House of Commons
Thursday 31 March 2011
The House met at half-past Ten o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Business, Innovation and Skills
The Secretary of State was asked—
Last week, this Government announced a new £75 million programme of training and other targeted support focused specifically on small and medium-sized enterprises to help them access advanced and higher-level apprenticeships. We also announced on Monday that we will be working to reduce bureaucracy for SMEs, making it easier for them to take on those new apprentices.
Will my hon. Friend join me in congratulating the Silverstone motorsport college on its outstanding Ofsted report and on the fact that 50% of its motorsport technicians get apprenticeships in this high-tech, innovative industry? What more can he do to support increasing apprenticeships in this area?
In anticipation of my hon. Friend’s question, and because I know of her passionate interest in and advocacy of this subject, I have asked the National Apprenticeship Service to take further the work that I know she wants to be completed on offering a new motor race technician qualification. We will do that work, because we understand the points she makes, the value of that industry and its importance to our whole country.
I strongly welcome plans to expand the apprenticeships scheme further. The biggest barrier to the participation of small businesses is the lack of information, so will my hon. Friend consider moves to include promotional material in the annual business rates mailing?
That is a most welcome suggestion. I am perhaps known for my understatement, rather than my overstatement, but I do not think we can speak too loudly or clearly about apprenticeships, and that information is vital if we are to engage the businesses to create the prosperity we seek and build the opportunities we want.
Is my hon. Friend aware of the scale of the challenge facing the automotive industry, with the Institution of Mechanical Engineers saying that we need at least 10,000 apprenticeships a year for the United Kingdom to be at the forefront of the electric vehicle industrial revolution that is about to occur?
Yes, indeed. We recently announced that we are going to work with all the interested parties in the industry to bring about the kind of technological advance to which my hon. Friend refers. This is a real potential area for growth and we are determined, with the industry, to make that growth happen.
The Minister will know that we are all in favour of apprenticeships these days—we welcome the coalition to the cause—but the fact is that this is all something of a fig leaf, given that all the other education policies seem to be falling apart. Higher education is in meltdown, but all we hear about is apprenticeships and the university technical colleges. This is a fig leaf covering up the lack of policy across the whole education and skills debate.
The Minister will know that the number of apprenticeships in this country was just 65,000 in 1996. It has increased to nearly 280,000 now, but young people face worse unemployment than ever and growth is down. He will not set a target for the number of apprenticeships, but what will he do if the number falls back?
The hon. Lady rightly identifies that apprenticeships and pre-apprenticeship training can provide an important vehicle to bring people from disengagement to engagement. That is why my right hon. Friend the Secretary of State for Education has cemented the work done in the Budget to create those extra apprenticeships for people moving from the very circumstances the hon. Lady describes to the skills and success they deserve.
The Government’s flagship policy on employment and small businesses is the national insurance holiday for all companies outside London and the south-east. We heard only yesterday from Treasury officials that that has created only thousands of jobs, so is it time to go back to the drawing board on this policy?
The Government are supporting a range of projects across the country including offshore wind, nuclear manufacturing, low-carbon vehicles and marine energy.
It is self-evident that if every part of this country is to take advantage of the strong future in low-carbon technologies, we need investment in skills and research and, of course, access to finance. We heard some platitudes in answer to the first set of questions from the Minister’s colleague, but will the Minister tell us in hard terms what will be done to ensure that young people get those skills, that we have the research and that we have access to a finance system that knows that technologies north of Watford are worth investing in?
I refer the hon. Gentleman to what the Budget set out very clearly last week, but let me give him the tangible example he requests. The technology innovation centre for advanced manufacturing is designed specifically to ensure that clusters where we have excellence can be enabled. It will help Rotherham, Coventry, Sedgefield, Bristol, Strathclyde and Redcar. I hope he welcomes that support.
Given the consultation on changes to feed-in tariffs and the effect it might have had on decisions about solar investment, will the Minister work with his colleagues in the Department of Energy and Climate Change to examine what might be done to consider alternative ways of stimulating the manufacturing and assembly of solar equipment in this country?
We are about to enter a new financial year, so will the Minister take the opportunity to reconsider the Government’s denial of the loan to Sheffield Forgemasters that the Labour Government planned to boost our position in civil nuclear trade? More broadly, will he confirm that the Government are still committed to a new generation of nuclear power stations, given the awful unfolding tragedy in Japan and the comments made by the Deputy Prime Minister to journalists?
Our commitment is clear and the right hon. Gentleman knows exactly where the Government stand. We have debated the question of affordability and Sheffield Forgemasters before, but I would say to the right hon. Gentleman and to Labour Members that we have the regional growth fund and we have worked with a range of businesses, including the business to which he refers, and we are happy to ensure that they have the chance to bid for that money as that part of the fund develops.
3. What steps he is taking to increase United Kingdom Trade and Investment’s share of world trade. (49966)
UK trade increased by 55% in real terms between 1998 and 2008. None the less, the relative share of world trade declined from 5.7% to 3.9%. Our recent trade and investment White Paper sets out how we will assist exporters, focusing UKTI and new trade finance products on small and medium-sized enterprises.
A businessman in my constituency has traded successfully in north Africa for many years, but now does not know when his invoices will be paid, which affects his cash flow and business viability. Will my right hon. Friend consider introducing some form of payment guarantee scheme that will give SMEs the confidence to increase their share of world trade in the knowledge that they will be paid for it?
I am aware of the firm that my hon. Friend describes and of its difficulties in Libya. If companies are operating in difficult markets, such as Libya, they are advised to take out trade insurance. Where the market cannot provide that, the Export Credits Guarantee Department will underwrite it. We are expanding the range of ECGD products and the Treasury has authorised payments to companies in Libya for which insurance is due.
Over the next four years, UKTI is set to have its budget cut by some 17%. The schemes most commended by the CBI are passport to export and gateway to global growth. Will the Minister give an assurance that among the budget cuts those services will be protected?
More than 50% of dairy farms in the UK closed under the Labour Government yet demand for dairy products across the world is rocketing. Will my right hon. Friend the Secretary of State set out what proposals we have to launch an ambitious plan to export dairy products across the world?
Enterprise Zones (North-east)
4. What discussions he has had with the North Eastern local enterprise partnership on the location of proposed enterprise zones; and if he will make a statement. (49967)
Last Thursday, I was in the north-east and met the North Eastern local enterprise partnership. We had a very useful discussion about the way in which enterprise zones will help the growth of the local economy and I was encouraged by the positive response I received.
I am very pleased to hear that the Minister got a positive response—I would expect nothing less of the friendly north-east. The Chancellor said in his Budget statement last Wednesday that there would be an enterprise zone on Tyneside, but the Red Book refers to an enterprise zone in the North Eastern local enterprise partnership, and I am sure the Minister is aware that they are not one and the same. The Secretary of State for Energy and Climate Change told the Sunderland Echo that Sunderland had a really good chance of getting an enterprise zone. Will the Minister confirm that the Chancellor misled the House last week and that a decision has not yet been made on where—
Well, I am glad we cleared that up, Mr Speaker. I can make it very simple for the hon. Lady: we are not going to impose a command and control model. We are working with local enterprise partnerships and we have offered zones where LEPs would like to locate them within their areas. We will discuss this with partnerships in the north-east and elsewhere.
Is not the danger of the Minister’s enterprise zone policy that it enriches landlords and developers by drawing economic activity from one area to another? When considering locations for the north-east, will he focus on the creation of jobs in industrial areas?
Last month I met the Minister with responsibility for civil society, the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), and other Ministers with an interest in advice services to co-ordinate our national efforts. The Department for Business, Innovation and Skills has already agreed to protect the core funding for the umbrella organisations Citizens Advice and Citizens Advice Scotland.
I thank the Minister for that answer, which I did not hear much of. Walkden citizens advice bureau, which is in Salford, serves an area that is among the 7% most deprived in the country, and has done since 1939, but it is now under threat because of uncertainty about funding and because of cuts. Will the Minister call a halt to the cuts in funding for advice services, and will he conduct an urgent review on the future of the funding of those vital organisations?
The hon. Lady will know that local citizens advice bureaux are funded by local authorities and that the Government have called on local authorities to play their part, as the national Government are playing their part, and to pass on funding to CAB services. Those services are very important and are valued, and we are looking to all local authorities to play their part.
At a recent meeting I chaired, representatives from individual CABs and other advice centres from across the country gave the loud and clear message that the current uncertainty about the funding of advice services means that advice service centres are closing their doors, expert advice workers are being made redundant and vulnerable people will soon have nowhere to turn for advice. It is all very well the Minister’s blaming the closure of individual CABs on local government decisions, but those decisions are often taken in the light of extreme uncertainty about the future of other funding streams. His Government admits that there is much cause for concern, so why has he not sought an immediate moratorium on all cuts to Government funding streams for advice services for the coming financial year in order to allow time for a longer-term strategy to be developed?
I am very surprised that the hon. Lady did not mention the £27 million that the Government announced last month for face-to-face debt advice. That has been strongly welcomed by citizens advice bureaux across the country, and I would have thought that she would have given us credit.
The CABs in Goole and Scunthorpe provide excellent advice to my constituents on debt-related issues. While I welcome the money that has been announced, is it not time that we tried to achieve a national approach? CABs have a battle, year in, year out, to secure funding, which clearly does not help our constituents.
As I said in my initial response, we are working across government with other Ministers to make sure that we co-ordinate national efforts. We will soon respond to the call for evidence on personal consumer credit and personal insolvency, which will deal with issues such as debt advice.
With over 85,000 employers offering apprenticeships, it is clear that many businesses already recognise the associated benefits of improved business and personnel performance. The evidence of strong demand is supported by research. The findings of the skills economy research from July 2010 are that 83% of employers rely on their apprenticeship programme to provide the skilled work force that they need.
The Minister has been quite generous in the past about the work done by Ministers in the previous Government, including me, on apprenticeship numbers, and he has made a commitment to build on that. Does he have any concerns about the targets on apprenticeships over the coming period, given the pretty dire figures on GDP for the economy?
The hon. Gentleman, like me, is fond of Yeats, who said:
“Do not wait to strike till the iron is hot; but make it hot by striking.”
That is what we have done. The hon. Gentleman is right. I have followed him, and he is a hard act to follow, because he was a very competent Minister. I can tell the House—and I know that you, Mr Speaker, will be pleased to hear it—that the Statistical First Release published today illustrates that we are likely, or certainly on target, to reach the ambitions I have set out, which is good news for the hon. Gentleman, good news for me and good news for Britain.
Is my hon. Friend aware that the number of 16 to 18-year-olds taking apprenticeships in Essex has increased by 44% over the past year, and that Essex council and Harlow college are investing £100,000 in 50 apprenticeships for people from poorer backgrounds? Will he look at rolling out that scheme across the country?
I know of the good work done by my hon. Friend and by Harlow college. He will wish to know that there was a 20% increase in apprenticeship starts in 2010-11 compared with the same period in the previous year. That is because of the work of organisations such as Harlow college and the advocacy of hon. Members such as my hon. Friend.
Over the past few years, the oil and gas industry in north-east Scotland has created many new apprenticeships and skilled many new workers for the future. Does the Minister accept that that has been put at risk by the massive tax increase announced without any consultation in the Budget?
Adult Vocational Learning
8. What steps he is taking to increase the status and prestige of adult vocational learning. (49973)
The aesthetic of vocational learning is at the very heart of our ambitions. I want apprenticeships to become the primary work-based learning route and apprentices to be recognised for their achievements. For too long, we have allowed the myth to be perpetrated that only academic accomplishment can lead to work. That is not so, and it is certainly not so for this Government.
I congratulate my hon. Friend on the work he has done in this area, and I thank him for that answer. However, does he agree that community and vocational courses are absolutely invaluable, not only for career advancement and upskilling but for younger people not in education, employment or training.
Yes, we spoke earlier about the importance of using those skills to create a bridge from disengagement to engagement. No one has been a doughtier champion of the need to stand up for those people than my hon. Friend. That requires a raising of the status of apprenticeships, but it also requires better progression, which is why I want to build an accessible, navigable and seductive vocational ladder that people can climb.
May I ask the Minister what discussions he has had with his counterparts in the Department for Education? The Secretary of State for Education consistently downgrades vocational qualifications in school. We cannot expect adults to value vocational education if we do not value it throughout the system. Is there not a disjunction in Government policy?
I am, for the purposes of this conversation at least, the Department for Education, and I can assure the hon. Lady that the Secretary of State for Education is wholly committed to this route. Indeed, his oral statement to the House earlier this week cemented and reinforced his commitment to apprenticeships and vocational learning.
The Budget included a plan for growth for life sciences, including the development of a new technology innovation centre, the speeding up and reforming of clinical trials and the establishment of research partnerships to support the new model of open innovation and collaboration in the industry.
I thank the Minister for his reply and congratulate him on his commitment to business. Last week’s Budget set out a clear strategy for growth based on science, innovation and enterprise, particularly in my area, the biotech corridor between Cambridge and Norwich. Does he agree that the challenge is to ensure that our leading research institutes link up with industry so that our science is driven around the world in the three biggest markets: food, energy and medicine?
My hon. Friend is an outstanding champion in this field, and I was pleased that we were able to support Norwich research park in that context, for which he has fought and argued for many months. Our plan is about accelerating innovation, investing in the way collaboration takes place and ensuring that we retain this country’s world-class role in life sciences and biotechnology.
I recently discussed the rising cost of energy with my counterpart at the Department of Energy and Climate Change to assess the cumulative burden of climate change policies and see what the Government can do to secure the competitiveness of energy-intensive industries as we decarbonise the economy.
We have an absolutely splendid coalition team in DBIS, led by a fantastic Secretary of State. In the past, energy was always the responsibility of the Business Department. Surely it should come back to that Department so that we can send out the message that we do care about business in relation to energy— and I could not think of a better set of people to look after it.
I am very flattered by the suggestion, if a little surprised, but I am already fully employed with my existing duties. In my recent conversation with my counterpart at DECC, we agreed that considerable progress had been made with Ofgem’s recent report on opening up competition and benefiting consumers, both industrial and personal.
Energy-intensive industries in my constituency, of which there are many, are worried about the cumulative impact of regulations relating to a carbon floor price on their competitiveness. Is the Secretary of State having discussions with the Treasury and DECC to ensure that our industries do not lose out to foreign competition?
I am doing just that. On Monday I was in Port Talbot to talk with Tata Steel about that exact question. It is absolutely right that the Government press ahead with our ambition to decarbonise the economy, but the system of tax and regulation is complex and we must structure it in a way that supports our energy-intensive industries.
We have introduced the one-in, one-out rule to stem the flow of new regulation. We have also introduced sunset clauses on new domestic regulation, stopped gold-plating EU directives and launched a consultation on tribunals. In the Budget we announced a three-year moratorium on new regulation for micro-businesses. We will shortly launch a public review of the existing stock of over 21,000 regulations.
I welcome all those measures, but spin-offs and start-ups in West Worcestershire are discovering that in order to win Government procurement contracts they need to have accounts for the past two years, and I wonder whether the Secretary of State would urgently review that.
We are taking steps to open up public procurement for the kinds of small spin-offs the hon. Lady describes. There is, of course, an aspiration to increase public procurement from SMEs to 25%. At the beginning of the year the pre-qualification questionnaires, which were appallingly complex, were simplified, and they will shortly be removed altogether from companies trading at over £100,000.
Will my right hon. Friend assure the House that he will work very closely with industry to tackle increasing environmental regulation, which has already been touched on, especially that coming over from the European Union, so that we do not have uncompetitive industries?
Environmental regulation is covered by the moratorium that I have just described. Of course, if it is European Union regulation, we cannot unilaterally disband it, but we can ensure that there is no gold-plating, which is why we are following a minimal copying-out procedure for EU legislation.
The regulation of business is important for promoting employment. In my constituency, youth unemployment is 30%, which is way too high, so will there be an enterprise zone to look at business regulation and employment in the south Wales valleys?
The Secretary of State’s very own figures show that he is not a deregulator but a regulator. It is 53-in, 3-out, not one-in, one-out, but apparently there is hope on the horizon, because he is going to repeal another regulation— one introduced to seize German-owned property after the war. I am sure Chancellor Merkel will be happy about that, but the point will be lost on UK business.
We hear from the Secretary of State about his plans to review 21,000 business regulations, but at this rate it will take more than 7,000 years to achieve that aim—and looking at the Secretary of State I do not think he has the time on his side. When will he ditch his rhetoric and begin practising what he preaches before it is too late?
The regulations that related to my Department were either European or related to the implementation of the minimum wage. I know the Opposition are showing considerable political versatility at the moment, but I did not think that they had got around to demanding the abolition of the minimum wage.
Company Profits (Reporting)
I, personally, have not had any recent discussions with my international counterparts on the matter, but the Government are committed to greater transparency through corporate reporting. Internationally, the Treasury is leading the Government’s efforts with the Organisation for Economic Co-operation and Development’s task force on tax and development, which is exploring the issues of country-by-country reporting on tax and profits.
In the light of his answer, the Minister will be aware of the OECD’s recognition that poor countries lose more money each year to corporate tax-dodging than they receive in aid, and Christian Aid estimates that to amount to $160 billion. May I ask him to have a conversation with the Secretary of State? The right hon. Gentleman said in opposition:
“New accounting standards are needed to force multinational companies to declare publicly the profits they make and the taxes they pay in every country in which they operate. That way anomalies will be quickly spotted.”
Can I reasonably assume that, in the light of his commitment to the issue, the Government will raise it at the G20 in November?
I think that the Government—both my right hon. Friend the Secretary of State and the Chancellor—actually have a very good record on the issue. We are contributing to the OECD taskforce, because it is about ensuring not just that UK companies report their profits as they need to, but that we improve corporate performance throughout the world.
What guarantees can the Government give for those companies that report their profitability transparently that, at the next Budget, the Treasury will not come along and, completely out of the blue, wallop them with a great windfall tax, as it just has with the offshore oil and gas industry?
The service provided by the Student Loans Company in the desperate, dying days of the previous Government was woeful, and it led to an independent report that said so. We replaced the chairman of the company immediately after we entered office, and I am pleased to report that the SLC answered more than 95% of telephone calls in the peak period from August to September 2010, compared with just 13% during a similar period in the previous year.
I am very grateful to the Minister for that response and to hear of those improvements. I have had a number of complaints from families in my constituency about repeated requests for information. Will the Minister assure families in constituencies such as mine and, indeed, throughout the United Kingdom that they will not have to suffer as they have because of past inefficiencies?
My right hon. Friend the Minister for Universities and Science is absolutely determined that the service provided by the Student Loans Company should be up to scratch. I can tell the House, and my hon. Friend, that 99% of applications received from students who applied by the relevant deadlines with the correct documentation were ready for payment at the start of term. This is real progress, but we are not complacent, and we will always insist that we do the very best with the Student Loans Company.
Science and Research
During the allocation of science and research funding, BIS consulted the national academies, business groups and universities and agreed a flat-cash ring-fenced settlement for science and research of £4.6 billion a year for 2011-15. In the Budget, the Government invested a further £100 million in science capital, including £10 million at Daresbury.
I welcome the announcement in last week’s Budget of the extra £100 million in capital spending, including the £10 million at Daresbury. Will my right hon. Friend confirm that that £100 million comes from the permanent bank levy, which was introduced by this coalition Government against opposition from Labour Members?
I can confirm that. Of course, the bank levy has a good economic basis because it is the payment that the banks make for the protection that the state provides for banks that are too big to fail. The £100 million is new money—new capital investment—and I am delighted that my hon. Friend’s campaign for Daresbury has borne fruit in this way.
In November, the Chancellor took £1.4 billion out of capital investment for science. Last week, he gave back about £100 million—strangely, all of it to Conservative constituencies. Our country’s leading reputation in science deserves better than that. When this week’s Royal Society report, “Knowledge, networks and nations”, spelled out the rise of China, India, Korea and Brazil as science superpowers, it was unable to set out the UK’s long-term plan because there is not one. Will the Secretary of State prevail on the Chancellor to agree a long-term plan for science funding, as we had under Labour?
There is a long-term plan for science funding. The hon. Lady obviously has not followed the comments that were made by the Royal Society and many others in the science community welcoming the flat-cash settlement and the ring-fencing of the science budget.
No university wishing to charge over £6,000 yet knows for certain how much it will charge, since no university has yet signed an access agreement with the Office for Fair Access. We expect there to be a wide range of charges, and those institutions discussing higher charge levels all look set to include substantial waivers for students from poorer backgrounds.
Hull university is reported to be planning to charge up to the £9,000 limit. Combined with this week’s announcement about the slashing by two thirds of the education maintenance allowance support to students, how will this help to attract more students from areas such as Hull to university, bearing in mind the excellent progress that was made under the Labour Government?
Is my right hon. Friend still reminding universities that it is unreasonable of them to charge fees significantly above the cost of providing the course and asking them to make sure that when they set their final fees in the coming weeks, they honour the cost that they said they would charge some months ago?
May I first thank my right hon. Friend for the extraordinarily useful work that he has been doing on social mobility? On his question, the Browne report estimated that universities would need to charge something in the order of £7,500 simply to replace their income, but no more, and that if they made the kind of efficiencies that other institutions are effecting, it could be as little as £6,000.
We have had the damaging row over student visas—still not sorted—and a Treasury growth paper that largely ignored the central role that universities have to offer for our economic future. However, the most serious problem is the considerable hole the Government are now staring at in their higher education budget—all because they ignored the many independent experts who warned, even before the tuition fees vote, that universities would charge close to the maximum fee level. Given the huge uncertainties facing university finances, all of them Government-created, does the Secretary of State not recognise that this House is entitled to know how that funding gap will be plugged?
First, the hon. Gentleman is terribly behind the times. He may not have listened to the Home Secretary’s statement on student visas, but she made it absolutely clear that there is no cap on student visas and that the study to work route is still available for overseas students. The universities have acknowledged that. There is no hole in the finances. If he had followed the public announcements that universities have made, he would have seen that of the 36 that we are aware of, 13 propose to charge up to the maximum. That is well below the 80% quoted by the Leader of the Opposition yesterday. Of those universities, many will have substantial fee remission on the Oxford model.
I have discussed on many occasions with the Minister for Universities and Science my view that Governments should avoid unnecessary interference in universities. The enhanced role given to OFFA is causing great unease in the sector and among some Government Members. Will the Secretary of State clarify the powers that OFFA has and how it will be expected to deploy them in relation to universities that set fees above £6,000?
I think that there is complete clarity. I set out the position in a letter that I sent to OFFA some weeks ago, which is available and which I can certainly make available to the hon. Gentleman. It is absolutely right that, in return for being allowed to charge the higher fee levels, universities should make the maximum possible access available to people from disadvantaged backgrounds. There is a particular problem with traditional universities, where social mobility declined in the last decade. We are determined to overcome that.
Small and Medium-sized Enterprises
Small businesses are vital to the economy and to future employment. That is why we have tackled the cost of employment by reversing the last Government’s plans for a payroll tax increase, and why the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey) has launched a comprehensive review of employment law to make the system easier and fairer for employees and employers.
I was pleased to see that the Federation of Small Businesses welcomed the Government’s three-year moratorium on new domestic legislation for micro-businesses. Will my hon. Friend assure the House that that and other measures to reduce the regulatory burden and increase job creation by small and medium-sized enterprises will be taken forward at pace, and that there will be regular updates to the House on their progress?
I am delighted to confirm that to the House. Those measures are crucial. We have to remember that under the previous Government, the proportion of employers who were small businesses dropped from well over a third to well under a quarter, and that was in a period of growth. We need to ensure that we reverse that trend.
One way to increase employment in small and medium-sized businesses in Stoke-on-Trent would be for us to have an enterprise zone. Following the Prime Minister’s very positive response to a question from my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) yesterday and the extensive meetings that north Staffs MPs have had with the Secretary of State, can the Minister give some comfort to people in north Staffordshire that the local enterprise partnership will be looked on favourably, and could we have a meeting?
The hon. Gentleman is right that enterprise zones will be advantageous for small businesses. There is a second opportunity for 10 further enterprise zones. We are happy to talk to the local enterprise partnership in that area to ensure that it is able to put forward a positive dialogue. If the hon. Gentleman and other Members wish to participate in that, I suspect that my diary secretary will not be thrilled, but I shall be happy to see them.
Corporate Social Responsibility
18. What recent discussions he has had with his G20 counterparts on corporate social responsibility. (49985)
I have had no such discussions in the context of the G20. However, in January, I met Professor Ruggie, the UN special representative on business and human rights. The Government welcome the guiding principles developed by Professor Ruggie and will work to build consensus for their adoption.
I thank the Minister for that answer. In opposition, the Secretary of State was a keen supporter of global action to tackle corporate tax dodging in developing countries, but the Department’s recent White Paper did not include a single reference to it. When will the Government put that right?
The hon. Lady was not listening to the answer that I gave a few moments ago to her colleague, the hon. Member for Glasgow East (Margaret Curran). The Government are working hard with the OECD taskforce on tax and development, because we want greater transparency in the reporting of profits and tax.
Groceries Code Adjudicator
The groceries code adjudicator Bill is being drafted. I had hoped to publish it before Easter, but now I expect that publication will happen soon after Easter.
I thank the Minister for that encouraging reply. Farmers in my constituency are very anxious to see the introduction of an adjudicator. Will it have sufficient powers to impose financial penalties if there is persistent avoidance of the code of practice?
When we publish the Bill, the hon. Gentleman will see that we wish to have a reserve power for the adjudicator on penalties, but there is also a real case to be made for the adverse publicity that large supermarkets would face if they breached the groceries supply code of practice.
Last week we had a debate in Westminster Hall on the pig industry, and Members indicated clearly that if there was no immediate action to restore the balance between supermarkets’ profits and the profitability of farmers, many farmers would go out of business. What steps is the Minister taking to ensure that that does not happen?
I may have to refer the hon. Gentleman to Ministers in the Department for Environment, Food and Rural Affairs, who are obviously responsible for agriculture. We should be clear that the groceries code adjudicator will not be a price regulator—that has never been proposed. It will be there to enforce the groceries supply code of practice. That is very important, because it is in the interests not just of the producers and farmers who supply the large supermarkets but of consumers.
My Department has a key role in supporting business to deliver growth, rebalancing the economy, bringing enterprise, manufacturing, training, learning and research closer together and, in the process, creating a stronger, fairer British economy.
On tuition fees, has the Secretary of State read the reports of the Deputy Prime Minister’s visit to Mexico, where he was humiliated first by a Mexican student who said that he could no longer afford to come and study in Britain, and then by the Mexican President, who said that British students should go to study in Mexico instead? Is the Secretary of State in any way embarrassed by the fact that his policy on tuition fees has become a laughing stock across the world?
I was not in Mexico, I was in another country—Wales—discussing the issue. The simple truth is that, as I am sure we have communicated to the Mexican authorities, Mexican students are welcome to come to this country and there is no cap on the number of overseas students.
T3. The Macclesfield, Richmond and Wandsworth chambers of commerce are developing local mentoring schemes to help better support smaller businesses, and have submitted a related bid to the regional growth fund. Does the Minister agree that such approaches deserve serious consideration and will provide important insights to other local communities? (49991)
I would be wise not to over-promote a live bid to the regional growth fund, but my hon. Friend is absolutely right that business-to-business mentoring is the best way forward. That is why we are developing a national scheme, and the contribution in the areas that he mentions sounds eminently sensible.
We would not have destroyed regional development agencies in the chaotic and Maoist manner that the Secretary of State has described, but as a constructive Opposition, we have proposed that RDA assets be transferred to local economic partnerships to promote growth and jobs. Will he confirm that many RDAs, including those in the north-west, the east midlands, the south-west, Yorkshire and Humberside and the south-east have also proposed that assets be transferred to local authorities in LEP areas, which will pay for them as jobs and growth are created? Why has he blocked those transfers?
In our Dengist phase, the LEPs are doing extremely well in constructing business-led leadership at local level. The process by which RDA assets are allocated is set out in the White Paper. As the right hon. Gentleman will know, some of the RDAs have negative net worth, so the issue of asset distribution does not apply. There will be different allocations, and my departmental officials are working through the RDAs’ legacy carefully.
The Secretary of State does not seem to know what is on his own website, which makes it very clear that he has blocked the transfer of those assets to local authorities. Will he confirm that the assets of RDAs that will now be sold will be worth more than the investment in enterprise zones? Is not the Conservative leader of Fareham council, who heads the Solent LEP, right when he says:
“Selling them at this time in the economic cycle is the worst possible solution. Treasury is looking for quick wins but that will undermine the growth agenda. We are meant to be focusing on growth but that will undermine the growth agenda”?
Why does the Secretary of State believe that Whitehall knows best, or has he been overruled yet again by the Treasury, who are the people who really run his Department?
The right hon. Gentleman seems to have forgotten that those are taxpayers’ assets, the disposal of which should be done in a way that produces best value for money for the taxpayer. Some will be disposed of and sold, and some will be transferred when that will produce a good outcome. The process is being carefully worked through at departmental level, and it will produce a sensible outcome that remains supportive of local initiatives through the local enterprise partnerships.
Technology innovation centres are proving extremely welcome in the research community because they represent a bridge between academic research and business application. The first of those—the advanced manufacturing TIC—has been launched, and I went to Rotherham at its outset. Others are being prepared, and I am sure that the one in my hon. Friend’s constituency will be carefully considered by the TSB.
T2. On enterprise zones, do the Government agree that it is important that subsidies are not simply given to jobs and development that would have happened anyway? It is fairly easy to see how the Government could stop, and take measures to prevent, a firm from simply transferring to an enterprise zone with public money, but if a firm decides to expand into an enterprise zone, or if a new firm is created in one, how can the Government ensure that money is not simply given to a development and jobs that would have existed without the subsidy? (49990)
Care needs to be taken in respect of the displacement effects of this policy, and indeed any other spatial economic policy, because of the danger to which the hon. Gentleman alludes. We are working deliberately with local enterprise partnerships to minimise that danger, and looking to ensure that we understand the dynamics of the economy in those areas. That is why the whole Government are ensuring that we do not simply impose the policy from the centre, but work with enterprise partnerships.
T6. Since 1997, the proportion of A-level students studying core academic subjects has fallen, despite the fact that those subjects are preferred by universities. I think that that is partly down to the equivalence of UCAS points and the league tables. What action will the Minister take to ensure that universities make specific subject offers rather than points offers, and that they publish students’ results? (49994)
My hon. Friend knows that universities are independent organisations and that they decide which offer they make to applicants. Nevertheless, the Government are working with UCAS to explore how it can publish for each course the most popular qualifications of previously accepted applicants. We welcome the Russell group publication, “Informed Choices”, which includes advice on subjects. Universities, as Disraeli said, should be places of life, liberty and learning.
T4. There are still high numbers of rogue operators in the fee-paying debt management industry and they often charge high amounts and pay not one penny to creditors. Does the Minister agree with the argument advanced in Wednesday’s Daily Mirror by the free advice sector that it is no longer tenable to stand by and fail to protect vulnerable individuals from those companies? (49992)
The hon. Lady is right to raise this matter. She will know from her time working in the citizens advice bureau in her area how significant this matter is. Some debt advice agencies out there—frankly—do not act in an acceptable way. We are considering this issue under the consumer credit and personal insolvency review, and will make an announcement after the Easter recess.
T9. I am all in favour of encouraging enterprise and start-up businesses. However, what will my hon. Friend do about the current scandal of businesses trading, taking people’s money, closing down overnight, then starting up the next day with the same directors and defaulting on all due payments? That is a scandal in society and we must stop it. (49997)
My hon. Friend is exactly right, so I hope he welcomes the statement that I have made today on this very issue. Following a consultation launched by the previous Government, we have concluded that action needs to be taken on phoenix companies when assets are sold to connected parties without open marketing. Our proposals, which are in the statement, include insolvency practitioners giving three days’ notice to all creditors before the sale, which we think will be valuable.
T7. The proposed changes to the feed-in tariff for solar energy projects has dealt the industry a massive body blow and left in tatters plans by Norton sports and social club in my constituency to build one to finance their community work. How many more projects have been deferred, and what does the Secretary of State have to say to this job-creating industry? (49995)
T10. I am very lucky to have many successful manufacturing businesses in my constituency, and I am always one to talk up our manufacturing expertise, whether it is David Brown Engineering in Lockwood, Thornton and Ross pharmaceuticals in Linthwaite, Equi-Trek horseboxes in Meltham or any one of many others. However, some of my smaller businesses are still reporting problems with bank lending. How aware is the ministerial team of this problem, and what can we do to help such businesses to achieve multimillion pound turnovers? (49998)
The hon. Gentleman is right that manufacturing is a success story. It is now growing at double-digit levels annually, in stark contrast with what happened in the period after 1997, when we had a hollowing out of manufacturing more rapid than anywhere else in the world. However, he is right that there is a threat to small and medium-sized enterprises in particular from bank lending practices. We have secured commitments to 15% more lending from the banks, but much more needs to be done.
T8. Given that demand for student places was always going to exceed supply this coming year, is the Secretary of State surprised that universities are charging as much as he has allowed them to charge? (49996)
The hon. Gentleman might be confusing the coming year with the year for which fee levels are being announced. However, as I said earlier, there is a wide distribution of proposed charge levels by the universities that have already made announcements—less than a quarter of all universities—and this reflects the policy that we introduced.
Will my right hon. Friend assure the House that the Government will not attempt to reduce the number of places at universities charging the full rate of £9,000 a year in order to oblige a greater proportion of students to attend universities that charge less?
We are reviewing health and safety legislation following a report on a common-sense approach to it. The moratorium approach to domestic regulation for micro-businesses will extend across health and safety, but it will be a common-sense approach based on ensuring that when public safety or national security are involved, measures are progressed.
In the light of the excellent question from my hon. Friend the Member for Reading East (Mr Wilson), surely it is a matter for universities to decide who to admit on individual merit, not for us to have a central Government control model—a command and control model—that inevitably produces unfair discrimination. We are trying to build a big society, not recreate the Soviet Union, are we not?
There is no command and control. Indeed, we are seeking to free universities from the complex, rather Stalinist system that we inherited. None the less, it is right that the Office for Fair Access should judge universities that wish to charge the top rate according to its access criteria.
The Minister might be aware that the Office of Fair Trading is receiving complaints about the market dominance and business practices of Electoral Reform Services. Will he encourage the OFT to be more attentive and responsive to those complaints than it has been to previous complaints?
Mr Speaker, I think we have both now got our maps out and are sorting out the geography. However, the important thing is that the LEPs will be able to talk to the Government. The policy is led by the Department for Communities and Local Government, but we are working with it, and I am sure that the Government would be happy to hear from my hon. Friend.
Although I am irrepressibly optimistic about future growth in Hastings, I was stunned to find last week that, on the index of multiple deprivation, we had fallen from 31 to 19. May I therefore urge the Minister to give careful consideration to stimulating areas of the south-east that have particular deprivation problems, and not to concentrate all the tools from his toolbox on the north-east region?
That is an image that I will not pursue. I am well aware that coastal towns in particular often feel that they are at the end of the economic line. I would welcome the opportunity to talk to parliamentary colleagues about that to see how we can focus in on this important issue.
May I thank the Minister for the role that he has played and congratulate Exeter’s Labour-led council on its doggedness in ensuring that Exeter has a guaranteed place on the Devon and Cornwall LEP? Will he urge the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Wantage (Mr Vaizey) to give urgent and positive attention to the bid for superfast broadband money, which has been submitted today and is supported by every Member of Parliament in Devon and Somerset?
We have issued a written statement today precisely on the new Heart of the South West local enterprise partnership for Devon and Somerset, as I think the right hon. Gentleman meant to say. I am grateful to him for his collaborative help on the scheme, which we are going to get under way. It is the next local enterprise partnership, and I shall certainly pass on his point to the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey).
Ivory Coast (Humanitarian Situation)
(Urgent Question): To ask the Secretary of State for International Development if he will make a statement on the humanitarian situation in Ivory Coast.
Whatever events are taking place elsewhere in the world, Britain has not forgotten the people of Ivory Coast or Liberia. The Government are deeply concerned about the ongoing serious political crisis in Ivory Coast, the risk of regional instability, and the humanitarian impact on those who have been displaced by the violence or otherwise affected. The latest information we have is that almost 500 lives are estimated to have been lost as a result. That is why my right hon. Friend the Secretary of State announced last Friday that Britain would provide a significant emergency aid package to help tens of thousands of people affected by fierce fighting and violence who are in urgent need in Ivory Coast and Liberia.
In Liberia, Britain’s support will provide food, shelter and basic services to 15,000 refugees; food, water and improved sanitation systems to 5,000 people living in border villages that have been overwhelmed by the refugee influx; and assistance for UNICEF’s work in ensuring that thousands of women and children affected by the crisis are protected from violence, abuse and exploitation. In Ivory Coast, Britain is planning to supply £8 million of aid to provide 25,000 displaced men, women and children with food for six months; tents for 15,000 people; and support to treat 10,000 children and adults for malnutrition, and help 3,000 west African nationals return to their home countries. Access to populations in conflicted areas remains extremely difficult, and fighting is hindering the humanitarian response. Our support is being delivered through trusted UN and NGO partners. In addition to our support, I hope and plan to meet leading NGOs working in Ivory Coast and Liberia shortly before I leave for Liberia to see for myself the facts on the ground.
I thank the Minister for his answer. The humanitarian situation in Ivory Coast is clearly becoming more desperate by the day and, as he said, is increasingly affecting neighbouring countries in west Africa. As well as in Liberia, there are now refugees from Ivory Coast in Togo and Ghana. The United Nations High Commissioner for Refugees estimates that 1 million people have already fled their homes, with the potential for up to 500,000 more refugees to arrive in Liberia alone over the next two months.
The Opposition certainly welcome the emergency assistance that the UK has given so far, but in view of what is obviously a deteriorating situation, can the Minister say how much of the assistance announced by the UK has been able to reach the countries concerned? What efforts are being made to reach the more remote areas of Ivory Coast, where tens of thousands are reported to be trapped, with no access to humanitarian assistance or medical supplies? Can he give us an update on how the rest of the international community is responding, given that the two UN emergency appeals so far have been grossly underfunded?
What steps are the Government taking to continue to monitor the situation in Ivory Coast and the neighbouring states, and are we in a position to provide more emergency assistance immediately any such need is identified? What discussions are the Government having with our international partners, particularly in the European Union, to ensure that our assistance efforts are co-ordinated with those of other countries? Is any consideration being given to strengthening the UN peacekeeping presence in Ivory Coast? Can the Minister give the House an update on the steps being taken by the international community to resolve the underlying conflict and to ensure that the outgoing regime respects the result of last year’s presidential elections?
I am grateful to the hon. Gentleman for raising those questions. He is absolutely right to focus on the extreme difficulty in accessing certain areas, particularly around Abidjan on the coast, where harassment, even of the international community, appears to be growing. In general, aid agencies have had some access to the north and the west of Côte d’Ivoire, though access to other parts of the country is changing on a daily basis. About 117,000 refugees have now crossed the border into Liberia, where access is not a significant issue at the moment.
We are seeking to produce the necessary humanitarian assistance, channelled through our tried and trusted UN and humanitarian non-governmental organisation partners. We have had direct contact with the NGOs. Indeed, officials in my Department are meeting representatives of Save the Children and Oxfam this morning, and the Foreign Secretary will meet representatives of leading British NGOs next week. He and the Minister of State will be meeting the president of the International Committee of the Red Cross. I am trying to organise a meeting with the NGOs that are leading the delivery of humanitarian responses in Côte d’Ivoire and Liberia before I leave for Liberia.
The hon. Gentleman asked about other diplomatic and political activity. There is an enormous amount of activity taking place within a number of bodies. The UK strongly supports the position taken by the Economic Community of West African States—ECOWAS—in seeking to co-ordinate supportive action in the United Nations and the European Union for ECOWAS. We also support what is going on in the African Union. It is important that the UN, which passed Security Council resolution 1975 last night, is now able to use that resolution as its authority to ensure that assistance is given within the context of finding the most peaceful means of allowing the duly elected President Ouattara to take his proper place in Côte d’Ivoire. In the meantime, we have to deal with the difficulties along the western side of the country, where the refugees are flowing into Liberia, as well as the serious humanitarian crisis in Côte d’Ivoire itself.
Initiatives are also being taken by the African Union in an effort to find a peaceful outcome to the crisis. It has been active in meeting and drawing up proposals, but, as we speak, a number of violent actions are taking place throughout Côte d’Ivoire, and the concern is that the peace processes are not as yet ahead of the actions on the ground. I compliment the African Union on its actions, however, and it is important that we recognise that the UN Security Council resolution does not impede the AU’s freedom to continue its process. The resolution neither competes with nor substitutes for that activity; it is a complementary process, and the sanctions imposed by the Security Council are designed to be persuasive rather than punitive, and will not cut across the AU process.
The hon. Gentleman mentioned funding. The $32.7 million UN appeal for Ivory Coast and for neighbouring countries, excluding Liberia, is currently fully funded, but an appeal revision is under way, reflecting the significant increase in humanitarian need. The $146 million UN appeal for Liberia is just 41% funded, and overall the response is reaching only a small proportion of those affected and displaced by the conflict. We have recently supported an uplift of 2,000 troops in the UN peacekeeping mission, the United Nations Operation in Côte d’Ivoire, and they will be coming through in the next few weeks.
I commend the fact that the UK Government are in the vanguard of funding the relief effort for Liberia and Ivory Coast, but is it not important that we encourage the African Union not just to engage to try to find a peaceful solution to disputes such as the one in Côte d’Ivoire, but to develop the logistical capacity to do more in these humanitarian situations in the future? It is fine for the G7 countries to fund the effort, but there needs to be more capacity within Africa to sort out the challenges that Africa faces.
My hon. Friend, who has great experience of these matters, raises an important point about capacity building behind what is indeed the good political intent and the increasingly consensual process of the African Union, which is making its best efforts to find a peaceful solution. I am sure that his comments will be widely heard. He raises an important point for the future; in the meantime, we have to tackle the immediate issues.
I welcome the Government’s humanitarian aid and the passage of Security Council resolution 1975. Does the Minister believe that there are enough UN troops on the ground? I am pleased to see beside him the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North West Norfolk (Mr Bellingham), who has responsibility for Africa. Taking a political track through the EU and bilaterally, what is the UK doing to address the problem of the polarisation between the north and south of the country in the longer term?
The hon. Gentleman, with his expert knowledge, is right to highlight those issues. He gives me the opportunity to make the important point that Her Majesty’s Government are working right across a number of Departments, not least through my hon. Friend the Minister with responsibility for Africa. The hon. Gentleman is also right about the north-south divide in the country, especially as we hear that troops loyal to President Ouattara are now only about 120 km north of the port of San Pedro, and may have captured Yamoussoukro, the political capital. It is vital to find a way of pulling together a political process that unites a riven faction that has caused desperate humanitarian crises in the past.
I welcome the Minister’s statement on the provision of humanitarian relief and I note the UN resolution, but does he accept that what is really needed is a political solution that ejects Laurent Gbagbo from the presidency? This is a man who has rebuffed his people, rebuffed the Economic Community of West African States and rebuffed the African Union and is rebuffing the United Nations. Does the Minister accept that in this situation we have not done enough and not moved fast enough, and that this Government should do more to make sure that there is a peaceful resolution?
Of course a political and peaceful solution has to be the overriding and most desirable outcome, but we have to deal with the facts on the ground as we know them to be. Enormous initiatives are taking place across ECOWAS, the African Union, the European Union and the United Nations. I know that the Foreign Secretary spoke to President Ouattara on 21 March and discussed the need for firm action in the UN against those who obstruct the African Union’s attempts to broker a peaceful transfer of power, and on 25 March my right hon. Friend the Secretary of State for International Development spoke to President Ellen Johnson Sirleaf of Liberia to ensure that we address the humanitarian concerns developing in that country.
The Minister rightly mentioned the need for a political solution and the role of the African Union. In fact, ECOWAS has a well-deserved reputation for efficient delivery on the ground. Will the Minister tell us whether the Minister with responsibility for Africa has been in active discussion with ECOWAS so that we can engage further with it to deliver practical support for that political solution?
I can. Indeed, I have just had it confirmed that my hon. Friend the Minister with responsibility for Africa met ECOWAS in Abuja three weeks ago and has continuing contacts with it, as do I in my travels through west Africa. It is a very important body to be developed to help these peaceful processes.
I welcome the Government’s efforts. The Minister mentioned assistance to refugees. Will he expand on that and explain what assistance the Government are providing not only for refugees from Côte d’Ivoire in west Africa, but for refugees in this country as well?
As I mentioned in my opening remarks, at this stage, when thousands of people are crossing the border westwards from Côte d’Ivoire to Liberia, the principal task is to provide shelter, potable water and improved sanitation systems, to ensure their survival and also the protection of thousands of children and women from violence, abuse and exploitation. It is equally important to recognise that helping west African and, indeed, other nationals to return home is part of the humanitarian response. My hon. Friend is right to highlight those issues.
We do indeed hear reports that children are again being recruited to fight as soldiers, mainly to replace members of the armed forces loyal to former President Gbagbo who are now leaving the forces or switching sides. For the former president and those who surround him to imagine that it is ever legitimate even to contemplate recruiting anyone who is under age to fight for him is completely unacceptable. No doubt NGOs and others will document the incidence of such recruitment to ensure that evidence is available should it be required for the purpose of bringing those responsible before the International Criminal Court.
I welcome the humanitarian assistance, but experience in Africa suggests that very large refugee camps invariably become difficult and dangerous places, especially for the most vulnerable. May I urge Ministers to redouble their efforts to remove people’s reasons for leaving the country in the first place, and to try to prevent it if possible? May I also urge them to ensure that when assistance is provided for the camps, the needs of the most vulnerable—particularly the elderly, women and children—are given priority?
The hon. Gentleman is absolutely right. I know from my recent visit to the Dadaab refugee camp in Kenya, on the border with Somalia, that a large refugee camp is extremely difficult to manage. In Liberia, which I shall visit shortly, I hope to go to where the refugees are to see what the conditions are like and how they can best be managed in a humanitarian way. As for the refugees’ reasons for leaving the country, they are very plain: deep fear, deep instability, and the aggression that is being directed at their own people. All those factors are causing them to flee for their own safety. Clearly, the underlying aim must be to return Côte d’Ivoire to political stability and some semblance of democratic legitimacy.
The situation in Ivory Coast is obviously terrible and tragic, and I welcome any aid and support that can be given, but a failure of politics has brought about that situation and there must be a political solution. Although there may be different interpretations of the election result on both sides, it must be recognised that there is considerable support for Gbagbo and Ouattara in their respective hinterlands, and any political solution must take that into account. Can the Minister confirm that working with the African Union and ECOWAS is the way forward, rather than allowing the country to descend into a terrible civil war?
Like everyone else in the House, the hon. Gentleman naturally wishes to avoid any descent into civil war. The primary focus of our efforts must be on the African Union and ECOWAS, because a locally owned solution is much more likely to be both sustainable and peaceful and to take account of the relative strengths of the support currently available to each of the warring parties.
As well as encouraging Ministers to persist in their efforts to resolve the conflict, may I have an assurance that they are keeping in touch with the small but not insignificant community here in order to enable their insights and information to be used to assist such a resolution?
We must indeed maintain those links. As I have said, I am making every effort to meet all the relevant trusted NGOs and representatives of UN agencies here before I leave for Liberia, which is the closest that I shall be able to get to the scene of what is taking place. The right hon. Gentleman is right: any influence that can be brought to bear, not least by diasporic communities, will be of great importance to the future.
I welcome the Minister’s proposal to visit the region fairly soon. May I encourage him to go to the borders, where NGOs—particularly the Catholic Fund for Overseas Development—are involved in a special mission? They are deeply worried about the situation, and are anxious for the final solution and agreements that we reach, if indeed we are able to do so, to reflect the wishes of the people rather than what we may think is right for them.
I am grateful to the right hon. Gentleman for his question. We are in touch with CAFOD, and it is part of the plan for my visit that I will go not just to Monrovia but up country to the borders so I can see for myself what is taking place. It is vital that we work with the grain of what people need locally, and that we are there to provide support rather than what might be regarded as a UK solution. On the contrary, it has to be a local Liberian and Côte d’Ivoirian solution to the problems the people there face.
The economic sanctions imposed by the EU, the US and some African states are clearly having some effect, as I understand Mr Gbagbo is running out of cash. However, it has been reported that he continues to be supported by a couple of African leaders, including Robert Mugabe, who has reportedly been sending him arms. Does the Minister know whether these reports are true, and if so, does he agree that it is of paramount importance that democracy is allowed to flourish and is respected, and that people get out and vote in other elections in the region, in particular those starting in Nigeria this weekend?
We have been hearing reports of that, too. However, a significant number of countries and leaders across Africa are deeply supportive of a peaceful political process through the African Union, ECOWAS and other institutions, not least the United Nations—and I might mention Ghana and Angola, to name just two countries. It would be totally unacceptable for any leader or country to seek to supply arms to either of the warring factions, and particularly former President Gbagbo. If that were to happen, it should receive the roundest criticism from all of us who are concerned and want a peaceful outcome to this very difficult situation.
May I press the Minister to outline what contingency plans his Department, the Foreign Office and the Ministry of Defence are putting in place if we have to move quickly to evacuate British nationals and others from Ivory Coast?
I welcome the Government’s actions in providing humanitarian assistance to the region. Comparisons will inevitably be drawn with the situation in Libya. What assessment has been made of the number of civilian lives that have been lost in Ivory Coast, and what efforts are we and our international partners making to ensure we protect civilians from another brutal leader refusing to leave?
The latest information we have is that about 500 civilians have so far lost their lives in Côte d’Ivoire, but that is very much an estimate—as the hon. Gentleman can imagine, reliable information is extremely hard to come by. All possible political and diplomatic processes are under way, and have been under way—we have been deeply engaged in trying to help and co-ordinate efforts to support that since the leadership crisis first arose in December. It is vital that we work down that track. Of course we do not want to have to take other measures, and it is extremely helpful that the UN Security Council passed resolution 1975 last night.
With permission, Mr Speaker, I should like to make a statement.
The House will be aware that in 2009 my predecessor announced a competition for the management of five prisons: Her Majesty’s prisons at Birmingham, Buckley Hall in Rochdale, Doncaster and Wellingborough, and the new prison, currently called Featherstone 2, near Wolverhampton, which is due to open in 2012. I am now able to announce the results of that competition process.
Let me remind the House that these prisons were selected by the right hon. Member for Blackburn (Mr Straw) for a variety of reasons. Birmingham and Wellingborough are currently managed by the public sector and were chosen after being identified by the National Offender Management Service as performing poorly. Buckley Hall and Doncaster are establishments that have been previously competed for and their contract is due for renewal. Buckley Hall is currently managed by the public sector and Doncaster is currently managed by Serco.
During the preparations for the bid it became apparent that competition could not produce improvements at HMP Wellingborough without significant capital investment to secure its long-term viability. In the current financial climate, this is clearly not a tenable proposition, so I took the decision to remove it from the competition process. HMP Wellingborough will continue to be managed by the public sector, and will need to deliver approximately 10% efficiency savings, in line with other public sector prisons, over the next four years.
I am now able to announce the results of the four remaining prison competitions. HMP Birmingham will be run by G4S plc. HMP Buckley Hall will be run by HM Prison Service. HMP Doncaster will be run by Serco Group plc. Featherstone 2 will be run by G4S plc. The new contracts will be effective from October 2011 for the prisons at Birmingham, Buckley Hall and Doncaster, and from April 2012 for Featherstone 2. I would like to put on record my thanks to all the bidders for contributing to what has been a challenging contest, which will secure significant quality improvements and savings at all the establishments involved.
The Government are committed to delivering reform in our public services. This process shows that competition can deliver innovation, efficiency and better value for money for the taxpayer, but also that it can do so without compromising standards. Before the bids were evaluated for anything else, they needed to demonstrate their fundamental ability to provide safe and secure custodial services. I can confirm that over the spending review period the new contracts will deliver savings of over £21 million for the three existing prisons. In the same period, the new Featherstone 2 prison will be delivered at £31 million less than the costs originally approved by the previous Government. Cumulative savings over the lifetime of the contracts for the three existing prisons are a very impressive £216 million.
But public protection is not just about how we manage prisons in order to punish people. It is also about how we achieve genuine and long-lasting reductions in crime by cutting reoffending. I am therefore particularly pleased to be able to announce that, for the first time, the contract award for HMP Doncaster will include an element of payment by results in reducing reoffending. Payment by results is central to our rehabilitation reform plans, because it means that we can concentrate on paying for what works to reduce reoffending. The current system funds services, but not outcomes. Providers of services face few consequences if what they offer does not succeed in cutting reoffending, and little reward if they do succeed in cutting reoffending. Payment by results looks to change this by rewarding performance against the outcomes specified in a contract. In the Green Paper I outlined plans to develop this policy further and commission at least six new pilots for payment by results. The contract for HMP Doncaster is an important first step towards fulfilling this commitment.
The new contract price for HMP Doncaster will in itself deliver significant annual savings. In addition, however, the introduction of payment by results means that 10% of the contract price will be payable only if the operator reduces the reconviction rates of offenders a year after they are discharged from the prison by five percentage points. If they achieve this, the contract will, of course, have significantly reduced crime, and for a cost of at least £1 million below what we currently pay. I regard this as a win-win approach. It translates to savings for the taxpayer, lower reoffending rates and a return for the service provider that improves their performance.
I know that Members on both sides of the House recognise the benefits of effective competition—at least I hope they still do. Today’s announcement shows it has a significant role to play in delivering value for money, better outcomes and broader reform. I encourage providers from any sector to rise to the challenge. The public are entitled to expect safety and security and better results to go hand in hand with efficiency and innovation. I commend this statement to the House.
I thank the Secretary of State for advance sight of today’s statement, and I welcome its tenor and how he delivered it. He will be aware that our policy was and is based on what works, rather than dogma. During our time in government, nine new private sector prisons were provided and three new establishments had been opened and run by the public sector, and I recognise that they have played a successful role in our prison system. It is right that we began the market testing that he is reporting on today.
I wish to ask the Justice Secretary a number of questions arising from his statement. First, he refers to the fact that during the bid preparations it became apparent that competition could not produce improvements at HMP Wellingborough without significant capital investment, so may I ask him what plans he has for such investment at Wellingborough prison? How much will be invested, and over what period? Does he understand the frustration of hard-working prison officers and other staff working in public sector prisons that need capital investment when they are compared with prison officers and other staff in newly built or refurbished private prisons? Can he confirm that the decisions on the Birmingham and Doncaster prisons are no reflection on the hard work of prison officers and staff there?
May I echo the Justice Secretary’s comments about the importance of delivering efficiency, innovation and better value for money for the taxpayer without compromising standards? Indeed, he has referred to the £216 million that will be saved as a consequence of this process, which was begun by the Labour Government. Does he therefore accept that the savings he is now championing are actually the fruits of the previous Government’s attempts to improve the efficiency of the Prison Service? Can he confirm that he will reinvest that money in the Prison Service?
The Justice Secretary’s announcement on payment by results is interesting and welcome. He will be aware that we began piloting payment by results in Peterborough, where we were trying to reduce reoffending. However, that is a pilot scheme and we recognised that lessons would need to be learnt before any full roll-out. What lessons have already been learnt from the yet to be completed Peterborough pilot? Can he confirm that Doncaster is a pilot and he will wait to see the results before the approach is rolled out further? His statement referred to the criteria for payment by results. He will be aware that 20% of offenders reoffend within three months of leaving prison and that 43% do so within a year, so will he explain further the criteria by which he will judge “if the operator reduces the reconviction rates of offenders a year after they are discharged from the prison by five percentage points”?
Finally, I wish to ask the right hon. and learned Gentleman about the workers in the prisons that he listed. Staff at HMP Birmingham and HMP Doncaster will understandably be worried about their future in these uncertain times. Does he anticipate any redundancies as a result of his decision? Can he confirm to the House that public sector terms and conditions will be protected under Transfer of Undertakings (Protection of Employment) Regulations arrangements? In addition, he will doubtless have seen the newspaper reports of contingency planning by his Department to deal with any industrial action that might result from his announcement. We have read that troops have been put on alert. Will he confirm whether that is the case? May I ask what discussions he or his Prisons Minister have had with the Prison Officers Association and others who represent prison staff? Does he agree that it is crucial that he and/or his Prisons Minister should meet the appropriate representatives today and begin a dialogue to avoid the sort of speculation reported in the media from becoming a reality?
I am grateful to the right hon. Gentleman, because I was interested to see whether the Labour party was in the position that I thought it was going to be in, and I am reassured by what he said. As he said, putting competition into the system in order to ensure the best standards at the lowest cost to the taxpayer is a continuous policy, and things have moved on an awful long way since I was Home Secretary 20 years ago, when privately managed prisons were a highly controversial subject. We got the first one under way at Wolds, but under Blairism the policy was taken a whole lot further, with all the private finance initiative prisons. As I readily acknowledge, the right hon. Member for Blackburn (Mr Straw) started this tendering process, which we have taken to what I believe to be this successful conclusion. It must be in the public interest and it must be right—I readily acknowledge what the right hon. Member for Tooting (Sadiq Khan) just said—that we leave aside stale ideology and dogma, and instead look at what works and what produces the right solutions for the public.
We have problems with the building at HMP Wellingborough. It is not a terribly old building—as I recall, it is largely a 1960s construction—but we are under notice that something has to be done about it and it cannot just carry on as it is. The building is not going to be adequate for very much longer. We are considering what to do about HMP Wellingborough. Its staff are responding very well to the problems that they face, but I hope to be able to come back soon to announce what will happen at Wellingborough.
The contract for Birmingham prison is now going to G4S. I acknowledge that the staff at Birmingham have made considerable efforts and that they put in a good public sector bid as part of the tendering process, but the fact is that that process is objective and the private sector bid was just better, and somewhat less costly. On the right hon. Gentleman’s later comments, the National Offender Management Service will, of course, have high regard to the interests of the staff at Birmingham. A new prison is opening not far away, which may offer some opportunities, but we will give all the appropriate support and hope to avoid an unnecessary number of redundancies.
Payment by results was indeed initiated at Peterborough by the previous Government, and we strongly support that worthwhile experiment. The only political claim that I would make is that I believe the previous Government responded to the policies suggested by the then Conservative Opposition in advocating payment by results. We suffered the fate that often happens to Opposition parties—I hope that this will happen to the right hon. Gentleman, too—of putting forward good ideas which then get stolen by the Ministers in power. However, at least we are at one on this policy.
The Doncaster scheme is another pilot. For the first time, the prison operator is entering into having a payment by results element in the contract; the operator will get extra reward if it succeeds, but it will share the risk with the Government, and will lose if it does not succeed. Five percentage points is what has been negotiated—a somewhat impenetrable figure. It means five percentage points down from the current percentage, so an 8.3% reduction from the current reoffending rate would be required for the operator to be paid.
It is indeed true that we have undertaken contingency planning in case we get the wrong sort of reaction to today’s announcement, although of course we very much hope that we shall not, because industrial action will be no more in the interests of prison officers than it is in the interests of anyone else. Contingency planning for disorder in prisons has always been done, as it has to be. It has been done for as long as I can remember, although I think the previous Government suspended it when they reintroduced the criminal law making it illegal to strike in prisons. They carried out an experiment when they lifted the legal ban, but they had a very bad strike in 2007, and put it back again. We have been bringing the contingency planning up to date, but we very much hope that that is a mere precaution. In the interests of public order, we have to ensure that we are prepared in case anything goes wrong in a major prison, but we very much hope not to have to put any of this into effect. We have had discussions with the Prison Officers Association and we are open to further such discussions, and we hope to be able to answer its legitimate queries in any way that we can.
The Secretary of State’s announcement will be widely welcomed in Wellingborough. Is he aware that the POA there and the management worked tirelessly together, doing so against the national union policy, to come up with a bid that has driven down the cost to £19,000 per prisoner and has reduced the number of prison officers from 147 to 101? Could either the Secretary of State or a member of his team visit Wellingborough prison to see the improvements?
I join my hon. Friend in congratulating the staff at Wellingborough, because they face a difficult situation, given the uncertainties caused by the unsuitable and deteriorating buildings in which they are operating. They certainly have succeeded, and my hon. Friend the Prisons Minister says that he can certainly take up the invitation to visit to see what they have achieved. I hope that the uncertainties will be resolved as soon as possible, but obviously it is difficult to find money for a large capital programme, which is what Wellingborough really needs.
As the Prisons Minister at the time the decision was made to undertake the market testing, I can confirm that we not only undertook the market testing but encouraged public sector bids. Now that those public sector bids have failed in Birmingham, could the Justice Secretary tell the House what will happen to the assets of Birmingham and Doncaster prisons? What is the cost of the TUPE arrangements? Will it be borne by the private sector contractor? If there are redundancies, will it be the Ministry of Justice that bears them?
The right hon. Gentleman was indeed involved in the competition process, so he cannot start protesting—however mildly—about the outcome. I assume that he contemplated that either the private or the public sector bids would win, and that is what has happened. The public sector has the contract at Buckley Hall and the private sector has the contract at Birmingham and the other prisons. Serco was already the contractor at Doncaster. To show how ideology is fading, the irony is that Buckley Hall, when it opened, was a private sector prison, but it has been in the public sector and this renewal of the contract has been won by the public sector again. The law on TUPE remains in place, but we are consulting on the wider implications on transfers of ownership from the public to the private sector. The outcome of this competition should be the kind of thing that the right hon. Gentleman was perfectly happy to contemplate when he was party to the decision in 2009.
I welcome the Lord Chancellor’s decision to build reducing reoffending into the Doncaster contract, but will he assure us that he recognises that that will require the provider to work closely with a range of other organisations, and that they too increasingly need to be incentivised to reduce the reoffending that creates more victims of crime?
My right hon. Friend is right. There are two major voluntary parties with which the provider at Doncaster proposes to be in contact, but their names escape me—one is called Catch22 and the other is something else—and there will be local voluntary and charity groups subcontracted below them. Serco will manage the prison and will be the principal contractor, but the delivery that it hopes to achieve will be effected by subcontractors. I have emphasised to those who have attended seminars on this subject that I hope that the operator will deal responsibly with the small local contractors. Serco is entitled to use its bargaining power when negotiating with the representatives of Government to get the best deal it can, but I hope that it will not overdo it when dealing with smaller voluntary and charitable bodies that are also entitled to expect to boost their funds if they deliver the results required.
It is important to put on the record the fact that my constituents and staff at Buckley Hall prison in my constituency have been concerned about the process, but I am sure that they will appreciate the stability that should now be provided. The reason why I raise this matter is that, as the Secretary of State pointed out, there has been constant change at Buckley Hall prison, and I hope that this decision will provide some stability. May I have some assurance that the staff, who do an excellent job there, can now get on with that, and that there will be no redundancies at the prison?
I think I can give the assurances that the hon. Gentleman requires. As far as I am aware, the public sector bid did not contemplate any redundancies; I do not have that information at my fingertips, but I would be surprised if it did. The provider has won a contract, and it is now up to it to deliver that contract on the basis on which it was won; the provider cannot now backslide from what was offered. I do not think that that is likely to happen, and fortunately, the staff at Buckley Hall now have some welcome stability for the period of the contract.
I warmly welcome my right hon. and learned Friend’s statement, and I know that he and his ministerial colleagues have been to Peterborough. May I add my voice to the calls to consider the social impact project at Peterborough with a view to extending it across the private prison estate? It could have an impact on prisoner education and in reducing recidivism.
I entirely agree with my hon. Friend, and I was immensely encouraged by what I saw on my visit to Peterborough. I have discussed Peterborough widely elsewhere, and there was tremendous enthusiasm for the social impact bond that raised the ethical investment that has gone in to the project and for the determination to deliver it on the part of the St Giles Trust, which is the partner, the YMCA and the other people who are involved. We are finding this enthusiasm reflected elsewhere, and I hope—Peterborough being another private sector prison—that public sector prisons will get equally keenly involved. There are people in the public sector prison service who wish to contract on such a basis. I hope that payment by results will take off, and social impact bonds are one model for raising important capital to get them under way.