their own lives. I have seen that they are more than capable of identifying problems and, more importantly, of finding innovative solutions to them. Indeed, I often think that they are far more capable than many of us here in the House and in Whitehall. But there is no reason why they should have to fight for this on their own. Legislation should not only support their attempts to improve their communities and make them sustainable long into the future; it should also enable them to do that.
I speak with the support of my constituents, and my parish and town councils, when I say that decisions should always be taken as close as possible to the community that they affect. When it comes to shaping the future of the communities that we live in and depend on, we must accept that local people know best.
Parish plans, through which people become involved in shaping the future of their community, are a wonderful idea, but does my hon. Friend agree that they seem to hit the buffers because there is no process available to take their proposals further? The Bill provides an opportunity for similar plans. I wonder whether my hon. Friend has shared that experience of parish plans, where individuals have been engaged in a plan, only to end up asking, “What now?”
My hon. Friend makes an excellent point. I have been to a number of villages in the north of the constituency that I hope to represent, and some of them have held meetings to discuss this matter. However, there needs to be a cultural change as well as a legislative one. We need to change the culture among district councils and among those officiating and planning in those areas, so that they can accept a little more flexibility and reflect the needs and desires of local people much more than they have done historically.
We must give people greater power over the policy and spending decisions that will forge the future of the area they live in for years to come. The Bill embodies that aim in letter, and I hope that the many contributions that we will hear today will embody it in spirit as well.
It is impossible to look at the intentions and substance of the Bill without first scrutinising the Act that it seeks to amend—the Sustainable Communities Act 2007. Like today’s Bill, the Act was introduced by a Conservative Member, my hon. Friend the Member for Ruislip-Northwood (Mr. Hurd), as a private Member’s Bill. After several previous attempts to take a sustainable communities Bill through the House, that one was successfully steered through Parliament in 2007, with cross-party support. As the Secretary of State said only last month, it is his intention for the Act to stand part of the permanent architecture of local government.
I hope that those are all positive omens of things to come, as my hon. Friend the Member for North-East Bedfordshire takes his Bill through its Second Reading today. I was a strong supporter of the previous Bill when it passed into legislation in 2007, and I welcome the Act’s initial success. All of us present in the Chamber know how important it is in fighting the corner of local decision making. It might be a comparatively short Act, but what it lacks in length, it more than makes up for in impact.
The existence of the Sustainable Communities Act owes a considerable debt to the impassioned advocacy of Local Works, a coalition of about 90 national organisations fighting for the cause of localism. The sheer size and voracity of this coalition is a real testament to the strength of feeling about sustainable communities, and there is a clear appetite for further progress. A real catalyst for this campaign was the work done by the New Economics Foundation to highlight the danger of a ghost-town Britain if the decline in corner shops, grocers, banks, post offices and pubs—to name just a few—were to continue unabated. This would soon snowball into neighbourhoods and communities no longer being able easily to access what the New Economics Foundation aptly describes as
“such essential elements of both the economy and the social fabric of the country”—
and, I might add, of our local communities.
Tackling this worry head on, the 2007 Act sought to address the previous lack of a coherent Government strategy to arrest both the community decline that so many of us have seen in our constituencies and the lack of transparency and civic participation seen in the way resources are allocated to, and within, a community. Local and central government must attach greater priority to the long-term development and protection of communities—something that my constituents are definitely pleased about. The Act has two central elements: action plans for achieving and maintaining communities, and local spending reports on public expenditure in local authority areas. What is so revolutionary about these action plans is the new chain of information established, flowing right through from the individual, through regional structures and directly to the Secretary of State in Government. This way, local residents have a direct say in proposing changes at a national level, which will help deliver sustainable projects locally.
Under the purposely broad remit of grouping these proposals under the four headings of the environment, the local economy, social inclusion and democratic involvement, the scope of the Act is dramatically expanded, along with the power of local decision making. Theoretically, no matter how small the voice propounding it, if a proposed scheme will improve a community’s sustainability in any of those four areas, it will be given a fair hearing by the Secretary of State and the appointed selector, the Local Government Association. Whether implemented or rejected, each proposal—and those who submit it—will be given feedback, ensuring that local people—those best able to diagnose specific localised problems—can provide tailor-made, practical and often highly innovative proposals to deal with specific local conditions.
Does my hon. Friend agree that our party’s commitment to repatriate regeneration moneys, regional spatial strategy and housing and planning powers to the local level, particularly to local authorities, is entirely complementary to the philosophy behind the Sustainable Communities Act 2007 and this amending Bill?
Not only is it complementary, it is truly within the spirit of what people in our constituencies say they want when we talk to them—local people know what is best for their own communities and they are the best drivers of what is best for the communities in which they live from day to day.
Earlier, my hon. Friend gave the example of Essex county council intervening to help post offices. That was done completely outwith the umbrella of this particular legislation, demonstrating that local authorities can be very effective operating within the currently available powers. Does he accept that that was much more timely than what we have before us now—a whole lot of proposals having gone forward, none of which have yet been determined by the Government, notwithstanding the fact that it is getting on for two and a half years since the legislation that my hon. Friend supports was first enacted?
I sense my hon. Friend’s concerns from noises off, suggesting that he has strong feelings about this issue. I am sure that, like me, he will be given time to elaborate his point admirably later. I hope that the amending Bill will not just facilitate but accelerate the process of taking the action to alleviate my hon. Friend’s concerns, so that things move on a little faster than they have in the past. I share his frustration that progress seems to have been made at a fairly slow pace—perhaps much slower than was the original intent in the 2007 Act.
Does my hon. Friend agree that one consequence of the implementation of clause 1 would be to give the Government an excuse for yet further delay in reaching decisions on the submissions that have already been made to them, and which were submitted by 31 July last year?
I understand the point made by my hon. Friend the Member for Christchurch (Mr. Chope), but I hope this provision will allow the Government and Secretary of State to have greater flexibility in handling existing proposals, which should help them to decide on some of them more quickly. My hon. Friend makes a fair point, as some proposals have been on the books for a long time, and the Government have been pressed on that on a number of occasions, but I hope giving this flexibility might address the problem.
I hope that when the Minister comes to deliver her winding-up speech, she will address the concerns that my hon. Friend the Member for Christchurch (Mr. Chope) will no doubt raise, perhaps not at too great a length, but certainly with a high degree of veracity.
The 2007 Act introduces some much-needed transparency and accountability into the process. The Secretary of State is compelled to produce local spending reports that provide information on public expenditure within a locality, the effect of which is to make visible those areas of public spending that are not already in the public domain and to give the public an extra opportunity to have more say on expenditure in their area. People will be able to see how much the Government are spending, and what they are spending it on. If they do not like what they see, they can submit new proposals.
My hon. Friend the Member for Ruislip-Northwood summed up the legislation well when he said:
“The Bill is an honest attempt to help communities address the social problems that arise from community decline and the loss of local services.”—[Official Report, 15 June 2007; Vol. 461, c. 1026.]
The Act was also greeted with much acclaim by people outside Parliament. Local organisations have heralded it as
“a remarkable piece of legislation. For the first time we have an Act of Parliament that discards the usual top-down decision making and also the nonsense that ‘consultation’ by the Government is somehow empowering, when the opposite is the case as most people know.”
The importance of the Act should not be underestimated. By empowering citizens themselves to make choices on the issues that affect their everyday lives, it begins to address the democratic deficit that, under Labour, has been growing ever wider. As we begin to stutter out of the worst recession since the second world war, and with the public finances in such a dire state, the Act also offers enormous potential in terms of economic value added through savings and efficiencies.
The sheer number of proposals submitted under the Act provides an easily quantifiable record of success. In the inaugural round of submissions, 301 proposals were received from 100 councils shortly before last Christmas, and about two thirds of them were shortlisted for the Secretary of State. Indeed, with this unexpectedly large number of proposals ratcheting up his work load, the Secretary of State is, perhaps, the only victim of the Act’s success. That should be no excuse for delays, however. Two months have now passed since the Local Government Association submitted this shortlist to the Secretary of State, and it would be instructive if he were to advise us on what discussions he has had with his Cabinet colleagues on taking some of the proposals forward.
I am a firm believer in local democracy. Far too many decisions that affect local communities are taken by officials in Whitehall, ignoring the nuances and diversity that shape our country and communities.
Not only does this de facto disfranchise residents; too often, it imposes identikit policies that are entirely unsuitable for whichever context they are haphazardly applied to.
I hope that I am not pre-empting the Minister, but does my hon. Friend agree that the Government could produce an action plan next week? They are statutorily required under section 4 of the existing legislation to produce such a plan. It could be produced within a week or two and should be produced before the Easter recess.
And certainly before the general election—whenever it is called.
The diktat of top-down, one-size-fits-all solutions is to the detriment of local communities, local government and politics generally. When it was introduced in 2007, the Sustainable Communities Act was an important step towards reversing that trend, and it is in this spirit that I support today’s Bill. This is about re-engaging people with politics and democracy. Local citizens and communities are the experts on their own localities and issues: they are the ones who live with them each and every day, as I pointed out to my hon. Friend the Member for Peterborough (Mr. Jackson). It is only natural to see that, from this unique vantage point, it is precisely local residents who are often best placed to produce the best solutions to their problems. Local Works is right when it says that
“citizens and councils are the experts on their own problems and the solutions to them”.
Quite simply, they know what works and what does not, but until the 2007 Act was enacted, the Government seemed blind to that truism.
I have often heard constituents voicing their concern that people feel powerless—powerless to stand up and make a change for the better, powerless to stop their communities losing access to vital services and facilities. Now, for the first time ever, we have a law, and thus a legal mechanism, whereby Government cannot simply say no to any or all requests made of them for different services or changed policies. Uniquely, the Act does not consult; it requests participation. Rather than being limited to raging when a far-off bureaucrat decides to close a well-loved community asset, local people can fight it. The potential for that to bring lasting change to the power structure within our country should not be ignored.
The Act is important not only for what is embodied within its letter, but for the spirit it engineers. A paper by Anthony Brand, published by New Local Government Network in October 2008, suggests:
“If used well, this Act could be a driving force behind the next stage of the devolutionary process. It provides local authorities with an opportunity to take a more proactive leadership role in formulating policy and making stronger arguments for the devolutions of powers, responsibilities and funding to the local level.”
Of course, I recognise that communal decision making does not always produce the neat and tidy results that can make life seem easier in the short term. In fact, suggestions rarely receive unanimous agreement in the first instance. Inevitably, there will be disagreements at local level on what proposals to make and the form they should take. Councils will no doubt have their own views, as will the Secretary of State and the Local Government Association. This may not be perfect, but democracy, as we all know, is not perfect. By its very nature it is a messy business, but this is the best, and only, choice. Consensual and co-operative politics and decision making far outstrip adversariality and diktats in what it can achieve for our country and our local communities.
Local democracy can be a self-perpetuating phenomenon. The very fabric that keeps our society together, the communal meetings and chats in the street, are all encouraged under the Sustainable Communities Act. Bringing people together to discuss the needs of their area not only gets people talking and communicating in the here and now, but builds an ethic of social responsibility.
As with any legislation during these difficult economic times, the financial implications must always be thought through. That applies to this Bill, but a look at the economic arguments for the 2007 Act, which we seek to amend today, shows an economic imperative. Not only have we been grappling with a long and deep recession, and a recovery that cannot be confidently described as anything beyond minimal at the moment, but the Government have sent our public finances rocketing to a record and unsustainable level. They should be jumping at the chance to make savings and efficiencies, and this legislation provides the opportunity to do just that.
Crucially, the 2007 Act matches local interest with investment. Too often I have seen local communities that are passionate about the cause that really affects them finding that few funds are available to help them achieve their objective, be it large or small. Let us contrast that with a project down the road whose rubber stamp from Whitehall has brought a flood of investment but which is of little use or interest to residents. The 2007 Act could change the whole dynamic. As I have mentioned, local residents know what makes communities tick, and by harnessing their knowledge not only can we increase their wealth and well-being, but we can do so without spending more money—there is even the potential to save money.
The 2007 Act offers at least three opportunities. The first is that councils may use it to request additional money. With the advantage of local knowledge, that can produce net savings. For example, using new money to keep a local public service open saves extra CO2 emissions, because people do not have to drive further to the nearest public service. In addition, such an approach provides an intrinsic good to those living close by. Thus, the Government need not spend more money elsewhere in the economy to reduce those emissions.
The second opportunity is that councils can request a transfer of public money from another Government funding scheme that they think is not proving effective for the community. An obvious candidate here would be to take control of some of the money of any one of the faceless quangos. The money could be put to much better use through promoting specific local needs. Given that recent Local Government Association research shows that these unaccountable, centralised quangos spend a staggering £43 billion of public money a year, surely it is time for local people to be given much more of a say in how their public money is spent in their local areas.
My hon. Friend will know that there has been much debate about the content and form of local spending reports. The Government have been criticised for being over-cautious in how they have published and used the information in the reports. Although this is not provided for in my Bill, the Government have spoken of a clear intention to improve them. Does he agree that honouring that requires greater transparency in the reports? They should be web-based, because the greater the information available to the community, the easier it is for people to identify what funds might be transferred if discretion is available, so that they can be put to community use that has greater local priority.
My hon. Friend makes an excellent point, particularly in these times when transparency has been a big issue for the public. I hope for a change of Government and I hope that transparency, not just locally and in Parliament, but in our public finances, will be a hallmark of a new Government,
The third and final opportunity is that councils can request new powers to make their own money, for example, by charging a non-domestic local rate to the large car parks of out-of-town superstores. The revenue could then be used to promote local shops and to revitalise town centres. Given these myriad opportunities for efficiencies, savings and profits, the economic benefits of the Sustainable Communities Act 2007 could snowball. Clearly, we are at the early stages, and the proposals are still with the Secretary of State, but I look forward with interest to seeing how the economic argument develops over the coming years.
Legislation means little unless we take a closer look at those whom it affects—in this case, the local people and communities that stand to benefit from the 2007 Act. The Act allows proposals that pursue sustainability through the environment, local economies, social inclusion or democratic involvement. In my constituency, there is plenty of scope in those areas and I can already see the outline of work emerging.
First, I know that many of the younger generation, in particular, feel passionately about improving the sustainability of the community through environmental means. I have spoken with many children and students who outline their creative solutions to “green” Braintree. Many of those solutions would make formidable proposals to the Secretary of State, and I think that this offers a bright hope for the future. In some of the more rural parts of my constituency, I have heard from individuals who are looking to set up their own highly localised renewable energy sources. That is a great idea, both for those involved and for the greater environmental good.
The promotion of local economies is perhaps the strand of the Act that holds the most resonance at the moment. I have seen first hand in my constituency the devastating consequences for those who are personally involved, and for the wider community, of the loss of local facilities and services on which we all depend. Well-loved shops have shut or relocated elsewhere. They include the local Woolworths branch and the Marks and Spencer in Braintree town centre, along with many of the locally owned and more specialised stores in our villages. Rural post offices have fought an especially long battle against closure, and I recently had news that the local HMRC office in Witham is closing. Looking ahead, I heard only a few weeks ago of the possible relocation of an employer of many of my constituents from Stansted.
Under Labour, we now have about 5,400 fewer post offices across England, 200 fewer libraries and 3,500 fewer pubs. However, in Braintree we are thankfully not an embodiment of ghost-town Britain. For example, we are fortunate enough to have a very active county council which has supported a long campaign to restore the rural post offices savagely cut by this Government, which I mentioned earlier in the debate.
I know that many other hon. Members are seeing local shops and businesses, along with pubs and post offices, dropping like flies. The steady creep of closures seems particularly insidious and, like all hon. Members, I am worried that the effects of the recession will continue to spread across our constituencies—and that in mine, they will spread across Braintree, Witham and our rural villages.
Does my hon. Friend share my view that the undertaking our party has made to keep the needs test for out-of-town shopping centres will protect small niche retailers in urban areas and in constituencies such as his from the pernicious effects of larger retailers who will put them out of business without the support of local people, local communities and elected representatives?
My hon. Friend makes an excellent point, but people shop at these big stores because they like to go to them. We need to bridge those desires and the evidence that people like to shop in big shops. I have that problem locally—we have Freeport shopping village, which is very popular with people who come from out of town, in particular, and has a devastating effect on Braintree town centre. I do not think that we have done enough work collectively to try to draw those two communities together. We could perhaps draw people who are shopping at Freeport into the town centre, but that means revitalising the town centre. I know that Braintree business council and the district council are working together to try to achieve that, and I am working with them on it.
The chairman of the selector panel has certainly seen evidence of such proposals in those already submitted. He says:
“Unsurprisingly, the recession is a strong theme as councils look to continue their efforts to offer support to local businesses and vital assistance to local people.”
So of course I can recognise the importance of having legislation in place swiftly to stem the tide of closures of local amenities, were it to grow.
When much loved amenities and assets are forced to close their doors, that can devastate the local community. Inevitably, that is often felt more keenly in the rural areas of my constituency. In towns, too, there is little more soul-destroying than seeing a once bustling street full of boarded-up buildings and closing down sales. Once a community is in a cycle of decline, it becomes so much harder to pull it out and restore it to a sustainable trajectory.
Community decline takes no prisoners among those whom it affects—whether the elderly and infirm, who rely on easy access to the shops, or the young children with nowhere to play and an environment where aspirations are dwindling by the day. But the story is not only one of gloom. I have been enthused to see the enterprising spirit and get-up-and-go of so many of my constituents. Those facing unemployment look to transfer their skills or work voluntarily, and the whole community rallies round as much as possible. In Braintree, we recognise that the best way to beat the recession and emerge the stronger for it is to work together. That strand of the Sustainable Communities Act gives us a much more structured and supported way in which to do that.
Communities can only ever be sustainable if they include all those whom they encompass. Social inclusion should stand at the heart of a community. I know that many groups in my constituency have some excellent thoughts on how to integrate all citizens, regardless of race, colour or creed. Let us take Braintree pensioners action group, for example. I regularly meet those pensioners and I am amazed by the direct insight that they give me into what life is like for the elderly in the community. Whether it is problems with bus services, dental care or fuel poverty, they have their fingers on the pulse of the type of action that we need to take for our elderly citizens. I congratulate them on all their hard work and on ensuring that they communicate with me as often as possible.
Another type of proposal that we could do with locally relates to the public services on which we all depend. They need to be inclusive for the whole community. Bus services are an example. All too often, the timetables and routes in my constituency are cut or altered to suit the needs of the bus company, rather than of the residents who rely on them. That can particularly exclude those in rural areas, creating both physical and psychological exclusion from the wider community. As Witham town council reminded me, it and local residents can act as the best eyes and ears for bodies such as the police or district or county councils. They can quickly identify where problems of social exclusion are emerging.
Finally, the promotion of a sustainable community goes beyond the bricks and mortar of buildings and shops, important though they are. It touches the very sense of community and social fabric that binds neighbourhoods together. Through increasing the ways in which people in Braintree can participate in local decision making and rejuvenate civic democracy, the Sustainable Communities Act offers a real chance of building a better society for the future. That has wholehearted support among many of my constituents and parish and town councils, such as Sible Hedingham parish council.
Of course I could go on. I have given just a small picture of the scope of the 2007 Act to arrest community decline and provide a channel through which my constituents can not only be heard, but have their proposals enacted.
We all agree that the 2007 Act was a huge step in the right direction, invigorating local decision making and democracy, offering economic benefits and securing accountability and transparency through the system. But why should we halt progress there? Rarely, if ever, are we lucky enough to encounter perfection at the first attempt. Robust and enduring legislation with a truly transformative capacity to revolutionise decision making and communities is more likely to involve a gradual process. Delicately crafted amendments, such as the Bill, enable us to correct any flaws that may have crept into the original Act, and they hold the Government to account for any failure to see through the original spirit of such Acts.
Today’s amending Bill, like the original 2007 Act, has the support of Local Works, which says that
“an ongoing Sustainable Communities Act process is absolutely crucial.”
The Bill is a natural evolution of the original Act, providing value-added measures and fleshing out more details, and if we want to enhance our existing momentum we must pass it soon. CAMRA’s chief executive says that
“there is an urgent need for the Act’s process to continue.”
Councillor David Shakespeare, leader of the LGA’s Conservative group, points out why, saying:
“Action is needed, anything less will send another negative signal to voters and lead to withdrawal from activity.”
I shall now consider some of the most pertinent issues that the Bill raises. The Bill sustains the 2007 Act for a further round of submissions. It removes the uncertainty pervading the future of the current round of proposals, and it makes sense. Indeed, given that the public’s appetite is strong, and that participation under the Act has already exceeded 40 per cent. in some areas, it would be ridiculous to halt the process just as it gathered momentum. Given also that the LGA says that
“submissions received were impressive and are reflective of the huge appetite for change and innovation across councils working closely with their communities”,
many proposals have every chance of being accepted by the Secretary of State.
There may be further merit in laying out explicitly the longer-term future of the Act. However, that may be better pursued in further amending Bills once we have seen more evidence of the success of the projects proposed in the first round. Today’s Bill shows that the 2007 Act was not a one-hit wonder, and this legislative commitment should maintain civic activity and quash any emerging cynicism that the Act is a gimmick with little intention of allowing through any truly local proposals.
The chief executive of the National Association of Local Councils has noted:
“The Act has created an excitement: our members want more—but unless we name a date a ‘second round’ of suggestions then we fear that the usual cynicism will take over.”
If we are to produce bottom-up legislation, we must do so with a conviction that shows that we truly want it. This Bill proves that point.
Does my hon. Friend agree that it is rare to see “councils” and “enthusiasm” in the same sentence? This is a fantastic opportunity to see the resurgence of some enthusiasm, and to see local councils enthused by the measures before us. It is an opportunity that must not be missed.
Notwithstanding the continual enthusiasm of Braintree district council, I accept my hon. Friend’s point that we need to build on the enthusiasm that the original Act kicked off. No doubt people will be enthused even more by this amending Bill.
Today’s Bill enables the Secretary of State to publish regulations on the proposals embedded in the 2007 Act. That includes such prescriptive measures as engagement with parish and town councils, petitions and the form, content and timing of proposals. The former is particularly pertinent to my constituency of Braintree, which has a number of excellent and active parish and town councils.
Following the initial hype and fervour around the 2007 Act, a few town and parish councils have voiced disillusionment. Although the LGA has found that in a number of cases the parish or town council is acting as the driving force behind the proposal, some, after being heavily involved in the long campaign to bring the initial Act to fruition, are feeling neglected and omitted from the process of decision making and the provisions of the Act.
Given the excellent organisational structures of our parish and town councils and their ability to canvass and reflect local opinion, I agree with the principle, enshrined in today’s Bill, that they could be given a more explicit and mandatory role in the chain of local decision making. The citizens’ panels that the Act requires, to reach out to and involve electors in the ideas of action to put to the Secretary of State, provide an obvious means through which to insert the representation of parish and town councils. As Great Bardfield and Finchingfield parish councils point out, powers that have already been devolved to parish councils have proved to be cost-effective and to work well.
However, I recognise the LGA’s concern that that would risk establishing a parallel Sustainable Communities Act-lite process whereby the consultation requirements are simply that only the members of parish or town councils are heard. That, of course, would be inimical to the spirit of local democracy. A more durable solution may be to ensure the representation of such councils on the citizens’ panels while still providing scope for the voices of those not involved with such councils.
Given the current levels of disillusionment—
Let me finish my paragraph, and then I shall give way.
Given the current levels of disillusionment and disengagement from politics, we should do all we can to get everyone involved in democracy; my hon. Friend the Member for Harwich (Mr. Carswell) has been an extraordinary advocate of that. Exclusion is simply not an option if we want to give people a real sense of ownership of the whole process.
I do not believe that my hon. Friend said that; he encouraged me to talk about the importance of localism, which he knows that I have supported as long as I have known him.
I am pleased that the messages I am getting in my constituency are that parish and town councils want to be involved. Why not make use of them and hear their ideas? The 2007 Act took us from a process of Whitehall consultation to local participation. Today’s Bill could go a step further and make the Act a truly enabling one. A good example of the need for parish and town councils to have a firm footing in creating sustainable communities relates to planning. I know that both Cressing and Black Notley parish councils in my constituency find that a particular frustration. As the representatives of the local community, those councils seek to promote the common good. They are often a good judge of which planning applications would promote the sustainability of Cressing and Black Notley, yet they feel that inappropriate applications are receiving the go-ahead from those who do not truly understand what villages need in order to prosper. Castle Hedingham parish council has gone to great lengths to produce a village design statement, outlining the types of developments that would fit in with and enhance the community. Yet such councils are frustrated and feel that local knowledge carries little weight.
That is indicative of a broader, serious problem in our country. Whether it is building new housing developments or giving the green light to new business parks or leisure facilities, the whole planning process can be divisive and frustrating, with developers, residents, councils and all interested parties fighting it out and things either never getting built or causing massive resentment when they are. Let us imagine giving local people real control over the look, shape, feel and character of the community and letting them decide how many houses they wanted built or whether they wanted a new park or playground. If those proposals were within the letter of the Act and could support local economies or the environmental aspect of sustainable communities, the potential for change would be enormous.
My constituents are fortunate that both Essex county council and Braintree district council support the 2007 Act, but many others are not so lucky. Indeed, when I checked the Local Works website, I was surprised to see that swathes of the country have still not opted in to the Act. I am surprised by that, because councils have nothing to lose and everything to gain. Despite pressures from residents and parish and town councils, some local authorities and county councils remain resistant to change. What about the local people in those areas? Under the Act as it stands, they have no form of redress and depend on the whims of their local authority or county council to get their voices and proposals heard. The Bill would give the Secretary of State the option of prescribing a mechanism whereby residents could petition their local authority to take up the Act. Although we currently seem to have no clearer proposal than that, I know from various petitions in my constituency that they can often serve to invigorate local residents even more. Surely that is yet another positive step forward for local democracy and political engagement.
I have one concern about the Bill, which is the absence of a mechanism to force the Government to publish full local spending reports. Although I recognise that that absence may have been necessary both for brevity and to gain cross-party support, I hope that we can return to the matter at a later date.
I, like local residents, am disappointed that the Government have backtracked on a vital part of the 2007 Act, and I hope that the Minister will address it. It is the section that requires the amount of Government expenditure in each area to be made public. They have taken a decidedly minimalist approach to the concept of, and commitment to, local spending reports as originally agreed in Parliament. The then Minister promised that the Government would publish a local breakdown of spending and proposed spending by all public bodies, but they have broken that promise and substantially watered down the Act. Rather than a full breakdown, local spending reports currently contain only information about local bodies.
My hon. Friend is making a powerful speech. Does he deprecate, as I do, the fact that when the Government had the opportunity to address the issue of local spending reports in the later stages of debates on the Local Democracy, Economic Development and Construction Act 2009 a few months ago, they chose not to include a provision that would have ameliorated the concerns that he mentions?
Again I concur with my hon. Friend, and perhaps the Minister might address that point. I shall press on, because I appreciate the concern of my hon. Friend the Member for Harwich, who I am sure is keen that we ultimately move on to his Bill, notwithstanding the importance of this one.
If we are to restore faith in politics, now more than ever we need greater transparency in public expenditure. We need to be able to see how politicians and organisations that rely on public funds are spending taxpayers’ hard-earned money, and, if necessary, challenge it.
Everyone in this House ought to be able to recognise that the days when taxpayer-funded organisations could keep their accounts under wraps are well behind us. The last year in Parliament has taught all MPs a painful lesson in transparency, but we need to reflect that in legislation that has implications throughout and beyond Whitehall. The LGA agrees. It remains wholly unconvinced by the arguments that full local spending reports are simply too expensive and that they would be of no benefit. We understand the need to approach the matter in a way that ensures value for money, but expecting basic figures on public expenditure is not an unreasonable request.
However, the Bill is about not only the principle of transparency, important though that is, but about efficiency. As I have stressed, local communities are best placed to understand what they need for sustainability. If they can easily scrutinise the costs and details of current projects, they can quickly deduce whether there is a cheaper or more efficient option. If communities and councils can look at the streams of funding in their areas, they can identify duplication and scope for greater co-ordination, and where resources could be more effectively deployed in another way. Put simply, by lifting the lid on public spending, we stand to get better outcomes in how taxpayers’ money is spent.
I recognise the concerns of both the LGA and some hon. Members that some proposals in the Bill lack clarity. However, I remind them that it is a short, amending Bill, designed to nuance the Sustainable Communities Act rather than create a new one. The prescriptive powers that the Bill would grant to the Secretary of State give a large degree of wiggle room, which is exactly what the 2007 Act needs. It is comparatively new legislation, so we are still at the early stages of the process, and proposals for implementation are still not finalised. To rush ahead with too many specific clauses, without learning what is going right and what is going wrong with the process, might be impetuous.
I support the Bill. We have the opportunity to show the country that “bottom up” is more than just a fashionable term for politicians to tack on to concepts—it can be one of the most important weapons in a local community’s arsenal and serve the greater good of so many of our constituents, as I have seen in my constituency. The Act has enormous transformative potential and radical implications for the decision-making process in this country if local people choose to use it.
This is why I believe in the importance of the Bill. First, it will extend the time for proposals to be submitted under the 2007 Act, and secondly, it will add some important nuances to what is already an historic measure. A key criterion on which to judge the Bill will is whether it offers the opportunity for local people to have their voices heard. If it does that, it will have done a good job. The words of support that I have received from residents and councils, along with the relative consensus in the House today, are encouraging.
All here today recognise the opportunity the Bill offers truly to engage people on how public money is spent and how public services are delivered in their areas. If we miss this opportunity today, I fear we will not only set back the cause of local democracy a few steps, but squander a lot of public support and good will. Today we have a clear decision to make, which is eloquently summed up by Local Works:
“We believe that we (civil society and politicians) now have a choice: we can support this Bill and give this new shoot of increased involvement a boost; or we can reject it and risk that shoot withering on the vine.”
I hope we make the right choice here today.
I have always been a great supporter of my hon. Friend the Member for Braintree (Mr. Newmark) and I hope that if his speech achieves nothing else, it will gain promotion for him in an incoming Conservative Government. He has served the Conservative Front Bench’s purposes well today by ensuring that the amount of time available to discuss the Lisbon Treaty (Referendum) Bill and the European Union Membership (Referendum) Bill will be greatly curtailed. We have five hours for debate on Fridays and my hon. Friend has spoken for one of those hours. In so doing, he has ensured—as far as I am concerned—that it will not be possible for this Bill to go through all its stages today, if that were ever a serious proposition—
No, I will not, because he has already spoken for an hour and I wish to make a few brief remarks. It will not be possible for this Bill to go through all its stages today because so much time has been taken up already. If the Bill is as simple as its promoters suggest, I am surprised that it took more than half an hour for my hon. Friend the Member for North-East Bedfordshire (Alistair Burt) to introduce it and more than an hour for my hon. Friend the Member for Braintree to explain why it would be such a good idea.
The 2007 Act was introduced when our great friend Eric Forth was very active on Fridays, and he shared the concern of many of us that it would not achieve much. I am sure that he will be looking down on our proceedings today and saying, “Well, I told you so.” The original objectives of the Act included halting the decline in the number of corner shops, banks, grocers, post offices and pubs. Two and half years later, we have seen a substantial and continuing reduction in the number of those businesses. The Government have not even decided on any of the proposals that were made by individuals—perhaps naive individuals—who thought that the 2007 Act would actually give them an opportunity to contribute to significant change for their local communities.
The Act has been a complete failure. Hon. Members have suggested that it has been a success, but they are living in a completely different world from the one in which I—and, suspect most of my constituents—live. My hon. Friend the Member for North-East Bedfordshire gave some examples. He said that a Wiltshire librarian had put forward a proposal to increase the tax on chewing-gum. However, action could have been taken much more quickly if the librarian had communicated with the local Member of Parliament, who could have tabled an amendment to the Finance Bill and we could have had a debate on the issue. Similarly, a proposal from Hackney suggested changing the planning rules relating to betting shops. It so happens that a private Bill on London local authorities is going through the House at the moment, and it would have been open to Hackney council to include that proposal in that so that we could debate it. The Second Reading of that Bill is coming up soon. Those two examples are of suggestions that could have been implemented more quickly through a direct relationship with Members of Parliament.
My hon. Friend also cited the further example of Liverpool city council trying to restrict the closure of post offices. That has not achieved anything. The only success that I am aware of was in Essex, and in that case the county council took direct action in defiance of the Government. The Government say that they support the Act, but people are given an incentive not to pay their road tax renewal at the post office but to do it online, because they are then entered into a prize draw for some foreign-manufactured car. That is meant to be an incentive not to use the local post office, and it is supported by the Government. It is ludicrous that the Government are promoting and encouraging that by giving people financial incentives not to use local post offices, while purporting to be interested in sustainable communities. The whole thing does not add up; the whole thing is a complete farce.
As my hon. Friend the Member for North-East Bedfordshire made clear in his extensive speech, the 2007 Act received Royal Assent on 23 October 2007, but it took almost a year for the Secretary of State to invite local authorities to make their submissions. Conveniently, the deadline was nine months later—they had to make their submissions by 31 July last year—and as of today not a single decision has been taken. Indeed, the Bill before us today is a recipe for further delay by the Government, because clause 1 would enable the Secretary of State to say, “Well, although I have all these shortlisted proposals put forward on a particular basis, we are now changing the basis on which I should assess them, and I can now decide, not whether to implement them, but whether to implement them in whole or in part.” That introduces a completely new dimension that was not available to the local authorities when they decided which proposals to put forward, and neither was it available to the people when they came forward with the proposals in the first place.
It is not surprising that people are cynical, because they are being misled into thinking that the way to make change in this country is to go down the route suggested in the Bill. However, change is really made through direct engagement with Members of Parliament and the Government. I shall give a few examples. When I was involved in local government politics in Wandsworth, we were fed up with the Inner London Education Authority: we thought that we would have a sustainable community in Wandsworth if we abolished it. We did not go namby pambying around trying to get people to make submissions under something like the 2007 Act; we engaged in direct action. We held public meetings, engaged the people and lobbied the Conservative Government strongly for its abolition. That was achieved and since then things have got a lot better in Wandsworth as a result, and many more people now stay there to enable their children to go to good-quality local schools.
Something similar happened when the people of Wandsworth, and a lot of other people in Greater London, decided that they would like to abolish the Greater London Council. Pressure was put on the Government, and the changes were made. Another example: a lot of people thought it extremely frustrating that their local councils were not prepared to engage in competitive tendering. There was a strong lobby of Parliament, including early-day motions with more than 200 signatures, and eventually a Conservative Government decided to legislate requiring local authorities to engage in competitive tendering—and that is what they did. As a result, the costs of local government were reduced.
Obviously, I pay tribute to my hon. Friend’s long service in local government and to the House. Surely, however, he is not suggesting that local spending reports and compulsory competitive tendering are mutually exclusive. In fact, the greater transparency brought about by local spending reports would assist local people at all levels in understanding the tendering process and the services provided by local councils.
I do not think that there is anything that a council cannot do already in terms of a local spending report—whatever that might mean. We must trust local authorities to do their work. We do not want to encourage them to waste a lot of time with bureaucracy or trying to make proposals that are then sat on by the Government. That raises local expectations and increases cynicism about the whole electoral process.
I shall not speak at greater length. However, I put down a marker that I think that the Bill is far from perfect, despite the enthusiasm of my hon. Friend the Member for North-East Bedfordshire. I think that it seeks to change after the event the basis on which people made their submissions under the original Act. If one goes through the detail of the Bill, one finds that, frankly, it contains a whole lot of top-down mandatory requirements, coupled with vague propositions and superfluous requirements. In short, it is bad legislation, and it should not go on the statute book, or indeed go any further, without substantial amendment. I hope that there will be an opportunity to consider the Bill further in Committee and that the points that I have put forward will be expanded on by others with similar concerns about its content.
The Bill sounds good: who could possibly be against sustainable communities? I am not against sustainable communities; what I am against is trying to suggest to people outside this place that the only way to have a sustainable community is to comply with the requirements of the Bill. The way to get a sustainable community is to have a strong Conservative council that works closely with local Members of Parliament and, where change is needed, engages with this House and Parliament as a whole to bring about legislative change.
It has been a privilege to take part in this debate and to work with the hon. Member for North-East Bedfordshire (Alistair Burt) in the formulation of the Bill. Let me congratulate him, first on his luck—which is not something that he can control—in doing so well in the private Member’s Bill ballot, and secondly on tabling a Bill that has attracted such vocal and passionate support, both inside and outside this House. I also thank him for the constructive way that he worked with my Department before the Bill was published.
Members will recall, from when I spoke on another aspect of the Bill last December, my dislike of yah-boo politics. It is a sad fact that most of the public think that that is how we behave all the time. It is also a sad fact that yah-boo politics is playing a role in turning the public off something that is essential to the very fabric of their lives and everything that they value. As hon. Members will know, it is not true that we behave like that all the time; in fact, there is quite a wide consensus across the House on what the issues are. Where we disagree is on how we deal with them.
The hon. Gentleman’s Bill is an excellent example of another, better kind of politics: the sort of politics that I call “me too” politics. That is where someone might say, “This is a problem and I believe something should be done about it,” and someone else goes, “Yes, me too. I think that.” In other words, “me too” politics is the kind of politics that mirrors the way people in the real world generally work together on problems. However, “me too” politics is not bland, as we have seen here today. In seeking solutions to problems, there is always the “me too, but” factor, and that is the important factor. The 2007 Act has had a long and occasionally turbulent history, with plenty of buts and a few outbreaks of yah-boo politics. However, thanks to the hon. Gentleman’s efforts, we are starting a new and, I hope, more consensual chapter in its history today.
With your permission, Mr. Deputy Speaker, I would like briefly to pay tribute to the people who, before the hon. Gentleman, helped to make the Bill and the 2007 Act possible, both inside and outside the House. The work done in this House by three particular Members, from three separate parties, was hugely influential in the passing of the 2007 Act. They are: my hon. Friend the Member for Stroud (Mr. Drew) and the hon. Members for Ruislip-Northwood (Mr. Hurd) and for Falmouth and Camborne (Julia Goldsworthy). I would like also to mention the dogged determination of my hon. Friend the Member for West Ham (Lyn Brown) and my predecessor as Minister, my hon. Friend the Member for Oldham, East and Saddleworth (Mr. Woolas).
I would like also to make particular mention of the good-humoured way in which my hon. Friend the Member for Stroud—who, like the hon. Member for North-East Bedfordshire this year, had the good fortune to do well in the private Member’s Bill ballot in the previous Session—took the disappointment of seeing his Bill fall because of lack of time. I hope that today’s debate will make up for that disappointment.
On Second Reading of the Bill in 2007, my hon. Friend the Member for Stroud said that dealing with such revolutionary legislation warmed the cockles of his heart. Although today’s Bill will be an excellent addition to that revolutionary legislation, it is more evolutionary than revolutionary, as the hon. Member for Braintree (Mr. Newmark) pointed out. That is a good thing, however. In a democracy, legislation must necessarily evolve if it is to continue to deal with our constantly changing world and requirements. The Bill will mean that the Sustainable Communities Act 2007 will continue to evolve and strengthen as the dialogue between the public and local and central Government also evolves.
As has already been mentioned, the Bill and its predecessor have attracted the support of more than half the Members of this House in early-day motion 143. That support is due in no small part to the campaign run by Local Works. Its national co-ordinator, Steve Shaw, and its redoubtable champion, Ron Bailey, are responsible for a great deal of this. Local Works has attracted huge support and is living proof of the veracity of its title. As the hon. Member for Braintree has said, this is about re-engaging people with politics, about doing politics slightly differently, and about listening to people and ensuring that we are as transparent as possible with the information that we present.
Will the Minister join me in acknowledging that Local Works has continued to work on this campaign? I first had a meeting with it in 2003, which feels like a long time ago, and this is testament to the strength of its campaign. We will all be knocking on doors in the lead-up to the next general election, and people will tell us that they cannot make a difference. This campaign gives us an opportunity to tell them that they can. It started on the streets in individual constituencies.
I agree absolutely with the hon. Lady. We all recognise that terrier-like determination. All hon. Members have done some work on the ground in which we have eventually got something done that we did not expect to get done. We have had to get through layers of bureaucracy and entrenched ways of doing things. We in this House are part of those entrenched ways of doing things, but we must try to be more open to other ways of working.
The subject of spending reports was raised by the hon. Members for Peterborough (Mr. Jackson) and for Braintree. Future local spending reports will be published online in a more user-friendly format. I have used the reports for my own constituency, and for other constituencies in the east, and I understand the criticisms of them. The reports will also include a much wider range of data. Indeed, the December reports already do so. We are working towards improving the reports but, as my hon. Friend the Member for Oldham, East and Saddleworth stressed during the debates on the 2007 Bill, this is an evolving process, and part of the brake on that evolution is resource.
Another part of that brake has been the simultaneous development of another strand of transparency, in the form of Total Place and the “Putting the front line first: smarter government” strategy. The hon. Member for Peterborough will know that a lot of work on this is being done in the region in which he and I have our constituencies. We have two of the 13 pilots there, but also 77 unofficial pilots. They are all aiming to find ways of making information more transparent and more accessible. Information can be written down but it can still be meaningless. Anyone who has read “How to Lie with Statistics” knows that there are huge opportunities in some of that information, and we must ensure that the statistics used are relevant and useful.
Turning to deal with the current process, which many hon. Members have mentioned, those not familiar with the logistics of the 2007 Act might have found our discussion rather arcane. It might also seem odd that we are attempting to amend a Bill that received its Royal Assent only a short while ago in parliamentary terms. As happens so often when good ideas are put into practice, the process of doing so reveals ways in which that practice can be improved.
What we are working with here is quite revolutionary in respect of how the British state behaves at all its levels. I believe that the Bill presented by the hon. Member for North-East Bedfordshire represents a real step forward in making the process more responsive by making it more flexible and by streamlining it. It is necessary to do that, because the process is at present cumbersome and resource-intensive, to put it mildly.
Providing the Secretary of State with the flexibility to ensure that both local and national Government can move more swiftly is a necessity, particularly if we want to engage with people, because their time scales are quite different to those of, say, a council or Whitehall. Our time scales are more elongated, but people are looking for a much swifter delivery than we have traditionally managed.
I know just how much work went into the formulation of the 301 proposals received by the selector body, the Local Government Association, and just how much work was put in by Councillor Keith Mitchell and his team to make sure that the shortlisting process was fair. So many of the proposals were good that 199 of them made it to the rather long shortlist. They were sent to the Secretary of State for consideration just before Christmas.
As many of us know, consideration in government does not mean looking at proposals and thinking, “That’s okay, we’ll have that one.” Other Government Departments have to be consulted in order to achieve a collective agreement through an arcane process known as the “DA round”—involving the Ministerial Committee on Domestic Affairs, to which we have to write in to say what proposals we are thinking of putting forward and to ask what the committee thinks about them. The relevant Government Department has to go through the same process. It has taken us quite a long time to arrive at a shortlist that is acceptable to all areas of government—but I think we are there.
I realise how this looks to the public and to some hon. Members, but believe you me, Mr. Deputy Speaker, my officials and I have been driving this. I am deeply committed to this kind of work. I am leaving this House in four or five weeks, but I do not really want to leave it without seeing progress made on this Act. That would be a failure, as far as I am concerned: my personal commitment is clear, and Members will have heard the Secretary of State’s personal commitment to it. We are not standing still; we are looking at the complex issues in detail. As I will make clear in a few moments, we have broken them down into those that can be actioned swiftly—thanks to this Bill—and others that might take slightly longer, but will still be addressed.
The hon. Member for Braintree asked me whether an action plan could be produced next week. I really wish it could, but the honest answer is, “Probably not next week, but, boy, we are working on it for pretty soon.” We all know that there is a cliff facing us—a cliff that I am going to walk straight off, although some Members will go down a ledge and return. As I say, I am going off it, as are some other right hon. and hon. Members, but before we drop to the bottom of the cliff, we are keen to see that we leave something verdant on the top of it.
I am aware of the difficulties facing private Members’ Bills, and I was a great supporter of the Cook reforms—which I urge newer Members to study—in part because I believe such Bills deserve more time than they sometimes get. I am therefore trying to make swift progress through my speech.
The Bill will increase the opportunities for parish and town councils to become even more directly involved in this process in future. I have enormous respect for parish councils. Like the hon. Member for North-East Bedfordshire, I have a lot of extraordinarily active ones; our constituencies are fairly close, and the area is well endowed with parish councils. The hon. Gentleman’s Bill allows us to develop that role, by taking them out of the guidance section, which is where they currently reside in the 2007 Act, and putting them into the main part of the Act.
The National Association of Local Councils is an extremely important partner of my Department. Indeed, we have allocated £750,000 of funding to it for the period between 2008 and 2011, in order for it to lead a programme of activities to promote the role of the local council sector. We are consulting the association, and exploring with its members how parish councils can get the most out of the Act.
Parish councils may be small, but they certainly punch above their weight, and we have seen what can be done with a bit of imagination—such as in Croxley Green, where a free bus service has been put in place for local senior citizens. That is a great example of using the powers councils already had—in this case from the Local Government and Rating Act 1997—to make a real difference to people’s lives. I want to see more of that, as well as more development under the 2007 Act. We therefore intend to use a power specified in section 5 to explore how parish and town councils, or county associations of parish councils, might submit proposals in certain circumstances, to further drive the progression of local idea to national action.
I want to look briefly at the Local Government Association proposals. There were 301 of them, 18 of which were joint proposals, and they came from 90 lead authorities with a further 10 district councils contributing to the joint submissions. That represents 28 per cent. of all authorities in England. As the hon. Member for Braintree remarked, not all authorities have engaged in this with the same level of enthusiasm; after all, we are talking here about 100 out of 353 authorities. The south-west submitted the highest number of proposals, with 84, or 28 per cent., followed by the London boroughs, with 45, or 15 per cent., and the south-east, with 44, or 15 per cent. The region with the highest number of lead councils submitting proposals was, again, the south-west, with 18 councils, or 44 per cent., of its lead councils. The greatest proportion of proposals, however, came from district councils, with 107, or 36 per cent., followed by unitary authorities, with 96, or 32 per cent. County councils, with 18, or 6 per cent., submitted the lowest proportion of proposals. That perhaps shows that the higher tiers of government are less responsive to this grass-roots movement.
The scale and range of the proposals submitted was incredibly diverse; I know that from having studied them late one evening. For instance, 43 per cent. wanted power given back to the local level through finance, decision-making powers or transfer of functions, whereas 25 per cent. wanted additional legislation, or existing law to be strengthened. On the other hand, 18 per cent. wanted the Government to raise the profile of certain issues or concerns, thereby providing both the resources and moral support necessary to have a local knock-on effect, and 12 per cent. wanted to encourage a change in the behaviour of groups of individuals through the use of incentives, while 7 per cent. made explicit reference to the reduction of legislative restrictions or barriers imposed at national or regional level. It is important to note, however, that relatively few—I was disappointed by this—proposed change that was relevant to the local area from which they originated, which is the basic idea behind the Sustainable Communities Act. Some work needs to be done at local authority level to ensure that we make such proposals a little more locally responsible. The vast majority of proposals would require blanket national reform.
The Government and I have worked with the LGA, and I was very pleased on 23 December to receive the 199 proposals. However, once disaggregated, some 242 separate requests for Government action are in fact contained within those proposals, and they cut across Departments. Many of those would require changes to primary legislation, but we have not lost momentum. Officials from across Government met officials from the LGA to discuss each proposal in turn. This took time. Issues relating to individual parishes and individual people were discussed in depth in Whitehall, which is a reform in itself. This is what we mean when we say that the Act is a wonderful tool to encourage a new dialogue between local people and local and central Government.
The LGA continued to challenge the Government and press us to address the issues and ideas raised by these local communities, and I will be talking to Councillor Mitchell about these proposals again next week as we try to come up with the shortlist that the hon. Member for Braintree and I are so keen to see.
This has been a very interesting process for all concerned, not least for me. It shows the priorities of local people and the barriers to the delivery of those priorities. I congratulate the hon. Member for North-East Bedfordshire on his foresight in consulting people about how his Bill would work before producing it. That shows a real commitment to the values in it. It is clear from the many responses we and he received that it is absolutely vital that the system be reformed. I know that some Members of this House—we have heard from one today—disagree with the view that the Bill can work, but if there is sufficient will and terrier-like action on the ground, it can. However, that does require us—all of us—to be responsible citizens and to have an input into the process as far as possible.
The Bill requires the Secretary of State to give notice of a further invitation, and I welcome that; we are more than happy to do it. That will give local authorities the time to prepare for the conversations that many of them have held so well, and that some have not. The Bill also gives us the power to specify other organisations that can submit proposals. The Government have a radical ambition for strong and accountable local government. Although we want to see local authorities firmly in the driving seat, free to innovate and take their own decisions, we also want to give others the opportunity to have their say. We are therefore delighted to explore how parish and town councils can submit proposals, in certain circumstances, further to drive progress in the idea of local action.
The Bill is also fully in line with our belief that the founding principle of local government is that citizens should have the right to influence the decisions that affect their lives and communities. Through the petitions duty in the Local Democracy, Economic Development and Construction Act 2009, we are supporting this principle. Regulations made under the Bill will promote that opportunity by making clearer the link between citizens’ right to request that a proposal be submitted to the Secretary of State, and the opportunity for councils to demonstrate leadership by doing that.
The role of the LGA, which is so significant in the process, remains and can be enhanced to give it more influence to press matters of real importance. Through the use of regulations, the hon. Gentleman is giving it the opportunity to help shape its role, to add real value and to cut red tape and the cost to the taxpayer. The crucial element of its role—a power and an opportunity for a body to influence the Secretary of State, with the expectation that the Secretary of State will reach agreement on what to take forward—remains in full. Although new section 5B would give the Secretary of State the power to appoint more than one person, I can assure the House that the Government do not intend to spend more in implementing the new arrangements than they do on the current system.
The Government believe that the 2007 Act should be part of the architecture of local government. The Bill will strengthen the Act, reduce red tape and provide greater responsiveness to the needs of local people. I am extremely happy to report that the Government will support the Bill and to commend it to the House.
With the leave of the House, Mr. Deputy Speaker, may I thank the Minister and both the other Front-Bench spokespeople for their support for the principle of the Bill? It reflects the sense of the early-day motion to which I have referred, which has the support of more than half the Members of the House. I am grateful for the support and I appreciate the Minister’s comments. I think that the Bill will make a contribution to the changed architecture to which she refers. On the basis that it is unlikely that she and I will stand across the Chamber from each other again before she stands down, may I thank her formally for what she has achieved as Minister, both in this particular area of work and in her work in the east of England, where both of our constituencies lie?
I have come back from my constituency, where I was visiting schools, to support my hon. Friend’s Bill. I congratulate him on the way in which he has approached it and on his success today. I particularly wish to congratulate the Minister on, and thank her for, the way in which she has approached the Bill. Her approach is the sort of thing that will restore trust in Parliament, and I am sorry to hear that she is leaving the House.
I thank my right hon. Friend for his kind remarks. He, too, has a good feel for and appreciation of the way in which grass-roots political activity contributes not only to this place, but to the success of local government and the like. I appreciate his comments and I am sure that they will be noted by the whole House.
We have had a robust debate in the time available to us. Disappointingly, we did not hear a great many contributions from Labour Members—the Labour Benches were empty—but Conservative Members engaged in a robust debate. I appreciated the support given to me by my hon. Friend the Member for Braintree (Mr. Newmark). I appreciated his comments about the Bill and how he made them, and his extensive knowledge of why this matters to local communities in his area and beyond.
My hon. Friend the Member for Christchurch (Mr. Chope) takes a slightly different view. His knowledge of and commitment to local government is considerable. I am with him in saying that what makes a difference to local government is having strong Conservative authorities—he is completely correct about that. However, I also think that because local government is moving on, engagement with the people, which perhaps he was able to engender in Wandsworth during his time there, is slightly different in many other ways now. The sort of engagement that is suggested through this Bill will assist in ensuring that strong local government and strong parties in local government will succeed and endure. I take what he says as a compliment, rather than something different, but our views differ and he has made it clear that he feels that this Bill should go into Committee to be considered further.
I accept my hon. Friend’s judgment on that so, unfortunately, we will not be able to complete all the stages of the Bill today. However, we will seek to establish the Committee as soon as possible and I hope that we can resolve the concerns there. That will ensure that the commitment of all Opposition Members to the principle of the Bill remains intact. Although it cannot go through all its stages today, it can be refined very quickly, we hope, and we can then return and, I hope, get it on the statute book just before proceedings come to an end in this Parliament. Thank you for the time allowed to produce this Bill, Mr. Deputy Speaker, and I hope that it will now receive its Second Reading.
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).
Lisbon Treaty (Referendum) Bill
I beg to move, That the Bill be now read a Second Time.
I am grateful for the opportunity to speak on this important issue. Trust was mentioned in the previous debate—in the context of trust in Parliament—and trust, once lost, is a hard thing to regain. As we meet here today, we know that distrust of politicians of all hues and distrust of this House are, tragically, at historically high levels. For that reason, the House should support this referendum Bill on the Lisbon treaty. There are a number of constitutional arguments and imperatives, but restoring the public’s trust in politicians and this House must be foremost in our minds.
The way in which the ratification of the European constitution and its identical twin, the Lisbon treaty, have been handled is symptomatic of a culture that breeds distrust and encourages cynicism among the people of the United Kingdom. Distrust and cynicism are impossible to counter when most people know that the refusal to allow a referendum on our relationship with the European Union is driven by fear. Too many of our political class believe that the people cannot be trusted to vote for a particular outcome, and so those people are denied any say at all. If the political class as a whole does not display a trust in the people, how can we expect the people to trust us?
Distrust and cynicism are impossible to counter when a referendum was once promised by all three main parties in this House. Support for a referendum on the European constitution was once a matter of British political consensus. I thank and acknowledge the support of hon. Members from various parties—Liberal Democrats, Conservatives, Labour Members and others—who have agreed to sponsor my Bill.
The principle of a referendum had been commonly accepted. It was a position endorsed by the people in the 2005 general election. Yet what do people see now? They see that a cosy consensus has emerged among all the main political parties in this House to deny the people their say through a referendum on the new fundamental changes that are being made through the Lisbon treaty to implement the provisions of the original European constitution.
The Government broke the original consensus, arguing—incorrectly in my view, in that of the vast majority of the people of this country and, indeed, in that of august organs of this House—that the Lisbon treaty and the European constitution were two fundamentally different documents. Of course, that does not make the decision of others to follow suit the right choice. Some might think that I exaggerate, but the reversal by Her Majesty’s Opposition on the subject of Lisbon was marked by a drop in support for them and in confidence in their leadership, neither of which they have since managed to restore. I believe that that shows that, beyond the merits of this issue, it is fundamentally an issue of trust as far as the public are concerned.
During the debate on Second Reading of the European Union (Amendment) Bill on 21 January 2008, the right hon. Member for Richmond, Yorks (Mr. Hague), made the issue for a referendum, saying that it rested
“above all on the need for the House and the Government to honour commitments solemnly given.”
He referred to the fact that he goes around
“schools and colleges saying to young people that they should take an interest in politics, that their vote makes a difference, and that what is said at election time really counts”.
Then he posed a salient and important question:
“What are we to say to them in future—that the fact that they elected an entire House of Commons committed to a referendum was of no account, that the Government regarded that commitment as a technicality to be escaped from rather than a promise to be kept, and that the promises made at election time do not really matter at all?—[Official Report, 21 January 2008; Vol. 470, c. 1256.]
That question can be applied with great force today, in the light of the decision of the right hon. Gentleman and all the main parties in the House to set aside their solemn commitments made at the time of the 2005 general election to allow the people to vote on these fundamental changes in the relationship with the European Union.
Distrust and cynicism are impossible to counter when people see power and influence slip further away from them. There is clearly a disconnect between the people and the institution of Parliament that must be repaired as quickly as possible—hopefully, during the next parliamentary term. However, that gulf between the voters and the House pales in comparison with the chasm between the people and the institutions of the European Union—the Commission and the Parliament.
The message of power in the hands of the people appeals, and it is used time and again, and will no doubt be a repeated theme during the coming general election, yet time and again Governments of every hue propose handing more powers over to the European Union. If they say that power will be restored to the people, yet send it in the opposite direction, how can we expect people to trust political parties or politicians?
Supporting the Bill fulfils the promise made by politicians and political parties in the House to the British people. The Government said in the Labour party’s 2005 manifesto:
“We will put it to the British people in a referendum and campaign whole-heartedly for a ‘Yes’ vote”.
That was in relation to the outcome of negotiations on the European constitution. The Prime Minister said just before taking office that he would regard honouring that manifesto as a matter of trust with the British people—that word “trust” again. That is what is at the centre of the denial of the people’s right to have their say.
The Government have now resorted to saying that things are different. The red lines have been drawn, despite the fact that these are almost exactly the same as they were in 2005, when we were promised a referendum. That matter was examined in great detail by the European Scrutiny Committee. Its Chairman, the hon. Member for Linlithgow and East Falkirk (Michael Connarty), said that the proposed safeguards would “leak like a sieve”. It has been made clear that the red lines make no real difference to the terms of the original European constitution.
Various peoples of Europe in various countries were asked to have their say. In May 2005 the French people had their say and rejected the constitution. In June 2005 Dutch voters swiftly followed suit. For once, the standard European tactic of calling a second referendum to get the right result was not chosen. Our referendum was postponed, not cancelled. In the aftermath the pro-constitution leaders and bureaucrats regrouped so that they could plan not how they would abide by the express will of the people of those countries and the clear view being expressed throughout Europe, but how they could develop a strategy to get around it—the Lisbon treaty strategy, a strategy to produce a new document that made the same changes as before, but essentially hid them.
Why do I claim that there is no substantive difference between the constitution as originally set out and the Lisbon treaty? I do so because Prime Ministers and Presidents across Europe queued up to tell us that the treaty and the constitution were the same in substance—from Angela Merkel, who said:
“The substance of the constitution is preserved. That is a fact”,
to the then Danish Prime Minister, now the Secretary-General of NATO, who told us that
“all the symbolic elements have gone, and that which really matters—the core—is left.”
We heard it from others as well.
The European Scrutiny Committee Chairman informed the House that
“every provision of the constitutional treaty, apart from the flags, mottos and anthems, is to be found in the reform treaty. We think that they are fundamentally the same”. —[Official Report, 11 December 2007; Vol. 469, c. 211.]
The Foreign Affairs Committee said:
“There is no material difference between the provisions on foreign policy in the Constitutional Treaty which the Government made subject to approval in a referendum and those in the Lisbon treaty on which a referendum is being denied.”
However, disguising the true meaning was not enough; it was necessary to avoid a referendum. State after state that had planned a constitutional referendum participated in a willing charade that the Lisbon proposals were somehow not as substantive as the constitution and need not be put to a vote. Frankly, it is a national disgrace that we in the United Kingdom were not only associated with but full participants in such a process, joining in with a near total democratic shut-out of people throughout Europe.
For decades it has been left to the political elite—if one can call them that—in SW1 and professional diplomats to decide our relationship with Europe. We need to give the people a say. Does the hon. Gentleman agree that we need to go even further and allow the people of the United Kingdom a vote on the UK’s entire membership of the EU?
I am grateful to the hon. Gentleman and thank him for his support. Others in the House would advocate a referendum on our whole membership—whether we should be in the European Union or not. My Bill, however, is about people fulfilling their 2005 general election promise, which was a specific commitment to a referendum on the new European constitution, and about trying to ensure that all the main parties honour that commitment. I have focused on that issue because it is a matter of restoring trust in politicians and this House. That specific issue must be addressed, and no doubt hon. Members will wish to say why—if this is still their position—they want to deny the people their say on the constitutional changes, and do not want to fulfil their manifesto commitments.
Does the hon. Gentleman not accept that one of the biggest travesties is that during the most recent general election people did not engage in a debate about Europe because they thought they would have one in a referendum? Cynically, the Government then denied the people a referendum, so does he share my hope that Europe will feature prominently in the forthcoming general election campaign?
I am grateful to the hon. Gentleman, who is absolutely right. I well remember the 2005 election campaign, when the Government told the people that there was no need to concentrate on such a debate during that period because the subject would be debated in a referendum. That was clearly a means of getting the subject off the agenda, and I suspect that the same thing is happening in respect of the coming general election, because the Government do not want it to be a matter of public debate, and, sadly, neither does the leadership of the Opposition.
We have examined the Government’s position, but let us examine that of Her Majesty’s Opposition. In 2007, the right hon. Member for Witney (Mr. Cameron) made it absolutely explicit in his personal promise of a referendum, come what may, that there was no wriggle room. He offered a “cast-iron guarantee” that he would put any treaty in front of the voters and said that
“if I become prime minister a Conservative government will hold a referendum on any EU treaty that emerges from these negotiations” —
meaning negotiations on the Lisbon treaty.
Significantly, the right hon. Gentleman also focused on trust. In an article in The Sun newspaper, he said:
“The final reason we must have a vote is trust. Gordon Brown talks about ‘new’ politics. But there’s nothing ‘new’ about breaking your promises to the British public. It’s classic Labour… Small wonder that so many people don’t believe a word politicians ever say if they break their promises so casually.”
We need to recall that a reference to the promise of a referendum was made again as late as May 2009, during the European election campaign. Yet in November 2009, the promise was dropped.
I could go on to deal with why a referendum is a perfectly acceptable means and device for dealing with this issue. Some argue that in a parliamentary democracy such as ours, we should not revert to the concept of a referendum, which is foreign to our tradition. However, a referendum can be entirely reconciled with the principle of parliamentary sovereignty: we have had one national referendum on membership of the Common Market, as it then was. The tradition has been well established in other areas of the United Kingdom, where polls have taken place and people have been asked their views when constitutional change has been brought about or considered.
The real reason, however, why we need a referendum is not only so that the people of the United Kingdom could be sure the issue was being taken seriously, but that it is the only way of ensuring that those with whom we have to negotiate in Europe, and the EU Commission, will take us seriously.
Rather than have a referendum, it has been suggested that the way forward is to have a plan for the repatriation of powers from the European Union back to the United Kingdom. The suggestion could be put into a party manifesto that would be voted on in the general election. It is suggested that that would be an effective means of giving the necessary strength, power and authority to those who will negotiate on behalf of the Government with the other EU member states and the European Commission.
I leave aside the issue of why people should be expected to vote overwhelmingly on the basis of manifesto promises when previous clear-cut and “cast-iron” guarantees have already been set aside. The fact is that such a way forward would in no way give strength to the hands of negotiators as a clear referendum undoubtedly would. Without a referendum, it will be extremely difficult—impossible, I would say—for other EU states to agree unanimously, as they would have to, to accede to British wishes on the repatriation of powers.
Does the hon. Gentleman agree that the concept of the repatriation of powers is no more than hot air? In reality, many decent long-serving Conservatives are flooding off to other parties such as the UK Independence party because they have no trust in the Conservatives’ proposals to repatriate powers.
I am grateful to the hon. Gentleman for his intervention and his sponsorship of the Bill. People have a lot of distrust not only of the Conservative party but of the governing party and others. People see that instead of being given a clear say, as they were promised, they get vague notions about people going off to negotiate or hold the line. The Prime Minister said that there would be no further transfer of powers for two Parliaments. The Opposition said that they would go off, negotiate and introduce other measures. I shall come to those.
Compared with the clear-cut commitment to a referendum, all such notions make no impression on the British people. They want their say in a referendum, as they were promised. A referendum has the effect of ensuring that the political classes—the Government—carry out the wishes of the people. Frankly, it is a lot harder to fudge the outcome of negotiations that have been entered into following a massive referendum result, because the people would clearly hold the Government and their negotiations to account.
Some argue that as the Lisbon treaty has already been ratified, there is no point, value or efficacy in a referendum. If we take that view, then we might as well not have had the Irish referendum, and Harold Wilson’s holding the referendum in 1975—after the United Kingdom had entered the Common Market—was pointless and without validity. Of course a referendum is still valid, and it is only because of a lack of political will that parties are now withdrawing from it.
As has been mentioned, some argue that there are ways short of a referendum to ensure that the UK’s position is protected. It has been suggested that there should be a referendum on any future occasion when a transfer of powers from the UK to Brussels is proposed. I have no particular objection to that, but the great difficulty that most people will have with it is that it is about 25 years too late. Most of the building blocks for a European superstate are now in place, and the so-called self-amending or passerelle provisions in the Lisbon treaty could mean, if others have their way, that we will never again have a major debate or decision in this country on certain changes. So although the commitment to future referendums is fine, we still need one on the Lisbon treaty, because it consolidates the foundations of a European superstate.
It has also been suggested that legislation be introduced to enshrine the primacy of UK law over European Union law. One problem with that is that the Lisbon treaty confirms the primacy of EU law. Where there are disputes between EU and UK law, they are to be resolved by the European Court of Justice, which is of course obligated to promote European integration. There is not much comfort in that.
Even though some people do not accept the argument that the Lisbon treaty is virtually the same as the European constitution, no one who examines its contents and provisions can seriously argue that they are not of such fundamental importance to how this country is governed that they should be the subject of a referendum in their own right.
As the hon. Gentleman knows, when we debated the Lisbon treaty in the House we argued and voted for a referendum—it was our amendment. In fairness, he and many of his colleagues voted with us. We have now said that, given that Lisbon has been ratified, we should introduce a referendum lock so that any further treaty that transfers powers from Britain to the EU would have to be subject to a referendum. We would amend the European Communities Act 1972 to achieve that. I believe he has just indicated that he would support that if an incoming Conservative Government were to do it. Would he also support our parallel proposal for a similar referendum lock if anyone ever tried to force us into the euro, to which we are very much opposed?
Yes, we are on record as saying that there should certainly be a referendum on any proposal to take us into the eurozone, and we would campaign for a no vote. The hon. Gentleman is right about the stance that was taken when the Bill on the Lisbon treaty was being debated, but what has gravely disappointed many people is what has happened following the Government’s decision to abandon their clear manifesto pledge to have a referendum, which the Opposition rightly condemned as a breach of trust and a major reneging on pledges to the British people. Sadly, the Conservative Front Benchers have decided to go down the same route. I understand what the hon. Gentleman says, but I hope he accepts that it is not too late to have a referendum on the constitutional treaty. Such a referendum is essential not only in its own terms, but—I hope he agrees—in helping to restore trust between the British people, and politicians, political parties and the institution of Parliament.
The Deputy Speaker interrupted the business (Standing Order No. 11(2)).
Bill to be read a Second time on Friday 5 March.
Business without Debate
EUROPEAN UNION MEMBERSHIP (REFERENDUM) BILL
Motion made, That the Bill be now read a Second time.
Bill to be read a Second time on Friday 12 March.
Land Use (Gardens Protection etc) Bill
Motion made, That the Bill be now read a Second time.
Bill to be read a Second time on Friday 5 March.
BRITISH MUSEUM ACT 1963 (AMENDMENT) BILL
Motion made, That the Bill be now read a Second time.
Bill to be read a Second time on Friday 5 March.
VIDEO RECORDINGS (EXEMPTION FROM CLASSIFICATION) BILL
Motion made, That the Bill be now read a Second time.
Bill to be read a Second time on Friday 5 March.
TOWN AND COUNTRY PLANNING ACT 1990 (AMENDMENT) BILL
Resumption of adjourned debate on Question (29 January), That the Bill be now read a Second time.
Debate to be resumed on Friday 5 March.
DEVELOPMENT ON FLOOD PLAINS (ENVIRONMENT AGENCY POWERS) BILL
Motion made, That the Bill be now read a Second time.
Bill to be read a Second time on Friday 5 March.
EMPLOYERS’ LIABILITY INSURANCE BUREAU BILL
Motion made, That the Bill be read a Second time.
Debate to be resumed on Friday 5 March.
CONTAMINATED BLOOD (SUPPORT FOR INFECTED AND BEREAVED PERSONS) BILL [Lords]
Motion made, That the Bill be now read a Second time.
Bill to be read a Second time on Friday 5 March.
MORTGAGE REPOSSESSIONS (PROTECTION OF TENANTS ETC.) BILL
Bill, not amended in the Public Bill Committee, considered.
Bill read the Third time and passed.
Self-Care (Minor Ailments)
Motion made and Question proposed, That this House do now adjourn.—(Mr. Spellar.)
It gives me great pleasure to introduce this debate. I should say at the outset that self-care is not about no care, but about ensuring that patients have far more control over their own health; not about saving money, but about ensuring that NHS resources are spent in the most cost-effective way to give the best possible outcomes; and not about simply passing people from professional to professional, but about many professionals being involved in ensuring that people can have control over decisions on their care.
The importance of self-care has long been recognised by the Government and their advisers. The Wanless review, published in 2004, concluded that the promotion of self-care is one of the most effective ways of reducing pressure on NHS front-line resources and improving overall health outcomes. That is very important. The review also said that for life expectancy and health outcomes to improve across the social gradient, patients need to become fully engaged in their health care and to take an active role in the diagnosis and treatment of conditions. Sir Derek Wanless called for the adoption of a comprehensive strategy on self-care that would give people the support and confidence they need to take greater responsibility for their health.
Lord Ara Darzi’s vision of the future of the NHS, “High Quality Care For All”, built on that vision, calling for more care to be transferred from hospitals into the community. More recently still, my right hon. Friend the current Health Secretary made it clear that the NHS needs to become
“a more preventative and people-centred service”
with patients getting more choice, more convenience and more control over their care.
We are still a long way short of the vision originally set out by Sir Derek Wanless. Research by IMS Health, for example, has found that every year 20 per cent. of all GP consultations involve minor ailments that patients could treat themselves. That is a grossly inefficient use of NHS resources. In most cases, minor ailments can be dealt with effectively and far more appropriately by patients opting to self-care.
It is worth listing the minor ailments that I mean. They are generally part of everyday life and include backaches, coughs and colds, headaches, toothache, indigestion, skin problems, allergies and some respiratory problems. In many cases people manage these minor ailments already through self-care using an over-the-counter, or OTC, product, but research conducted by the Proprietary Association of Great Britain indicates there is often a significant level of dependency on the doctor.
The research shows that people often abandon self-care in favour of a trip to the doctor. Typically, this switch is made between four to seven days after the onset of symptoms. According to GPs, this is earlier than needed, generating unnecessary consultations. Furthermore, in most of these cases, a prescription is issued that would not have been issued if patients took their own decisions.
Little research has been done to measure the amount of NHS resources dedicated to ailments that could be treated by self-care. The first major study was commissioned by PAGB and undertaken by IMS in 2007. The study considered GP work loads for minor ailments and the associated costs. It showed high volumes of GP consultations for minor ailments, with some 57 million consultations per year. Some 6 million of those consultations were for a minor ailment in association with another condition that necessitated a trip to the doctor, but 51 million were only for the minor ailment that could have been treated differently. That included 5.3 million consultations for nasal congestion, 6.8 million for heartburn and indigestion, and 2.7 million for migraines. It has been estimated that 18 per cent. of GPs’ work loads were for consultations involving minor ailments alone. Nearly half the consultations are generated by 16 to 59-year-olds. Overall, minor ailments account for £2 billion of NHS funding a year or some £250,000 for every general practice in the country.
Why is this happening? The problem seems to be that a culture of dependency has built up, whereby patients lack the confidence to address minor ailments themselves through self-care. This must be addressed if we are to maximise the efficiency of NHS spend in these times of tightening budgets. There are three main reasons why this culture of dependency must be addressed. First, it would help to alleviate current demands on the NHS, and in particular GPs, for the treatment of minor ailments. The pharmacy White Paper makes several welcome recommendations to relieve pressure on GPs by utilising the resource of community pharmacies. That is to be encouraged, although I want to ensure that this debate is not simply about passing patients from one professional to another, but about enabling people to take care of themselves, when appropriate, and using the expertise of pharmacists and others to help them do so.
Secondly, we need to help people to strengthen their ability to self-care, empowering them to be more confident and independent in their attitudes and behaviour. Thirdly, we need to free up resources in the NHS, which could enable us to continue to develop NHS resources even in times of constrained budgets. We have to free up money to use in the most cost-effective and appropriate way, thereby continuing the development of front-line patient services.
These calls originate from the London declaration for self-care, which was signed up by both the PAGB and the Royal College of General Practitioners, and emerged from a joint conference last year that I attended.
Why do patients fail to choose self-care? They are usually looking for reassurance on diagnosis from a medical professional, or confirmation that no serious disease is present. Asking patients to make a risk assessment of their symptoms, then select an appropriate medication and finally monitor their response to the medication demands a degree of confidence and knowledge that many feel they do not have. People are also much less likely to “risk” self-care if it is a question of someone else’s health, such as a child or dependent adult.
The culture of the NHS also encourages dependency. Speaking at a conference organised by the Royal College of General Practitioners and the PAGB last November, Dr. Laurence Buckman, chair of the British Medical Association’s general practitioners committee, suggested that the nature of the relationship between patient and GP, with the GP seen as an uncritical, no-strings-attached provider of free medication, supplements, housing, legal support and advocacy, has encouraged a culture of passive dependency among patients, coupled with an ingrained aversion to risk. He feels that, as a result, many patients feel scared to proceed without permission.
Other factors that might also play a part are the duration of the illness, previous experience of the illness, availability of suitable medicines and social factors, such as family pressures. Confidence, too, is a key factor. Once a patient has successfully self-treated on one occasion, they are much more likely to do so again should the illness recur. Moreover, once a patient is in the habit of self-caring, there is a good chance that their family and friends will follow suit. Cost, too, is an issue. Many patients will make appointments to see a GP simply to get a free prescription for a minor medication or analgesic. In theory, patients should be able to pick these prescriptions up from the pharmacists, many of whom can now prescribe independently, but that is not happening as much as it could. The NHS, as a whole, needs to do more to publicise this option.
Why are professionals failing to promote self-care? The best way of persuading patients to self-care is if their doctors, pharmacists or practice nurses—people whom they know and trust—encourage them to do so. Yet self-care is an option rarely discussed in consultations, and many doctors feel that it is an issue that they do not have much time for in a consultation. Crucially, there are no performance-related financial incentives to promote self-care. Although promoting self-care might help to reduce surgery work load in the long term, it does not appear to be influencing practitioners’ behaviour at the moment. Perhaps we need to consider whether the quality and outcomes framework could be used to encourage GPs to include self-care as part of a consultation.
There are good examples from around the country, however, of where that has been working. The Pharmacy First minor ailments scheme, which was introduced in Erewash primary care trust a few years ago, is a good example of a self-care programme in action. Aimed at the mothers and carers of children aged from three months to 12 years, it attempted to increase awareness and take-up of self-care options and reduce the number of GP consultations for minor complaints. Information booklets and leaflets including, “Better Health at Home and at Work”, “Caring for Kids” and material relating to seasonal campaigns—on, for example, winter ailments and hay fever—were distributed widely across the community to support the scheme. The scheme was accompanied by a lot of public relations activity supporting the minor ailments promotion.
As well as leading to a slightly higher level of self-care for several childhood ailments, the scheme encouraged mothers and carers to think again about how they used GPs, pharmacists, practice nurses and other health care professionals. The scheme also illustrated how hard it is to encourage patients to become more self-sufficient and confident in their own care. Not only do we need extensive, carefully tailored community publicity, but we need to ensure that key opinion formers, such as GPs, early years child care workers, health visitors and teachers, are fully behind the self-care model. We also need national publicity and high-profile endorsements, which are also important in changing patients’ attitudes. In other words, if we want to achieve a lasting cultural shift in perceptions of self-care across the country, we need a coherent, well-planned national campaign requiring ministerial support.
How can greater self-care be achieved? The opportunities for self-care are greater than ever before, given the growing number of formerly prescription-only medicines now available over the counter, including for indigestion, pain, thrush, quite a few minor infections, and emergency and hormonal contraception. That is beginning to turn the tide. To increase the level of self-care we also need to address the culture of dependency and give patients the support that they need to feel confident in treating their own minor ailments.
All that could lead to significant cost savings, which, as I have said, could be passported to other parts of the NHS to achieve greater improvement there. According to a list that I have managed to achieve, the 10 minor ailments most commonly seen in consultation, beginning with the most common, are: back pain, dermatitis, heartburn and indigestion, nasal congestion, constipation, migraine, cough, acne, sprains and strains, and headache. That is a long list of minor ailments for which medication is now available over the counter. We need to take action to ensure that that is more widely publicised.
Five clear steps need to be taken if we are to ensure that self-care is increased. First, it is time to recognise the need to change the culture of dependency for minor ailments. Secondly, we need to develop a training package for health care professionals—GPs, pharmacists and nurses—on how to conduct “self-care aware” consultations. Thirdly, we need to initiate communications, nationally and locally, on the efficient use of the health system and taking responsibility for one’s own health and that of one’s family. We need TV and radio advertising campaigns, together with posters and patient information leaflets, in GP surgeries, pharmacies and citizens advice bureaux, that provide lists of minor ailments that could be treated by over-the-counter medications. All promotional material should include the strapline, “Ask your pharmacist”, because many people will approach their pharmacists, as they are often open quite late and on weekends.
We also need to develop a co-ordinated health and social care policy that promotes self-care behaviour, particularly for minor ailments, and introduce a comprehensive health education package in schools, to ensure that future generations use the health service efficiently and understand the principles of healthy living. Pharmacists and expert patients could also be invited into schools to give presentations on self-care. With those proposals in place, there is a good chance that we will begin to change attitudes to self-care among patients across the country. I hope that my right hon. and learned Friend the Minister will give those suggestions good consideration.
I certainly agree with my hon. Friend the Member for Dartford (Dr. Stoate) that those proposals need to be given serious consideration. Let me begin by congratulating him on holding this debate, on a subject that is important to him as chairman of both the all-party pharmacy group and the all-party primary care and public health group. Self-care is a cause that he has championed. He has made a strong case that some people turn to their GP when they do not need to, for minor ailments such as coughs and colds, and indigestion, rather than using simple and basic methods of care themselves. That is partly about knowledge and partly about self-confidence, as well as about people being willing to make a judgment about when they really need to see their GP and when they are going just for a bit of reassurance.
Last November, the Proprietary Association of Great Britain and the Royal College of General Practitioners launched their “Declaration of Self Care”. They put the total cost of GPs treating minor ailments at around £2 billion, of which £1.5 billion is in GP time. The potential benefits of some element of self-care are considerable, if we can begin to change the attitudes of some patients, some GPs and others. With proper support from health professionals such as pharmacists, people can take the appropriate level of responsibility for their own health. GPs could then focus on treating more complex conditions, which make better use of their expertise and time.
We need to get the balance right. We do not want people with difficult long-term conditions not going to see their GPs. That is not what this debate is about, nor is it about saving money. The NHS budget has increased massively in recent years. It will increase by 5.5 per cent. this year and 5.5 per cent. next year, and we will lock in that further increase for front-line services over the following two years.
Self-care, which comes in many forms, is about people looking after themselves and their families better, where that is the right thing to do. Many people do it, whereas some do not. Self-care can range from taking paracetamol when someone gets a cold, to disinfecting their child’s grazed knee when they fall, and from eating healthily and exercising more to stay fit, to getting out for a walk if they are feeling low—or it can mean someone deciding actively to manage their long-term condition with the help of health care professionals.
Society has changed in recent decades. People want more choice. They want to remain independent and stay healthy. They want safe, effective services, tailored to their needs and delivered as near to their homes as possible. A survey in 2005 showed that more than 80 per cent. of people with long-term conditions already play an active part in their own care, that more than 90 per cent. want to do more, and that more than three quarters would feel far more confident about taking care of their own health if they had the right support.
The NHS has also changed. The Government have long been committed to making medicines available over the counter by switching their legal status when it is safe to do so. For example, azithromycin, for people with chlamydia, has moved from being available only on prescription to being available over the counter in pharmacies. Similarly, many nicotine replacement therapies that were previously available only on prescription in pharmacies are now widely available on the high street. We have now made them available without a prescription.
The Government have gone to great lengths to give people more and more accessible information on health. In the late 1990s, we launched NHS Direct, providing national, 24/7 access to information, advice and support over the phone and on the internet. NHS Direct has a number of online tools to help people to care for themselves at home, such as symptom checkers and a “click to call back” function, whereby patients can request a phone call from NHS Direct. In 2008-09, 52 per cent. of all calls to NHS Direct were completed without the need for further medical attention—for example, from a GP.
In 2007, we introduced the NHS Choices website, which now receives more than 8 million visits a month. It provides convenient, comprehensive and clinically accredited information about treatments and local services on health, health improvement and social care. There, people can find “Your health, your way”, a guide to long-term conditions and self-care. It also tells people about the range of self-care support available to them locally, including healthy living advice, information about their condition, training to help people feel more in control, and access to self-help groups and to new technology to help people remain independent and in control. As a consequence, people are increasingly using NHS Choices rather than calling NHS Direct or visiting a GP.
Self-care is about more than just providing information, however. It is also about improving the partnership between professionals and the general public. General practitioners have a crucial role to play in engaging people in their own care and helping them to manage their condition, and many GPs already do this brilliantly. But we need to support new GPs and those who want to improve, and we have worked with the Academy of Medical Royal Colleges to produce an e-learning module called “Supporting Self-Care”, which is now part of the Royal College of General Practitioners’ e-GP training materials.
Of course, not everyone has access to the internet. Those who are not on the web can visit their local community pharmacy for information and support. Pharmacies already support self-care, providing advice and selling over-the-counter medicines, when appropriate. Since the 2005 community pharmacy contractual framework was introduced, support for self-care has been one of the essential services delivered by all community pharmacies in England.
The aim was to increase access and choice for people, including their carers, who wish to look after themselves or their families, helping them to self-manage minor illnesses, injuries or long-term conditions. Every day, pharmacies advise millions of people on how to treat or manage minor conditions, and on the appropriate use of over-the-counter medicines. When a pharmacy cannot help, it can provide information on health and social care providers or support organisations that can offer that help. The contractual framework represented a major change in the role of community pharmacies, from the place where medicines were dispensed, to somewhere that can offer more clinical services, such as chlamydia screening, health checks and support for people with long-term conditions. Some PCTs have even commissioned pharmacies to provide minor ailment services for those who do not pay prescription charges. By 2008-09, more than 3,200 pharmacies provided this service, an increase of 5 per cent. on the previous year.
If these measures are to make a real impact, however, people must first understand that pharmacists are highly trained clinical professionals in their own right who can help them with their self-care. So this year, we will raise public awareness of the skills, expertise and services offered by pharmacies. We are also funding some PCTs specifically to promote services commissioned through and delivered by community pharmacies.
Pharmacy has an important contribution to make to improving public health and reducing health inequalities. One of the themes in our 2008 White Paper “Pharmacy in England: building on strengths—delivering the future” was to help people to self-care—to improve their health and well-being and to take better care of themselves. Work is progressing on a framework to transform into healthy living pharmacies, focusing on prevention as well as cure. We have also published a number of educational resources to help pharmacy staff deliver advice to members of the public on subjects including stopping smoking, weight management and physical activity.
The Government therefore recognise the importance of having reliable, convenient advice readily available—whether it be on the phone, on the NHS Choices website, in GP surgeries or in local pharmacies. I think that the proposals set out at the end of my hon. Friend’s contribution are an important contribution to the debate on how we should drive this agenda forward. There are enormous benefits to be gained from encouraging people to take more responsibility for their own well-being, where it is right to do so. We will continue to support people to make their own informed choices.
Question put and agreed to.