Tuesday 22 June 2010
[Mr Graham Brady in the Chair]
Motion made, and Question proposed, That the sitting be now adjourned.—(Bill Wiggin.)
Thank you, Mr Brady, for this opportunity to seek assurances from the new coalition Government on their energy policy. I have considerable concerns, which are well founded and based on the track record and previous rhetoric of the Ministers now responsible for delivering a comprehensive, balanced energy policy that will provide security of supply and reduce our CO2 emissions. Internationally, there are tremendous concerns regarding the effects of climate change, and the UK must continue to play a major role in delivering. There are many hon. Members present, and quite a few will want to intervene or speak, so I will try to keep my remarks as short as possible. Having said that, I have a number of things to say and a number of questions to ask.
We have had considerable discussions on the subject over many years, started by scientists and political leaders who believe that climate change is the most dangerous and life-threatening issue facing the world. That, along with security of supply, has been my focus for a number of years, and we need clarity and a positive response to the issues that I will raise in this brief but important debate.
The UK’s security of supply is a major concern, and it is vital that the Government take appropriate action to ensure that we do not run out of power and end up with black-out Britain. The demise of the coal-fired power stations, and the closure of nuclear power stations at the end of their life cycle, will create tremendous challenges for the Government, and it is important that they are united in the pursuit of a coherent energy policy.
All energy sources must be developed to reduce our carbon footprint and allow us to meet our emissions targets. Although I am in favour of a balanced energy policy, it is time that we looked at the ever-increasing subsidies for renewable energy. Onshore wind energy, which is intermittent and requires 100% back-up, has benefited enormously from the renewables obligation, but it is extremely expensive and it is not the best way to use our huge levels of investment.
I must declare an interest as the chair of the all-party group on nuclear energy. Over the years, we have had considerable success in highlighting the issue of nuclear energy and promoting solutions to the problems that the UK faces over its security of supply and the devastating effects of climate change. As chair of the APG, I had hoped that the general election—no matter what the result—would not affect the nuclear industry and the future of new build. However, there is a problem with the Con-Dem coalition, because the Government said one thing—or, should I say, two things—during the election and another after it. That has been a regular occurrence with the coalition over the past few months.
Despite considerable misfortune, recent polls clearly demonstrate that those who support having a nuclear component of a comprehensive energy policy are winning, and may indeed have won, the argument. The majority of the general public are now convinced that we need to build new nuclear power plants. When the APG was formed, nuclear energy was on the back-burner, but leading environmentalists who have spent a lifetime opposing nuclear energy have recently gone public in support of it. The former head of Greenpeace, Mr Tindale, has openly come out in support of nuclear and is lobbying for it. It is interesting to look at his reasons for once opposing, and now supporting, nuclear energy; his reasons for having opposed it are shared by many of those who oppose it today. He says that
“nuclear power was wrong, partly for the pollution and nuclear waste reasons but primarily because of the risk of proliferation of nuclear weapons…My change of mind wasn’t sudden, but gradual over the past four years. But the key moment…was when it was reported that the permafrost in Siberia was melting massively, giving up methane, which is a very serious problem for the world…It was kind of like a religious conversion. Being anti-nuclear was an essential part of being an environmentalist for a long time but now that I’m talking to a number of environmentalists about this, it’s actually quite widespread this view that nuclear power is not ideal but it’s better than climate change”.
Given that analysis of the global impact of carbon emissions, the melting of the permafrost and the release of methane, what contribution will nuclear make to the reduction of global carbon emissions?
I thank the hon. Gentleman for his question. As I develop my argument, he will get the answer to it, but I will happily let him intervene again before the end of my speech if he wants to repeat his question.
As I said, I am concerned about the new Government’s policy, because their strongly held, differing views will not be coherent and will lead to the development of a mishmash of energy policies that does not meet the country’s needs. We are fast running out of time, and my concern is that we will end up with a dash for gas that leaves us dependent on imports for our energy supply. Any delay in delivering new nuclear build would be disastrous. Unfortunately, the history of some members of the Government raises major concerns about the new nuclear build programme. If Government policy is less than positive, the delivery of new nuclear power stations in the UK will be undermined.
Across the globe, there is strong demand from many countries that wish to build new nuclear power plants. The Government’s recent decision to withdraw funding for Sheffield Forgemasters must be viewed with deep concern.
My hon. Friend is making a strong case for a low-carbon future, but does he agree that what happened to Forgemasters was not just a tragedy for British jobs? The only other company that makes these reactor pressure vessels—these large components for nuclear reactors—is Japan Steel Works, in Hokkaido, Japan. We therefore face a huge lost export opportunity. Forgemasters has tripled its order book in recent years, and there is now a waiting list. Not only have we have lost an opportunity to be a major exporter of a key component in nuclear growth, but we may be at the end of a waiting list, which may jeopardise the future build programme in the UK.
My hon. Friend is absolutely right, and I will go into that in more detail later. The situation with Forgemasters is symptomatic of the problem that we will face in years to come. The previous Government pledged cash to Forgemasters to enable the Sheffield company to build parts for nuclear power stations—it was as simple as that.
The hon. Gentleman makes a fair point, which he has made many times. It has been said on many occasions that no subsidy will be given. Indirect subsidy is a different thing; it would be about what was happening with the carbon price in European markets and so on. We can never say never about anything, but the Labour Government said that they would not give any subsidy, and that it was down to the companies to cover the cost of not only building plants but dismantling them at the end of their life cycle. I hope that that answers the hon. Gentleman’s question.
When the loan to Forgemasters was announced in March, it was clear that it would make the plant one of two in the world—the point that my hon. Friend the Member for West Bromwich East (Mr Watson) made—able to make large forgings for the nuclear energy industry. Apart from creating employment opportunities and highly skilled jobs, it would lead to international order opportunities for the product. Those of us who have been involved in nuclear energy know that a number of nuclear stations are being planned all over the world. It does not come as a surprise to me, although it will to some, to hear that even Sweden is jumping on the bandwagon. As we speak, people all over the world are tackling the issues of security of supply and the need for a base load that includes nuclear. On that basis, it is essential that the Government look again at the decision. We need world leaders, and the Sheffield plant, with the investment, would have an opportunity second to none.
I do not feel the need to rehearse the concern about climate change and emissions targets; we have expressed it many times. However, I seek assurances from the Government about their intent. It is vital that we hear at first hand what position Ministers at the Department of Energy and Climate Change and the Prime Minister will take not just on climate change but on nuclear power. I have some concerns about their policy on new build. The Secretary of State for Energy and Climate Change has long been completely and unequivocally opposed to nuclear build. He has said:
“No private sector investor has built a nuclear power station anywhere in the world without lashings of government subsidy since Three Mile Island and Chernobyl. The World Bank refuses to lend on nuclear projects because of the long history of overruns.
Our message is clear, No to nuclear, as it is not a short cut, but a dead end. Yes to energy saving, yes to renewables, and yes to a sustainable energy future.”
That view—that nuclear power is not the answer to future energy needs—is the view, of course, of the Secretary of State.
On Friday 12 May 2006, the Secretary of State said, responding to an affirmation by the then Secretary of State, my right hon. Friend the Member for South Shields (David Miliband), that the Government were considering a new generation of nuclear power stations:
“While Mr Miliband’s acknowledgment of the scale of the climate change challenge is welcome, his comments on nuclear power are worrying.”
He went on to say:
“Not only does nuclear cause a great threat to the environment through the large amounts of waste produced, but it is also economically unviable.
The Government intends to use private investment to fulfil our future energy needs. However, since the Chernobyl disaster, no nuclear power station has been built anywhere in the world without huge amounts of government subsidy.”
That is the point that the hon. Member for Bermondsey and Old Southwark (Simon Hughes) was making earlier. Such statements cause problems for those of us who want a balanced energy policy, because it is the Secretary of State making them, and one would expect him to be writing the policy.
I want to quote Melanie Phillips of the Daily Mail, although it is not a paper that I quote very often, and is not known to be a friend of mine—
As my hon. Friend says, I shall do so just this once. The Secretary of State’s former colleague at The Guardian highlighted the dilemma of the coalition when she wrote:
“Or look at the farce about to play out in the energy ministry. To stave off Britain’s looming power crisis, the Tories are committed to building more nuclear power stations.
Yet the new Lib Dem Energy Secretary Chris Huhne is viscerally hostile to nuclear energy. So to stop the lights from going out in Britain, Mr Cameron has apparently given the Tory junior energy minister Charles Hendry responsibility for civil nuclear power.”
I have great respect for the Minister. We both served on the Select Committee on Energy and Climate Change, as did several other hon. Members who are here—I thought I was at a Select Committee meeting when I came into the Chamber. I think I can say that the Minister and I have been singing from the same hymn sheet for some years, even if that did upset the Front Benchers of our respective parties. Melanie Phillips continued:
“But with Mr Huhne so opposed, is it not all too likely that Mr Hendry’s boss will find ways of kicking the nuclear power station programme into the long grass—thus provoking a possible nuclear explosion in the energy department?”
No pun intended.
I know that I should not believe everything that I read in the Daily Mail, or other media, for that matter, but will the Minister give this House an assurance that nuclear new build will go ahead, that the Secretary of State has changed his stance, and that the Secretary of State’s complete dismissal of the building of any new nuclear power stations has been sacrificed for his present position?
I appreciate my hon. Friend’s obtaining this debate. I am completely confused about the coalition’s policy on nuclear. “The Coalition: our programme for government” states:
“We will implement a process allowing the Liberal Democrats to maintain their opposition to nuclear power while permitting the Government to bring forward the National Planning Statement for ratification by Parliament so that new nuclear construction becomes possible. This process will involve: the Government completing the drafting of a national planning statement and putting it before Parliament; specific agreement that a Liberal Democrat spokesperson will speak against the Planning Statement, but that Liberal Democrat MPs will abstain; and clarity that this will not be regarded as an issue of confidence.”
How on earth can we keep the lights on when we have such confusion at the heart of such an important part of Government energy policy?
My hon. Friend played an important part in the previous Government and should be thanked for all the work that he did—and for all the work that he will do in opposition. He makes a fair and valid point. The Minister must answer those questions. Those of us who are not trying to make political points— [Laughter.] I am shocked by that reaction. The point of the debate is to clarify exactly where we are on energy, where the industry stands, and where we are on this country’s security of supply. I know that the Minister does not mean to be flippant, and takes his job seriously, and will be able to answer all my questions to my satisfaction—I say that tongue in cheek.
While the Minister is confirming the change that I spoke of, will he also confirm the position of the Prime Minister, who has also seen the light, like Paul on the road to Damascus, and who no longer feels that new build can be seen only as a last resort? Will the Minister comment on that? If the Prime Minister is not behind a nuclear programme and a balanced energy policy we certainly have a problem.
Given the strong points that the hon. Gentleman has made about the need for nuclear power and, in the light of the potential energy gap, the need to press ahead with the nuclear programme as swiftly as possible, does he share my concern that it was premature of the previous Government to take Dungeness off the list of approved sites?
I welcome the hon. Gentleman to the House and hope that he has a long and happy career here—but perhaps not too long. I totally agree with him, but that will not be a surprise to the Minister. Options must be kept open. Acting prematurely for the sake of looking good is a mistake. I asked a question in a similar vein yesterday, but did not get an answer, but I hope that the Minister will answer me today.
It will be the Government’s fault if we end up with power cuts. If they do not pull their finger out, that is exactly where we are going. It says here in my speech that I have tremendous respect for the Minister, and I do; I hope that that has not affected his political career or job prospects, as I am sure that he would like to move up at least one place. I hope he will. In a recent speech at Chatham House he said that he welcomed the opportunity to focus on one of the biggest challenges facing Government—the issue of energy security and how we decarbonise society. He went on to say:
“This is a green coalition with a shared priority. Both to create a low carbon economy to meet the urgent challenge of climate change and to help achieve energy security.”
That sounds a bit like “peace for our time” because there was no mention of nuclear power.
The hon. Gentleman made the point that if the lights go out, the Government will be at fault. The Government on watch must deal with the situation on the day, but with his knowledge and experience of the energy industry, the hon. Gentleman must accept that there is a huge lead time in the development of energy policy and in capital planning. We have had 13 years of a Labour Government; does the hon. Gentleman accept that the legacy of their decision making will contribute to the consequence, if the lights go out?
The hon. Gentleman has obviously read the next paragraph of my speech. I give him credit for his X-ray vision; perhaps what I say next will position me exactly as he has said.
Low-carbon technologies have an important role to play, not only when it comes to meeting our climate change targets, but with regard to building recovery from the recession and creating new jobs and industries in the coming decades. We face the greatest energy challenge of our lifetime. Over the next 10 to 15 years, we will need something in the order of £200 billion of new investment. How does the withdrawal of funding from Sheffield Forgemasters fit in with that rhetoric?
The need for a balanced energy policy that uses all proven sources of generation has been reinforced by the events of the last few years. The increased price of oil, and the effect that that has had on the economy, has highlighted the need to reduce dependence on imported gas and oil. Petrol prices have gone through the roof, with knock-on effects for transport and food bills, and inflated electricity and gas prices. The UK cannot be left at the mercy of imported oil and gas, but the demise of coal and nuclear would leave us dependent on our core source, gas, for at least 50% of our electricity needs. If, as is hoped, we go down the clean cars route with electric vehicles, we will need more electricity to cover the increase in demand. To ensure cheap, reliable electricity, we will need more than simple efficiency savings or more clean-generated electricity—either that, or the answer to our energy needs will have to be magic or come from thin air.
I have raised my concerns. It is essential that we have a coherent energy policy, but that requires total agreement within Government. I seek assurances that they will deliver a comprehensive balanced energy policy that includes a nuclear component. The decision to withdraw funding from Sheffield Forgemasters must be reversed, as that is contrary to delivering the skills and the means to make Britain a world leader in nuclear technology. As the Minister has said,
“Time is not on our side, and we recognise the scale of the challenge. We see low carbon technologies as the way forward to meet our climate change commitments, but also to enhance our energy security.”
He alluded to the fact that if we do not plan now—we should have planned already— we will hit a spot when there are real problems. That, of course, is where the dash for gas comes in.
When we get to about 2016-17, we will be in a particularly vulnerable position. It is hoped that the first nuclear power station will soon be given planning permission, and that it will be available and ready for commissioning in 2017-18. The most important time is between 2020 and 2025, when other power stations go offline and new power stations will have to be built. The Government have to make a commitment today: if they do not, those power stations will not be built. Indeed, that was said by my predecessor on the all-party group in 2002-03, when it was not popular to be a member of the group. It is amazing how time has proven him to be correct. Our original goal—when I say ours, I mean everyone’s; I am referring not only to you, Mr Brady, but Opposition and Government Members and the people of this nation—was to make Britain the most attractive place to invest in energy. In order to provide secure, low-carbon energy, we need to keep bills affordable.
In conclusion, I must tell the Government that talk is cheap and that actions speak louder than words; they must lead, proving that they have the solutions to our energy needs. If they act, they will have my full support and that of my party, as well as the support of everyone else in the country. If they do not act, I shall look forward to the next Labour Government being here—but we will probably need candles to see one another.
I congratulate the hon. Member for Glasgow North West (John Robertson) on securing this important debate. I may not be able to say this a huge number of times in my parliamentary career, but I can say this morning that I agree very much with the thrust of his argument on the importance of nuclear being part of our energy mix. In an intervention this morning, I spoke of the Dungeness nuclear power station in my constituency, a subject that I also mentioned in my maiden speech. My hon. Friend the Minister knows that I take a strong interest in the matter; I am grateful for his reciprocal interest, as it is important to my constituents.
As I said earlier, in their consultation on the nuclear new-build programme, the previous Government removed Dungeness from the national policy statement on approved sites. That caused great concern in my constituency, and it was something of a surprise. There has been nuclear power at Dungeness since the 1960s, and there have been two generations of facilities. Dungeness A is being decommissioned, and Dungeness B is due to run until about 2018. It has always been anticipated that there would be a third—and, potentially, a fourth—generation of nuclear power stations on the site, which is strategically important; it is the only nuclear facility to the south-east of London, and it is in an area of high energy demand. It produces enough power to provide electricity for the whole of Kent.
I share the concern expressed by the hon. Member for Glasgow North West: if that facility is no longer available, and there is no new nuclear power, where is the energy to come from? It is likely to be imported, and the sources of that energy may not be as secure and certain as we would like. That will have a knock-on effect for consumers in the prices that they have to pay.
Like many Members who have nuclear facilities in their constituencies, I am aware of the excellent safety record of the British nuclear industry, and of the large number of jobs created by the building and running of nuclear power stations. They create an important economic infrastructure for the local economy. It is estimated that Dungeness B nuclear power station puts £20 million into the economy that it serves; in the current economic climate, I struggle to see where else that funding could be found, or what other investment could match it.
I wish to consider why the right hon. Member for Doncaster North (Edward Miliband) decided to take Dungeness off the list of potential new nuclear sites. Was it a lack of local support? No, not at all: there is a huge amount of support for the Dungeness nuclear power station. Research conducted in that area of Kent shows that the nearer one gets to Dungeness, the more popular it is. Was it because of the risk of coastal flooding? The Environment Agency says that it is perfectly content with managing the flood risk at Dungeness. If anything, maintenance of the flood defences there has a knock-on benefit for the whole of the Romney marsh area, which is largely below sea level and is considered to be one of the areas most at risk from sea flooding, so it was not that. Was it, as some in my constituency have suggested, concern about the proximity of a small, local airport? In evidence to the previous Government, the Health and Safety Executive said that that was not a concern, either now or if the airport should expand; it would not be a reason for not progressing with the Dungeness site.
The European Commission is not a body that I would normally draw upon for supporting evidence, but it clearly considered Dungeness to be a site for potential new nuclear build, because when EDF Energy completed its takeover of British Energy, it requested the new company to consider selling sites where new power stations might be built, so that it did not have a monopoly. Dungeness was earmarked as a site that might have to be sold. Clearly, at the macro level, the European Commission considered that it was logical for Dungeness plans to be taken forward, which is interesting.
It seems that Dungeness was taken off the list because of an interpretation of the habitats directive, and because of the Natura 2000 reserves, which are set up at a European level, although enforcement takes place on a national level. The Dungeness site would fall foul of the environmental protections under the habitats directive. That was certainly the view of Natural England, the Government’s statutory consultee. My predecessor, Michael Howard, raised that point with the right hon. Member for Doncaster North before the general election, asking whether Natural England had a veto on Government policy in such matters—its objection would seem to be the primary reason why Dungeness plans have fallen—but the right hon. Gentleman said that it did not. I hope that that is so.
We know that overwhelming national interest can take precedence over concerns about enforcing the habitats directive. Given what the hon. Member for Glasgow North West said about the huge need for nuclear power, I hope that we will consider it a matter of great national importance to have as many new-build nuclear sites as possible. I know that there would be problems with planning, and local opposition to grid connection points in various sites around the country. However, in evidence to the Select Committee on Energy and Climate Change before the election, EDF Energy said that it considered Dungeness to be an excellent site for grid connection, and that it could potentially be online and producing energy before 2020.
The hon. Gentleman makes a compelling case, and he will have a very long career in this House if he makes arguments as potent as the one that he makes this morning. I suspect that part of the reason why Dungeness was taken off the list is that it does not work well—or occasionally does not work very well. Does he think that it would be useful for the Minister to forge links with the nuclear industry work force, and to perhaps meet Mr Dougie Rooney of the Amalgamated Engineering and Electrical Union, who could build common cause with him on the work force of Dungeness?
The intervention from the hon. Member for West Bromwich East (Mr Watson) was confusing, because the performance of an existing power station does not have anything to do with the performance of the next power station on the site. Not to defend the previous Government, but I am sure that the decision was to do with the environmental impact locally, and the fact that the Government found sites elsewhere to fill the quota that they were looking to hit.
The hon. Gentleman makes an important point about the nature of the environmental objections and whether they are well founded. Natural England’s objection is that Dungeness sits on a peninsula of shingle. It is the second largest shingle peninsula in the world; the largest is Cape Canaveral in Florida, so clearly either NASA has found ways of managing the natural environment, or the Americans are working to different rules. We are talking about a living, moving landscape, with nuclear power and other development. There is a need to intervene to prevent coastal erosion of the shingle peninsula, which is moving, and to maintain the defences and protect the existing power station; that means moving shingle from Lydd-on-Sea to the western end of the peninsula. That work has to go on, and people who have lived in Dungeness all their lives are aware that human intervention is natural.
Natural England is right to raise concerns about this important ecological site, which is unique in our country and, in many ways, in Europe. The history of Dungeness is the history of man working in successful partnership with nature. The site is excellent for meeting the energy demand for nuclear power in our country, and it should be considered as a site for a station. Given that the development area for the new power station sits alongside an existing power station, and is on land previously disturbed and developed as part of the building of the first two power stations, we are talking about potentially less than 1% of the entire protected area that covers Dungeness and Romney marsh and the Rye site of special scientific interest. That is a relatively small area of development; development could not be said to bring into question the integrity of the whole site. Only a very small part is affected, so some mitigation may be possible.
The national case and demand for nuclear power is such that we should seriously look at that option. We should not get into a position where any area of development is considered impossible, or where Natural England has, on certain sites, a veto over whether anything happens at all. There are even objections to the movement of shingle from one area of Dungeness to another to maintain the sea defences; there are questions over whether that should be stopped, and whether the building aggregate should be dumped into the sea instead, at great cost to the taxpayer.
I am following the hon. Gentleman’s argument closely. Like him, I have a nuclear power station in my constituency, and there is the possibility of a replacement power station next door. There is also an area for birds, which is of scientific interest, so we have very similar views. I would like nuclear power to be part of a balanced mix of energy for Britain. We need that to happen as quickly as possible, and I think that he agrees with me. On that basis, does he think that the Government’s abolition of the Infrastructure Planning Commission is a good or a bad thing?
The hon. Gentleman makes an important point. The question is, what planning framework should deliver the nuclear new-build programme? Regardless of what takes the place of the IPC, all Members want a structured and coherent plan to take the sites forward. My concerns and argument are about the bit that comes before the IPC—the consultation on the list of nuclear sites. My concern is that that system has fallen down.
I am aware that the Government have inherited a live and open consultation from the previous Government. Ministers are still considering the evidence given by my constituents and many others during the consultation period, as well as the evidence in the report of the Select Committee on Energy and Climate Change. Those things will be taken into account, and I look forward to reading the report. I hope that Ministers will consider some of the points that I have made on the suitability of Dungeness as a key site.
Of course Natural England does not have a veto, but new build will take place only at a certain rate, and that is determined entirely by the private sector. It makes a great deal of sense for a Government to choose the sites most likely to progress at speed. In the case of Dungeness, the consultations necessary would be complicated. It was a purely pragmatic, straightforward and reasonable decision for the Government to withdraw the site from the consultation.
The right hon. Lady makes an important point about the nature of consultation and how it is conducted. From the evidence of the Department of Energy and Climate Change on the consultation on Dungeness—available on its website—it seems that Natural England raised the issue early, and that meetings were called between it and EDF Energy very early on in the process. I am not certain how much interrogation there was of Natural England’s argument, or whether it was just accepted. Were the Government concerned that Natural England might make a serious challenge? Natural England said that it potentially had concerns about a number of the sites, but it had the greatest concern about the one at Dungeness. My concern is this: how much exploration has there been of Natural England’s argument, and what cases for mitigation have been made?
I am conscious that other right hon. and hon. Members would like to contribute. I obviously want Dungeness back on the list of sites, maybe with caveats at the planning stage that a very detailed plan for managing the local environment must be part of the consideration of how that power station could be built. I am sure that the right hon. Lady is correct that there will be issues with a number of the sites, whether or not they are included in the national policy statement on nuclear power. It would therefore be sensible to have as many sites on the list as possible that can contribute to our energy needs. We can then progress as many as possible and hope that a good number are delivered.
I am pleased to make a brief contribution to the debate. I congratulate the hon. Member for Glasgow North West (John Robertson) on securing the debate. He is, of course, a well known and passionate advocate of nuclear power, as is the Minister—these debates often seem like a meeting of old friends. While I respect their positions, it will not come as a great surprise to either of them that I take a somewhat different position. The Scottish National party remains opposed to new nuclear power stations. We believe that Scotland neither needs nor wants such stations, and there is a clear majority in the Scottish Parliament against them. This debate centres on the new Westminster Government’s policy, and I do not want to debate the pros and cons of nuclear power as such, but will focus on what their policy is.
Before the election, the Conservatives made no secret of their support for nuclear power, and their manifesto clearly supported new nuclear power stations
“provided they receive no public subsidy”.
The Liberal Democrats clearly stated that they
“reject a new generation of nuclear power stations”.
However, the coalition agreement states unequivocally:
“We will implement a process allowing the Liberal Democrats to maintain their opposition to nuclear power while permitting the Government to bring forward the National Planning Statement for ratification by Parliament so that new nuclear construction becomes possible”—
a fudge if ever there was one. It gets worse, in that the Liberal Democrats can speak against it but are committed to abstain on any vote. That seems to lack principle completely. The present Liberal Democrat Secretary of State for Energy and Climate Change, the right hon. Member for Eastleigh (Chris Huhne), who once described nuclear power as a “failed technology”, has stated that it is very clear that there will be a new generation of nuclear power stations. No doubt the Conservative party are relying on a temporary coalition with Labour to ensure the measure goes through.
We should not be unduly surprised; the Liberal Democrats were against nuclear weapons, but now appear to be in favour as long as they cost less than Trident. The position appears to be that there will be new nuclear power stations provided the private sector meets all the costs, but how will that work? In November last year, Citigroup published a fascinating report entitled “New Nuclear—the Economics Say No”, in which it describes the “three Corporate Killers” and says:
“Three of the risks faced by developers—Construction, Power Price, and Operational—are so large and variable that individually they could each bring even the largest utility company to its knees financially. This makes new nuclear a unique investment proposition for utility companies.”
I presume it does not mean that in a good way. It makes the point that
“No where else in the world…have nuclear power stations been built on this basis”,
“Nor will they be built in the UK—We see little if any prospect that new nuclear stations will be built in the UK by the private sector unless developers can lay off substantial elements of the three major risks. Financing guarantees, minimum power prices, and/or government-backed power off-take agreements may all be needed if stations are to be built.”
Has the hon. Gentleman not seen the comments by the head of EDF, Vincent de Rivaz, about how his organisation welcomes this new development and how it will continue to put forward its programmes despite there being no subsidy from the public sector? Such comments will be very pleasing to my constituents because it should mean that Sizewell will get built.
I have heard Mr de Rivaz’s comments, but he seems to be the only one to make such comments. Different comments have been made by the head of E.ON UK, who is also interested in new nuclear power stations.
Let me return to what Citigroup was saying. I should add that the report was written before the oil spill in the gulf of Mexico, where BP has found that legal maximum liabilities are meaningless. Already, it has paid out more than the legal maximum under United States federal law and is facing many billions more in compensation payments. Just what would the cost be to any operator of a nuclear power station should—God forbid—there be a serious incident? The fact that there is a serious potential liability should be a red light to utility companies, and all those who invest in them. It is also worth noting that the present Secretary of State has already reported a black hole in the budget of his Department to meet the cost of decommissioning current stations and of containment of our existing stock of nuclear waste. Given that situation, how will the Government ensure that the new nuclear power stations will be built without public subsidy, especially as that has never been done anywhere in the world?
The coalition agreement gives us a clue when it states:
“We will introduce a floor price for carbon, and make efforts to persuade the EU to move towards a full auctioning of ETS permits.”
It seems that that is the answer as to how nuclear power is to be given a subsidy. Nuclear is to be made commercial by introducing a floor price for carbon. In a recent speech to the Nuclear Industry Forum, the Minister said:
“The carbon price is not a subsidy for new nuclear, it is to drive forward low carbon investment.”
An argument can be made that that is the case, but it is also undoubtedly true that new nuclear will be the main beneficiary of such a policy. It will have the effect of driving up, perhaps very substantially, the price of energy produced by fossil fuels, thus making nuclear much more attractive, which is why the nuclear industry is the cheerleader for this particular policy. In his speech, the hon. Member for Glasgow North West said that without nuclear power, we faced the prospect of very high energy prices, but if this policy is pursued, we may face very high electricity prices across the board with or without nuclear power.
In effect, the introduction of a floor price would be fixing the market, which I thought would have been anathema to free market Conservatives. It will no doubt be argued that that is a move that will help all other low carbon emitters, and that there are already many subsidies on different kinds of renewables. That point was also made by the hon. Member for Glasgow North West. Some of that is true, but other forms of renewables are new technologies that are receiving help to get them to a take-off postion in the market. The previous Government’s proposals to stagger renewables obligation certificates recognised that some of them had almost reached that position.
Nuclear is not a new technology; it is an old technology that has already had a shedload of money from the taxpayers. I am old enough to remember when it was said that nuclear power would be too cheap to meter. That did not happen, and we have seen the vast amount that will be needed to deal with the legacy of waste, now and far into the future.
It seems, therefore, that rather than making private investors take the risks, it is again the taxpayer who will do so, and I would be interested to know whether the Minister can give us more details on how the policy of the floor of the carbon price is to work. For example, when and how is it to be introduced? I noticed that The Independent suggested that it will be introduced when new nuclear power stations would be up and running in 2025. Will the policy apply only within the UK if he is unable to persuade the EU to adopt such a position, and how will that work with the competition laws within the EU?
Finally, I ask the Minister to confirm that the coalition Government remain signed up to the respect agenda with the Scottish Government that the Prime Minister talked so much about, and that there will be no attempt to amend the powers of the Scottish Parliament in that area so that we might continue to be nuclear-free.
As I stated at the outset, the SNP remains opposed to new nuclear power stations. We believe that Scotland has great potential to be the green powerhouse of Europe and that the determination of all three Unionist parties to pursue new nuclear power stations is an horrendous mistake that will cost the taxpayers dearly in the future.
I congratulate the hon. Member for Glasgow North West (John Robertson) on securing this debate and on putting his case for nuclear power, as he did so many times in the previous Parliament. As he recognises, one of the legacies that this Government will have to address is the previous Parliament’s lack of momentum in decarbonising electricity generation in the UK.
The hon. Gentleman did not address my specific question about nuclear power’s global contribution. Although nuclear power will be embraced by some countries, it will not be the solution to providing a low-carbon future across the world. Therefore, it is very important for us to develop other low-carbon energy systems, such as carbon capture and storage, especially if they can be retrofitted in China. That will have a far greater impact.
I thought that I had addressed the hon. Gentleman’s point; if I did not, I apologise. As we speak, power stations are being built around the world. Still more will be built when people see the low-carbon output—it is practically nil—of nuclear power stations.
The hon. Gentleman is absolutely right. China is the market that we have to get into, and CCS would help us do that. Nevertheless, the case has to be proven and the technology has to be there, and it is not there at the moment. The hon. Member for Angus (Mr Weir) said that nuclear power is an old energy. It is, but it is also a tried and tested energy that can be relied on.
Historically, the nuclear industry has required public subsidy for the purposes of trying and testing. Even the great white hope in Finland, which was meant to show how the market could deliver, has turned out to need an underpinning of public subsidy. I recognise that the carbon market is an important way of incentivising whatever means of low-carbon electricity generation comes before us, and anything that can be done to get a better price for carbon will be an important part of driving forward alternative energy supplies.
I must declare an interest here as a shareholder in Shell. I also represent the north-east of Scotland, where the oil and gas industry is extremely important. The hon. Gentleman said that he was worried about us relying on gas. This Government will have to address one of the legacies of the previous Government and make sure that we maximise our own gas production, because in that way we will reduce any immediate worries about having to rely on imported gas.
Moreover, the Government must recognise that the big change resulting from the near-decoupling of the oil and gas markets following the discovery of the means of producing shale gas—a new means of producing gas—is altering the whole concern about a further dash for gas. Gas is one of the cleaner fuels. Although it produces CO2 , it produces less than other fuels. Therefore, it can play an important part in our electricity mix without too much concern.
I hear what the hon. Gentleman says, and I agree with him in many ways, but does he not accept the point that raising carbon prices will affect the cheapness of gas? It will substantially push up the price because gas is a fossil fuel and will be hard hit if we put a floor on the carbon price to benefit nuclear power.
What the hon. Gentleman has to accept is that we want a low-carbon future. Can he suggest a mechanism other than putting a price on carbon? The EU has embraced the idea of putting a price on carbon as the only means of producing a low-carbon future for the European Union.
The EU has not accepted a floor price for carbon, as is proposed by the coalition Government. So we may have a position in which the UK is the only country trying to impose a floor price for carbon while remaining within the emissions trading scheme. I cannot see how that is workable.
That is why we have to convince the EU that, if it is going to deliver on a low-carbon agenda and if it has embraced the ETS, it will have to put a floor on carbon to make the ETS deliver the treaty commitments and other commitments to having a low-carbon future.
The hon. Member for Glasgow North West said that the world is facing the major problem of there being too much carbon dioxide going into the atmosphere. There is no way of not putting CO2 into the atmosphere unless we are willing to pay the costs of producing alternatives to CO2. Nuclear is one alternative, which we do not think is the right alternative, but marine renewables also need a floor on carbon—all low-carbon energy systems, if they are going to take off and be delivered, will need a floor on carbon. That is the only way. The EU has decided to embrace the ETS and unless we actually make the ETS work, we will not deliver on all our commitments.
I think that this debate about the European ETS is at the heart of European energy policy. Would the hon. Gentleman go as far as I would and say that the introduction of that scheme has been a catastrophe, that the low level of carbon is actually subsidising polluting industries and that it would be better to start again?
The EU cannot keep inventing new schemes. I think that we need to make the ETS work now that we have embraced it and we actually need to deliver it, because at least it uses the market to try to come forward with the best and most efficient solutions for achieving the low-carbon future that we need to embrace. So that is an important point.
There is another situation with nuclear. When we on the Energy and Climate Change Committee were looking at the planning statements, it struck me that the long-term solution for nuclear waste may well be a deep repository, but the plans now are to keep the waste on site for a considerable time. Therefore, all these communities must be managed for a long time, to protect those waste sites. They are all in low-lying floodplains, so we had this vision of little islands of nuclear waste being protected by flood defences, as the sea level rises and the legacy of the new nuclear generation is left for future generations to pick up.
So it still seems a major challenge for this country to go down that route of nuclear if we can embrace other technologies, such as carbon capture and storage and marine. We have a massive tidal resource around our coastline, which we have failed to tap and failed to launch. Those of us who are committed to marine renewables and the alternative technologies have been frustrated about the legacy of so many resources going into nuclear. That has diverted resources away from what could have been another great export industry and a very substantial source of low-carbon energy for this country, and it does not pose the risks of pollution that we would still face with nuclear.
I just want to make one other point. My hon. Friend has huge experience in all of these areas. However, the statutory body that advises on waste and nuclear waste, and that gave the official advice to the last Government, has not said so far that there is a safe method of disposing of nuclear waste. Yes, it has accepted methods of storage of nuclear waste, and the communities where that waste is produced and stored understand that, but there is not yet an agreed safe method of disposing of nuclear waste. Going ahead with a programme of new nuclear without a safe method of disposal being objectively agreed would be another folly.
Yes. It seems that we should deal with the legacy that we already have before adding to that legacy.
I am conscious that other Members want to speak. As the hon. Member for Glasgow North West said, we have the serious challenge of ensuring that the lights stay on. We need electricity to be generated. There is also the serious challenge of producing a low-carbon future. We need long-term investment, and we need the incentives that have been mentioned. I think that a price on carbon is an important incentive to low-carbon energy industries and that nuclear is not the great white hope that will solve the problem, although it is portrayed as such.
I also think that we need to embrace marine renewables and carbon capture and storage, and ensure that we achieve the most effective gas production from our own gas resources before we waste them and leave them locked in the ground. There is a low-carbon future in which we can keep the lights on, but I do not think that nuclear is the means of achieving that future.
I congratulate my hon. Friend the Member for Glasgow North West (John Robertson) on securing this debate. It is, of course, a debate about Government policy on new nuclear; we are not talking about the overall advisability of going down the nuclear route. My view remains that nuclear power is not renewable. We have no nuclear fuel in or around the UK and I have my views on that subject. However, Government policy on new nuclear is the important issue that we need to concentrate on right now.
In that context, the Minister has an enormous responsibility on his shoulders. I, too, have a great regard for him and for his skills in tackling these matters. However, he will need at least the skill of those responsible for putting in and removing the nuclear cores from Three Mile Island to keep the coalition on track as far as its policy is concerned, because although the provisional wing of the coalition is in for this debate, the official wing is apparently locked into Government policy on nuclear, in respect of the decisions that will need to be made as far as the Department of Energy and Climate Change is concerned.
Of course, we have clarity about what those decisions will consist of—indeed, we had that clarity in a speech that the Minister made to the Nuclear Industry Forum very recently. In that speech, he stated:
“We will keep the fast-track process for major infrastructure, but planning decisions will be made by Ministers thereby ensuring democratic accountability”.
There is a national policy statement on nuclear. Incidentally, the new Government are going to take that statement apart and put it together again, which I think will ensure further delays in the process. Among all the national policy statements that have come out, the statement on nuclear is unique in that it is site-specific. We have already heard mention this morning of the inclusion or exclusion in that statement of a particular site at Dungeness; in total, 10 sites have been identified in the statement.
If that is to happen as far as those sites are concerned, the decision taken by the Minister will mean that he will have to frank each of those sites and so will, among other things, give an enormous use value to those people who are then commissioned to develop them. The Minister will have to take a positive decision; he cannot remove himself from it.
As my hon. Friend the Member for Hartlepool (Mr Wright) mentioned, we will therefore have the spectacle of an agreement that appears to suggest that the Liberal Democrats can maintain their opposition to nuclear power while permitting the Government to bring forward the national planning statement for ratification. But that same Minister, in agreeing to that national planning statement, will specifically have to frank those sites, thereby allowing those particular nuclear stations to be developed.
I was just going to reflect on that issue very briefly. As the Minister mentioned in his recent speech to the Nuclear Industry Forum, these decisions will come before Parliament. Presumably, therefore, the Minister who has made the decisions will be in the position of abstaining during votes on them. That will be an interesting piece of choreography, if the policy is to go ahead.
In his recent speech to the Nuclear Industry Forum, the Minister also emphasised that there will be no cost to the public purse as a result of the new nuclear programme. We need a little more clarification of what that actually means. In the past, one of the reasons why potential builders of nuclear power stations said that they might go ahead with nuclear build was that their clear underlying view was that they really did not believe that the new proposals would present no cost to the public purse.
It is one thing to say that there should be a floor price for carbon—that would not be a cost to the public purse, but generic assistance for all forms of low-carbon energy—but there is also the question of subsidising or giving guarantees of last resort on insurance, waste and storage, and of giving assistance on how all that works. Those are subsidies. If the Government are saying out of one side of their mouth that there will be no subsidies but out of the other side that, actually, there will be subsidies in several areas, that may be the way forward that they wish to assume as far as their policy is concerned. However, if they really do mean that there will be no subsidy from the public purse, there will also be no timetable for the build of new nuclear.
That is the crucial issue that we need to face in respect of future policy. If there is no subsidy at all from the public purse, a company may come forward and build a new nuclear power station, two or three companies may come forward and build two or three new nuclear power stations, or perhaps no one will come forward to build a new nuclear power station. We cannot easily afford that uncertainty, given our energy supply situation.
The previous Government’s timetable for the arrival of the first new nuclear power station was 2017-18. My hon. Friend the Member for Glasgow North West mentioned that potential date today. Interestingly, a policy document issued in 2007 by the then Department of Trade and Industry, “New nuclear power generation in the UK: Cost benefit analysis”, gave a different date—the early 2020s—for the arrival of the first new nuclear power station. Indeed, several industry analysts and others suggest that a realistic date is more likely to be in the mid-2020s.
That is important because, by that date, some 8 GW of coal-fired power stations, 3 GW of oil-fired power stations and 7 GW of nuclear power stations will have gone out of commission—for various reasons, including the large combustion plant directive, the age of the plant and the difficulty of maintaining or extending the life of nuclear power stations. That capacity will definitely be out of the system, so the question is what we do in the meantime to replace it. If no nuclear power stations are likely to come on stream until the mid-2020s, it will have to be replaced by other means.
Personally, that is not a source of regret to me, but there certainly is an argument that, because of the long-term scale of the planning, if one were to develop a range of new nuclear power stations to replace power stations as they ran down, replacement should be on that basis: as they run down. However, successive Governments have not taken that view on nuclear power; it was not only the previous Government for whom it was not an issue. However, we are in a position where like-for-like renewal would mean an enormous fleet of new power stations coming on stream at an early stage.
If that does not happen, base-load power, which is so important for our energy economy, is likely to be replaced by other means such as carbon capture and storage-fitted coal-fired power stations or—the Committee on Climate Change recently wrote to the Government to emphasise this—CCS-fitted gas-fired power stations. That would then be a new generation of base load, on the back of which new nuclear power would have to compete.
If new nuclear power has not been planned in any way, it will have to compete with that new form of base load, and whether it can compete on price for its power will be entirely determined by whether there is a subsidy for new nuclear power or whether there is some form of carbon pricing that enables nuclear power, at the point at which it comes in, to compete effectively against other forms of power. The time scale is crucial as far as new nuclear power is concerned.
That is the central issue for this country’s future energy policy. The challenge that we face is to keep the lights on, to replace an enormous amount of generating capacity—not just base-load, but other forms as well—and to ensure that that generating capacity is low carbon for the low-carbon economy that we must move towards. Above all, that needs planning. Planning is needed to ensure that that happens over a period of time.
For the new Government to announce a policy that says, in essence, that there will be no planning as far as new energy supplies are concerned seems perverse, given the imperatives ahead of us. Whether we plan to have a fleet of CCS-fitted power generators, large-scale renewables—wind, wave and tide, and large deep-sea wind arrays—or a new generation of nuclear reactors to provide energy, we have to ensure that there is planning at some stage.
I am concerned that the new Government’s announcements in their early days about how they will manage the energy economy, and what they are doing in respect of national policy statements, the Infrastructure Planning Commission and nuclear power, appear to be moving away from ensuring that we plan our energy economy so that we can keep the lights on for the next 50 years.
I congratulate my hon. Friend the Member for Glasgow North West (John Robertson) on his success in securing the debate and on the way in which he made his case. He has always been a supporter of nuclear power and has worked hard to keep the issue before the House. Not all of us in the Labour party have shared his enthusiasm over the years. Indeed, my own position was not dissimilar to that of the Prime Minister, who said that nuclear energy was an energy of last resort. However, in any consideration of nuclear energy, we need to ask why so many people have changed their minds in favour of new nuclear, and what that means for those who have not.
As my hon. Friend said, the twin imperatives of tackling climate change and achieving energy security have focused and changed minds on new nuclear—but only some minds. Despite constantly challenging the Labour Government to do more on climate change, the Liberal Democrats in their manifesto explicitly rejected a new generation of new nuclear power stations, and we have heard contributions this morning that have entirely underlined that.
Perhaps the Minister could say whether he remains committed to a reduction in greenhouse gases of 34% by 2020, and at least 80% by 2050, as specified in Labour’s Climate Change Act 2008, given the Liberal Democrats’ brake on his nuclear ambitions. Does he recall the warning given by his newly acquired friend, the hon. Member for Cheltenham (Martin Horwood), who stated:
“I assure any investors who may be watching our debate…that their investment will be at risk if we play a part in any future Government, because if we had the chance we would seek to slow down, and if possible to stop, the development of nuclear power.”—[Official Report, 30 April 2008; Vol. 475, c. 322.]?
That is in stark contrast to the Minister’s statement that clarity is essential if new investment is to happen.
What are business and industry to make of the coalition Government’s position? It is clear that there is no united Government position on nuclear energy. As my hon. Friend the Member for Hartlepool (Mr Wright) said, there is not just one or even two but three positions. The coalition agreement states that the Government will introduce a national planning statement, so they are notionally in favour of nuclear. But a Liberal Democrat representative will speak against it, and the Liberal Democrat party will abstain in any vote. We always knew that being a Liberal Democrat in opposition meant not having to choose. It seems that old habits die hard and that Liberal Democrats do not accept the responsibilities of government, so perhaps the Minister will tell us whether his right hon. Friend the Secretary of State is committed to nuclear power. Was not one of the very first actions of his Government to create the very risks to investment, and slow-down in the development of nuclear power that the hon. Member for Cheltenham threatened?
Much has been said about Sheffield Forgemasters, and some of it bears repeating. Surely the Minister—I have the greatest regard for him and welcome him to his new position—must have shared my astonishment at the decision to cancel the loan to that company. I well remember him in opposition constantly banging on about energy security and investing in manufacturing, so what is his explanation? The deal took two years to negotiate, and would have put the UK at the forefront of an expanding market with great export opportunities. There must have been collusion between a Liberal Democrat Chief Secretary and a Liberal Democrat Energy Secretary who are determined to slow down the nuclear replacement programme that we were putting in place. Exactly what role did Liberal Democrat opposition to nuclear play in the Sheffield Forgemasters decision, and can we have a full explanation? How will that decision affect the timetable for new nuclear?
Without the new investment by Sheffield Forgemasters, the waiting list for pressure vessels is too long. Korean and other companies, including two in China, intend to enter the business of making large forgings, but the work necessary to ensure that steel is made to the right quality is bound to take several years. Any failure of the reactor core would be catastrophic, as the Minister knows, and customers will be wary about buying from a company without sufficient experience. Sheffield Forgemasters is one of a small number of businesses in the world that could increase the speed of roll-out of new nuclear. Forgemasters might have been the central company in a nuclear renaissance in the UK.
So what now? In government, we systematically developed the instruments and legal frameworks necessary for the transition to a low-carbon economy. We believed that the energy revolution was vital to our security and to tackling climate change. Planning was clearly an obstacle, so we created the Infrastructure Planning Commission. Despite the CBI saying that it is vital for strategic infrastructure, we understand that the coalition plans to scrap it. In response to that announcement by the Secretary of State for Communities and Local Government, Clare Spottiswoode, chair of Energy Solutions Europe, which helps to manage five nuclear sites in the UK, said:
“People are already nervous...the risk is they will just take their money elsewhere.”
Who will make the decisions on new nuclear plants under the coalition’s proposals? I believe that it will be none other than the Energy Secretary, who opposes nuclear power. Does his hon. Friend the Minister of State have any confidence that new nuclear plants will be built? Will the Secretary of State chair the Nuclear Development Forum, or will that also be scrapped? If he does not want to support British manufacturers of components for new nuclear, how does he plan to encourage industry? Is he aware that in the real world where private finance is hard to come by, support through soft loans, tax breaks and procurement policies is commonly provided by our competitors?
In the run-up to the election, both parts of the coalition talked about the need to make Britain less dependent on financial markets and property speculators as the engines of growth. They talked about green investment banks. They talked the talk, but clearly they have no intention of walking the walk. Frankly, cutting investment in a highly skilled and productive British manufacturing company is economically illiterate. Last week the Minister talked about skills, and praised the chief executive officer of the National Skills Academy for Nuclear, John Llewellyn.
I accept entirely that I have made an error, but I obtained the information from a good source, so I blame that source and not myself. I accept that the chief executive officer is a woman. I have never met her, but she praised the Northwest Regional Development Agency and said that the sector’s collaboration in skills training with the agency’s backing
“was an example envied by other countries”.
Will the Minister tell us his Government's intentions for that agency?
What is left? Is it correct that there will be no assistance with planning, no assistance with investment and no assistance with skills? I anticipate that the Minister's answer will be to create a floor price for carbon, something that we, of course, considered when in government. Unusually, I join the hon. Member for Angus (Mr Weir) in asking what progress has been made. How effective does the Minister believe he can be in trying to set a floor for a single member state, at what level might it be set and what might be the effect on energy consumers? What talks have he or his officials had with other member states on the functioning of the EU’s emissions trading scheme and the carbon price? I can tell him that there is no easy solution.
The Labour Government transformed the UK's approach to energy security, and recognised the finite future of North sea oil and gas, the challenge of imports and the need dramatically to increase renewables in the face of climate change. We added to that mix the need for a new generation of nuclear power stations and the development of carbon capture and storage to enable us to burn clean coal. We put everything in place to achieve a low-carbon economy. This should be a time of great opportunity. Instead, it is a time of confusion, contradiction and lack of confidence. The Government have made a bad start.
I am grateful to my hon. Friend the Member for Glasgow North West for giving us all the opportunity to make these issues clear to the coalition, and I congratulate him and all other Members who have contributed to this debate. I look forward to the Minister’s reply.
I welcome you to the Chair, Mr Brady, in this important debate, and I congratulate the hon. Member for Glasgow North West (John Robertson) on securing it. He has had an interest in this area of policy for many years, and we welcome his commitment. He delivered his speech with the degree of mischief that we have come to expect from him. I hope that we all approach the matter on the basis of needing to find common ground. In opposition, we approached the nuclear debate by asking how we could best co-operate with the previous Government’s approach and how to take the matter out of politics. I hope that that approach will continue during this Parliament, because some of the most important decisions will have to be made during it. I will try to answer as many as possible of the points that have arisen during the debate, but if I do not respond to any, I will be more than happy to make an early appearance before the hon. Gentleman’s all-party group on nuclear energy to try to provide the assurance that its members seek.
The hon. Member for West Bromwich East (Mr Watson) asked whether I would meet the trade unions. I have already had contact with some of them. They are all part of the family, and I am keen to work closely with them because they have a significant contribution to make on skills, safety issues and the whole approach to new-build nuclear in this country.
This has been a good debate and I am grateful for the kind comments that people have made to me personally—they normally say that they respect me just before disagreeing with virtually everything they think I might be about to say. This is perhaps a bit of a replay of the work of the Energy and Climate Change Committee, to which I am sure we will return more formally in due course. We have heard some extremely useful contributions. My hon. Friend the Member for Folkestone and Hythe (Damian Collins) made an extremely impressive speech. He will understand that I am constrained in what I can say about Dungeness, but it is very encouraging indeed that it has such a strong advocate in Parliament for its interest and for the nuclear agenda more generally.
The hon. Member for Angus (Mr Weir) asked about the respect agenda. We absolutely understand that those planning issues are a matter for the Scottish Government, and it will be up to them to decide whether there should be new nuclear plants in Scotland. We have a fairly clear idea where they are coming from on those issues. The national policy statements covered only England and Wales, so the process for Scotland has not been considered, but if one talks to the investors, one realises they have essentially ruled out investment in new nuclear plants in Scotland for the time being. Many people will feel that that is a mistake and is unfortunate. However, we completely respect the position of the Scottish Government.
The hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) talked about the range of other low-carbon technologies that we should also be considering. I agree with him. This is not just about nuclear; it is about marine development, in relation to which the United Kingdom is not taking the lead that it should. The issue is also about carbon capture and storage, and we must up the game in terms of our contribution to that. As he said, the matter is critically also about the offshore oil and gas industry and having policies in place that enable us to get the maximum potential out of the resources that are there. That is a central part of our national interest in relation to energy policy.
The hon. Gentleman commands the respect of all parties and I welcome him to his position. He mentioned the issues of nuclear on the one hand and renewables on the other. I agree with him that those matters are not mutually exclusive—in fact, a range of infrastructure is needed to have a degree of compatibility. In Tees valley in my constituency, there are great opportunities to have not only a nuclear power station but a range of renewable energy. What help and support can he give my area to make sure that we become a real centre of excellence and an engine for growth for energy policy in the UK?
I absolutely understand that it is not just a nuclear matter. The Tees valley can play a crucial role in the development of carbon capture in nearby Teesside, and there are also many offshore opportunities there. We want to try to find the best way we can to encourage a supply chain to invest in Britain. That is not always going to be through Government grants and subsidies, although there is a role for that and such an approach can make an important contribution. Other issues will also determine whether people invest in Britain. It is mostly—although not exclusively—international companies that will be making such investment, and there is a wide range of issues surrounding the regulatory and tax environment that will be central to whether they invest here. Nuclear is part of an overall approach. I hope I will have the chance to come up to Hartlepool to see some of those opportunities, and perhaps be shown around by the hon. Gentleman.
Some of the issues raised today have to be considered against the backdrop of the challenge that we face as a country. In the course of the next few years, we will see a third of our coal plant being taken out of commission because of the large combustion plant directive, and most of the rest will go as a result of the industrial emissions directive. Much of the remaining oil plant will also be closed because of those measures. Based on current plans, if there are not life extensions, apart from Sizewell B, the nuclear fleet will have closed down in little over a decade. We therefore have an incredible challenge to face.
The hon. Member for Glasgow North West, who introduced the debate, talked about £200 billion of new investment, which compares with about £350 billion of new investment in energy infrastructure in the other 26 nations of the European Union. We have a uniquely serious challenge, and part of the problem is that not enough has been done soon enough. If the five-year moratorium on nuclear had not taken place, we would obviously be five years further forward in the development of those plants. The pressure points in our energy security to which he and others have referred exist because we have not been securing enough investment at an early enough stage during the course of the process.
The coalition agreement is absolutely clear. By definition, a coalition agreement brings together people of differing views to work together for the national good, and that is what we are seeking to achieve. It has been made clear that nuclear will be part of the mix as long as that is done without subsidy. Above all, we have to know whether the industry itself is comfortable with that position and whether the people who will be required to invest billions of pounds in each plant are happy with that agreement. The discussions that we have had since the election suggest that they are comfortable with that arrangement and with the position of myself and the Secretary of State.
Some people opposed nuclear for philosophical reasons; others believed that it would not happen because it would never be economically viable. The Secretary of State has always questioned the economics. However, he is happy that if people come forward with an application for a new nuclear plant without subsidy, it should be part of the mix going forward. We have a clear position, which the investors themselves have been very keen to clarify and which they are now able to support. I hope hon. Members will give us the credence to work forward on that basis, because it is critical for investor confidence that they see a broad coalition in Parliament in favour of a future role for nuclear in this country.
We will go to great lengths to ensure that the taxpayer is protected—no subsidy means no subsidy. We are considering areas in which there may have been hidden subsidies and dealing with those. For example, we will certainly maintain—and reinforce if necessary—measures put in place by the previous Government to ensure that the operators of new plants are required by law to set aside money from day one to pay for the waste and clean-up process. The industries themselves will have to carry out the investment, but the Government will be responsible for the regulation of the safety and environmental aspects that go with that.
The Office for Nuclear Development will continue its crucial work in trying to remove barriers to investment. I give the right hon. Member for Lewisham, Deptford (Joan Ruddock) an assurance that the Nuclear Development Forum will be a key part of taking that forward. It has been an extremely important part of that process, in which both the Secretary of State and I will be very involved. We want people to see that we are at one on these issues.
There has been much discussion of planning during the debate. A statement will be made to Parliament in the near future that will set out exactly how the changes will work. We want the national policy statements to be ratified by Parliament because that reduces the risk of judicial review and makes them stronger and more robust. We want investors to see that there is a strong majority in Parliament in favour of new build, as that sends a strong signal to their overseas boards. We will certainly take account of the representations made by Dungeness to be included in the list, but we will also give similar weight to the representations from community groups in areas concerned about new build, so that we can ensure that their views are fully taken into account. We are currently considering our response to the NPS consultation process and we will make it clear as soon as we can.
On the Infrastructure Planning Commission, we will be introducing a degree of democratic accountability. There will not be delays as a result of that process because we totally understand the urgency of driving these decisions forward, not just in nuclear but right across the board in the energy mix. However, we are keen to ensure that there is parliamentary accountability—again, because we believe that reduces the risk of judicial review.
I am grateful for that intervention. Other issues have also been raised, on which I will certainly write to hon. Members. On Sheffield Forgemasters, the decision was not a reflection of the quality of its workmanship or the nature of the company. We simply had to look across the board at a vast number of projects to which significant sums of money had been committed at a time when the nation could not afford it. Essentially the Government were having to borrow money to lend money. If one went to a bank and said, “I need an overdraft because I want to give more money to charity,” the bank would question the wisdom of that approach.
It is not, but the similarity in the situation I outlined exists. I am not suggesting that the money was for charity but, however good the cause, it does not make it right to borrow money when one cannot afford to do so. As a Government, we clearly recognise that the previous Government committed us to borrowings that we cannot afford. Sheffield Forgemasters is not a charity; it is a very important business and a key part of the Sheffield community. We will work with Sheffield Forgemasters, which has indicated that it is looking for commercial routes to make its plans possible. We very much want to see that happen, but we do not believe that it is possible to provide Government funding to do so. We will obviously want to return to some of the other issues, and I will certainly write to hon. Members on them. Once again, I thank the hon. Gentleman for giving us the opportunity to discuss such a crucial subject.
Northwick Park Hospital
I am grateful for the opportunity to raise the future of Northwick Park hospital on the Floor of the House today. Although I have no financial interest to declare, I should declare that the hospital has looked after me and my family and friends at many points in my life, dealing with things ranging from running injuries through to dislocated shoulders as a result of canoeing accidents. I continue to be extremely grateful to the staff of Northwick Park hospital. Although no speech in the House could ever be regarded as anything other than political, I hope that this one will at least be judged to be not partisan. I have sought to give the Minister and my parliamentary neighbours notice of the issues that I intend to raise. I see in their places my hon. Friend the Member for Brent North (Barry Gardiner) and my immediate neighbour, the hon. Member for Harrow East (Bob Blackman).
Northwick Park hospital is the primary hospital serving my constituents. Mount Vernon and the Royal National Orthopaedic hospitals are nearby, but Northwick Park sees the vast majority of work involving Harrow NHS hospital patients. I want to raise with the Minister four issues: the case for capital investment for the rebuilding of the hospital; the ongoing revenue budget of the hospital; the hospital’s move towards foundation hospital status; and whether the hospital will be designated as a major acute centre for north-west London.
The hospital is 40 years old, having been opened by Her Majesty the Queen in 1970. It has a certain celebrity status, having featured in, for example, the Channel 4 comedy “Green Wing”, in “Prime Suspect” and—I suspect this will worry my constituents a little—in the 1970s horror film “The Omen”. More recently, the hospital merged in 1994 with St Mark’s hospital, a national centre that is world renowned for gastrointestinal medicine. Northwick Park is also home to the British Olympic Association’s Olympic Medical Institute and, together with Central Middlesex hospital, forms part of the North West London Hospitals NHS Trust.
Northwick Park is in general extremely well run. After 13 years of substantial investment in the NHS, I now rarely receive complaints about the quality of care at Northwick Park. Its mortality rate—a crucial indicator of quality—shows Northwick Park to be one of the best hospitals in the UK. I pay tribute to its current management team and the trust board for a job that I think they are doing well.
The hospital provides a range of services that straddle acute and community care. It also provides a large range of important regional services, including maxillofacial services for all of north-west London and parts of the NHS Eastern and South Central regions; a neuro-rehabilitation medical in-patient centre for NHS London and the east of England; bowel cancer screening; clinical genetics; and a dedicated infectious diseases centre. If it is not the largest acute hospital in north-west London as a whole, it is certainly the largest in outer north-west London. It has a very busy accident and emergency department, is a key part of the Imperial College Healthcare NHS Trust trauma network and, crucially, was recently designated as one of eight hyper-acute stroke units in London. The decision to have an acute stroke unit there enabled the hospital to take a significant step towards formally securing designation as a major acute centre for north-west London. First, therefore, I formally ask the Minister, can he confirm that a journey that the hospital has been on towards designation as a major acute centre is complete and that crucial status has been secured?
Secondly, the trust board has faced and still faces a challenging financial picture, in part, as I understand it, because of the level of usage of the Central Middlesex site. The trust has succeeded in meeting many of its financial targets, but has faced pressure in part because of the impact of the polyclinic model of care and, more generally, the steady move of out-patient services from hospital settings into the community. I should make it clear that my constituents and I are strong supporters of the Rayners Lane polyclinic, run by the excellent Ridgeway Surgery group of GPs. Can the Minister confirm that there will be no cuts to Government funding for NHS London or, crucially, to NHS Harrow—the chief although not the exclusive source of funding for the hospital? Can he set out to the House how he sees the hospital’s financial future?
I applaud my hon. Friend for securing the debate and for all the remarks that he has made. Does he share my concern that we should hear from the Minister about the business case for £23 million that has been presented to the Department for a series of essential works as a result of the Arup review in 2009? Does he agree that it would be extremely helpful if the Minister could give us some indication about the outcome of that to settle the minds of our constituents?
I certainly agree with my hon. Friend. That maintenance work is essential, as I shall come on to say, and it would certainly be good to hear the Minister’s reaction to that bid.
The third and most important of the issues that I shall raise today relates to the issue alluded to by my hon. Friend—the case for additional investment out of the NHS’s capital budget for the redevelopment of the hospital. A fire in the hospital’s basement in February last year led to the trust board commissioning a report into the maintenance situation at Northwick Park. It recommended up to £65 million of improvements to the infrastructure on the site to ensure that it remains fit for purpose. Indeed, on the basis of annual NHS estate returns, the trust has one of the largest backlogs of maintenance in London. It has been clear for a considerable time that a major redevelopment process is required.
In November 2004, a strategic outline case for redevelopment of the whole site was approved, and private finance initiative credits of more than £300 million were made available the following March. However, redevelopment did not start, on the grounds of the project’s affordability. Various reviews of the PFI project, all crucially linked to an ongoing debate about levels of usage of both hospitals in the trust and therefore likely levels of income, have not yet led to enough clarity about how redevelopment of the hospital might proceed. I believe that it was not until February 2009 that the PFI project was formally cancelled.
There has been and remains, in my view, little doubt that major redevelopment of the whole site is required. Indeed, senior figures in NHS London have consistently accepted the need for a major rebuild. There is unfinished business on the redevelopment of the hospital. I therefore ask the Minister, does he accept that the case for a rebuild is strong, and on what timeline does he envisage such a redevelopment taking place?
To be fair, the NHS has certainly not ignored Northwick Park. There has been significant capital investment in clinical and IT equipment; in reducing the backlog in maintenance and ward refurbishments, particularly in refurbishing maternity services; in a new children’s centre and paediatric accident and emergency; in oral maxillofacial services; in bowel cancer screening; and, as I mentioned, in the new stroke unit. Indeed, more than £85 million of capital investment has been put into Northwick Park since 2005. There have also been more than 300 extra staff at Northwick Park, the bulk of them clinical, since 2005. However, the need for capital investment remains.
I should make it clear that I remain a very strong supporter of foundation hospital status. Its governance model will, I think, help to bring the hospital closer to those who use it. The mutual element of foundation hospitals has long been championed by the Co-op party, of which I am lucky enough to be the chair. In particular, I welcome the role of the board or council of governors that foundation hospitals have. The council of governors comes from staff, patients and members of the public and from other local nominating partner organisations, who together form a local membership base for such hospitals and can introduce a hugely important local level of accountability into NHS decision making. They also help to draw local people closer to what can sometimes seem a remote, albeit local, institution. There are other benefits to foundation hospital status, but it is that greater access to senior figures within the hospital, and therefore the greater sense of ownership of their local hospital, that will be of most long-term benefit to my constituents.
I therefore ask lastly of the Minister, when will my constituents be able to sign up to become members of the North West London Hospitals NHS trust? I have welcomed the opportunity given to me by the Speaker to put an issue of profound concern to my constituents before the House, and I look forward to the hon. Gentleman’s response.
I begin by congratulating the hon. Member for Harrow West (Mr Thomas) on securing the debate. I wish also to pay tribute to the NHS staff, not only at Northwick Park hospital but across north-west London, who do so much, day in, day out, to look after patients and, it turns out, the hon. Gentleman and his family. The staff consistently deliver first-class care, benefiting his and other hon. Members’ constituents throughout north-west London.
Before I get on to the hon. Gentleman’s specific points—I shall seek to deal with all the issues he raised—I wish to set out the general financial situation. All decisions around NHS funding need to be seen in the context of reducing the deficit. Despite the massive debt acquired from the previous Government, and the measures to rectify our situation, which are to be set out later today by my right hon. Friend the Chancellor of the Exchequer, the NHS budget is protected. More than that, it will receive real-terms increases in each year of this Parliament. That underlines the Government’s commitment to the national health service.
However, the NHS still faces a huge challenge to improve patient outcomes and meet the increasing demand for services and new medicines within a tight financial settlement. North West London Hospitals NHS Trust, which runs Northwick Park hospital, is still dealing with long-standing financial difficulties. Two years ago, the trust was almost £24 million in debt. Since then, NHS London has been gradually helping the trust to return to economic stability one step at a time. I know that clinical staff and managers are working hard to ensure that cost savings do not come at the expense of patient care. Savings can be and have been made by providing more effective and efficient care for patients, and by reducing the burden of back-office costs. Notable examples of cost savings by 2010-11 include: recruiting permanent staff to replace, and reduce reliance on, higher-cost agency staff; a 10% reduction across all corporate areas, such as finance, human resources and information technology; and improving procurement, principally through bulk buying and working in collaboration with the London procurement programme.
As well as savings, there are new investment proposals on the table, as the hon. Gentleman said. They aim to address the essential and immediate needs of the hospital, and to improve the fabric of the hospital and the facilities on offer to patients. If approved, the programme will complement other investments in recent years, including: the £4.1-million new hyper-acute stroke centre, which he mentioned; the £6.7 million for three dedicated elderly care wards; and a £4.3-million bowel cancer screening hub based at Northwick Park—one of six such hubs across London.
The total value of the proposed programme is £65 million, with most of the money coming from the existing budget. A business case for the additional £23 million needed—a point that the hon. Member for Brent North (Barry Gardiner) raised—was submitted to NHS London for approval on 7 June. After careful consideration, the hospital trust was asked to improve the bid. NHS London received the strengthened business case last Friday, and we hope that it will be ready for consideration by the Capital Management Group on 25 June, a little later this week. If the business case is approved, my Department will then thoroughly consider the loan application from NHS London. Let me be clear: my officials will need to see a sound and credible recovery plan before they can agree to the investment.
I am afraid that I cannot give a specific time when a final decision will be reached, but we are acutely aware of the urgency of the issue, and we will reach a conclusion as quickly as we possibly can. I hope that that reassures both the hon. Member for Harrow West and the hon. Member for Brent North.
I can categorically give the hon. Gentleman an assurance that at the appropriate time, before the announcement, I will make sure that my office contacts all three hon. Gentlemen present to ensure that they have advance notice of it.
On the question of foundation status, the hon. Member for Harrow West raised the possibility of North West London Hospitals NHS Trust attaining foundation status. The Government strongly support all trusts that aspire to that aim. Foundation-trust status enables the local NHS to develop stronger connections with communities, so that health care better reflects patient needs. It also creates the conditions for improving performance, which can only benefit patient care. More than half of all eligible NHS trusts are now foundation trusts, but we want to go further. We want to reduce Government control over the health service and set trusts free to innovate and take decisions based on what is right for their local populations. That includes North West London Hospitals NHS Trust.
The trust serves its population well and delivers good-quality care, as the hon. Member for Harrow West mentioned, but to step up to this new challenge, the trust needs to establish a solid financial foundation and needs to gain the support of GPs and commissioners. Bearing that in mind, I understand that the trust is likely to apply to become a foundation trust in 2012, and I wish it well in its application.
I am grateful to the Minister for giving way; he has been most generous. He talked about building the confidence of local commissioning GPs. My understanding is that under his Department’s new arrangements, the ring-holder for the GP commissioning groups set up under the auspices of Brent primary care trust—I am sure the same applies in Harrow also—will no longer be the primary care trust. How does he propose that those groups of private businesses avoid the risk of being providers of services that they commission? Who will hold the ring, as the PCTs used to do?
The hon. Gentleman is tempting me to go down a path that it would be unwise to go down at this stage. The reason I say that, and why I will not be tempted, is that as he is probably aware, my right hon. Friend the Secretary of State and my ministerial colleagues are doing a considerable amount of work putting together and fleshing out our vision for the NHS, not only for the next five years but thereafter—a vision that puts patients at the heart of the NHS and that is driven by the needs and improved care standards of patients. It would be inappropriate and wrong of me to succumb to temptation and to start to unveil, in this august debate, what my right hon. Friend the Secretary of State will announce in due course. The only good news that I can give the hon. Gentleman is that he will not have long to wait before all these mysteries are explained to him, and I am confident that he will be reassured and pleased by what my right hon. Friend the Secretary of State has to say.
One of the key issues for Northwick Park hospital is how it deals with both Brent and Harrow primary care trusts. Both are in desperate financial straits, as I think hon. Members would agree. My concern is how that will be manipulated for Northwick Park and St Mark’s hospital trust in the future.
My hon. Friend raises an interesting point. It is true, as I hope I have explained, that there have been challenges for the North West London Hospitals NHS Trust with regard to its finances in recent years. However, as I explained—I will go into more detail on this later—measures are being put in place to seek to minimise the problems. I can assure my hon. Friend that when it comes to dealing with PCTs, trusts and the finances, I do not recognise the word “manipulate” as being in the lexicon. Everything is done to ensure that the maximum amount of money is made available to PCTs and trusts, to ensure that we protect front-line services, and to provide the best health care possible for my hon. Friend’s constituents and those of all hon. Members throughout the country.
I wish to correct any suggestion that Brent PCT is in any way financially embarrassed. [Interruption.] My hon. Friend the Member for Harrow West (Mr Thomas) wishes to correct any such suggestion for Harrow as well. Three years ago, Brent PCT was running a deficit of more than £20 million. It took the necessary measures, and that deficit has now been turned into a surplus of £12 million.
I appreciate what the hon. Gentleman says. I am sure that my hon. Friend the Parliamentary Secretary, Cabinet Office, will have taken that on board, and the record will certainly reflect the accurate assessment that the hon. Member for Brent North makes of the situation. However, it is fair to say, particularly in the case of the constituency of the hon. Member for Harrow West, that there has been a problem with the finances. As I said earlier, the requests for a loan and for money that are being considered reflect a need to bring finances into better alignment without affecting front-line services. I am hopeful—probably a bit more than that—that, with the actions that have been taken and the proposals that are awaiting decisions, there will be positive movement.
I come to the point raised by the hon. Member for Harrow West about new hospital build. He mentioned his desire to see completely new build at Northwick Park. As he knows, plans were put forward in 2004 to build a brand new £305-million hospital for his constituents. In 2005, at an early stage of the business case and planning application processes, the plans for the scheme were put on hold by the trust and the local PCTs due to concerns about their affordability. After more than a year on hold, the proposals were formally cancelled by the Department in the summer of 2008. That is standard procedure for schemes that are not progressing and that have been put on hold for a specified period of time. I am afraid that those limitations remain. While the trust is working hard to achieve financial stability, I regret to say that it is still a long way from realistically being able to afford such a large building project.
The hon. Gentleman also raised the issue of designating Northwick Park hospital a major acute centre within the context of the north-west London sector review. The proposals, which I understand are still at a very early stage of development, would need to pass the Secretary of State’s four tests. They would need the support of GP commissioners; the support of the local community; to be evidence-based; and to develop patient choice. That relates to the decision that the Secretary of State took a few weeks ago to strengthen the criteria for considering any reconfiguration by placing more emphasis on gaining support following full consultations with GPs, clinicians and local stakeholders. I am sure that the hon. Gentleman, being a reasonable man, would accept that that is a sensible improvement, with regard to seeking to reconfigure health patterns throughout the country and to ensure that the local community and the clinicians and GPs who deliver the services have more say and influence over what happens.
The hon. Gentleman requested a commitment from me, but there is not a lot that I can tell him at present, because the proposals are at such an early stage. What I can tell him—I hope this will go some way towards reassuring him—is that all proposals, when put together as a final package for consideration, will be fully considered in the context of the Secretary of State’s criteria, and a decision will be taken at the appropriate time.
I should acknowledge the presence at this debate of the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), who represents the fourth constituency with a strong interest in Northwick Park hospital. I am indeed a reasonable man, and the Minister has a reputation for being a reasonable man, so will he meet with those of us who are interested in the future of Northwick Park within a minimum of 12 months to review some of the issues that we have discussed today, and particularly the affordability or otherwise of any significant rebuilding of the hospital?
I am grateful to the hon. Gentleman. He is a knowledgeable man who knows that flattery usually gets one everywhere. I cannot resist flattery. It would be a considerable pleasure to meet him and any of his or my hon. Friends. If he would be kind enough to get in touch with my office, a meeting will be arranged in the not-too-distant future.
In conclusion, the Government have made a clear commitment to protecting the NHS and to ensuring real-terms increases in funding. There remains, however, a responsibility on all parts of the NHS to be innovative, to become more efficient, and to reinvest the savings that they make to improve quality of care for patients. North West London NHS Trust shares that responsibility, and must continue to rise to the challenge. We will consider all the proposals that we receive very carefully and will reach a decision as quickly as we can. Moreover, we will work with the trust to achieve ongoing improvements for the constituents of the hon. Members for Harrow West and for Brent North, and those of my hon. Friends the Members for Ruislip, Northwood and Pinner (Mr Hurd) and for Harrow East (Bob Blackman). I hope that we will be able to consider the issue further when I meet the hon. Member for Harrow West.
[Mr Mike Weir in the Chair]
I am particularly pleased to have secured this important debate on health funding. I know that the allocation of funding has an impact on a large number of colleagues, particularly those from the north, the midlands and the south-west. I welcome the Minister of State, Department of Health, the hon. Member for Chelmsford (Mr Burns) and the shadow Minister, the hon. Member for Kingston upon Hull North (Diana R. Johnson), to their new posts, and I look forward to their responses.
Although the title gives the impression of a wide-ranging debate, I shall concentrate on a more narrowly drawn issue—the decisions that lie behind the way in which funding allocations for primary care trusts are made. In doing so, I refer to a debate in this Chamber on 18 March 2009 led by the then Member for Wigan and a debate in the House on 17 June last year that was led by me, both on this and related subjects.
When talking about health funding allocations, we speak of the NHS as a national service. The assumption is that funding is provided according to need, and most assume that it is allocated fairly and according to need; but as I have found during my years in Parliament, we may be assuming too much. The funding allocation formula has been reviewed and finessed over time since the inception of the NHS in 1948. However, 13 of the 52 PCTs in the country now receive funding at the floor of 6.2% below target funding. That is many millions of pounds. For example, the Cornwall and Isles of Scilly PCT receives at least £56 million less than the Government admit is needed or should be allocated. The funding formula was most recently altered for the year commencing April 2009.
The purpose of the allocation formula is to make changes on the most objective basis and, as far as possible, to take the matter out of the hands of any political influence. I admit that funding allocation—the weighted capitation formulas and so on—are some of the most dry areas of political debate one can imagine, but I do not apologise for briefly relating their history from the creation of the NHS. Then, of course, people made allocations as best they could in the circumstances, given the uneven pattern of hospital building in the previous century.
In 1970, the Labour Government’s Green Paper on NHS reorganisation included a commitment to a new method of resource allocation. The basic determinant of funding allocation was to be the population served by the area, modified to take account of relevant demographic variables and underlying differences in morbidity. That led to the development of the so-called Crossman formula. Over time, the formula changed to one in which allocations were made according to population, weighted by age, sex and the number of beds and hospital cases. That was further reviewed in 1974 by the resource allocation working party; the result was the transfer of resources from regional health authorities in the south-east to those in the north. The formula was further revised in the early 1990s, and that change resulted in resources being shifted back from the north to the south-east.
One significant element of the formula that has always caused concern to those in parts of the country such as mine was the market-forces factor. It was introduced in 1976, but was significantly altered in 1980 by the advisory group on resource allocation. That informed allocations from 1981-82. It based its recommendations on the new earnings survey, the annual assessment of average wages and salaries in all parts of the country. Cornwall has been at the bottom of the new earnings survey ever since.
What vexed us and others concerned about the allocation of health funding under the market-forces factor was that the poorest-paid areas received the least money. Salaries accounted for about 70% of the market-forces factor, which meant that they had a significant impact on the overall allocation and weighted capitation. Those areas with lower wages therefore suffered; salaries in an area would drag health funding down if they were low.
Throughout the entire debate on the change, we told the Government’s advisory committee on resource allocation that that was clearly unfair, especially as most of those employed by the NHS were paid according to national pay scales. Even those working in the grounds, including those doing building maintenance work, were receiving good money. We felt that the premise on which the calculation was made was unsound. Over the years, we have argued with the Government over the matter. Latterly, however, we persuaded the Government to review the market-forces formula. That review resulted in a change in the funding formula from April 2009.
There is one major element that adds to costs in places such as my area of west Cornwall and the Isles of Scilly. The area includes five inhabited islands—six including St Michael’s Mount—and two substantial peninsulas. It is difficult to provide access to services in that area; providing ambulance services, NHS dentistry and other health services in such a rural context is clearly a great deal more expensive than in suburban or urban areas, but that aspect is not properly taken into account in the funding formula.
On the social side, the impact of salaries and so on, we were pleased that the review resulted in a change in the funding formula for 2009. However, it identified a new set of losers—the 13 PCTs to which I referred earlier, which are currently at the floor of 6.2% below the national target.
Cornwall is £56 million below its target. In the south-west, Somerset is nearly £21 million, or 2.6%, below its target; Plymouth is £26 million, or 5.9%, below target; Devon is over £12 million, or 1%, below target; and Torquay is nearly £9 million, or 3.4%, below its target. Other areas with substantial, gross gaps in funding—those in the minus 6.2% league table—include Derbyshire, which has nearly £73 million less than its target; Lincolnshire, with £74 million less than its target; Nottinghamshire, with £65 million less than its target; and South Staffordshire, with £57 million less than its target.
In contrast, other PCTs receive more than their target and are overfunded in comparison with that target. The vast majority of those fall within the south-east. Surrey receives £171.5 million, or 11.6%, more than its target; Westminster receives £81 million, or 20%, more; Lambeth receives £78 million, or 14.8%, more; Wandsworth receives nearly £65 million, or 14.4%, more; and Kensington and Chelsea receives more than £60 million, or 20.4%, above the target funding. That contributes to health inequalities across the country. I would like the Minister, whom I am looking forward to hearing, to respond to the question of how we are going to ensure that the allocation of funding meets those targets, and does so as soon as possible.
Health Ministers in the previous Government made it clear that we need to be careful not to make catastrophic funding changes to PCTs receiving more than their allocated funding target. Withdrawing funding too rapidly would seriously impact on the health services in those areas. Nevertheless, a formula must be put in place to ensure that those places currently under target are not disadvantaged by remaining under target. For example, this financial year, Cornwall was 6.2% below target and remained there, so we are not moving very rapidly towards our target.
In the previous Parliament, the then Minister of State, Mike O’Brien, said:
“We are committed to moving all primary care trusts (PCTs) towards their target allocations as quickly as possible. In 2009-10 and 2010-11, we have ensured that the most under-target PCTs benefit from the highest increases in funding. Over those two years, the allocation to Cornwall and Isles of Scilly PCT will grow by…12.1 per cent., compared with the national average of 11.3 per cent…The rate at which PCTs will move towards their target allocation in future years will need to be considered in light of a number of factors including population changes, cost pressures and the overall resources available to the national health service.”—[Official Report, 30 November 2009; Vol. 501, c. 529W.]
This financial year, Cornwall has not moved one iota towards its target, which does not really amount to PCTs moving to their target allocations “as quickly as possible”.
It is marvellous that Andrew has secured this debate so early in the new Parliament, because this is an important issue for everyone living in Cornwall. I applauded the previous Government’s efforts to focus on closing inequalities in health. However, their measure of success, which focused on average life expectancy, did a great disservice to people in Cornwall, as it masks a lot of the problems there. On the face of it, the average life expectancy is way above the national average—
I am grateful to my hon. Friend. She rightly highlights that many factors, including life expectancy, rurality and age profile, need to be taken into account, and we must get the balance right. The history of the changes to the allocation formula—not something I would recommend as bedtime reading—shows that all the factors have been conjured with and balanced over time. It is difficult to arrive at a formula satisfactory to all people.
I want to emphasise the fact that we need to identify and make the allocation formula clear. We need to be able to show that it takes into account the health inequalities across the country and, above all, does not further impoverish the most deprived areas. I represent the poorest region in the UK, yet its poverty was used as a reason not to give it additional funds. Its poverty acted against its best interests, which would have been additional funds, as I explained in my description of how the market-forces factor operated and the impact that it had in some areas.
It is difficult to assess what impact the Budget will have on the future of the PCT allocation formula so soon after the statement, which was made in the Commons today. The NHS Confederation recently estimated that the announcements made by the coalition Government indicate a real-terms reduction of between £8 billion and £10 billon in funding to the NHS in the three years from 2011. According to the King’s Fund, a rise in VAT will lead to an additional cost of £100 million per annum to the NHS budget overall.
My hon. Friend the Minister will no doubt ask where we will find the money to provide additional resources for deserving areas such as Cornwall and the Isles of Scilly, Bassetlaw, and South Staffordshire, and the other places that receive allocations that are further below their target than those anywhere else.
I am grateful to the hon. Gentleman for securing the debate and for giving way. He has been an extremely tenacious campaigner on health inequalities and housing, a subject on which I used to speak for the Government in a previous life. What are the hon. Gentleman’s views on the relationship between resource allocation and capital spend? It is an important subject to bear in mind when trying to iron out health inequalities. He mentioned the Chancellor of the Exchequer’s Budget statement, which said: “Well judged capital spending by Government can help provide the new infrastructure our economy needs to compete in the modern world.” If we put that in the context of reducing health inequalities, is it not important to have good capital spend in health? Does the hon. Gentleman share my disappointment at the £463-million cancellation of a new hospital for North Tees and Hartlepool?
I thought that the hon. Gentleman would use a local matter as a sting in the tail in his intervention. Let me commend his work on housing, which deserves a great deal of credit. With regard to capital spend, I was never terribly enamoured of the previous Government’s enthusiasm for the private finance initiative projects that were put in place across the country; they did not represent value for money. Having said that, I acknowledge that some difficult decisions need to be taken. I am sure that the hon. Gentleman’s point about his hospital will be heard by Ministers, and that he will be as tenacious in mounting a campaign to ensure that the right decision is taken as I have been on the issue of health funding, and on other issues.
As far as the health allocation formula is concerned, Hartlepool’s funding was 4.3% below its target, so the hon. Gentleman may wish to join the campaign to ensure that the areas furthest from their target achieve their target as quickly as possible. The PCT and the health community in that area may well be able to address their need for capital investment by ensuring that their revenue and allocations are increased by means of our campaign.
The difficult question that the Minister will be asking himself is where will the additional resources be found if areas such as Lambeth, Richmond, Westminster and Kensington and Chelsea are not to have the rug pulled from under them. Part of the answer lies in looking at how the last Government spent their money. There was an obsession with centralised, top-down and quite expensive projects, such as the alternative providers of medical services—or polyclinics, as some people have called them—and the independent treatment centres built across the country, which have never given value for money. A lot of money has also been committed to the NHS information technology programme. I urge the Minister to look at that, and at other such areas, to find the funding, and to give that funding to the PCTs. The PCTs can then decide how best to use their resources, rather than having decisions made for them in Richmond House.
Many issues in Cornwall need a great deal of further investment and support, including ambulance response times. Of course, given our geography, we do not expect to have the quickest ambulance response times in the country, but we would like resources to be put in place to ensure that the ambulance service can at least begin to address some of the deficiencies in the service at present. The NHS dentistry service in Cornwall is one of the most threadbare in the country. Given how difficult it is to see an NHS dentist in most of my constituency, and in many other parts of Cornwall, there would be massive benefits to improving the service there. Other such areas include: cancer screening and prevention; better support for the rehabilitation of stroke patients; improving the functionality of mental health services by ensuring greater availability of therapists and a greater ability to meet demands for treatment; improvements in psychological therapy support for armed forces veterans—provision is clearly insufficient in Cornwall, as in other areas—greater support for dementia; expanding physiotherapy; and improving and investing in the midwifery services in Cornwall, which are overstretched.
In closing, I want to ask the Minister a few questions that hit the bull’s eye of the issue. Bearing in mind that the NHS budget will be protected, how soon will the Government ensure that the funding shortfall in the most underfunded areas of the country is removed? I mentioned the 13 PCTs that are 6.2% below their target; do the Government see those targets as genuine targets to hit, or just as something for the Department to take note of? What is the Government’s policy on the pace of change in the most underfunded areas, and what will be the pace of change in future?
I know that a number of other hon. Members wish to contribute to this debate, so I will resume my seat now. I look forward to the Minister’s response.
I add my support for all the things that Andrew has said. I should like to touch on two ways in which my constituency is affected by the underfunding of the NHS in Cornwall. First, there is the considerable debt that has been acquired by the Royal Cornwall Hospitals Trust. Andrew and I have three hospitals in our constituencies.
I am very sorry. You will have to forgive a new girl, Mr Weir. I will try much harder next time I speak. It is the first time that I have had the opportunity to speak in a debate, so I apologise for my mistake. As I was saying, the hon. Member for St Ives (Andrew George) and I share, in our constituencies, the three hospitals that are part of the Royal Cornwall Hospitals Trust. It is interesting to note that there has not always been below-target expenditure in Cornwall.
Order. I am sorry to intervene on the hon. Lady again. She did say that this was the first time that she had spoken in a debate. She cannot speak here unless she has made her maiden speech in the main Chamber. Has she made her maiden speech in the Chamber?
Thank you, Mr Weir. I appreciate your generosity, because the issue is of vital importance to my constituency.
It is interesting to note that there has not always been below-target funding in Cornwall. If we go back to 1997-98, we find that the funding allocation was just below the average and the hospital trusts in Cornwall were not in debt. A great gulf has arisen over the past 10 years, as has the debt that has accumulated at the Royal Cornwall Hospitals Trust. There are issues and problems at the trust, but the severe financial pressures that it has had to bear because of the unfair funding allocation over the past 10 years have definitely contributed to them, and those pressures are standing in the way of it acquiring foundation status, which would enormously improve its ability to provide excellent care to the people in Cornwall.
The other factor that I should like to mention arises from our geography. It is difficult for people in Cornwall to get to a dentist or a hospital. We have good access to GPs; most people can access a GP within a couple of miles from their home, but not a dentist or hospital. As part of a recent survey undertaken by Citizens Advice Cornwall and Age Concern, 411 people filled in questionnaires on how easy or otherwise it was for them to get to hospitals. The survey showed that a significant number of people are prevented from attending hospital by the costs involved. Of the 411 people who responded, 35 reported that the cost of getting to a hospital stopped them from attending a clinic; 28 said that it prevented them from accompanying someone to hospital; and 115 said that it stopped them from visiting friends or families.
Although I welcome the Secretary of State’s revision of the NHS operating framework yesterday, I hope that future revisions will include an examination of the whole issue of hospital transport. I say that because there is significant evidence to show that the current scheme is not always widely understood by constituents, and that some aspects of it do not work very well for people in remote rural areas who struggle to gain access to a car or public transport to get to hospital. Also, the costs involved are quite considerable for the large numbers of people living on low and fixed incomes in our part of the world.
I want to reiterate what I said earlier in an intervention and congratulate the hon. Member for St Ives (Andrew George) on securing what I think is a very important debate; it is important not only in the south-west but across the country.
I also want to congratulate the hon. Member for Truro and Falmouth (Sarah Newton) on what I think might be her maiden speech, although I am not entirely certain that it was. [Laughter.] I imagine that she will be as tenacious as the hon. Member for St Ives, her close parliamentary neighbour, in ensuring that she stands up for the interests of her constituents.
I want to make two or three key points about health funding issues that are affecting my constituents. The first point relates to something that the hon. Member for St Ives said; he has obviously done his homework and knows his brief incredibly well in this area. As he said, despite great improvements in recent years Hartlepool primary care trust is still some distance from its funding target. It is about 4.3% below its funding target, which is about £7.7 million. In the last two years, 5.5% more funding was provided year on year, but we still have some considerable way to go. I just want to press the Minister on the question asked by the hon. Gentleman—how far and how fast can we move to get to the funding target for deprived areas such as Hartlepool?
The second issue that I want to mention is access to health care and funding for health-care-related transport. The hon. Member for Truro and Falmouth made a telling point about how important it is that people should have access to transport in rural areas, to enable them to access health services. I certainly have that situation, to some extent, in my constituency. Hartlepool is a very urbanised constituency—one of the most urbanised in the country. However, we have outlying villages, such as Dalton Piercy, Elwick and Greatham, which I am thinking about in particular. In the last 12 months or so, Greatham’s nurse-led clinic has been closed, largely on clinical grounds rather than because of cost-cutting exercises. Nevertheless, I think that finance has still had a role to play. I have tabled a number of parliamentary questions about the provision of nurse-led clinics in rural areas and the Government, in their written responses, have said that they are very much committed to those clinics. But I want to know from the Minister what extra assistance will be given to residents of Greatham and other rural areas, which can really help communities to have access to health care—both preventive health care and care related to reactive clinical outcomes.
The third issue that I want to mention is the appalling health inequalities that we still have in Hartlepool, despite the improvements that we have made in recent years. A person is more likely to die earlier if they live in Hartlepool than if they live anywhere else in the country, with the possible exception of Easington, which is next door to Hartlepool. In certain parts of my constituency, particularly Stranton ward, the difference between the local life expectancy for men and the national life expectancy for men is 11 years; a man living in one of those parts of my constituency will die more than a decade earlier than if he lived in other parts of the country. That issue needs to be addressed, not only through funding but through reconfiguration of services so that they are really patient-led.
That brings me to my final point, which is my most relevant point at the moment. It is about the announcement made by the Chief Secretary to the Treasury on the Floor of the House last Thursday about the cancellation of the £464 million new hospital for North Tees and Hartlepool. That hospital was something like a decade in planning; it was not thought up in the last two months before a general election campaign. There has been an awful lot of pain with regard to reconfiguration of health services in Hartlepool. The issue dominated the by-election that I won to come to this House. It has been extremely painful for the community to get to this position, but with one swift swish of a pen we are back to square one, with no real vision about where we go to for hospital services north of the Tees in my area. With the co-operation of neighbouring primary care trusts, we are embarking on what is known as the momentum programme, whereby we are pushing services closer to the community. That has an impact on health funding allocation. What reassurance can the Minister give that we will receive additional services and additional resources, so that the momentum programme can go further and faster in pushing health care into the community?
Also, with regard to the cancellation of that hospital and with regard to the idea that we do not have a plan B—there is nothing in place—can the Minister provide me with a degree of reassurance that support will be able to maintain the existing North Tees and Hartlepool hospitals? Is that the way that his Department is suggesting that we are going? If so, that would be at odds with the clinical recommendations from the independent reconfiguration planning of a number of years ago. It was recommended that we should have a new world-class hospital, which could serve the communities of Hartlepool, Easington, Stockton and Sedgefield.
I hope that the Minister will agree to meet me and my neighbouring MPs, so that we can discuss these issues and ensure that the health inequalities and the uncertainty that has been created by the announcement last Thursday can be addressed; so that the concerns of my constituents and those of people in neighbouring constituencies can be addressed; and so that we can really begin to address health inequalities in the north-east.
It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate the hon. Member for St Ives (Andrew George) on securing today’s debate. From my reading in preparation for the debate, I know that this is an issue that he has taken up over many years during his time in Parliament and that he is a very committed campaigner for health funding for his local area and the wider area of Cornwall. I welcome the Minister of State, Department of Health, the hon. Member for Chelmsford (Mr Burns), to his role and wish him well in his new position.
It has been very interesting to hear the contributions of the two Members who have also spoken in the debate today, the hon. Member for Truro and Falmouth (Sarah Newton) and my hon. Friend the Member for Hartlepool (Mr Wright). As my hon. Friend said, I want to congratulate the hon. Member for Truro and Falmouth on her maiden speech, if that is how it is going to be seen. Like the hon. Member for St Ives, she is making a very strong case for her constituents and ensuring that there is an advocate for them in this House who stands up for the real health funding that is required for people in her constituency.
It was also very interesting to hear what the hon. Member for St Ives said about some of the different criteria that have been used to allocate funding and about some of the tensions that exist when one looks at some of those criteria. I hope that I shall have an opportunity to say a few words about those tensions shortly.
My hon. Friend the Member for Hartlepool made some very pertinent points about the need to get to the target for health funding for primary care trusts. I noted that he said that his constituency was 4.3% below the funding target. As a result, I had a quick look to see where my primary care trust was in terms of being on target. It is actually 6% below target, so we are just above the group of PCTs that the hon. Member for St Ives referred to, which are 6.2% below the funding target.
It was also very pertinent to raise the issue of access to health services, and of course there is a funding implication to that issue. If we want to have services out in the community, there is a need to look at how funding is allocated and at the issues related to health inequalities. It is not acceptable that there are still parts of this country where the mortality rates show that men in particular will live for fewer years than men born in the south of England. I know that in the north there are real concerns about that issue.
Very importantly, there is also the issue of hospitals and capital funding. I know that that is mainly about PCTs’ revenue funding, but we need to keep an eye on what happens to capital funding. Of course, the hospital at Hartlepool that my hon. Friend the Member for Hartlepool mentioned has been in the planning for a very long time and there has been a huge investment in it, through the PCT and other people and other organisations in that area ensuring that it was really going to deliver for local people.
Therefore, I am particularly concerned about the cancellation of that hospital, especially in the light of the reassurances that were given by the new coalition Government that the cuts that they would make this year would not to be to front-line services and that, as I understood it, they would protect hospital builds. So it would be very helpful if the Minister could say a little more about his view of how the cancellation of the Hartlepool hospital fits in with the agreement not to cancel front-line services.
The main thrust of the debate is the funding of health services in Cornwall, and I have looked with interest at what the hon. Member for St Ives has said about it previously. Today I also had a quick look at his website, where he trails the debate and says that he is looking to secure an additional £56 million of funding for his area. He also says:
“The Conservatives created a system of endemic underfunding. Now they are in Coalition they can put this right.”
The press cuttings prepared by the Library for the debate also include an article from The West Briton of 10 May, in which he says:
“The coalition is already starting to deliver many outcomes which Cornwall has craved.”
I admire his positive view of what the new Government will deliver for him and his constituents and I very much hope that he is correct.
What the coalition Government have said so far about the NHS is quite limited. Section 22 of the coalition agreement sets out their priorities for the NHS, and the first bullet point says:
“We will guarantee that health spending increases in real terms in each year of the Parliament”.
Paragraph 21 of the revision to the operating framework for the NHS in England for 2010-11, which was published just yesterday, reiterates that commitment, and I have just heard the Chancellor of the Exchequer make it clear in the Budget debate on the Floor of the House that the commitment remains.
Of course, that is just the headline, and we do not actually know what it will mean for services in the NHS in England in the coming years. Obviously, the Minister will be working hard on the comprehensive spending review over the summer months. He will be looking at how he can make sure that his Department secures all the resources that it needs to ensure that the view of the hon. Member for St Ives that he will get his £56 million comes to fruition. The written reply to a question that the hon. Gentleman tabled to the Minister contained a commitment just to increase spending
“in real terms in each year of the Parliament.”—[Official Report, 7 June 2010; Vol. 511, c. 47W.]
We really need to have the detail. I accept that it is very early days for the Minister, who has been in office a few weeks, and that the coalition Government are still trying to sort out their policies on NHS funding.
The hon. Member for St Ives made a clear and effective case for raising the funding for his constituency and primary care trust. There have been many written questions and debates on the issue, and I pay tribute to everybody who has been involved in the campaign to get additional resources into the primary care trust and into Cornwall. I also pay tribute to the staff, who are working hard day in, day out with the resources that they have.
Funding is obviously a key issue. The hon. Gentleman has given us quite a detailed canter through the historic reasons why we are where we are on funding, which was very interesting, but many of the views about why there is underfunding in certain constituencies and areas point to the 1970s as the time when allocations perhaps did not work in quite the way that they should have. That is the view that comes out of the debates and explanations about the current funding criteria.
At this point, it is worth reflecting on how the NHS has changed over the years. Patients now want access to high-tech, specialist services with the best nursing and clinical advice. There is also a tension around the fact that people want services much closer to home—in their local GP surgeries or at home if at all possible.
I was just reflecting on what the hon. Lady said before she got to this section of her speech. I must gently remind her that her party was in power for 13 years and introduced the funding formula that the hon. Member for St Ives (Andrew George) is complaining about. Having put that on the record, I beg to ask why the last Labour Government did nothing in those 13 years to remove the problem facing Cornwall and the Isles of Scilly.
I am grateful that the Minister intervened on me, because I am coming to that. I recognise, as the hon. Member for St Ives probably does, that where we are today might not be perfect, but the previous Labour Government made huge strides in terms of putting money into his area and others that were underfunded. The statistics show that there have been significant improvements since 2003-04, when some PCTs were 22% below target; now the figure is 6.2%, so there has been movement. I am not saying that everything done under the Labour Government was done as fully as we would have liked, but it would be interesting to hear what plans the Minister has to target the pace of change and how soon he feels we will reach the target level for all PCTs. We have to recognise, as I am sure the hon. Member for St Ives does, that taking money from other areas of the country in one fell swoop is not the best way to have a stable national health service.
If the hon. Lady rereads what I said earlier, she will see that I very much acknowledge that. Just to reassure her and, indeed, the Minister, let me say that it was in fact 1980 when the impact of the market forces factor changed quite significantly and created the detrimental impact that I described. Yes, I did make some disparaging remarks about the then Conservative Government and I welcomed the additional funding that the Labour Government put in, which I voted for and the Conservatives did not; that is a matter of record. However, I simply urge the hon. Lady to recognise that the formula change, which I fully applaud the last Labour Government for introducing, puts a responsibility on whichever party is in government to ensure that underfunded areas receive their target funding as quickly as possible.
We can probably agree that history is history. We are where we are today, and we need to make sure that we move forward as quickly as possible to get to the point that we all want to be at—an NHS that is funded fairly across England and that addresses some of the issues that the hon. Gentleman raised about rural constituencies and rural areas.
I want to address the rural nature of the hon. Gentleman’s constituency, the primary care trust and the patients that it serves. The issue of islands and peninsulas is also quite unusual, and few primary care trusts have to deal with it, so there needs to be some recognition of that. Clearly, the influx of people during the summer months must swell the demands on the national health service; all that must be recognised and factored in. There is also the issue of poverty. There can be pockets of poverty in rural areas; they are not just in urban areas, although we recognise that there might be different solutions to poverty in different parts of the country.
Let me reiterate that 80% of NHS spending is at primary care trust level, which means that the best solutions for an area can be put forward, debated and agreed at that level. I want to remove the myth that seems to exist that everyone is being told that certain areas have to do things in a certain way. That is wrong. Primary care trusts have much more capacity to design local services to meet their area’s needs. I understand that the new coalition Government will introduce directly elected representatives into primary care trusts to increase the level of local involvement and accountability. I hope that I have that correct, because the Minister is looking at me as if I do not.
I am delighted to hear it.
I now want to move on to the matter of health spending. I recognise that the hon. Member for St Ives would like more money for his constituency, but I think he recognises that since 1997 the relevant spending on St. Ives, and on Cornwall, has increased. This year the allocation for all PCTs is £164 billion. As I said, 80% of the entire NHS budget is now in the hands of PCTs—the highest proportion ever. That means that local decision making is possible. The PCT for Cornwall and the Isles of Scilly is this year receiving £856.2 million and its budget has increased by 12.4%, but we recognise that it is still 6.2% away from the target.
I am grateful that the hon. Member for St Ives has recognised the work of the independent Advisory Committee on Resource Allocation, which is made up of GPs, academics and health service managers, to develop a new funding formula to determine each PCT’s allocation. That has built on previous formulae to meet the objectives of providing equal access for equal need, and a reduction in health inequalities. Of course, a huge debate has raged about the tensions between the criteria used for allocating resources. For instance, there has been a debate about age versus deprivation, and the Conservative party in opposition would often argue that it was not deprivation but age that should be given more weight. The Conservatives also criticised the weighting of health inequalities in trying to remove those inequalities.
I hope that we now recognise that a series of criteria must be considered. Since last year a new formula has been introduced. We can clearly see how far the PCTs’ actual allocation is from their target allocation. The previous Government’s commitment was to move towards the target, while recognising that that would have to be done over a period of time, ensuring that it did not cause major problems to the smooth running of the NHS throughout the country.
When I looked again at the figures I found that the PCT that was the furthest over its target was Richmond and Twickenham; it was 23.4% over the target. I thought that it would make an interesting example to consider, as the relevant MPs are the Secretary of State for Business, Innovation and Skills, who is a member of the Liberal Democrats, and the hon. Member for Richmond Park (Zac Goldsmith), who is a member of the Conservative party. I can just imagine the tension and debate in that case about chopping the funding allocation for that PCT. Perhaps it would add some strains to the tensions within the coalition.
The hon. Lady makes a reasonable point about Twickenham and Richmond PCT, and about all those PCTs that receive significantly more than their target, because of the change in the funding formula. If she reads what I have said, she will notice that I recognise that it would be catastrophic to pull the rug out from under those PCTs, and we cannot do that: over a period of time, which I hope would be as short as possible, we need to find ways to ensure that if there are constraints on NHS spending, the areas that are now below their targets should not suffer.
I hope that the Minister will enlighten us with his thoughts on the pace of change in approaching the target and tell us whether he thinks the Department should adopt a target, with deadlines and dates. I know that he is not keen on targets, as we have seen from announcements in the past few days, but it would be helpful if he would explain his thinking about how we can arrive at a situation in which the hon. Member for St Ives gets his £56 million for his PCT, and other PCTs also receive the money that they feel they need.
The hon. Member for St Ives made a strong case for his constituents. I am grateful for his acknowledgment of the work of the Labour Government to deal with the problem; it may not have gone as far as he would have liked, but an attempt was made to deal with it. I look forward to hearing the Minister’s comments on NHS funding in this context. I wonder whether he will also discuss the issue of capital spending, which is preying on the minds of many hon. Members.
I congratulate my colleague, the hon. Member for St Ives (Andrew George), on securing this debate on NHS funding allocations. I also congratulate the shadow Minister, the hon. Member for Kingston upon Hull North (Diana R. Johnson), on her appointment to the Health Front Bench. In Government she was a Minister with other responsibilities, and a Whip, and I assure her that she will find serving as a shadow Health Minister tremendously rewarding, because of the important role of such matters in our lives and those of our constituents. I also congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on her almost but not quite maiden speech.
I pay tribute to the NHS in Cornwall, which provides an excellent level of care to the constituents of my hon. Friend and those of my honourable colleague; he has long campaigned on how best to distribute resources and has argued that PCTs should be moved to their target allocations. Before I respond in detail to his points, perhaps I might set out the general principles of the system of funding allocation; that may help the hon. Member for Kingston upon Hull North.
The Government believe in an NHS that is free to all, irrespective of need or ability to pay; in which professionals are freed from the shackles of centralised targets and empowered to take responsibility for their patients; where better access to services is matched by improved quality and greater efficiency; and which provides value for money and health outcomes that are second to none. That is our vision for the national health service, and the coalition’s programme for government sets out how we will achieve it.
First, the Government will increase spending on the NHS in real terms for each year of this Parliament, as the shadow Minister acknowledged. It is a commitment that reflects a deeper belief: that the NHS must be protected and properly resourced to continue its vital work. We must focus our resources where they are needed most. That means stopping the flow of resources from the front line to the back office, giving front-line staff the responsibility and resources to improve outcomes for patients, and entrusting local professionals—and local people—with the means to improve local health. By committing to cut the costs of health bureaucracy by a third, we will release resources that can be reinvested in front-line services; by giving GPs the power to commission services based on need, we will push decisions about health care provision close to patients; and by giving local communities more responsibility for public health, we will create a more flexible national health system—one that is responsive to local demand for health services, and is able to react to changing health needs and to direct funds towards emerging priorities.
Secondly, we will establish an independent NHS board to allocate resources and provide commissioning guidelines. The board will ensure access to health services that are designed around the needs of the patient, not the needs of the bureaucracy. It will set standards based on clinical evidence, not political micro-management. The aim is to achieve the best outcomes for patients, instead of simply ticking boxes and meeting targets.
I congratulate the Minister on securing his post. I know that he is passionate about health, and I wish him all the best as a Minister in the Department of Health. He mentioned the establishment of an independent NHS board whose focus will be on clinical standards as opposed to political micro-management. Bearing in mind health services north of the Tees, a clinically led, independent reconfiguration panel recommended that a new hospital should be built. Is that not something that the Government should be doing?
I have to congratulate the hon. Gentleman. I remember that as a Minister he was extremely helpful, within the confines and straitjacket of his remit. He was tenacious both in that job and this afternoon, and is using his skills to try to tease out an answer beyond the one that was given to him in my letter to him last Thursday explaining why that capital project was cancelled as part of the public spending review. However, to be helpful, and if he would like it, I will repeat basically what the letter said. Facts are facts, and I am afraid that the situation has not changed since I wrote to him.
When this Government came into power in May, we were faced with the largest deficit and debt that any Government had ever inherited from an outgoing Government. The debt is a financial problem that must be addressed urgently. Therefore, the incoming Government announced a review of spending commitments that were made by the previous Government after 1 January 2010—that is, in the run-up to the general election. As a result of the review, which has been carried out over the past seven weeks or so, an announcement was made on 17 June in which the coalition Government announced the go-ahead of four major hospital programmes, ranging from the Pennines to Liverpool and to St Helier in south-west London. Unfortunately, the North Tees and Hartlepool project did not get permission to go ahead. I am afraid that that is the answer. It is because of the economic situation and debt in which we find ourselves.
The Minister is gracious in giving way a second time. On that basis, and given what the Prime Minister said about NHS funding increasing in real terms despite the financial problems that we find ourselves in, capital spends will be provided elsewhere in the country, but seemingly not in my constituency. Are my constituents’ health outcomes not to be thought of because of financial considerations?
The hon. Gentleman knows the answer to that question. That is not why the hospital was not given the go-ahead last week. I can appreciate his frustration. As a constituency MP myself, I too would be frustrated, but the hon. Gentleman, who is a generous man, must not try to reinterpret the decision for other reasons. Sadly, the decision was taken simply because of the urgent need of this Government to take decisions to start curbing the ballooning debt problem, which needs to be addressed. That is the reason, I am afraid. It has nothing to do with our commitment to reducing health inequalities and spending more money on providing health care and services for people throughout the country.
I hope that the hon. Gentleman is satisfied with that. If he is not, and if it would be of any help to him, I would be more than happy to meet with him and, if he wants to bring them along, his colleagues from the Hartlepool area and the surrounding constituencies. They can discuss the matter with me—my door is always open. I would be more than happy to do that, if we can arrange a meeting, and if he thinks that it would be helpful.
Let me return to Cornwall and the general position on health funding allocations. I was saying, before discussing Hartlepool again, that we will establish an independent NHS board.
I can reassure my hon. colleague that it will not. It will be something completely different. It will be a stand-alone body that will be the driving engine of the NHS, in its required field.
By strengthening the link between investment and outcomes, the board will enable the NHS to deliver improved quality, higher productivity and better value for money. I am sure that my hon. colleague will appreciate that I cannot yet discuss the precise functions of the board, nor its composition, but our proposals underline our central belief that resources should be allocated according to need, without ministerial interference.
Perhaps the Minister can touch on another hospital situation. I understand that the Secretary of State visited Bury on Friday and overrode a clinically reached decision on maternity units. He said that, in his judgment, Fairfield General hospital’s maternity unit could remain open, against a clinical decision made in the “Making things better” reorganisation in Greater Manchester.
I hope that the hon. Lady is aware of the announcement that my right hon. Friend the Secretary of State made shortly after he assumed his current position, in which he laid down new criteria for determining the reconfiguration of hospital services. Prior to the general election, when he was the shadow Secretary of State for Health, he made it a priority that, in particular, maternity units and accident and emergency units would be looked at far more closely than they had been looked at. That is why, on assuming office, he strengthened the criteria for carrying out consultations on proposed reconfigurations, and brought in four new criteria that will apply to any future reconfigurations, and current ones that are still in the process. They will have to abide by the new strengthened criteria, which include ensuring that the wishes and views of GPs, clinicians, local stakeholders and the general public are taken into account. Decisions that affect local communities and people will have the input of local people, rather than simply being imposed on communities which, for a variety of reasons, do not want what is being proposed.
Those of us in Greater Manchester who are affected by the decision and the new process that the Minister is outlining are struggling to understand how to square the clinicians’ recommendation, which was based on things such as the number of doctors available, doctor training and the experience that has to be gained in maternity to deliver a safe service—a clinically led decision was made in that case—and the community’s wish and desire always to keep maternity and A and E units. It is hard for local people to understand how such things can be squared. Most constituency MPs understand that no one ever wants to lose an A and E or maternity unit. Does that really mean that clinically led decisions, such as those in Hartlepool and Manchester, will be overridden if local people do not want them?
No, it does not mean that. What I said when explaining the criteria that the Secretary of State has laid down is that it will strengthen the consultation process leading to decisions, but obviously there will be a number of processes thereafter. The different processes of assimilation before a final decision must ensure that the Secretary of State’s criteria for greater input of clinicians’, GPs’ and local communities’ wishes are taken into account. In the past, reconfigurations have too often left the impression among local communities that they have not been consulted or listened to, and that decisions have been made by managers or others based only on their narrow point of view without taking account of other people’s views.
No. I have been generous, and I want to make progress.
That is the principle for the criteria, but it will not mean automatically that there will never be any changes because there is a block. We are strengthening the process to take account of local wishes and needs. There is a balance to be struck, which will emerge during the reconfiguration process.
Is my hon. Friend aware that we have a unique arrangement for health, and that a single organisation is responsible for both commissioning and delivery—the local hospital? That works for the Isle of Wight, and it has turned round a deficit of £3 million and broken even in the past three years. Can he assure me that the forthcoming White Paper will allow the success of the island’s health services to continue?
I am grateful to my hon. Friend for that intervention. I assure him that the White Paper will be aimed completely at improving and enhancing the provision of health care throughout the country—not just on the Isle of Wight, but on the mainland from Cornwall and the south-west up to Hadrian’s wall in the north. That will be based on a principle of putting patients first and at the heart of health care provision so that they drive the national health service and so that it is there for them and their needs, rather than the needs of management bureaucracy or of politicians micro-managing the system from Whitehall down the road. However much affection and respect I have for my hon. Friend, I cannot be tempted to outline in detail now the White Paper’s contents, but I assure him that when it is published he will share my enthusiasm for the way in which the Secretary of State will unveil his vision for the national health service, not simply for the next five years, but thereafter. I trust that that satisfies my hon. Friend, if not the hon. Member for Worsley and Eccles South (Barbara Keeley).
My honourable colleague the Member for St Ives mentioned the current pace of change, and particularly the distance from target measurements used to assess relative progress towards target allocations. His constituency is in Cornwall and Isles of Scilly primary care trust. It received an allocation of £808 million in 2009-10, which increased to £856 million in 2010-11—an increase, as he knows, of 12.4% above the national average of 11.3%. However, under the formula established by the previous Government, and as many contributors to the debate have noted, that is still 6.2% or some £56.3 million below its target allocation for 2010-11.
I hope that my honourable colleague will appreciate that until the spending review is complete, I cannot comment on specific time scales or the future plans for NHS allocations, nor on the financial standing of specific local health services. I trust that he will be reassured that his partners in Government share a common assessment of both the problems facing the NHS and the solutions available to us.
During the spending review, we will examine rigorously all areas of health spending to identify where we can make savings—for example, by maximising the NHS’s buying power, renegotiating contracts and improving financial accountability throughout the system. The picture that I have painted is of an NHS in which decisions on resource allocation centrally are made by an independent NHS board. But although I cannot give the hon. Member for St Ives the commitment and promise that he wants now, the matter will be examined as part of the spending review between now and the autumn. When our reforms become reality, the NHS board will be responsible for the allocation of spending and will consider a whole range of areas.
I want to raise a point for clarification. The Minister described the role of the NHS board and made it clear that it will be remote from political micro-management. He also said that he cannot give me or the PCTs that are a long way below their targets any answer until after the spending review. Will the decision on the pace of change towards achieving targets be made by the spending review, or will that decision be made ultimately by the independent NHS board? If he cannot say which of the two, or which combination of the two, when will I and other hon. Members receive a clear answer on what will happen and who will make the decision on the speed of change?
I believe that I can help my honourable colleague. The ultimate decisions will be made by the NHS board when it is established, but he will appreciate that primary legislation will be required and that that will take time. In the meantime, the allocation of funding for health care throughout the country will be done initially following the spending review, but when the board is established on a statutory basis and operating, it will take over that function. I hope that has cleared up the matter for my honourable colleague.
That is a reasonable question, and I shall be reasonable in my response. The date will be determined partly by Parliament because primary legislation will be required, as outlined in the Queen’s Speech last month. Speaking as an ex-Whip rather than a Minister for Health, I anticipate that the legislation will make progress through Parliament this Session and receive Royal Assent in July next year, or perhaps September, depending on whether there is a spillover in September or October next year, which I do not know at the moment. That is my guess as an ex-Whip for the timetable for the primary legislation. We will then have to wait to see at what point after that it will be up and running, but my guess is that it will be as soon as is feasible.
Given the state of flux and the uncertainty of the spending review, which will be followed by the creation of the independent NHS board, there will be a vacuum because decisions have yet to be made in this two-stage process. Will the Minister agree to meet colleagues from Cornwall and me to discuss the progress of that review, either at the time of the review itself or immediately afterwards? We would find that very helpful, because we know that the NHS budget in Cornwall is under tremendous pressure at the moment.
I reassure my honourable colleague that there is not a state of flux. There is a state of potential change, yes, because there is a new Government with an important vision for the future of the health service. That is a difference, but there is not a state of flux because there is stability there. I am not criticising him, but I wanted to reassure him, so that he did not get the impression that there was a state of flux, with the connotations that that has. There is no state of flux. We have a vision, which will be unveiled shortly, but we have things in place to make sure that the system is running properly.
The other thing I would like to repeat—it is so important that it does not matter if it is repeated again, because the issue has featured frequently during today’s debate—is that the Department of Health budget is, of course, protected, which means that in every year of this Parliament, it will increase in real terms. There will be pressures on the Department of Health budget but, under the coalition agreement and the commitment that my party gave prior to the general election, which has been upheld by the coalition agreement, there will be a real-terms increase in that budget. That gives a degree of stability to the health service because it knows that, in every year of this Parliament, it will receive that money.
I thank my honourable colleague for his earnest and informed contribution to today’s debate. As a constituency MP myself, I respect and appreciate the tremendous battle that he has fought over a number of years for Cornwall. I am thrilled to see that my hon. Friend the Member for Truro and Falmouth is also joining in fighting for her constituents to ensure that they, too, get the best health care possible. That is something that all hon. Members want and fight for on behalf of their constituents.
At its most basic level, allocation is a question of measuring need and distributing resources accordingly. To the outsider—and some insiders—funding allocation is a dense and sometimes opaque subject. As the former health editor of The Times wrote,
“only the brave or foolhardy venture into some areas of NHS management. Resource allocation is certainly one”.
I can safely say that my honourable colleague falls into the former category. I trust that he is reassured that although it is too early to comment on specific funding allocations, the coalition’s programme for government shows that we share the same basic belief in the importance of both independence and local decision making when it comes to setting funding levels for the NHS.
Foreign National Prisoners
I welcome you to the Chair, Mr Weir. I thank Mr Speaker for allowing me to have the debate and I congratulate the new Justice Minister on his well deserved appointment.
I have come here today, on behalf of my constituents in Kettering, to advance a proposal that would save Her Majesty’s Government quite a substantial sum of money and free up quite a large amount of prison space, and that would enable us to advance a sensible policy on law and order—putting criminals behind bars so that they cause less crime. The proposal is basically that we should send back to secure detention in their own countries the 11,500 foreign national prisoners in our jails.
Those 11,500 foreign nationals make up some 13% of the present prison population. It is a staggeringly large figure, and I understand that it has more than doubled in the past 15 years. The figures available to me show that in England and Wales, as of 30 June 1995, there were just over 4,000 foreign nationals in our jails. I believe that the latest figure is some 11,500. I should be grateful for the Minister’s confirmation of what the most up-to-date figure is.
I also understand that, on average, foreign national prisoners serve nine to 10 months in jail, including for some extremely serious offences, and that the numbers of foreign national prisoners are now so large that we have dedicated whole prisons to holding just them. I should welcome the Minister’s confirmation that HMP Canterbury, HMP Bullwood Hall and HMP Morton Hall are reserved, either entirely or almost entirely, for foreign nationals. This is a national disgrace. We cannot go on like this. We should arrive at a sensible situation in which we can return these people, who have done very bad things in our country and abused our trust, to serve out their sentences in their own countries.
It is no exaggeration to say that Britain has become the “United Nations of crime”. I understand that we are now paying for the board and lodging of criminals from some 160 countries, out of only 192 recognised countries; 80% of the world’s nations are represented in our jails, and there are some pretty nasty people. Apparently, one third have been convicted of violence or sexual offences and almost one fifth are guilty of drug crimes. Other offences include robbery, burglary and fraud. They come from some pretty exotic places. Apparently, 10 countries account for almost half these foreign offenders, with the leading countries in the league of shame, according to the numbers as of 18 December 2009, being Jamaica with 963, Nigeria with 752, the Republic of Ireland with 647, Vietnam with 620 and Poland with 617. By my reckoning, those top five countries as of last December accounted for 3,599 foreign national prisoners—one third of the total.
My contention is that we ought to send these people back to their country of origin. I am not a lawyer, and I am rather pleased that I am not a lawyer, but I understand that there are weighted meanings to words that most of us would regard as meaning the same thing. Repatriation, I understand, is different from deportation, which is different from removal, but to my constituents in Kettering, they all basically mean the same thing. We want these nasty people back in their countries of origin. I am not particularly fussed as to whether they are repatriated, deported or removed—I just want them there, not here.
I understand that until very recently, we did not really have any kind of prisoner transfer arrangements with any countries in the world. We then established some voluntary agreements so that prisoners could be transferred if they volunteered, and very recently we have just begun to look at compulsory transfer agreements. I would like to see more of those. I was pursuing the matter with the previous Government and not getting very far. I hope that with the enlightened good offices of the new and far-sighted Minister, we shall make rather better progress.
In the questions that I have asked so far, I have concentrated on the countries at the top of the list of shame, because that seemed a sensible place to start. I asked whether there were agreements in place with Jamaica. That is a Commonwealth country, to which we send very large amounts of development aid each year. My understanding is that a transfer agreement is in place. It was signed in 2007. However, it is still subject to ratification and also requires legislation in the Jamaican Parliament. I am unclear about whether it is a compulsory transfer agreement or just a voluntary one.
I am grateful to my hon. Friend for securing such an important debate. Does he know that our coalition partners were far ahead of us on this issue? In their wonderful manifesto, “change that works for you”, they say on page 76 that they will
“Prioritise deportation efforts on criminals”.
Our coalition partners should be congratulated on that, and we should follow their lead.
I am grateful for that most helpful intervention from my hon. Friend, who I know has a prison in his constituency. I am sure that there are foreign nationals there as well. Of course, that is not the only policy from which we should learn a lesson from our coalition partners. It is a very helpful move forward.
Nigeria is second in the list of shame, with 752 prisoners as of December. I understand that we are looking for a compulsory transfer agreement with that country. Again, it is in the Commonwealth. I understand that a Bill is before the Nigerian National Assembly. I hope that we are using our diplomatic efforts abroad to encourage these countries to get a move on.
I also understand that at the end of last year, the United Kingdom brought into force the additional protocol to the Council of Europe convention on the transfer of sentenced persons. That took place on 1 November. Under the additional protocol, the United Kingdom can transfer prisoners, without their consent, to 34 signatory countries, provided that the prisoner is subject to a deportation order. The consent of the receiving state is required in each case. However, the written answer that I received on 1 February 2010 stated:
“To date no prisoners have been transferred under these arrangements.”—[Official Report, 1 February 2010; Vol. 505, c. 115W.]
Thirty-five countries are affected by compulsory prisoner transfer agreements, and of those 35, most are in Europe. There are 3,069 foreign national prisoners from the 35 countries in British jails, which is 28% of the total. The list of shame in this case is headed by the Republic of Ireland, with 647; Poland has 617; in third place is Romania with 357; Lithuania comes in fourth at 330; France is number five with 163—and so the list goes on. I also understand that we have an agreement for compulsory transfer with Libya but, to date, no prisoners have been transferred under those arrangements, although I understand that Scotland has been involved in sending prisoners back to that country even if England and Wales have not.
I should very much like to find out from the Minister the cost of keeping a prisoner in jail for a year; I understand that it is about £30,000 to £40,000. Given that there are 11,500 foreign national prisoners—again, the number is to be confirmed by my hon. Friend—that would imply that the cost to this country of keeping those nasty people in British jails is something between £300 million and £400 million a year. That is a substantial amount.
My hon. Friend is being extremely generous in giving way. Matters go further than he has described. Wellingborough prison is in my constituency, and it is overcrowded all the time. Its prison officers, who do a wonderful job, tell me that they never have enough time to work with prisoners and get them educated, so that when they go back on the streets, they reoffend instead of being model citizens. That is partly due to the overcrowding, which is caused by there being so many foreign national prisoners.
My hon. Friend makes an excellent point. The purpose of prison, in denying people their liberty, is to be a punishment, but it is also to rehabilitate them so that, when they go back into the real world, they do not reoffend. If we are having to spend such a length of time dealing with people, many of whom do not speak English and do not understand our customs and how we do things in this country, it makes prison officers’ jobs, which are already very difficult, far more difficult and challenging. That will have an impact on the rehabilitation of British prisoners, who are likely to stay in this country for a long time.
I am extremely grateful to my hon. Friend for giving way during his very powerful and important speech. Canterbury prison is in my constituency, and it is entirely composed of foreign prisoners. At stake is not only the cost, both financial and in management terms, of the prisoners, whose numbers almost trebled under the previous Government from 4,000 to 11,500, but the issue of deportation at the end of sentence.
We have several bad cases in my constituency. A woman who calls herself Sheena Daniels is perhaps the worst case of a person whom judges recommended for deportation. Somehow or other, she has claimed be a Zimbabwean—although I am told that she has a Nigerian name and a west African accent—and on the strength of that has finally received exceptional leave to remain. The judicial recommendation to deport has been abandoned, so that the community where she and her family have continued to commit criminal offences is suffering.
My hon. Friend makes a very good point, and what a shocking case that is. Sadly, I do not think that it is the exception; I would have thought that it was probably fairly typical. Let us get things clear. These people have come to this country. They have abused our trust. They have committed offences so bad that even our creaky, criminal justice system has actually sent them to jail. I very much doubt whether they ever serve their sentences in full, given that most British prisoners do not.
A few years ago, there were lots of such cases, and there was a scandal about people not being automatically deported to where they came from. It is therefore important that, if foreign national prisoners complete their sentences, they should be deported. In my view, they should all be deported, repatriated or removed—whatever the legal term is—at the end of their sentences. However, I would go further and say that in-sentence prisoners need to be sent back to their countries of origin because of the costs that we are having to pay to keep them in British jails.
If the coalition Government were to take sensible steps to address the problem, especially with our European partners and our Commonwealth compatriots, we could make real progress in freeing up the prison space that our country badly needs. We could then send more prisoners from this country to jail. We know that too many people are not going to prison because magistrates and others are under direction to try to keep them out of prison, as there is not enough space. Given that 13% of our prison population is made up of foreign nationals, it is obvious to me that if we tackled this issue sensibly, we could make real progress on a wide variety of fronts.
I congratulate my hon. Friend the Member for Kettering (Mr Hollobone) on securing the debate. He raised this issue on numerous occasions during the previous Parliament. He has found two occasions already to raise the subject orally with me, and I am delighted that he is going to hold this Administration to account with the same vigour as he did the previous one. I am grateful to him. This is an area where progress has been stuttering. The issue is bureaucratically complicated and difficult. I am as anxious as he is for progress and will welcome the regular spur that my officials and I will receive from Kettering to keep our focus and that of the bureaucracy—in the best sense of the word—on addressing the issue.
Foreign nationals who come to our country and abuse our hospitality by breaking our laws should face the full force of the law. If appropriate, they should go to prison. I share fully my hon. Friend’s frustration that foreign national prisoners who have no links to the United Kingdom are still not routinely transferred to prisons in their own country. As he said, a significant part of the purpose of prison should be the rehabilitation of the offender. That is not a duty owed by the United Kingdom taxpayer to foreigners in the same way as it is owed to our own citizens.
We currently hold 11,367 foreign national prisoners, of whom 7,824 have been convicted and are serving sentences of imprisonment, and who could be considered for transfer to their own country. In contrast, our posts overseas are aware of about 2,000 British prisoners held, of whom about half are thought to be sentenced prisoners. Yet in 2009, with this large number of foreign national prisoners in our prisons, we managed to transfer 41 back to prisons in their own country and we received 64 British prisoners back. While the proportions are striking, so is the feebleness of the overall number. I have asked my officials to pursue all possible options for increasing that number.
I congratulate my hon. Friend on securing the debate. The Minister referred to the numbers of prisoners who are incarcerated abroad; may I draw his attention to an issue at a slight tangent to this debate? A significant number of British citizens are on bail in European countries. They are not in jail, having not served trial. Many are there as a result of the notorious European extradition warrants. They are there for an extraordinary length of time, which is a problem for their families, who face a lot of hardship. Can the Minister work with officials to secure an agreement to allow them to serve bail in their home country?
My hon. Friend has put that on the record. It is separate from today’s debate. I do not want to pursue that because it will reduce the time I have to reply properly to my hon. Friend who secured the debate.
Transferring prisoners to their own country frees up prison places here and reduces the cost to the British taxpayer, but that is not the only reason for seeking their transfer. The Government want our prisons to rehabilitate prisoners better and enable them to lead productive, law-abiding lives following their release from prison. Just as I want to see British prisoners provided with work, education and training to reduce reoffending in this country, so a foreign national prisoner is more likely to be rehabilitated if he serves his sentence in his own country where he can undertake offender behaviour programmes and pre-release activities most suited to his needs and those of his host community. There are real difficulties associated with imprisonment in a foreign land, including language and cultural barriers and visiting difficulties, which make rehabilitation less effective. A prisoner serving his sentence at home is also more likely to receive help and support from family and friends. Transfer is in the best interests of not only the prisoner but the public in his country of origin.
Since the introduction of automatic deportation in 2008, foreign national prisoners who receive a sentence of imprisonment of 12 months or more can expect to be removed from the United Kingdom at the end of their sentence. Transferring prisoners during the course of the sentence ensures that the receiving state is aware of the prisoner and his offence, and is better able to protect the public when the prisoner is released. Information on previous offences is plainly helpful and welcomed by overseas jurisdictions.
Although there are sound public policy grounds for transferring prisoners to their own country, I accept that the numbers transferred are pathetically small. As my hon. Friend the Member for Kettering is aware, the United Kingdom has prisoner transfer arrangements with more than 100 countries, yet we only managed to transfer 41 prisoners from prisons in England and Wales while 64 returned here. It is apparently the first time that we managed to get more imports than exports. I am determined to do everything to ensure that the risible figure for transfers is increased.
There are a number of reasons why the figure has remained stubbornly low, which my hon. Friend probably already appreciates, and which need to be addressed and overcome. The vast majority of the transfer arrangements have been in place for some time and require the consent of the prisoner, without which the prisoners cannot be transferred. Prisoner transfer was initially conceived as a humanitarian measure, and I understand that it is for that reason that Parliament thought it right to make prisoner consent a prerequisite to transfer when passing the Repatriation of Prisoners Act 1984. That remained the case until 2006, when Parliament amended the Act to enable prisoners to be transferred without their consent. I have asked my officials to investigate the scope for renegotiating arrangements on the basis of compulsory transfer. Although we may not be able to achieve compulsory transfer arrangements in all cases, we should do so wherever we can, and there is some limited progress to report.
In November 2009, the UK ratified the additional protocol to the Council of Europe convention on the transfer of sentenced persons, which provides for compulsory transfer where a prisoner has been served with a deportation order. My officials are working closely with the UK Border Agency to identify suitable prisoners for transfer under the protocol. As an example, I expect the first prisoners, from Lithuania in this case, to be transferred later this year. No-consent arrangements have also been concluded with Uganda and Rwanda, but as my hon. Friend pointed out, they await ratification.
Work is also ongoing with the Nigerian Government to put in place a no-consent prisoner transfer agreement. My hon. Friend may be aware that legislation to amend Nigeria’s prisoner transfer legislation is currently before its National Assembly. Like the UK law before its amendment, current Nigerian legislation requires prisoners’ consent. I am grateful to the Nigerian Government for their willingness to engage with us on the issue, which I hope to discuss further with their Ministers during a visit by President Jonathan of Nigeria to the UK next week. In the meantime, we continue to pursue the option of voluntary transfers to Nigeria. To date, 22 prisoners have applied for transfer, and the applications are currently being considered by the Nigerian Government.
Although we support the principle of compulsory prisoner transfer, some countries maintain that sentences should be served where they were passed, claiming that rehabilitation can be achieved only if the prisoner wants to transfer. I disagree with that view, but where it is held, it is an obstacle to the compulsory transfer of a significant number of foreign national prisoners. However, we will continue to negotiate compulsory agreements wherever we can.
My hon. Friend will be aware that the European Union has agreed a framework decision governing the transfer of prisoners between member states of the Union, which comes into force next December. The agreement provides for compulsory transfer under certain defined circumstances: where the prisoner is to be transferred to the country of his nationality in which he is ordinarily resident, where the prisoner is to be transferred to the country of his nationality, to which he would otherwise be deported at the end of his sentence, and where the prisoner has fled and a sentence is transferred to his country of nationality for enforcement. Regrettably, the framework decision does not apply to sentences before its implementation, but we expect to see a steady increase in the numbers transferred after December 2011 and consequently a steady decline in the number of EU nationals held in our prisons after that date.
My hon. Friend has already drawn attention to the fact that the largest group of foreign nationals are Jamaican. In 2007, the United Kingdom signed a prisoner transfer agreement with Jamaica. I regret to say that it is a voluntary agreement, which was the limit of what was able to be negotiated at the time, and it has not yet been ratified. Changes to Jamaican legislation are necessary before ratification can proceed. I have asked my officials to investigate how we can work with other Departments here to help and encourage the Jamaican Government to progress with the agreement.
We will continue to press voluntary prisoner transfer arrangements where we cannot negotiate compulsory ones, and we will take action to encourage prisoners who could transfer but do not to apply for a transfer. I have asked my officials to look urgently at how prisoners can best be informed of the options available to them and encouraged to apply.
We are gradually increasing the number of prisoners transferred to countries outside the European Union. In addition to those seeking voluntary transfer to Nigeria, 25 prisoners have sought transfer to prisons in Pakistan. The transfer of the first four of those has been agreed and will take place in the next few weeks. Many foreign nationals in our prisons cannot be transferred to serve their sentence in their home countries, because there is no agreement in place. It is right that we seek to have prisoners who are subject to deportation action, or who have no entitlement to remain in the United Kingdom, removed as soon as possible at the end of their sentence.
We have inherited an overcrowded prison estate that is teetering on the edge of being able to keep pace with the demand created by those sent there by the courts. Moreover, one of the key factors is the large number of foreign nationals in our prisons, many of whom have no right to be in the United Kingdom. I therefore need no reminding of the importance of improving the situation by all appropriate means. At a time when we have been left with no money by the previous Government, we need to look carefully at how our resources are used and what can be done to target them more effectively. Our priority is to protect the public and focus our efforts on reducing reoffending. It is therefore right for us to consider how prison resources can be better focused on prisoners who will be released into the community in the United Kingdom, which will free up prison capacity currently taken by foreign nationals who will be removed from the country anyway. That is one way that we can help achieve our priority.
Provisions are already in place to help ensure that foreign national prisoners can be removed from the United Kingdom as early in their sentence as possible. The early removal scheme has been in operation in England and Wales since 2004 and gives the Secretary of State the power to remove eligible prisoners earlier in their sentence than would otherwise have been possible. Foreign national offenders who are serving a determinate sentence and who are liable to removal from the United Kingdom can be removed from prison and the country up to 270 days, or nine months, before the halfway point of their sentence, when they would normally be released. The period of early removal in each case varies depending on the length of the sentence being served, and the maximum of 270 days applies where the sentence is for at least three years. It will be proportionately less for shorter sentences. Prisoners must serve at least a quarter of their sentence before early removal can take place. In each case, removal is dependent on the UK Border Agency making the necessary arrangements. That can be affected if the prisoner appeals against removal or if there are difficulties in securing the necessary travel documentation.
The scheme does not apply to offenders serving life or other indeterminate sentences. However, all foreign national prisoners serving a determinate sentence who are liable to be deported by UKBA are considered for the scheme by the National Offender Management Service. It is important to remember that those offenders would be subject to deportation by UKBA on their release anyway.
Early removal under the scheme is not pursued for prisoners with outstanding criminal charges or further custodial requirements, such as an offender with an outstanding confiscation order. Such prisoners should not be permitted to avoid their liability by leaving the United Kingdom’s jurisdiction early. I would like to emphasise that foreign national prisoners who are removed or deported under the scheme are flagged on UKBA’s warnings index and can therefore be identified if they attempt to return to the United Kingdom.
UKBA will continue to seek to remove foreign national prisoners who have no right to remain here. Since 2007, some 15,000 foreign national prisoners have been deported. UKBA works closely with NOMS to ensure that prisoners can be removed at the earliest possible moment. In 2009, UKBA embedded immigration teams in nine prisons as part of the rationalisation of the foreign national prison population in the category C prison estate. The two hub and spoke prisons are Canterbury and Bullwood Hall, not Morton Hall, which was mentioned by my hon. Friend the Member for Kettering. This enables UKBA staff to gather nationality and identity information at the earliest opportunity with the aim of reducing the number of prisoners and increasing the removal and deportation of foreign criminals at the end of their sentence.
Police Funding (Greater Manchester)
It is a pleasure to see you in the Chair, Mr Weir. I wish to pass on my thanks to Mr Speaker for ensuring that this debate can take place today. I would also like to put on the record my thanks and appreciation to all the police officers and staff at the Greater Manchester police, who do an absolutely fantastic job—a very difficult job in very difficult circumstances. I wish to put on the record my tribute to their work in making my constituency a safer place.
I would also, very briefly, like to congratulate the Minister on his appointment. Given everything that is facing the public services as we progress with the new coalition Government, I am sure that he will do his best, in very tight circumstances, for the police service in Great Britain.
It is, however, a concern that one of the first acts of the new Conservative-Liberal Government has been to introduce a cut of £125 million in police revenue, with a further £10 million from capital funding and £10 million from the counter-terrorism budget. For Greater Manchester police in my region, that announcement will mean a cut of just less than £7 million. That represents a reduction in grant of approximately 2% of total budget. Only Greater London, at £30.4 million, and the west midlands, at £7.5 million, will be harder hit.
Clearly, the Greater Manchester region will be hit harder than most. That has led to uncertainty, as the police had already set out their budgets for the coming financial year. That is why the reduction is so damaging to the efforts being made to tackle crime in my constituency and in other constituencies across Greater Manchester. Police authorities will now have to cut services that they have not planned to cut and there is the likely possibility that that will impact on front-line services.
Does my hon. Friend agree that local councillors in Manchester, of whom I am still one, have worked very hard in recent years, on a cross-party basis, to deliver precept rises that allow Greater Manchester police to have the resources to do its job, and that the least we could expect from the Conservative-led Government is a similar level of commitment at a national level?
This is the first opportunity that I have had to welcome my hon. Friend to the House. He will be a stalwart campaigner for his constituents, who are on the other side of the River Tame from my constituency. He is absolutely right. Although the police authority has had to make some difficult decisions about the police precept, a lot of hard work went into ensuring that the funding package for this financial year was robust and matched the needs of policing in Greater Manchester.
Of course, the previous settlement was made by the Labour Government before the general election. As a result, police authorities set their local budgets on the basis of that settlement and will now have to make difficult choices to bring their budgets into line with the new Government’s amended settlement. Greater Manchester police authority has already admitted that tough decisions will have to be made. There is a concern in my constituency about how that will affect policing in Greater Manchester.
Throughout the years of the Labour Government, we saw a real fall in the number of crimes that were committed. Overall, crime fell by 36%. That was, in part, thanks to the record investment in levels of policing. In 1997, Greater Manchester police employed fewer than 7,000 police officers. According to the most recent figures, from September 2009, there are now 8,148 police officers.
According to the House of Commons Library, in my constituency we now have 917 full-time equivalent police officers, as well as—a great invention of the last Labour Government—police community support officers. Across the same area, the boroughs of Tameside and Stockport, we now have 99 PCSOs committed to being a uniformed presence on the streets.
Like my hon. Friend, I would like to pay tribute, particularly to Inspector Kevin Mulligan and the Greater Manchester police force in Salford, who have done a great job, with the help of PCSOs, in bringing down crime—particularly antisocial behaviour, which was of great concern to my constituents. Does my hon. Friend share my concern that these budget cuts will really affect PCSOs and, in our case, the neighbourhood team work that can get crime and antisocial behaviour down?
I agree with my hon. Friend. It is crucial not to diminish the role of the PCSOs and to support the neighbourhood policing teams. Most people will recognise that neighbourhood policing teams, based on every ward in our boroughs, are one of the most successful recent changes to policing in areas such as Greater Manchester. That localism has made a big change to how the police are viewed by the general public, and it is important that we should maintain it.
Backed by that high level of investment, there have been some impressive results. In the borough of Tameside, during the period from 2001-02 to 2009-10, crime was reduced by a fifth. Crimes such as burglary fell significantly. Figures from the House of Commons Library show that the number of burglaries in Tameside fell from 6,084 in 2002-03 to 3,926 in 2008-09. There was a similar trend in Stockport: vehicle crime fell from more than 7,000 in 2002-03 to 3,746 in 2008-09. That shows that proper investment has an effect on crime. In Tameside, we know that effective crime-fighting has improved the quality of life for residents, both collectively and individually. That is why the cut of just under £7 million is of real concern.
Crime itself is not always the main threat to people’s sense of well-being: sometimes the fear of crime is just as, if not more, important, although it can be hard to quantify. Neighbourhood policing and bobbies on the beat have been a real reassurance to our constituents.
I am concerned about how many more efficiency savings there are in the police service in Greater Manchester. It has been streamlined over the past decade and it is not clear that there is now much spare capacity; it is a very lean organisation. In short, all the cuts will inevitably impact on front-line services, even if that is not the Minister’s intention.
Any plans to cut back office staff might not be as simple as they first sound. Some back-office positions are filled by officers who have been injured in the line of duty. If there are no roles for them, they might have to go on sick leave, which will not help to reduce costs. A key to freeing up police officers has been to have the necessary bureaucracy carried out by civilians in a back-office role, so that officers can spend more time on the beat, which is something my constituents will want to be continued and maintained.
We also have to bear in mind that a number of cuts have already been announced and reconfirmed in today’s Budget. The local crime and disorder reduction partnerships in Tameside and Stockport, and no doubt across the whole of Greater Manchester—partnerships involving various local agencies including the local council, housing associations and the NHS—have made a significant impact on reducing crime in my constituency. They have helped to reduce the rate of reoffending, especially in respect of key crimes such as burglary, car crime and antisocial behaviour.
Reducing the funding available to crime and disorder reduction partnerships will put all that good work in jeopardy. The ability to respond to complex issues in a multi-agency setting, which ensures a range of expertise, could no longer be relied on if agencies were stripped back even further. Agencies would go back to being able only to fire-fight issues, rather than take the current proactive approach to local concerns.
I give one example. In Tameside, alley-gates have had a huge impact in dealing with crime and making people feel safer. Since 2005, more than 1,300 households have benefited from the initiative. In a recent survey by Tameside council, 96% of people said that they had felt safer since the gates went up, and 42% felt that they had had an impact on antisocial behaviour. However, with local authority cuts on the way, there will be less money available for such crime prevention initiatives; that, along with further cuts in the police budgets, will have a knock-on effect.
I turn to another matter that I wish to highlight. There is a sense of irony in my constituency about the local Liberal Democrats in Stockport. I appreciate that the Minister may not have the authority to speak for his coalition partners on this matter, but we shall see. We have found out all too soon that the Liberal Democrats say one thing in opposition and quite another when in government.
In February, the Stockport Liberal Democrats put forward a council motion condemning the previous Labour Government and the borough’s two Labour Members of Parliament—myself and my hon. Friend the Member for Stockport (Ann Coffey)—for the 3% increase in the local police grant settlement, claiming that it would impact on front-line policing in Greater Manchester. How strange that they should have said nothing when the Tory-Liberal Government ordered the cuts. It is the height of hypocrisy, especially as it will mean a less effective police force in my constituency, in Tameside and Stockport and across Greater Manchester.
What objections have the local Liberal Democrats raised? The silence is deafening. [Interruption.] It so happens that the hon. Member for Manchester, Withington (Mr Leech) has just popped his head round the door; he has now left. Perhaps they are so mesmerised by their newly acquired Government offices that they are suffering from some form of political amnesia. They are certainly not putting the people of Stockport and Greater Manchester first. That is not surprising, given that every Liberal Democrat Member of the House today was elected on a pledge not to support the £6 billion cuts programme, although they now seem content to its being driven through at high speed. I hope that they recover their principles soon, and think once more about these damaging cuts to our police service.
I accept that people are generally suspicious of politicians using statistics, but it is worth repeating the point that when Labour was in government, we in Greater Manchester saw recorded crime fall by 36%, including antisocial behaviour and other more serious offences. We need to ask serious questions about the Government’s commitment to reducing crime and protecting British people.
Has the Minister given any thought to the effect that the cuts will have on local policing? What will be the effect on the fear of crime if the police are less visible in the community? In light of the cuts to local government announced in the Budget today, what will be the effect on the funding of crime and disorder reduction partnerships? A multi-agency approach has made a real contribution to cutting crime and the fear of crime.
The counter-terrorism budget, too, has been cut—by £10 million. Although no one wants to raise public concerns about terrorism, has any assessment been made of how the cut will impact on our effectiveness in protecting the public from terrorism? That question is particularly appropriate for Greater Manchester, as its police take the lead on such issues for the whole of the north-west.
We also need to consider grants for specific posts, such as drug-testing officers or school-based police officers. They are not funded out of the main police grant, but specific grants are given for individual posts. Given the budget tightening, those important and worthwhile posts could well be under threat too, putting more pressure on the remaining posts. What assessment has been made of the combined impact of the grant reductions made by the Minister’s Department and the council tax freeze, which will effectively eliminate Greater Manchester police authority’s ability to raise funds locally to support policing?
From the discussions that I have had with the local police and other agencies, I know that there is a real sense of concern about this issue, not just for Greater Manchester police, but police forces across the country. We need to have a more considered approach that takes into account what local communities want and need, particularly in relation to something as important as policing and community safety. I look forward to the Minister’s response.
I congratulate the hon. Member for Denton and Reddish (Andrew Gwynne) on securing the debate on behalf of his constituents, and I thank him for his kind words about my appointment to the job. I welcome the opportunity to discuss the important issue of police funding.
I would like to say something about my recent announcement on the reductions in police funding for 2010-11 before turning to the specifics of Greater Manchester. My announcement on 27 May that we intend to reduce funding for the police service of England and Wales by £135 million may have been expected. Announcing reductions of any sort is not pleasant or easy, particularly when they relate to an important service such as the police service. However, given the size of the overall budget deficit, the police will need to make a fair share of the savings required.
As I said in my written ministerial statement, the Government’s priority is to cut the budget deficit and get our economy moving in the right direction. The proposed reductions to police funding are, in fact, spread equally across all forces and no one force will have its funding reduced by more than another—the hon. Gentleman needs to understand that point. That will mean that police forces have less money than they were expecting this year, but forces have already identified savings of £100 million for this year on areas such as better procurement and IT spending. I am quite confident that additional savings can be achieved by driving out wasteful spending, reducing bureaucracy and increasing efficiency in key functions, while leaving the front line of policing strong and secure.
In total, the Home Office has been asked to cut £367 million this year as a contribution towards the £6 billion of savings required. To minimise the impact on the police service, the Home Office has decided to cut a greater-than-proportionate share of its own central budget. In short, the Government intend to reduce police funding by a total of £135 million this year, which will be achieved by a proposed £115 million reduction in rule 2 grant, a £10 million reduction in capital grant and a £10 million reduction in counter-terrorism-specific grants. I should point out that even after those reductions, Government funding to the police service will remain at £9.6 billion in 2010-11, which is still £124 million more than last year.
Assuming that, following the consultation process, the House approves the proposed reductions laid before it on 10 June—there will be further opportunity for debate for hon. Members—Greater Manchester will receive £465.5 million in general grants and around a further £49.4 million in specific grants and capital provision. Again, that will still mean an increase of more than £6.6 million since 2009-10. In fact, between 2005-06 and 2009-10, central Government funding to Greater Manchester increased by £77.5 million, or 15% in real terms.
As I said, the Government have made it clear that tackling the deficit is the most urgent issue facing the country today, and the police need to contribute towards the overall reduction. That applies to every force. The package was the first step but, as I said, the reduction was shared across the service, so that each force will face a cut of 1.46% of its core funding. I think the hon. Gentleman suggested that the cut was 2%, but I should point out that that is incorrect. In fact, the reduction is 1% of the total estimated revenue spending by the force in 2009-10. The reduction itself is £7 million, and we have to see that in the context of total estimated revenue spending by the force of £681 million, £473.8 million of which comes from central Government. In fact, there will be an increase in the amount of central Government grant of 1.4% compared with last year.
The hon. Gentleman suggested that Greater Manchester was being hit harder than most areas, but in fact every force will see proportionately the same reduction, so it is not true to say that. Of course, if he uses a cash figure, it will be different; the Greater Manchester police force is a big force, and it will experience a bigger reduction in cash terms. But proportionately, it has been hit no harder than any other police force.
I am grateful to the Minister for giving way, and I suppose that I should also be grateful for the increase that he has managed to magic out of his speech. Of course, that increase is less than the Labour Government gave to Greater Manchester police when they set their budget earlier this year; we are not grateful for a few crumbs. Will he accept that Greater Manchester police have regional responsibilities, and that their resources are often used by other police forces, particularly those in the north-west of England? Sometimes we help out across the Pennines and across the whole of the north of England, too. The impact on forces such as Greater Manchester, which take the lead on issues such as counter-terrorism, is therefore greater than on other forces.
Of course, separate funding is made available for counter-terrorism responsibilities in the region, and all those responsibilities on forces are taken into account. I also accept that we are talking about an in-year reduction. The Government are not making any secret of the fact that, in order to pay down the deficit, we needed to find £6 billion-worth of savings. It is necessary for the Home Office and, in turn, the police, who account for well over half of Home Office spending—indeed, they account for half of all law and order spending—to find their fair share of savings.
I ask the hon. Gentleman to accept that we have a sense of proportion on the issue; he used quite strong language when talking about the implications of the cuts. Actually, I do not believe that his view of the implications of the cuts is shared by policing professionals, or those who are responsible for administering the budgets. Yesterday, my right hon. Friend the Home Secretary and I convened a meeting of chief constables; we invited them to come and talk to us about the challenge that they face. They are absolutely realistic about that challenge. The chief constable of Greater Manchester police was at that meeting, and I note that he has said, on the reduction in grant, that the force hopes to get officers on the streets by working more efficiently. I have also met the chairman of the Greater Manchester police authority on a number of occasions over the past few days to discuss wider issues relating to policing and, according to reports, he has insisted that the public would not see the effect of the cuts. He has said:
“Can I give an assurance to the people of Greater Manchester that we’re not looking at cuts in police or police staff? Currently the situation is difficult, we’ve had 10 very good years. Now the tough times are with us and we’re having to make those cutbacks—and considerable cutbacks they are.”
I believe that the chairman of the Greater Manchester police authority, who I understand is in the same party as the hon. Member for Denton and Reddish, is adopting a responsible attitude towards the savings that he has to make, and indeed a realistic attitude to the fiscal position that the last Government bequeathed to this Government.
It is, of course, for chief constables to use their expertise to decide what makes most sense for their force, but I am clear that the saving that we are discussing can be achieved by driving out wasteful spending on support functions, reducing bureaucracy and increasing efficiency in key functions, leaving the front line of policing strong and secure. I expect forces to be held to that, both by police authorities and by Her Majesty’s inspectorate of constabulary.
If police authorities find that their initial assessment is wrong and that they cannot make the required savings, will the Minister look sympathetically if they came forward with their proposals to ensure that officers remain on the beat? Visibility of officers on the beat is the bottom line, is it not?
I agree with the right hon. Gentleman. It is very important that police officers remain on the beat; that is what the public wants to see. It is the responsibility of chief constables, as the managers of their forces, to do everything possible to drive out costs, reduce bureaucracy, find the savings within their forces, and find ways to work more efficiently and share services so that they can protect the front line. That was very much the discussion that I had yesterday with chief constables. It is the collective ambition both of the Government and of the police leadership in this country that we should do that. There is also a great realism about the situation in which we find ourselves; to coin a phrase, there is no money. We were faced with having to make savings, and they are, I believe, of a relatively manageable size in the overall scheme of things.
The service is already working towards realising more than £500 million of savings by 2013 and 2014—that work was already in train—of which £100 million will be realised this year. Collaboration, including in the procurement of goods and services and with regard to information technology, will be important in improving both service delivery and value for money. It is vital that we drive down the costs of policing while maintaining the quality of the front-line policing services that the public receive.
Will the Minister move on to the issues that I raised about specific grants, separate from the police settlement, that impact on police posts, and to the knock-on impact of the tightening of local authority budgets, particularly given the council tax freeze?
On the council tax freeze, I should point out to the hon. Gentleman that that is something that local authorities, including police authorities, can choose to do if they want to participate in the scheme. That is the important thing to understand about it. We hope that council tax payers will be protected in that manner. If the authorities agree to participate, the funding will be available to them to freeze council tax. That is important for local taxpayers who have had to find a great deal more money for council tax over the past few years. As for the specific matters relating to the grant, the easiest thing would be for me to write to him about those.
I do not deny that tough choices have had to be made in trying to reduce the deficit, which is unprecedented in this country’s history. The Home Office is playing its part by putting together a total package of cuts that reflects a considered view of where efficiencies can be made. We have sought first to trim as much as possible from the costs of running the Department and its non-departmental public bodies. I walked to the House today to contribute, in a modest manner, towards the share of savings that we as a Department have to make. None the less, we are confident that forces can make this relatively modest level of saving without a reduction in the world-class service that they provide to the public.
I congratulate the hon. Gentleman on his election to the House. His contributions are already proving effective. As for the choice of how savings are made, I should say that that is very much a matter for the operational responsibility of chief constables. The Government will not seek to interfere in that. We will seek to support, where we can, the decisions that have to be made, but there will be a fundamental difference between this Government’s approach and that of the previous one, in that we will not seek to direct chief constables so extensively. Chiefs must find the savings. It is for them to decide how to manage their work force and to provide the high-quality service that we and the public expect from them. I am confident that we can maintain front-line policing services, visibility and availability to the public.
Sitting adjourned without Question put (Standing Order No. 10(11)).