House of Commons
Wednesday 14 March 2012
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
We have given direct support to 20,000 families for food rations, medical supplies and emergency water. We are today announcing additional support for humanitarian aid.
The massacres unfolding at the hands of the murderous Assad regime are now being compared to great humanitarian tragedies such as Srebrenica. Unhindered humanitarian access is desperately needed. Has the recent Valerie Amos mission on behalf of the United Nations offered any hope whatever?
Any hope from that mission is severely limited. At the weekend I spoke to Baroness Amos, the head of the United Nations Office for the Co-ordination of Humanitarian Affairs, and on Monday night I spoke to Jakob Kellenberger, the head of the International Committee of the Red Cross. We continue to reflect the horror and indignation at what is happening in Syria—as my hon. Friend expressed—and to demand unfettered access for all humanitarian agencies.
The hon. Gentleman is entirely right to identify Russia as the key blocker to international agreement and to taking effective action on humanitarian relief, and more widely, in Syria. This subject is very dear to the heart of the Foreign Secretary, and he has repeatedly raised it in New York.
I welcome the Government’s efforts to secure humanitarian access to help the people of Syria, but what steps are being taken to protect the estimated 230,000 internal and external refugees fleeing the violence, especially in light of reports that the Syrian regime is laying mines along the routes to the borders with Lebanon and Turkey?
The hon. Lady rightly flags up the plight of those who have been forced to leave their homes, and not only the refugees who have fled across the border, but the internally displaced people. That is why some of our specific support goes to help 5,500 people who are in Syria and who have been forced to leave their homes.
The UK has allocated funding for Palestinian development to help build a future Palestinian state that is stable, prosperous and an effective partner for peace.
I am sure the Secretary of State agrees that it is imperative that any funds provided by this country to the Palestinian Authority go towards securing the Quartet principles. Does he therefore share my concern that there are still Palestinian textbooks that contain anti-Christian, anti-western and anti-Israeli sentiments? Can he assure me that his Department is doing everything possible to ensure that no British taxpayer money is being used to fund textbooks of that sort?
I have looked very carefully into this issue, not least because I know of my hon. Friend’s interest in it, and I have found no evidence in Palestinian school textbooks of what he describes. I was in Gaza just before Christmas, and I raised the specific matter then. I am sure my hon. Friend will share my pleasure in the fact that the State Department in America has set up an inquiry to examine the quality of both Israeli and Palestinian textbooks and will be reporting later this year, probably in the autumn. He and I will, no doubt, look with great interest at what the report has to say.
I was in Gaza at the weekend, as it witnessed the biggest escalation in Israeli air strikes and Palestinian rockets for three years. Although we all hope that the current truce holds, does the Secretary of State agree that the ongoing and daily madness of Israel’s blockade is illustrated by the fact that it incentivises a few to make millions from a tunnel economy and benefits armed groups, while legitimate Palestinian businesses cannot export, the UN cannot get the materials it needs to rebuild shattered schools and hospitals, and the poor are forced to rely on food handouts?
Given that many hundreds of missiles have been fired from Gaza into Israel—some armed with ball-bearings and causing enormous hardship to many—will my right hon. Friend use the levers of aid to put pressure on the Gaza authorities and Hamas to stop firing them?
I had an opportunity on a recent trip to Israel to visit Sderot and see for myself the effects of what my hon. Friend is describing. British development policy on Palestine is very clear: we concentrate on state building and strengthening financial management by public authorities; we support the private sector on growth, reducing unemployment and eliminating poverty; and we are working closely with the United Nations Relief and Works Agency and the World Food Programme on issues of humanitarian relief. I will, however, take on board the point he is making.
The last time I was in Gaza the thing I thought was most cruel was the denial to the Palestinians of their land—35% of their land—and of 85% of their fishing rights. Does the Secretary of State agree that it would be so much better if people could produce food for themselves and for the local economy, and were not reliant on food aid?
The right hon. Lady is entirely right to say that it is much better to produce food in a sustainable way than to have to rely on food aid, and that is one of the policies we are pursing vigorously around the world. However, as she will know, the answer is for both parties in this long, protracted and bitter dispute to negotiate with each other in good faith. That is the way in which we will reach a two-state solution.
Democratic Republic of the Congo
Good governance is central to improving the lives of the Congolese people. We supported voter education for 2 million citizens; we are working to increase mining revenues by a total of $2.8 billion over 10 years through improved transparency; we are empowering 2,500 communities to control their own development; and we are strengthening public financial management in the DRC.
I am grateful to the Minister for his response, but he will be aware of the significant legal challenges to the elections that have just been held in the DRC and of the level of violence that has occurred in that country over many years, which has caused the deaths of more than 3 million people. What steps are the Government taking to work with the international community to ensure that good governance and the safety of the population is our priority in the weeks to come, as we await this outcome?
The hon. Lady is entirely correct to say that this is a large challenge facing the Congolese people. We are working to review the priorities for future funding on the question of elections through the CENI, the DRC’s electoral commission. We are also urging the CENI to carry out an in-depth investigation into all the allegations. Good governance and, in particular, access to justice, not least for women and girls and in response to sexual violence and violent crimes, is one of the areas in which we are seeking to make strengthening partnerships.
In DFID, we put girls and women at the heart of everything we do. DFID’s strategic vision for girls and women, launched last March, sets out four priority areas for greater action in all its 28 country programmes. It is not, however, possible to calculate the precise proportion of our budget that is spent on that.
I am grateful for that reply. Given President Karzai’s support for the ulema council’s statement, which classified women as “secondary”, what representations have the UK Government made to him on this issue? What projects are the Department developing specifically to promote Afghan women’s social and political rights, and participation?
Supporting girls and women is an integral part of the UK’s work in Afghanistan. We support initiatives to increase girls’ education and access to finance, and to increase women’s participation in governance. For example, we fund the gender unit in Afghanistan’s independent electoral commission.
I welcome the Government’s approach to putting women at the heart of international development efforts, especially the most recent drive to combat domestic violence and trafficking in the poorest countries. Will my right hon. Friend give some more information about how that will work in the forthcoming months and years?
My hon. Friend the Minister for Equalities is the UK’s ministerial champion on tackling violence against women and girls overseas. She has made successful visits to India and Nepal, for example, to raise awareness of this agenda, and DFID has increased its focus in 25 out of our 28 bilateral programmes to tackle violence against women.
In assisting women’s groups in Egypt, the Select Committee on Foreign Affairs recently went on a visit and met some of them. One of the issues raised with us, particularly by women who had demonstrated in Tahrir square, was the forced virginity tests that many of them had to undertake. A military court has just acquitted the doctor responsible of the charges against him. Will the Minister raise this issue in conversations with any Egyptian counterparts?
The answer to the right hon. Lady’s question is most definitely yes. We are working through the Arab partnership that we set up specifically to encourage groups, and women in particular, in developing countries following the Arab spring. The agenda that the right hon. Lady has championed for many years is one that we share.
Ethiopia is making real progress in development and Britain’s programme plays a crucial role, as I saw for myself on the ground during January.
As my entry in the register shows, I travelled with Save the Children to Ethiopia during the February recess and I saw at first hand how UK aid is saving children’s lives in remote parts of the country. Will my right hon. Friend update the House on how UK aid is helping with malnutrition in Ethiopia and other parts of the world?
I thank my hon. Friend for making that visit with Save the Children. I know she has both great interest and great expertise in that area. She asks about the results, and last year Britain secured provision so that some 1.7 million children are getting into school. We have also conducted a very successful pilot programme to help eradicate early marriage. Over the next four years, Britain will help to ensure that some 2 million children are able to go to school in Ethiopia.
The UK Government are committed to helping halve malaria deaths in at least 10 of the worst affected countries by 2015. We will achieve that through support to country programmes and through multilateral channels. I recently visited Kenya, a country where DFID has provided 20 million bed nets. Those nets have played a part in the 40% reduction in child deaths over the past five years.
I thank the Minister for that reply. Will he consider a discrete programme to support malaria treatment in a hospital in Kaesong in north Korea, where a remarkable South Korean doctor, Dr Kim—who spoke in Westminster recently—and his team attend the medical needs of thousands of North Koreans and have identified malaria as one of their most pressing problems?
My right hon. Friend the Secretary of State also had the opportunity to meet the doctor and admire the great work that is being done. It is right that our methodology for support should be through our investment in the various multilateral organisations, such as the World Health Organisation and UNICEF. Working in the Democratic People’s Republic of Korea on that basis represents the best way to help the people of that republic.
Many faith-based groups are doing excellent work on the continent of Africa. Will the Minister assure the House that those faith-based groups that carry out excellent work in education and in treating malaria can be of assistance in trying to combat its spread?
Not only could such groups be of assistance, but they already are of great assistance. There are many examples of faith-based groups and others that are helping and complementing the national malaria control programmes and many of the large international programmes. We have set up a group in our Department to work with the Synod to consider precisely what more can be done and how that assistance and complementary activity can be more effective.
One of the key players in eradicating malaria is the Global Fund to Fight AIDS, Tuberculosis and Malaria. Will the Government consider calling an emergency replenishment conference to increase the funds for that organisation so that it can work further and faster towards eradicating the diseases, saving money in the long run on treatment?
The hon. Gentleman makes a valid point. The global health fund is making a significant contribution to the eradication of malaria over time as well as to combating HIV/AIDS and TB. With the cancellation of round 11, there is now a question mark over how we can continue the funding. I can assure him that the UK’s pledge of £1 billion between 2008 and 2015, of which we have contributed £638 million to date, is showing the UK’s leadership. We stand ready to make further funding available when the reforms that we want to see have been put through.
The coalition Government have set out how we will stand by the United Kingdom’s promise to invest 0.7% of national income as aid from 2013. The Bill is ready and we will legislate when parliamentary time allows.
Does the very able Secretary of State—[Laughter]—no, genuinely, the very able Secretary of State. Does he understand the concern in the country that the overseas aid budget is to increase from £8 billion to £12 billion because of this commitment while brave men and women in our armed forces are being sacked because of the cuts?
As I have said to my hon. Friend before, I yield to no one in my respect for the armed forces having served in the Army myself. However, Britain’s development budget is spent very much in Britain’s national interests. We do it because it is the right thing to do and because it is hugely in our national interests. There is enormous support across the country, which is not always reflected in all our tabloids, for Britain’s very strong commitment to this important policy area.
The Secretary of State has been unable to give hon. Members a cast-iron guarantee today that the 0.7% legislation promised by the coalition parties will be in the Queen’s Speech. Can he now assure the House that he has made it clear to the Chancellor that any retreat in the Budget on the Government’s commitment to spend 0.7% on aid by 2013 would be a broken promise? It would be another nail in the coffin of the Prime Minister’s claim to have changed the Conservative party.
The hon. Gentleman has set up a straw man that he knows to be untrue. We are the first Government in history who have set out very clearly precisely how we will reach the 0.7% target. As I have made very clear, the Bill inevitably has to take its place in the queue behind essential legislation for rescuing the country from the perilous economic condition inherited from the Government of whom he was a part.
The Government recognise the threats and opportunities for economic growth, poverty reduction and food security related to the expansion of biofuel production in developing countries, and that they are important subjects for analysis and debate.
Does the Minister agree that the development of biofuels, particularly in developing countries, should not be at the expense of ordinary people’s human rights, particularly with regard to water, insufficient food, health and workers’ rights? Will he outline the Government’s policy on biofuels?
The hon. Gentleman is quite right to highlight the challenges and opportunities represented by biofuels, particularly in developing countries, and he ties those issues to human rights. UK biofuels policy is set by the Department for Transport, but I assure him that my Department continues constantly and rigorously to review the evidence on the impact of biofuel production in developing countries, not least in relation to land and water rights.
Thanks to British aid and support, the lives of hundreds of thousands of Somalis have been saved, but insecurity and drought continue to threaten lives, as I saw during my visits in recent months to Puntland, Mogadishu and Dolow, and to Hargeisa in Somaliland.
The Somalia conference, which my right hon. Friends organised, was a huge success with great hoo-hah, but now that the press caravan has moved on can the Secretary of State assure us that Somalia and its desperately sad situation remain central to his concerns?
My hon. Friend is entirely right to identify the conference on Somalia organised by the Prime Minister as the beginning and not the end of the process. Certainly, there will be an absolute commitment across Whitehall to drive forward the results of that conference and make them meaningful on the ground in the way that my hon. Friend describes.
My Department is heavily engaged in achieving the development results set out to Parliament a year ago in the bilateral and multilateral aid reviews. Those include securing education for at least 11 million children, saving the lives of 50,000 women in childbirth, and getting clean water and sanitation to more people than live in the whole of the United Kingdom. Britain is also heavily engaged in difficult humanitarian situations around the world, including in Syria.
On 24 February, Israeli authorities approved 500 new homes in the west bank settlement of Shiloh and retroactively legalised more than 200 built-without-permits, some in the settler outpost of Shvut Rachel. What does the Minister say to his colleagues in Israel to try to stop these illegal developments?
T2. What is my right hon. Friend doing to ensure that British funds provided to the United Nations Relief and Works Agency are not abused in a way that undermines the middle east peace process? (99644)
I can tell my hon. Friend that I have looked in detail at that, not least because of the point that my hon. Friend the Member for Harlow (Robert Halfon) made earlier, and not least because during the latter part of last year I spent time with UNRWA in Gaza. We are very clear that the funds that we are allocating to UNWRA are buying the results that we have agreed they should buy.
The hon. Gentleman is absolutely right to flag up the importance of clean water and sanitation. That is why in the bilateral and multilateral reviews last year we set out clearly that this Government would seek to ensure over the next four years that we get clean water and sanitation to more people than live in the whole of the United Kingdom.
The Foreign Secretary has set out clearly the need to resolve some disputes which affect the land space of Puntland and Somaliland, but that the issue of the future of Somaliland is a matter for Somaliland, Somalia and the surrounding countries. [Interruption.]
T5. Will the Secretary of State commit not only to work on further food and shelter developments for the people who need them throughout the globe, but to look at the social and emotional development of the children and families of those suffering areas, and to learn from some of the early intervention techniques being pioneered in this country? (99648)
I am grateful to the hon. Gentleman for giving me notice of this question. I have considered it in some detail. I agree with him about the importance of early intervention. Much of the Department’s work in relation to the early years is to try to make sure that contraception is available to women so that they can space their children and decide whether or not they want children; to focus particularly on nutrition, the lack of which causes stunting; and to get children, particularly girls, into school. I believe that those three things at least contribute to the agenda that the hon. Gentleman so wisely champions.
My hon. Friend is right to point to the important work that is going on in Kashmir, not least following the earthquake. I can tell him that work has recently been completed. We have refurbished some 37 schools, affecting 10,000 children, and we have also managed to rebuild 35 bridges and secure about 66,000 latrines.
T8. Next Thursday is world water day, when we recognise that 743 million people worldwide do not have access to safe water, and more than 2.6 billion live without proper sanitation. Although I welcome the announcement last week that we have met one of the access to water millennium development goals targets, can the Secretary of State tell the House what ministerial representation the Government will have at the high-level meeting of Sanitation and Water for All on 20 April? (99651)
The hon. Gentleman is entirely right to emphasise the importance of this. I referred earlier to the Government’s commitment on water and sanitation, and it is because of the importance of the agenda he has identified that I will be attending the conference myself.
Will my right hon. Friend confirm that the whole of the DFID budget is effectively allocated and that, if non-governmental organisations or others exhort him to spend more money on one aspect of international development, however worthwhile, it behoves them to explain where in the departmental budget other savings need to be made?
My hon. Friend is absolutely right. The whole of the international development budget now focuses on outputs and outcomes, buying results, with the added extra that we now have an independent watchdog that can assure taxpayers that the money is really well spent.
In thanking the right hon. Gentleman for the way he dedicates himself to alleviating the suffering of the Palestinian people and congratulating him on the trouble he takes to go there and see for himself, may I ask him, with regard to textbooks for Palestinian children and children in Gaza, whether it would be valuable if there were schools in which they could study, in view of the large number of schools destroyed by the Israelis and their refusal to allow building materials in to rebuild them?
The right hon. Gentleman, who has long and distinguished experience in championing this area, is entirely right. We will be meeting UNRWA on Monday, but I have seen for myself the effective way it is working to alleviate suffering and promote education in Gaza and elsewhere.
The Prime Minister was asked—
I have been asked to reply, as my right hon. Friend the Prime Minister is visiting the United States for meetings with President Obama.
I am sure that the whole House will want to join me in sending our deepest condolences to the families and friends of the servicemen who died in Afghanistan last Tuesday: Sergeant Nigel Coupe from 1st Battalion the Duke of Lancaster’s Regiment, and Corporal Jake Hartley, Private Anton Frampton, Private Chris Kershaw, Private Daniel Wade and Private Daniel Wilford, all from 3rd Battalion the Yorkshire Regiment. These were men of outstanding courage and selflessness. This tragic incident will long be remembered by our nation, because it reminds us all of the immense danger that our armed forces regularly endure to guarantee the safety and security of our country.
We are also deeply shocked by the appalling news that a number of Afghan civilians were wounded and killed in Afghanistan on Sunday morning and send our sincere sympathies to the victims and families who have been affected by this terrible incident.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
I would like to associate myself with the Deputy Prime Minister’s comments on the tragic events in Afghanistan. I am sure that Members on both sides of the House express our deepest sympathies for the families who have lost loved ones at this deeply distressing time.
Today the Prime Minister is in America, where unemployment is coming down and the economy is growing. In Britain, unemployment is now at its highest level for 17 years and the economy is flatlining. Will the Deputy Prime Minister explain what has gone wrong?
What went wrong was the Labour Government for 13 years. They created the most unholy mess in 2008, which we are now having to clear up. The only way to get the economy moving is to fix the deficit, get banks lending money again and make sure we have a tax and benefits system that pays people to work.
I join the Deputy Prime Minister in paying tribute to Sergeant Nigel Coupe, of 1st Battalion the Duke of Lancaster’s Regiment, and from 3rd Battalion the Yorkshire Regiment Corporal Jake Hartley, Private Anthony Frampton, Private Christopher Kershaw, Private Daniel Wade and Private Daniel Wilford. They died in tragic circumstances, serving our country with bravery and with determination. Their deaths remind us of the great sacrifice that our armed services make on our behalf, and our thoughts are with their families.
I join the Deputy Prime Minister also in expressing our horror at the appalling murder in Afghanistan on Sunday of 16 civilians, including nine children. We all deplore that crime and offer our deepest condolences.
Today’s figures show unemployment up, and the hardest hit are young people looking for work and women being thrown out of work. The Deputy Prime Minister says that the Liberal Democrats are making a difference in this Government. With more than 1 million women looking for work, what difference does he believe he has made to those women?
Of course any increase in unemployment is disappointing. It is a personal tragedy for anyone who loses their job—for them and their families. The right hon. and learned Lady should be careful, however, not to pretend that somehow this is a problem which was invented by this Government. Let us remember that unemployment among women went up by 24% under Labour. Youth unemployment went up by 40% under Labour—remorselessly from 2004. I suggest that we all need to work together to bring unemployment down.
When we left government unemployment was coming down, and this Government’s economic policy is not only driving up unemployment but means that they will have to borrow more. It is hurting but it certainly is not working. For all the right hon. Gentleman’s bluster, the truth is that having five Liberal Democrats seated around the Cabinet table has made no difference whatsoever. This is what the Business Secretary said on economic policy: he said that this Government have no “compelling vision”. These days no one agrees with Nick, but does Nick agree with Vince?
It is worth dwelling on some of the details that have been published this morning on the unemployment statistics, because behind the headline figures long-term unemployment actually came down in the quarterly figures, and very importantly the number of new jobs created in the private sector outstripped the number of jobs lost in the public sector. Under the right hon. and learned Lady’s Government, the Labour party sucked up to the City of London and over-relied on jobs in the public sector. We are now having to remedy those mistakes, and we are creating new jobs in the private sector.
The right hon. Gentleman is complacent about unemployment under his Government, and the Lib Dems are making no difference on unemployment, just as they are making no difference on the NHS.
When it comes to the NHS, the Deputy Prime Minister obviously thinks that he is doing a stunning job, so will he explain why he has failed to persuade the doctors, the nurses, the midwives, the paediatricians, the physicians, the physiotherapists and the patients?
We are proud of what Labour did when we were in government: more doctors, more nurses, shorter waiting times, greater patient satisfaction. No one believes the right hon. Gentleman. It is no wonder that he cannot convince those who work in the health service; he cannot even convince his own conference. Does he not realise that people are still against the Bill because it has not changed one bit? It is still a top-down reorganisation—
The Bill is still a top-down reorganisation, it is still going to cost the NHS a fortune, and it is still going to lead to fragmentation and privatisation. It is clear that the Deputy Prime Minister will not stand up for the NHS—the only thing he stands up for is when the Prime Minister walks into the room.
Some of the right hon. and learned Lady’s colleagues must think that the Liberal Democrats make a difference, because they were handing out leaflets at our conference in Gateshead while her leader was throwing a sickie and going to watch Hull City play football instead. She says that she is proud of Labour’s record. Is she proud of the fact that her Government spent £250 million of taxpayers’ money on sweetheart deals with the private sector that did not help a single NHS patient? Is she proud of the fact that the Health Act 2006, which the hon. Member for Leicester West (Liz Kendall) worked on, was a privatiser’s charter in which her Government offered an 11% premium to the private sector to undercut the NHS?
We will compare what our Government did on the NHS with what the Deputy Prime Minister’s Government are doing any day. He says that the problem with the Bill is that doctors and nurses just do not understand it, but the problem is that they do. However, even at this late stage it is within his power to stop the Bill. Next Monday, the Bill reaches its final stage in the House of Lords. There are 90 Lib Dem peers, and their votes will decide whether the Bill becomes law. Will he instruct Shirley Williams and his peers to vote to stop the Bill?
The right hon. and learned Lady has invited me to make comparisons; let me make three comparisons. The shadow Health Secretary has said:
“It is irresponsible to increase NHS spending”.
So Labour Members do not believe in more money for the NHS; we do. That is comparison No. 1. Secondly, Labour Members indulged the private sector with sweetheart deals, which we are making illegal in the Bill. They want sweetheart deals with the private sector; we do not. Thirdly, they presided over inequality in the NHS; we are including a statutory obligation in the Bill to deliver more equal outcomes in the NHS, which they failed to deliver in 13 years.
That is absolute rubbish. In undermining the NHS and making Shirley Williams vote for it, the Deputy Prime Minister has trashed not one but two national treasures. He did not need to sign the Bill, but he did. He could stop the Bill, but he will not. He says that the Lib Dems make a difference, but they do not. What has happened to that fine Liberal tradition? They must be turning in their graves: the party of William Gladstone; the party of David Lloyd George: now the party of Nick Clegg.
I know that the right hon. and learned Lady has her prepared script which she sticks to religiously, but it is worth having a question and answer session; that is what this whole thing is actually about. What we are doing—the two parties that have come together in the coalition—is to sort out the banking system, which she left in a mess; to sort out the public finances, which she left in a mess; to sort out the economy, which she left in a mess; and to stop the arbitrary privatisation of the NHS, which she left in a mess. Do you know what? In government, the Labour party ran out of money; in opposition, it is running out of ideas.
My right hon. Friend may be aware of the figures that were released this week, which show that there has at least been some progress towards the target of 25% of places on boards being filled by women by 2015. What will the coalition Government do to ensure that they meet that target and enrich our boards with a diversity of talent that will help to achieve the growth that our country needs?
It is excellent news that there has been real progress in the few short months in which we have been in government—far more progress than was delivered in 13 years under Labour—to get more women on to our boards. I think that everybody now agrees with the consensus that having more women on boards is good for all companies. There has been a woefully unrepresentative mix on our boards. I very much hope that we will continue to apply the right kind of voluntary pressure to see the representation of women increase further.
Q2. I sincerely hope that the Deputy Prime Minister enjoyed our famous north-east hospitality and the support of Northumbria police at his spring conference in Gateshead. Will he tell the House when the 3,000 extra police he promised at the general election will be in post? (99614)
The key thing is whether police officers are properly deployed. Over the past decade, far too many police officers have been tied up in knots, filling out paperwork in the back office, rather than being out in our communities and on the streets where they belong.
Does my right hon. Friend share the priorities of my constituents, who believe that this Parliament should focus its attention on cutting the deficit, promoting growth and getting people off welfare and into work? They would be bemused if they learned that we were to spend much of our time discussing the reform of the House of Lords. How shall I explain that priority to them?
I suspect that my right hon. Friend will do so in the same way as he will no doubt explain to his constituents that there are other priorities, such as changing the boundaries of constituencies, which I know is close to his heart and that of his party. I think that Governments and Parliaments can do more than one thing at once. I also believe that it is a simple democratic principle that the people who make the laws of the land should be elected by the people who have to obey the laws of the land.
Q3. Mr Deputy Speaker—[Interruption.] My apologies, Mr Speaker. It is elsewhere that the deputies are present today. Study after study shows that it is crucial for older people that NHS services work closely with social care. My primary care trust in Blackpool has been doing that by working alongside the council’s social services in the same set of offices. Why is the Deputy Prime Minister still cheerleading for a Bill that scraps trusts and such co-operation, and that puts the health of older people, including those in my constituency, at risk? (99615)
I am backing a Bill that includes, for the first time, statutory obligations to integrate social and health care. The hon. Gentleman is right that one of the abiding failings of our health service is that social and health care are not properly integrated. There has not been much integration over the past 10 years. We are trying to change that. Secondly, the creation of health and wellbeing boards will bring together representatives of the NHS and social care.
As the chairman of the all-party parliamentary beer group, I commend the Government for their efforts to tackle the irresponsible pricing of alcohol by supermarkets. Does the Deputy Prime Minister agree that the safest place to drink is in the community pub, that beer is a lower-strength drink, and that scrapping the beer duty escalator would create 5,000 jobs? Will he take his Treasury colleagues out for a beer and tell them not to put up the duty on the great British pint?
As my hon. Friend knows, all such matters are for the Chancellor to announce at the time of the Budget, but I am sure everyone across the House agrees with his sentiment that we should support community pubs, which are such an important part of the fabric of our communities up and down the country.
Q4. Is the Deputy Prime Minister aware that now that the gang of four Tories are gallivanting around America, he has got a chance to shine? What does he really, really think about this Murdoch sleaze and the latest development—the Prime Minister riding borrowed police horses, having employed Andy Coulson in the heart of government? Man to man, what does he really think? I will give him a chance to separate himself from the serried ranks of Tories behind him. Come on, be a man! (99616)
We had to wait a while for the hon. Gentleman to get going, but it was great when he did. I think we are soon going to celebrate, if that is the right verb, 42 years of his presence in this House, and I am delighted to see that in all that time he has not mellowed one bit.
Will the Deputy Prime Minister join me and my right hon. Friend the Member for Chelmsford (Mr Burns) in congratulating the citizens of Chelmsford on their newly acquired status following Her Majesty’s announcement that Chelmsford is to be a city? Does he agree that it is entirely appropriate in Olympic year that Essex’s first city should be chosen when Essex is also looking forward to hosting the mountain biking competition during the Olympics?
I am not sure whether my hon. Friend the Member for Colchester (Sir Bob Russell) would entirely share that sentiment—we are all aware of the Colchester-Chelmsford rivalry. However, I can confirm the announcement today of the results of the civic honours competition in honour of Her Majesty the Queen’s diamond jubilee, namely that Chelmsford, Perth and St Asaph have been awarded the right to call themselves cities, while Armagh will from now on have a lord mayor. Although I know there will be disappointment in other communities that entered the contest, this is another announcement that will really lift the spirits of the nation in this, the year of the Queen’s diamond jubilee.
Q5. Before the general election, the Deputy Prime Minister said that he was profoundly hostile to the closure of Remploy factories. Now, 1,700 disabled people are losing their jobs because of the closure of 36 factories. What difference has he made? (99617)
As the hon. Lady will know, this is a consequence of a review conducted by Liz Sayce, the head of the UK disability forum. Her conclusions are supported by such organisations as Mind, Mencap and others, and I do not want to disagree with them lightly. They say—this is their conclusion and what they think we should be doing—that segregated employment, which was started in the aftermath of the second world war, is not the best way to promote the interests of disabled people in this country in the 21st century.
Q14. Last weekend, the Deputy Prime Minister spoke about the need for a tycoon tax. Does he intend that to include individuals who claim that they want tax raised on the rich, yet set up companies so that they pay only 20%, not 50%, of their income, such as Ken Livingstone? (99626)
It is worth dwelling for a minute on the explanation provided by Ken Livingstone for his exotic tax arrangements. I quote from an interview that he gave just this weekend:
“I get loads of money, all from different sources, and I give it to an accountant and they manage it”.
That is modern socialism for you.
Q6. In September 2010, I raised with the Prime Minister the case of a part-built college in my constituency that lost £4 million following the closure of the regional development agency. I asked the Prime Minister for a hand-up, not a handout, for the young people in my constituency. Last week, that college was officially opened, yet 18 months on there is no sign of progress in addressing the shortfall. As the Deputy Prime Minister has said, there should be“no…barriers to people’s talent and aspiration”.Will he help give the young people of West Lancashire a hand-up? (99618)
Of course, Ministers will be more than willing to look into the case of the hon. Lady’s college. Colleges are unbelievably important in providing skills and support to young people seeking to get the right qualifications to get into work. They have been working successfully with the Government, not least, for instance, to provide a hugely expanded apprenticeship programme—the largest expansion in apprenticeships ever in our country. I am more than happy to ensure that Ministers look at the case she raises.
Q7. After the 2004 Morecambe bay cockle pickers disaster, the Gangmasters Licensing Authority was created. Although the GLA has protected vulnerable workers, it has also been a burden to business. Will my right hon. Friend assure me that any cuts in red tape will not leave workers unprotected, particularly those in the shell fisheries industry? (99619)
I hear what the hon. Gentleman says. This is an important issue and it is important to get the balance right. The Department for Environment, Food and Rural Affairs is working to ensure that the GLA works effectively and bears down on abuse, such as that in Morecambe bay to which he alludes, but that it does so in as business-friendly a manner as possible to minimise the amount of unnecessary red tape.
I am sure the Deputy Prime Minister would like heartily to congratulate the city of Perth on the restoration of its city status in today’s diamond jubilee announcement on official city status. He will know of the fantastic cross-community, cross-party support that has led to the restoration of that fantastic civic honour. May I thank the palace, the Deputy Prime Minister and his Department for organising this competition and for that tremendous award today?
Those are the kind of questions I like. It is a good thing, and of course, on behalf of everybody in the House, I would like to convey my congratulations to all the people of Perth who have worked in such a fabulous way, and on a cross-party basis, to get this accolade and award today.
Q8. One treasured piece of green space near Cheltenham is attracting a lot of sporting attention this week, but other local green spaces treasured by local people will be at risk if the national planning policy framework does not help us to follow Germany’s example of combining economic success with tough controls to protect the countryside. Will my right hon. Friend reassure us that a truly green planning framework is still a safe bet? (99620)
The Government will publish the national planning policy framework shortly. It is important that we do everything, including through the planning system, to promote growth, because we need growth, jobs and new homes, particularly for young families who are unable to have a home to call their own. Of course, that should be tempered by social and environmental considerations. That balance will be properly reflected in the planning framework when it is published—I hope—shortly.
On Monday, the Housing and Local Government Minister told me and the House that the Government have no plans or wish to introduce rent controls in the private sector. Is the Deputy Prime Minister aware that the increase in private sector rents in central London and the capping of housing benefits means, in effect, that many families on benefit are being forced out, and that a process of social cleansing is going on? Will he give a commitment that the Government will examine the case for private sector rent controls?
As the hon. Gentleman knows, we accompanied the restraint on the housing benefit budget—there was a commitment in the Labour party manifesto to bring that part of the benefits system under control—with a major fund to deal with hard cases. We have also unveiled a number of measures that should lead to a significant increase in the building of affordable homes. The lack of supply of affordable homes is the underlying problem in London and elsewhere in the country.
Q9. Changes to child benefit will mean that a single-income family earning £43,000 a year, with one parent staying at home to care for the children, will subsidise a couple earning more than £80,000. Does the Deputy Prime Minister think that that is fair? (99621)
I think it is fair that someone who is earning far, far beyond the average should not be subsidised by, and receiving child benefit from, people on much lower incomes. The hon. Gentleman raises a perfectly valid point, which is that the cut-off point can create those anomalies and cliff edges—as he said, one earner on £43,000 will have their child benefit removed while two earners earning £80,000 will not. We have all said that we will look at a pragmatic way of implementing this in a sensitive manner.
The Deputy Prime Minister will be aware of the very serious incidents in my constituency involving three separate explosive devices planted since Friday, the most recent being adjacent to two local schools. Will he join me in condemning such reckless attacks, which bring misery to the community and place lives at risk, and will he assure the House that, in the absence of the International Monitoring Commission, the UK Government will continue to monitor closely any linkages between such activity and proscribed organisations?
I am sure I speak on behalf of the whole House in utterly condemning the cowardly pipe bomb attacks in east Belfast, which endangered the lives of all those in the surrounding areas, including those of young children attending school. It was totally reprehensible. I understand that all these attacks are now being investigated by the Police Service of Northern Ireland. There is no indication, at present, that these were terrorist attacks, and they therefore fall to the purview of the Northern Ireland Justice Minister.
Q10. The EU is currently consulting on changes to the rules governing state aid in assisted areas. The Government have shown commitment to northern Lincolnshire by establishing an enterprise zone to attract large businesses. The changes will restrict aid only to small and medium-sized enterprises. Will the Deputy Prime Minister assure me that the Government will fight these proposals and look for alternatives? (99622)
I am delighted that the enterprise zone in north Lincolnshire and the Humber area is now taking shape. It will be a huge boost, not least through investment from such major investors as Siemens in the renewable energy sector in that part of the world. I hear what the hon. Gentleman says about the European Commission reviewing how those rules will be applied for regional aid—from 2014 onwards, I think. We are extremely mindful that we do not want those rules to undermine the excellent work taking place in north Lincolnshire.
Q11. The Ministry of Justice announced today that it had given two new contracts, worth £30 million of public money, to A4e. This company has been under investigation by the police, the Department for Work and Pensions and the Public Accounts Committee, and since I have been raising concerns about it, I have received 40 or 50 e-mails from members of the public alleging fraud and bad practice. Are the Government going to continue handing out public money to A4e? (99623)
The hon. Lady raises a very serious issue. The police investigation into allegations of fraud at A4e concern contracts entered into by the previous Government. We have now launched our own audit of the existing contracts that A4e has received from government, and if there is any evidence of systematic abuse, of course we will end all contracts with A4e.
The six British servicemen killed in Afghanistan last week will be repatriated next Tuesday and include three of my constituents: Corporal Jake Hartley, Private Danny Wilford and Private Anthony Frampton. At this difficult time for the families, will the Deputy Prime Minister assure me, and my constituents, that everything is being done by the Government to support the families?
I know how strongly the hon. Gentleman must feel about this terrible accident, given that three of his constituents have, sadly, lost their lives. I know that the MOD and, I am sure, the Secretary of State would wish to confirm to him personally that they are doing absolutely everything possible in quite difficult circumstances to ensure that the bodies are returned to the families as soon as possible.
Q12. Has the Deputy Prime Minister considered the implications of the Treasury’s planned changes to the controlled foreign companies rules, which will incentivise multinationals having recourse to tax havens? Opening this new tax loophole is estimated to cost developing countries some £4 billion in fair and much-needed revenue and the Exchequer here £1 billion in fair and much-needed revenue. Will this perverse and invidious change be corrected in forthcoming Budget measures? (99624)
The hon. Gentleman raises an important issue. I have spoken to campaigners about this matter, and I know that ActionAid, for instance, has spoken to Treasury Ministers as well. Like all international tax matters, it is incredibly complicated once we get into the detail, but it is something that was not dealt with in the past 13 years and which we are now prepared to look into.
Will my right hon. Friend join me in welcoming today’s launch of the Government’s adoption action plan, which sets out how we can achieve more adoptions more quickly? Does he agree that making adoption work well everywhere should be the priority of all of us who have the interests of vulnerable people at heart?
I am sure that we speak on behalf of everyone in the House when we say that it is very frustrating for couples and parents who want to adopt children, and not good for the children concerned, when there are inordinate delays. That is why I think it is a very good thing that there seems to be a general consensus on the announcements made recently by the Secretary of State for Education and the Prime Minister to accelerate the adoption process to ensure that this will now indeed happen.
Q13. Is it right that when my constituent took her young daughter to A and E, she later received a letter from her GP saying that the visit was inappropriate and also reminding her of the cost? Is this going to be the future of the NHS under this Government, with vulnerable and elderly people scared to ask for treatment? (99625)
Of course not, and clearly that letter was issued under the current system. However, the hon. Gentleman touches on a serious issue that not only we in this country face, but every developed society faces, which is that we have health care systems that were not designed for a massively ageing population or for an increasingly large number of older people with long-term chronic conditions spending much, much longer in hospital than before. That is why we need to ensure that they are kept well and strong, so far as possible in their homes and in their communities. That is what this NHS Bill is all about.
Students at comprehensive school are just as likely to study A-level history as their private school counterparts, but are only half as likely to study maths or physics. What are the Government going to do about the social mobility issue that we face in the sciences, and does he support the proposed Sir Isaac Newton maths school in Norfolk to help to address this issue?
The hon. Lady highlights an incredibly important point. It is one of the reasons why the new English baccalaureate places great emphasis on those scientific disciplines; it is why we have protected the science budget, in order to send out a clear signal that we value sciences; and it is why we have placed such an emphasis on STEM subjects—science, technology, engineering and maths—because we need more youngsters, particularly those from disadvantaged backgrounds, taking up maths and science courses for our collective future and the country as a whole.
Q15. The Deputy Prime Minister says that the Health and Social Care Bill would be going through unamended without the Liberal Democrats, but will he listen to people up and down the country who know the real truth: that the Tories would not be getting their shambolic Bill at all without him and his MPs propping them up? (99627)
Motion for leave to bring in a Bill (Standing Order No. 23)
I beg to move,
That leave be given to bring in a Bill to require large food retailers and large food manufacturers to take steps to reduce food waste and donate surplus food to charities for redistribution and, where food is unfit for human consumption, to make it available for livestock feed in preference over disposal; to encourage and incentivise all other businesses and public bodies which generate food waste to donate a greater proportion of their surplus for redistribution; to protect from civil and criminal liability food donors and recipient agencies where food has been donated in good faith; and for connected purposes.
This Bill is backed by Friends of the Earth, WWF UK, FareShare, FoodCycle and Feeding the 5,000, as well as the chef Lorraine Pascale and many others who have expressed their support over the past few days. People have been shocked to hear of the absolutely scandalous levels of food waste in this country and they want Parliament to act. Many MPs have been visiting food banks in their constituencies recently to see the excellent, although sadly necessary work that they do, and we had a well-attended debate on food poverty in this Chamber a month or two ago.
Now is not the time to debate why so many people are having to turn to food banks to feed themselves and their families. These are tough economic times, food prices are rising at above the rate of inflation, and many people are struggling to make ends meet. The charity FareShare is feeding 35,500 people a day, which involves 8.6 million meals a year. It is supplying 67 food banks and other outlets across Bristol alone. Many other organisations are doing the same or similar work, including the Trussell Trust, which has 170 food banks and predicts that up to 500,000 people will rely on food banks by 2015, and FoodCycle, which gets volunteers to run community cafés providing good-quality nutritious meals at low cost or at no cost to anyone who wants to drop by. Those organisations would be able to do much more of that great work if more food were made available to them. At the moment, however, about 50% of edible, healthy food across the EU that could be eaten is not being eaten. Globally, 1 billion people could be lifted out of malnourishment with less than a quarter of the food that is wasted in the US, the UK and Europe.
The Bill is not just about tackling food poverty. By creating unnecessary demand, waste drives up food prices and the surplus puts pressure on scarce land and resources, contributes to deforestation and needlessly adds to global greenhouse emissions. In fact, 10% of rich countries’ greenhouse gas emissions come from growing food that is never eaten. The water used globally to irrigate wasted food would be enough to meet the domestic needs of 9 billion people—the number expected on the planet by 2050.
Government policy has to date focused on slightly environmentally better methods of disposal, such as anaerobic digestion and composting, ahead of landfill. However, there is no Government incentive for diverting surplus food from disposal to levels higher up the food waste pyramid such as human consumption and, when it is unfit for human consumption, livestock feed. Only action such as that could properly justify the carbon footprint created in making that food.
I am well aware that about half of all food waste is down to householders, but that sector is starting to achieve steady reductions, with a 13% reduction over the past three years. Supermarkets and manufacturers have played a role in supporting that reduction. For example, Warburton’s has removed “display until” dates from its bread, and Asda has introduced resealable salad bags.
There is also a significant food waste problem at the start of the food supply chain. Inequitable business tactics employed by some supermarkets, such as obliging their suppliers to accept the risk on unsold food, are due to be addressed by the much-delayed groceries code adjudicator Bill. I very much hope that that Bill will be included in the next Queen’s Speech, and that the adjudicator will be given the teeth that it needs to be effective.
I am by no means saying that retailers and manufacturers are totally to blame, but they do waste a staggering 3.6 million tonnes of food per annum. Reasons for that include over-production caused by inaccurate forecasting; labelling errors and barcode problems; a few damaged items resulting in a whole tray of goods being rejected; and expired promotional campaigns and seasonal offers. For example, any products carrying Olympics promotional offers will be dumped as soon as the games are over.
It is important to note that the main problem is not the so-called back-of-the-store waste—that is, the unsold food that is put into skips at the end of the day. By far the bigger problem is food that never makes it on to the supermarket shelves in the first place—the food that never even leaves the distribution centre. I have been told of one premium brand of breakfast cereal, for example, that is not put on the shelves if it has less than six months to run till its sell-by date. If the supermarket does not need to bring it from the distribution centre before then, it is wasted even though it would be edible for at least six months and probably a lot longer.
The food industry’s progress under the phase 2 of the Courtauld agreement is slow. The agreement set a relatively unambitious target of a 5% reduction in product and packaging waste in the grocery supply chain by the end of this year. This already compares badly with the equivalent Norwegian and Dutch targets of 25% and 20%. Despite the low hurdle, the work of the Waste and Resources Action Programme—WRAP—and the expenditure of millions of pounds of public money to subsidise big business’s waste-reduction efforts, the UK’s performance has been described by Tristram Stuart, the author of “Waste: uncovering the global food scandal” as “spectacularly dismal”. Businesses have cut their food waste by a mere 0.4% in the first year. Unfortunately, we see only the figures published for the sector as a whole, but I know that some companies are doing considerably better than others, showing that where there is a will, there is a way. As it stands, it is estimated that only 1% to 3% of the food that retailers could give to charities is actually donated, and that the percentage from food manufacturers is even smaller.
To turn to the detail, the Bill has three main provisions. In 1996, a law was introduced in the USA—the Bill Emerson Good Samaritans Food Donation Act, which has been replicated in every state in Australia. It protects good-faith donors and recipients such as food banks from civil and criminal liability. This has made a huge difference to the willingness of donors to donate food, as we heard yesterday at this Bill’s parliamentary launch from Jim Larson of Food Donation Connection. He works in the US with companies such as Starbucks, KFC and Pizza Hut, arranging for their unsold food to be frozen and passed on to hostels, shelters and other charities. He said that the lack of liability protection was a
“recurring theme in his discussions”
with UK branches of US food companies, which cited this as their main barrier to donating. Exempting companies from liability in the USA has led to a surge in food donation.
I was grateful to the Department for Environment, Food and Rural Affairs Minister in the House of Lords for attending my launch yesterday and, as a consequence of what he heard, for asking his officials to meet Jim Larson this morning. I gather it was a very successful meeting, and I must stress that this legislation imposes no burden at all on businesses—on the contrary, it frees them from liability.
The Bill calls for large retailers and manufacturers to be required to donate more of their surplus food to charities, and for Government to encourage all other businesses and public bodies that generate food waste to do the same. It basically enshrines in law the waste hierarchy that will have to be implemented by all businesses and public bodies by the end of 2013 under the latest EU waste framework directive. This ranks measures according to their environmental impact, giving the first priority to preventing waste from occurring in the first place, but stipulates that when surplus does arise, the next priority should be feeding humans, then livestock feed, and so on, on to disposal methods such as anaerobic digestion, composting and, worse of all, landfill.
As I said, my Bill would apply to public bodies, too, encouraging them to reduce and redistribute food waste. The Houses of Parliament are, I am told, one of the biggest catering outlets in the country. Answers to parliamentary questions have revealed that a huge amount of food—of course, that also means money—is wasted here. I will be trying to persuade both Houses to sign up to an agreement for the hospitality sector, managed by the Waste and Resources Action Programme, as many Government Departments, perhaps all, have now done. I have an offer from the Sustainable Restaurant Association, which is prepared to carry out a food audit of Parliament’s catering services and to see how waste can be reduced or redistributed. We need to put our own House in order if we want others to do so, too.
This is a Bill whose time has come. In tough times when people are struggling to make ends meet and to put food on the table, the waste and profligacy in the food supply chain seem ever more obscene. I am gratified to see the number of people who have turned up to support this Bill today, and I hope that we can achieve a cross-party consensus and take these measures forward.
It is with a degree of regret that I want to oppose the Bill—not the whole Bill, just a tiny bit of it. With all the good will intended in my speech, I hope to draw the hon. Lady’s attention to my concern.
May I first congratulate the hon. Lady, as she absolutely right that too much food is wasted and that many things could be done to ensure that more food is utilised rather than wasted. I was particularly disappointed when Open Door in St Albans lost the food that had been available from Marks & Spencer because of the very worry to which the hon. Lady has referred—that it would face liability if something went wrong. That was a real wasted resource.
The problem that I hope can be addressed as the Bill makes progress—in some ways, I hope it does; I am worried about only a tiny bit of it—is the provision that refers to
“food…unfit for human consumption”
“available for livestock feed in preference over disposal”.
I am completely sympathetic to the aims behind that, but I remind the hon. Lady that in June 1988, the Government banned the use of mammalian products in feeds destined for ruminants. She might remember that, unfortunately, Creutzfeldt-Jakob disease was contributed to by the prion that existed when mammalian products were put into the feed of ruminants. The disease’s spread was not stopped and, in March 1996, the Government banned the use of all flesh in the feeds for domestic animals because the prion linked to CJD lived through the processing of the two products.
I ask the hon. Lady—I am sure everyone is hugely sympathetic to what she wants to achieve with the Bill—whether she could tweak the wording so that there is no obligation to make all food waste available for animal feed. I hope that that would stop any future recurrence of inappropriate foods being fed to livestock and diseases potentially crossing the species divide.
That is my only objection to the Bill, and I congratulate the hon. Lady on presenting it. I am one of the old school who look at an apple and, if it is not wrinkly with a few things growing out of the top of it, will happily eat it regardless of the date on the label. My children look at the top of a yoghurt pot and say, “Oh mum, that was due to be thrown out yesterday,” but the hon. Lady is absolutely right: we have moved too far down the road of throwing away perfectly good, edible food. Years ago, people would use common sense to determine whether food was still edible.
My concern relates only to the small part of the Bill that requires all food products to be available for processing. If that could be tweaked, I would withdraw my objection.
Question put and agreed to.
That Kerry McCarthy, Luciana Berger, Robert Flello, Andrew George, Zac Goldsmith, Kate Green, Caroline Lucas, Dame Joan Ruddock, Laura Sandys, Henry Smith, Joan Walley and Dr Alan Whitehead present the Bill.
Kerry McCarthy accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 27 April 2012, and to be printed (Bill 318).
On a point of order, Mr Deputy Speaker. I do not know whether you have seen this morning’s edition of The Times, but it states:
“The Chancellor will announce details in the Budget next week to borrow money cheaply”
from international monetary funds.
This is a very serious matter. It appears that there has been a leak from the Treasury a week before the Budget. Have you, Mr Deputy Speaker, received any indication from the Chancellor that he intends to come to the House immediately to make a statement on these issues? They relate to the bond markets, and they have a market impact. It is clear that information relating to next week’s Budget has been leaked directly from the Treasury. When we raise issues and questions about fiscal matters in the House, we are told by Treasury Ministers and others that we must wait for the Budget. Is it not time that Ministers did the same?
On a point of order, Mr Deputy Speaker. This morning news emerged that water cannon and CS gas are apparently to be available to police forces in London and, indeed, other parts of the country. Have you received any intimation that such a major change in policing tactics is indeed being contemplated, and that a Home Office Minister wishes to come and make a statement to the House?
Business without Debate
Motion made, and Question put forthwith (Standing Order No. 118(6)),
That the draft Localism Act 2011 (Consequential Amendments) Order 2012, which was laid before this House on 9 February, be approved.—(Mr Newmark .)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
That the draft Parish Councils (General Power of Competence) (Prescribed Conditions) Order 2012, which was laid before this House on 9 February, be approved.—( Mr Newmark.)
Question agreed to.
Water Industry (Financial Assistance) Bill
Considered in Committee
[Mr Lindsay Hoyle in the Chair]
Financial assistance to reduce charges
I beg to move amendment 1, page 2, line 2, at end insert—
(a) In exercising the power under subsection (3) the Secretary of State may make an order containing a scheme for the provision of financial assistance to customers whom the Secretary of State considers are disproportionately adversely affected by the water charges with a view to reducing the impact of those water charges.
(b) The scheme shall—
(i) specify the customers whose charges are covered by the scheme,
(ii) set out the basis of the adjustment of the charges, and
(iii) specify the duration of the adjustment.
(c) An order shall not be made under this section unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.’.
With this it will be convenient to discuss the following:
New clause 1—Water company social tariffs—
‘(1) The Secretary of State shall provide in regulations for the introduction of minimum standards for water company social tariffs, by 1 April 2013.
(2) Regulations made under subsection (1) above shall be made by statutory instrument and may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.
(3) Ofwat shall publish 12 months after the passing of this Act and every year thereafter a league table of water companies reporting the performance of the provision of social tariffs and the number of households spending more than 3 per cent. and more than 5 per cent. of their disposable income on water bills.’.
Both the amendment and the new clause deal with the issue of water affordability for customers, but they do so in two different ways. Although I feel certain that a man as reasonable as the Minister will want to accept both improvements to the Bill, I should add that I intend to press them to a vote if necessary.
We made clear on Second Reading that, as a responsible Opposition, we would not seek to frustrate the will of the Government in legislating for a reduction in customer bills throughout the south-west. We accept that Government action should be taken to ensure that water remains affordable for South West Water customers following the botched privatisation of the early 1990s. We all benefit from the “national treasure” status of Cornwall and Devon’s spectacular coastline, just as—this was pointed out by the hon. Member for St Ives (Andrew George) on Second Reading—we benefit from London’s incredible museums, which are also supported by Government action.
I pay tribute to Members in all parts of the House who, over a period of years, have sought to correct this historic injustice. Our work in government in commissioning Anna Walker to look at the problem of water affordability in the south-west has been coupled with action by the present Government in legislating for payments to be made. Let me make it clear to all Members that we support Government action to reduce customer bills in the south-west.
Amendment 1 is not in any way a wrecking amendment. It seeks to improve the legislation by providing for proper parliamentary oversight of the wide-ranging powers in clause 1, which—let me be honest—I suspect are intended not to involve the Secretary of State in some kind of land grab, but to avoid the Bill being classified as something other than a money Bill. I can reassure south-west Members that if the amendment were adopted, we would not use the additional scrutiny for which it provides to frustrate the will of the House. Its inclusion would, however, serve as an entirely proper safeguard to prevent the Secretary of State, or her successors, from abusing the powers given to her and extending financial inducements in any way for any reason.
Amendment 1 would ensure that the Secretary of State makes an order when she wishes to exercise the power in clause 1 to give financial assistance to a water and sewerage company in order to secure a reduction in household bills. The amendment requires the scheme contained in her order to
“specify the customers whose charges are covered by the scheme”,
so that there is clarity about the households who will benefit from a reduction. It requires the scheme to set out the basis for the reduction in charges, so that everyone understands why the reduction is being made in the first place and to ensure that the Government’s logic is tested and sound. Crucially, it requires the scheme to
“specify the duration of the adjustment”,
so that this Parliament does not write blank cheques, and so that the most cost-effective option can be considered over an appropriate length of time.
In short, the Government will be required to answer the questions that need to be answered if effective parliamentary oversight is to be exercised. We feel that that is especially important given that the Secretary of State can give the assistance in any form whatsoever, including grants, loans and guarantees, and given that, because this is a money Bill, it will receive just one day of scrutiny in the other place.
We believe that when the Secretary of State wishes to use the powers granted by the Bill in the future, the least she can do is lay out her argument before a representative Committee of the House. I say that for one simple reason. As new clause 1 makes clear, there are numerous, increasing and varied threats to affordable water, and as the Government’s own water White Paper makes clear, our climate is changing, which has profound implications for the scarcity of water. New infrastructure may be required to supply fresh water, while—as the Government have also made clear—complying with higher standards for waste water will require expensive construction projects such as the Thames tunnel. More regions will seek to make a similar case to that of the south-west, and now that the principle has been established by the Government’s actions, we require a mechanism to test the logic of successor Secretaries of State.
Let me give an example. According to yesterday’s Evening Standard,
“The boss of Thames Water today warned that bills will have to rise to pay for new pipes and reservoirs if customers are to avoid more hosepipe bans in future.
Chief executive Martin Baggs, who announced yesterday that the first hosepipe ban in six years will come into force on April 5, said Thames was ‘living on the past’ and needed to step up levels of investment.
He told the Standard: ‘The last two years have been exceptionally dry and there needs to be flexibility in the system to deal with that.
The flexibility needs to come from one of two directions: it means people must use less water during those extreme conditions or we have got to have extra resources so people don’t have to have those restrictions.’
Mr Baggs wants clearance from the regulator Ofwat to step up investment when the company negotiates its next five-year funding plan from 2015.
London water bills are already set to go up by an inflation-busting 6.7 per cent next month to an average of £339 per household.”
We therefore know that the south and east of our country in particular will require additional investment, putting strain on household budgets. What is a future Secretary of State to do now that the principle in respect of giving taxpayer assistance to regions that are struggling to pay their water bills has been breached and after the power in this Bill has been enacted? We are pondering what might happen under a benevolent dictator, but let us suppose for a few moments—I am sure it will be hard for you to conceive of this, Mr Hoyle—that a successor Secretary of State, or even the current one, decided to use the power to reduce bills in an election year. Indeed, this year’s mayoral election in London might serve as a good example in this regard. We believe that the least the Secretary of State can do is come to a Committee Room of this House and demonstrate that she has worked through the pertinent issues.
The amendment is defective in that there would be regulatory implications in respect of Ofwat, but they have not been considered. Indeed, I am struggling to understand why we need this amendment at all, given the current text of clause 1.
The purpose of the amendment is to ensure that when the power under clause 1 is triggered, there is proper parliamentary accountability and oversight at the time of making any reductions. The hon. Lady mentions the regulatory regime. It would not be particularly affected under clause 1 as it currently stands. Ofwat’s role will be to see the money coming in and the money going out. This amendment would not change that situation at all, except that we in this House would have the opportunity to examine any scheme that is to be established and to have answers to any questions we might have: namely, how long, for which customers and for what duration.
As I have said, we agree with the proposals to give financial relief to the south-west from April 2013. Indeed, we examined this issue when in government and laid the groundwork for helping 700,000 households in the region. We therefore accept the argument that the south-west requires additional help to keep water affordable, but stopping there misses the point.
The south-west has the highest bills in the country and about 200,000 people are under water stress. In the Thames region, that number is 1.1 million, however. Our new clause 1 therefore starts with the simple proposition that by April 2013—the month when financial assistance will start flowing to Devon and Cornwall—the Secretary of State should bring forward minimum standards for a company social tariff. We think that is not too much to ask.
The numbers speak for themselves. As I established on Second Reading, 400,000 households in Wales, 460,000 households in Yorkshire, 780,000 households in the Severn Trent region and 1.1 million households in the Thames region pay more than 3% of their disposable income on water. The squeeze on living standards is real. This Government’s actions are contributing to high inflation and pressure on family budgets. The rise in VAT has pushed up the price of petrol, and the cost of child care is going up at twice the rate of wages, just as the Government cut that element of the working tax credit. Families with children who cannot raise their working hours from 16 to 24 could find themselves almost £3,000 worse off from next month. Energy prices have risen, while for many people pay has been frozen.
The crunch will be felt first and worst by low and middle-income families, particularly those with children. A single-earner couple household with kids that is earning £44,000 might sound well-off—and, indeed, in comparison to many, it is—but it will be hit hard by the £1,750 a year that it will lose overnight when child benefit is scrapped.
I am intrigued that the hon. Gentleman wants to have a debate about tax credits, as we recently had a vote on such issues. Is he going to mention the fact that this Government are delivering free nursery places for the most disadvantaged two-year-olds, and that increasing numbers of children will be covered by that in the course of this Parliament?
I will not test your patience, Mr Hoyle, by continuing that debate. The hon. Gentleman puts his case on the record, but one of the key arguments in respect of new clause 1 is the squeeze on family living standards. We believe it would be wrong to park that argument in a different silo from the rising costs of water bills.
People are facing falling living standards, frozen wages and rising water bills. Our amendment would ensure that the power to introduce a company social tariff—a power that we legislated for when in government—is followed by Government action to ensure that these schemes are effective at making water affordable for those who are struggling to pay. Under the current Government’s plans, the design of any social tariff is entirely in the hands of each of our 20 or so water companies. Apart from WaterSure, there will be no national tariff, and there will be no national branding of water affordability schemes. Outside the south-west, there will be no new Government money to help those who cannot pay.
Under this Government’s plans, it is even down to the individual companies to decide whether to introduce a social tariff scheme at all. Although we believe the industry and Government should be working towards a national affordability solution, the first part of new clause 1 would require the Secretary of State to bring forward plans for minimum standards for water company social tariffs.
The second part is just as important. We know that if we cannot measure it, we cannot manage it. Therefore, water companies should be held to account by ensuring a league table is published each and every year reporting on the performance of company social tariffs. In the energy sector, Ofgem sets parameters for what can be included by suppliers as part of their spend on social initiatives, and it annually monitors suppliers’ progress against the voluntary commitment. A handful of water companies already have good social tariff schemes, but we want to raise the bar for all companies to the standards of the rest of the industry, both by requiring the Secretary of State to have minimum standards approved by Parliament, and by the monitoring and reporting of all companies, shaming those poor performers into action. By also requiring the number of households spending more than 3% and 5% of their disposable income on water to be published, we can monitor the scale of the affordability problem and make meaningful comparisons between companies.
Our amendment 1 and new clause 1 are attempts to improve the Bill. We welcome the money for the south-west, but stopping there misses the point. People’s ability to pay for something as basic as water should not be subject to a postcode lottery. This issue is at the heart of shaping a socially responsible water industry in the years to come. I hope the Minister will accept the amendments.
I followed the arguments of the hon. Member for Luton South (Gavin Shuker) very closely, and I went along with a great deal of what he had to say, particularly his congratulations to the Minister and the Government on introducing what is a very timely Bill. I think I understand the spirit in which the Opposition amendments have been tabled. The Front-Bench colleague of the hon. Member for Luton South, the hon. Member for Ogmore (Huw Irranca-Davies), is present, and he will recall that we spent many—happy—hours scrutinising the provisions that were to become the Flood and Water Management Act 2010. That Bill was fairly good, but it was improved as we went along—although we did not have sufficient time to address many of its measures, of course.
That Act gives enormous order-making powers to the Secretary of State, and I would be interested to learn from the Minister why the Government have chosen not to draft a parliamentary order in respect of interested parties on this occasion. For the record, a number of hon. Friends—I hope I may call them that—on both sides of the House would normally be discussing the business of the Select Committee on Environment, Food and Rural Affairs, but we deem this debate so important that we thought it was our priority to be here to discuss the Bill and these amendments. Obviously, I am entirely at one with the Government, given that we have worked so hard under successive Governments to come up with a novel means of helping people with water bills in the south-west, but it would be helpful to know why clause 1 made no provision for parliamentary scrutiny. I, therefore, have some sympathy with what the hon. Member for Luton South and his colleagues have proposed.
Amendment 1 and, even more so, new clause 1, on social tariffs, raise the question of why the hon. Member for Ogmore and the previous Labour Administration did not introduce social tariffs as part of the 2010 Act. In addition, why were they not minded to introduce amendments at this stage to deal with bad debt, an issue that is exercising water companies? The Select Committee took evidence just last week on the water bills that the average household is having to pay because of the position on bad debt.
The hon. Lady is making her points clearly, and I welcome the spirit in which she makes them. We have accepted the timetabling for this short Bill, which will go through quickly. We have been promised a comprehensive water Bill and if we had more time, we would have much to say about bad debt and we would look favourably on any amendments seeking to deal with it. Unfortunately, such amendments have not been tabled for today.
I am grateful to the hon. Gentleman for those remarks. I hope that the Minister will confirm that the draft water Bill will contain provisions on social tariffs and tackling bad debt—I do not know whether there is any more recent news as to when it may be published.
The hon. Gentleman also referred to the Anna Walker report and water efficiency measures. Again, I wonder why he did not include any more detailed provisions on water efficiency measures in his amendment. I also wonder what the Minister and the Government are thinking on such measures, given that we are on the brink of the worst drought for at least 40 years. Anna Walker proposed some imaginative measures that households and businesses could take, and it is disappointing that they were not elaborated upon to a greater extent in the natural environment White Paper or the water White Paper. It would be helpful to know the Minister’s thinking on that. A lot of unfinished business on the 2010 Act could have found its way into this small Bill, but we await confirmation that such things will be dealt with in the wider and more comprehensive draft water Bill.
On new clause 1, I am not sure that I entirely followed the hon. Gentleman’s thinking on minimum standards for water company social tariffs. In what regard are these to be “minimum standards”? Are they to be minimum standards for comparative purposes or will they govern how the social tariffs would apply?
I understand the hon. Lady’s confusion on this point. A number of options are available to us in terms of amending the Bill. We felt that the most appropriate route to go down was to allow companies discretion on whether or not to introduce a company social tariff, but to ensure that, at the very least, any such tariff met minimum standards set by the Secretary of State and approved by this House. At the moment, we are at the lowest rung of all the possible interventions and we simply seek to move things up one, in the hope of getting towards a national affordability solution.
I am most grateful for that clarification. It would be interesting to know the background to the amendment and, in particular, to new clause 1. It would be helpful to know what discussions took place and what level of support the hon. Gentleman has from water companies and from Ofwat.
I did not have the opportunity to discuss this matter on Second Reading. It is appropriate to examine new clause 1 and amendment 1, as I have a concern and I am trying to help the Minister. A helpful Library note spells out clearly:
“The Government intends that bills be reduced from April 2013. The funding will come from the HM Treasury Reserve until the end of the spending review period in 2014-15. After that time funding will come from the Department for Environment, Food and Rural Affairs…budget.”
I understand that that was confirmed in a House of Commons debate in January.
“The payment will continue until ‘at least the end of the next spending review period’.”
So my question is: from which part of the Department’s budget is this funding going to come from 2014-15 until, presumably, 2019-20?
I must make a general remark about departmental budgets, and I do not think that the Department for Environment, Food and Rural Affairs is any different in this regard. We had the opportunity to question the Secretary of State on the annual report, in its new revised format, and the annual accounts. I think that there is a lack of transparency and clarity in all the departmental accounts—I do not single DEFRA out. I am deeply concerned about the position for those in the south-west whose water bills will or could benefit from this Bill, and for those in other areas who could benefit subsequently, as highlighted in amendment 1 and new clause 1. My real concern relates to how this will be funded in the next spending review period, given that we have not yet worked through all the savings in the budgets of the Department and other agencies, such as the Environment Agency. I am prepared to give any assistance I can in arguing with the Treasury that this money should be ring-fenced. Obviously, there is real concern that if it is not ring-fenced or if additional money cannot be found, other parts of the budget currently being spent on farming or flood defence will simply be hijacked for this purpose.
With those remarks, I welcome the opportunity to have this debate and to understand a little more about the thinking behind these proposals. However, I shall have to disappoint the hon. Member for Luton South by telling him that I will not be following him into the Lobby.
It is a pleasure to serve under your chairmanship, Mr Hoyle. I follow the hon. Member for Thirsk and Malton (Miss McIntosh), whom I customarily refer to as “Madam Chairman” in the Select Committee. Obviously, it is a delight still to be considering this Bill. We are doing so rapidly, in order to make progress and get it on the statute book, so that it can start delivering fairness for my constituents and those of other Members across Devon and Cornwall, and so that we can start putting in place the framework for the necessary works here in our capital.
Although the amendment and the new clause proposed by the hon. Member for Luton South (Gavin Shuker) present a number of opportunities for discussion, they will not necessarily take us that much further forward. The amendment makes a reasonable point: if in future the Secretary of State or any other Secretary of State wishes to use the enabling powers of the Bill to make a difference to another part of the country that seems to have been disadvantaged, that should be explained to the House. I would have thought that it would be extraordinary, however, for such a thing to happen without a great deal of public debate or decades of campaigning, such as that which we have experienced in Devon and Cornwall. Perhaps other parts of the country might have such a keen hold on the Secretary of State or any future Secretary of State that they could get it all pushed through within a matter of weeks, but I suspect that that would not be the case. The Treasury would want to know very plainly and in great detail why the money was required and why it was felt to be a priority.
From a south-west perspective, the money we are getting is clearly welcome. As the hon. Gentleman has mentioned, other parts of the country might have demands, and given drought measures and so on, there might be reservoirs or other very large schemes in small areas that might impinge on us as our water bill payers could be asked to pay towards the costs. That would not be unreasonable, as we are expecting the payment to go the other way. Does the hon. Gentleman share my concern that, as the hon. Member for Thirsk and Malton (Miss McIntosh) mentioned, the money is not ring-fenced and how it is spent in future will be at the discretion of the Secretary of State?
The hon. Lady is referring to the money identified for the south-west, and the worry that it might, to use a watery phrase, be diluted and spread out across the country. I suspect that that could potentially happen, but I know that the coalition Government are absolutely committed to seeing this provision through for the people of Devon and Cornwall. Who knows what might happen under a future Government? I hope that they would take the plight of our water bill payers equally seriously and continue that level of support. The hon. Lady makes an interesting point.
As I understand it, the amendment seeks to ensure that if a Government wished to offer such support to further areas, a statutory instrument would have to be tabled and debated. I find it hard to believe that any Government would consider doing such a thing without a debate not only in this place but out in the country at large and, I am sure, a debate in the Treasury too, which would have to be conducted publicly as well as privately. I know that that has been the case with the programme we now have for Devon and Cornwall. Although I accept the logic of what the hon. Member for Luton South said, I will wait to hear what the Minister has to say in reply before I decide what approach to take. Naturally, I want to support the Government—as I would on every occasion, but particularly as regards the provisions in this Bill.
The new clause concerns social tariffs and the next steps that we might want to take to help people who are under water stress, which, as the hon. Gentleman pointed out, will still be a significant problem for people in the south-west after the support set out in the Bill is delivered. Of course, water stress is also a worsening problem in other parts of the country.
I am delighted to see that the hon. Member for Wakefield (Mary Creagh) is in her place. On Second Reading, when we debated this subject, I intervened on her and made the point that any social tariff within a water company area presents problems as well as opportunities. If there is to be a social tariff at a significant level for those experiencing the worst problems in an area such as the south-west, despite the fact that many people will benefit we must be aware that within an area with a small population, a huge amount of the funding for the tariff will be provided by people just above the qualification threshold. I am very worried that in-region social tariffs will be unable to deal with the problem. When the hon. Lady set out where she would like the Bill to be improved, she said that she would do something about national water tariffs. It is a shame that we do not have such a provision and Devon and Cornwall MPs have put the matter before the Government. I understand that there are issues with the Treasury’s response, as that might be regarded as a tax, but we must consider how we can address that situation.
I do not see how a league table will help, however. Indeed, it might mean that water companies were under pressure to introduce the tables in such a way that it might disadvantage those people about whom I was talking—those just above the threshold who will not benefit from the tariff but whose water bills will increase to pay for their hard-pressed neighbours.
My hon. Friend is making a very good point. At the risk of delaying the process of the Bill through the further elaboration on the amendments, does my hon. Friend agree that the best way of addressing the issue would be to seek the assurance of the Minister that the issue will be addressed in the forthcoming water Bill as quickly as possible after the Queen’s Speech?
I want to reply to the hon. Gentleman’s point about league tables. The idea came from Ofwat and is meant to ensure that there is transparent information for customers, shareholders and the Government so that they understand who is levelling the tariffs, where they are going and where the money is going. That was Ofwat’s idea and I cannot claim any credit for it, much as I would like to.
The hon. Lady is very generous in ascribing the idea to Ofwat. I suspect that Ofwat could probably do that anyway and would not need legislation; if it wanted to publish a league table, it could get the information. Ofwat would have information from companies about where the money was coming from and where it was going and could publish it without that needing to be on the face of the Bill.
I thank Madam Chairman—my hon. Friend—for putting that on the record. I am delighted that the Opposition Front Benchers support what the Bill seeks to do for bill payers in Devon and Cornwall and that they have chosen not to oppose it in any way. I do not think that the case is proven that either amendment 1 or new clause 1 will make a huge difference or improve the Bill significantly, but they do touch on two areas that I hope the Minister will address.
I apologise, Mr Hoyle, for being a little slow in standing to indicate my intention to speak. You can take it that I was confused about which clauses were being debated at which time.
I want to speak briefly about new clause 1 and, in particular, to press the point of a national social tariff. In the north-west, the affordability of water is affected by deprivation. Unlike the south-west, it is not affected by geographical issues or expenditure. We are a region with considerable difficulties and the bills of United Utilities, which is the north-west water company, are close to the national average, but income deprivation is worse than in any other region. More than half of the country’s most deprived communities are in the north-west, even though we have only 13% of England’s population. Ofwat’s analysis shows that once households in the South West Water region receive their proposed £50 bill reduction, affordability problems will be more severe in the north-west than in the south-west. Company social tariffs will not solve the problem, however, as too many customers in the north-west are in financial need to make the in-house cross-subsidy work properly. We therefore need a national social tariff scheme that all water companies would pay into. Taking the hands-off approach of leaving it to water companies to provide their own affordability schemes, and certainly giving them the choice of whether or not to provide it, will not help the people who are most in need in Bolton West.
There is no definition of water poverty, but if someone is paying 5% or even 3% of their income on their water bill, they are pretty poor. Some 840,000 households in the north-west spend 3% of their income on water, and 370,000 households spend more than 5% of their net income on water. It is United Utilities that is telling me that company social tariffs will not work in the north-west; we therefore need national action on social tariffs. Water debt is just part of the problem facing so many low-paid people. In my constituency, people are dependent on food handouts, are losing their homes and are unable to heat their homes or pay their water bills. Very poor people are paying the price for global economic failure. Let me finish by asking a few questions. Will a water Bill be announced in the Queen’s Speech and will we see action on this in the next Session of Parliament? If not, will the Government do something about a national social tariff?
As Members know full well, the only purpose for which we currently plan to exercise the power in clause 1 is to reduce the charges on household customers in the South West Water area. We have recognised that the circumstances in the south-west are exceptional and we will be addressing that unfairness. I am grateful to Opposition Members for bringing forward the amendments because they allow us to explain a little more clearly what we are trying to achieve in this part of the Bill.
Our policy has been set out clearly both in the water White Paper and by the Chancellor in the autumn statement. We will fund South West Water to reduce its customers’ bills by £50 a year from April 2013 and we have committed to do that until the end of the next spending review period. To answer the question that my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) asked, yes, from then it will be for the next comprehensive spending review period to negotiate this out of the Department for Environment, Food and Rural Affairs’ budget, but that certainly does not imply cuts across other vital parts of its budget. I assure her that this is an absolute priority. It has been hard-fought for by hon. Members from across the south-west, and there is an absolute commitment from the Government to continue the important work to address an unfairness that we recognise.
As hon. Members from the south-west will testify, this support for customers in the south-west is the result of their long campaign. They have fought hard for this and the problem of high water bills in the region has been raised many times in the House. I am proud that the Government are making progress on this issue but I am a little disappointed that the Opposition wish, through amendment 1, to force a further round of discussion on the merits of reducing bills in the south-west before we can move forward. Let me explain why. The Chancellor’s Budget or autumn statement is the appropriate place for setting out Government spending plans and for doing so within the broader economic context in which such decisions are made. It is inappropriate to micro-manage the economy through individual statutory instruments committing future Government spend. The Government make many decisions on spending and Parliament does not examine each one in detail through a process involving the laying of statutory instruments. However, the opportunity for parliamentary scrutiny does exist. DEFRA spending is subject to scrutiny by the excellent Environment, Food and Rural Affairs Committee and, if so wished, by the Public Accounts Committee. Government spending is also subject to the usual supply and estimates procedures with which we are all familiar. If the Government decided to use this power to provide further support, I would fully expect Members to scrutinise the case and to ensure that assistance was given only where and for as long as it was right to do so.
I draw to the attention of the hon. Member for Luton South (Gavin Shuker) the fact that new section 154A(1) within clause 1 focuses on an “English undertaker” and a “licensed water supplier”. We have to accept that there is not a lot of money floating around in Government at the moment—I am sure he recognises that—and so the idea that the Government are going to start sloshing money around freely without any public debate is absolutely ridiculous. One must also accept that that would be the case in future. We do not know what the future holds, but we want future Secretaries of State to be able to use the power where genuinely necessary. We therefore do not think the amendment is necessary. The Government are not going to start doling out money to water companies on a whim. We are using this power this time after years of debate, but it is unimaginable that any future use of the power would not attract the same level of debate.
In a similar vein, new clause 1 would threaten the action we are taking to deal with wider affordability problems. I point out that we will have the opportunity to develop the House’s thinking on this with the water Bill. I know that the Bill is eagerly sought by Members on both sides to take forward many of the issues we set out in the White Paper, which have been the subject of past reports to the Government. The Government have given a clear commitment that the Bill will be available for proper and full pre-legislative scrutiny and I hope that we will be able to publish it soon. Whether or not it is in the Queen’s Speech is not a matter for me.
The hon. Lady will understand that I am not privy to what is in the Queen’s Speech. I very much want a water Bill as soon as possible, but we have given a commitment that the Bill will be available for pre-legislative scrutiny, and that is not something that happens overnight—it requires a process and it would be tight to get in the full level of pre-legislative scrutiny and a Bill in the next Session. However, I accept her point that it is needed by many people as quickly as possible.
We know that some households in the south-west and other regions—let me reiterate that other regions are also affected—struggle with their water and sewerage charges. We will soon be issuing guidance that will allow for the development of company social tariffs. Water companies will be able to reduce the charges of customers who would otherwise have difficulty paying in full. In consultation with their customers, companies will decide who needs help in their area and then design local solutions to address local circumstances. Water companies know their customers and local circumstances. Companies vary in size and customer base, and average bills also vary from company to company. On Second Reading, Members spoke about the different kinds of affordability problems faced by their constituents. They also recognised that in some parts of the country there might be less scope than in others for customers to cross-subsidise others in the region. I urge hon. Members to consider the Cholderton company, which serves only about 2,000 people. The difficulty of having a nationally mandated tariff that would apply to that company as well as to Thames Water, which has several million customers, accentuates the problem.
Imposing one-size-fits-all standards, as new clause 1 would require, on companies that decide to develop social tariffs would prevent them from reflecting the circumstances of their customer base and what their customers want. Some companies might be less likely to introduce social tariffs if the model did not suit their local circumstances. If hon. Members intend that all private water companies should be forced to introduce a centrally imposed social tariff scheme, I cannot support the introduction of that regulatory burden.
The shadow Secretary of State said that she did not wish to take the credit for some of the amendments because they were the initiative of Ofwat. Having looked through Ofwat’s response to DEFRA’s consultation on company social tariffs, I think the amendments all came from Ofwat, apart from the question of what concessions to offer. Ofwat says that it supports the view in the draft guidance that it is preferable that the companies themselves should design concessions that best suit their customers’ needs. It says this so that companies, rather than the Government, will have greater scope to innovate, which I think the Minister is saying too.
I am grateful to my hon. Friend for making that point. It shows when one prays in aid an organisation, one has to do so in the context of all the evidence that has been given by it to many organisations, not least a Select Committee of the House.
We want companies to be imaginative in the way they tackle affordability in their areas, not to force them into a straitjacket. Our guidance will not dictate eligibility criteria, the level of concession or the amount of cross-subsidy. It will give companies the freedom to make judgments, with their customers, on what can work in their areas. This addresses the point made by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). Social tariffs are a new tool in the tool-kit for companies, but they are not the only tool. Companies have many other effective tools—for example, win-win tariffs, which are self-funding from savings on bad debt and do not rely on cross-subsidies. They have trust funds, as has been mentioned, which are set up by the company to pay off the debts of those most in need, as well as payment plans and referrals to holistic debt agencies such as Citizens Advice, arrangements made locally that really work.
We must not see a social tariff as the only show in town. There are no state secrets here. The information from water companies about the social tariffs that they develop will be produced in negotiation with DEFRA, working on the guidance that we will publish in a few weeks. The proposals from the water companies and the decisions that DEFRA makes will be available for scrutiny.
This is slightly tangential. The companies are working to tackle unaffordable water charges, but there is one thing that they probably cannot deal with, which was mentioned on Second Reading by one of the Minister’s colleagues and by me. Once the £50 payment comes through the system, which will help most people on low incomes, the companies will not be able to guarantee that it goes to the person who pays the bill. Instead of going to the vulnerable party, the money may be going to a park home owner who is not reputable, or a private landlord. What discussions has the Minister had, perhaps with the Ministry of Justice, about whether it would be a criminal offence—a fraud—if the park home owner did not pass the money on?
The hon. Lady could lead me down a long path of personal frustration on this subject, which I am happy to share with the Committee. I have a number of park homes in my constituency. Some are well run. It is a style of living that we across the House should encourage because it allows people at a certain age to release some capital and live in a smaller dwelling surrounded by people in similar circumstances, but there are too many park home owners who are appalling human beings. Various Governments, including this Government and the Government whom the hon. Lady supported, have sought to address this. I am working with my hon. Friends in the Department for Communities and Local Government to ensure that the alternative arrangements that the Government are making for park homes will be fit for purpose.
I thank the Committee for that bit of therapy. I can assure the hon. Lady that we intend the £50 to get to precisely the people whom she describes. I am happy to talk to anyone. In my Department we are keen to make sure that that money is not siphoned off by anybody and gets to the householder, even if that householder is a park home owner on a site owned by somebody else.
I shall outline some of the other measures available to water companies. We are working to make sure that the issue is looked at holistically. We do not believe that social tariffs are the only method of addressing affordability. All these methods are in addition to the existing statutory WaterSure scheme which provides a safety net for the most vulnerable customers. We fully expect different companies to use these tools in different ways, and make no apologies for that.
It remains the case that most water bills are not high in comparison with other household costs, such as energy bills. Customers struggling with water charges are likely to be struggling with other living costs. The Government have other measures in place to tackle the broader problem of low incomes. Universal credit will make work pay and combat worklessness and poverty. Our social tariff guidance will say that we expect companies to keep their social tariffs under review and work with Ofwat on how best to do this.
We do not propose to require the kind of annual reporting suggested in new clause 1, which would be just the sort of regulatory burden that David Gray’s recent review of Ofwat warned the regulator away from. Ofwat already has a primary duty to protect the interests of consumers and will act in their best interests. A league table would also fail to show the real picture on the ground. The measures of 3% and 5% of a household’s disposable income are useful indicators of risk, but they are not absolute measures of the number of households struggling to pay their bills. In short, therefore, we think that enabling companies to work with their customers to design schemes best suited for their area is a much better solution. I therefore ask hon. Members to withdraw their amendments.
The Minister was articulate and charming, but his argument was unconvincing. I am sorry to say that because I have a great deal of sympathy for him and his position. This is a short Bill and the Government want to get it through quickly and cleanly, but we believe our amendments serve a useful purpose.
The Minister clearly ruled out the possibility of a national water affordability scheme. I think I am right in saying that. The Minister is not willing to give that assurance at this stage, but I will go back through Hansard. I thought it was pretty clear from what he said that a national water affordability scheme was ruled out. We believe that that is the wrong approach and that work can be done. If provision is not made in this Bill, we would like to engage with the Minister and work collaboratively to try and find a way to respond to the concerns of the hon. Member for North Cornwall (Dan Rogerson), who raised the possibility of such a scheme, as we have done on previous occasions.
The hon. Member for Thirsk and Malton (Miss McIntosh) asked about the opinions of the water companies. In my experience, the water companies would like a level playing field. It is clear to me that in new clause 1 we do not ask for a one-size-fits-all solution, as the Minister described it. We simply ask that at the same time as the south-west receives the benefits of the Bill, the whole country should receive the benefits of a set of mandatory minimum standards for those tariffs. We do not even require water companies to introduce the social tariffs, but when those are introduced, we ask that they be effective—that they are not just based on guidance, but that the House has the right to weigh in on what they should be. My hon. Friend the Member for Bolton West (Julie Hilling) dealt with issues of national water affordability. She is a strong advocate on behalf of her constituency.
In conclusion, despite my sympathy for the Minister, I intend to press amendment 1 to a Division.
Question put, That the amendment be made.
Clause 1 ordered to stand part of the Bill.
Financial assistance for major works
I beg to move amendment 4, page 3, line 3, at end insert—
‘(5A) Financial assistance may only be given under subsection (1) if the financing of the infrastructure is being secured by a group company which has adopted the equator principles.’.
With this it will be convenient to discuss the following:
Amendment 5, page 3, line 3, at end insert—
‘(5A) Financial assistance must not be given to any company which has a debt to equity ratio of more than 65%.’.
Amendment 10, page 3, line 3, at end insert—
‘(5A) The Secretary of State may only grant financial assistance after a business plan for the proposed infrastructure has been approved by Ofwat and the National Audit Office.
(5B) The business plan must demonstrate that the company carrying out the infrastructure has adequate capital resources to complete the infrastructure project.’.
This issue is of significant interest to those of us who live in the Thames Water area. Some 20% of the population of the United Kingdom do, so it is not an irrelevant issue to people across the country who pay water rates. Specifically, I am talking about colleagues who have constituencies in Gloucestershire, Northamptonshire, Essex, Kent, Hampshire and Greater London, and the issue raises broader questions about how the Government and Ofwat, the regulator, deal with water companies, their financing and, specifically, the financing of major projects.
I shall make some preliminary comments that relate to all three amendments. I am grateful to the Minister and to the Secretary of State for engaging with the issue; I am grateful for the engagement on Second Reading; and I am grateful for the correspondence that I have had with the Secretary of State since Second Reading. I shall refer to that and read some of it into the record.
First, in parts of London and, certainly, in my constituency, one of the most significant current debates is about whether there will be a Thames tunnel, and Thames Water’s proposal is that to address the current system’s inefficiency and inability to deal with London’s sewage, understandably because the system was created in the Victorian era, new infrastructure—a main sewer, in effect—needs to be built to cope with current and future needs.
There is an ongoing debate, which I do not propose to get into today, about whether the current plan for the proposed tunnel is the right answer. In summary, sewage capacity is already being built to the east of London, in the Lee valley; and there is a proposal—the projected costs of which have risen to £4.1 billion—for a long tunnel, travelling from west London not far from here, along my constituency and ending up at the sewage treatment works in east London.
Some people say that the only solution is the currently proposed tunnel; others say that it would be better to have a shorter tunnel and some other forms of sewage alleviation. That debate is ongoing, but in the end decisions will have to be made. There is a whole planning process for deciding whether the tunnel will be built.
Secondly, there is a debate—in constituencies such as mine and in boroughs such as Hammersmith and Fulham, and Wandsworth—about where, if there is to be a tunnel, the main sites of activity should be. In the middle of Bermondsey, a very large site is proposed for drilling down to create the shaft from which the tunnel boring will happen, both west and east, at a place called Chambers wharf. In the first round of consultation, the proposed site was King’s Stairs gardens, by the Rotherhithe tunnel. That is a greenfield site, and the proposal was not at all popular. We have managed to persuade Thames Water that that is not a good idea, but there is a tale of unexpected, or unwished-for consequences, because having won a battle to save one site we then found that the company came up with another site next door, taking the pressure off one community but immediately transferring it not far away. That is a separate debate, and I do not propose today to get into the detail of where the sites should be. I see my constituency neighbour and colleague, the hon. Member for Cities of London and Westminster (Mark Field) in the Chamber, and many of us have a constituency interest—big and small—in where the sites should be.
The third issue—the issue of the Bill—is whether the Government should, if necessary, provide financial support to Thames Water for such a project, and if so, the terms and conditions under which it should be granted. Clause 2, which all my amendments would change, is entitled “Financial assistance for major works”. I shall not read it all into the record, as people can turn to it, but it proposes the insertion into the Water Industry Act 1991 of a new provision, section 154B, of which I shall read the first proposed subsection:
“If the Secretary of State considers it desirable to do so, the Secretary of State may give financial assistance in connection with—(a) the construction of water or sewerage infrastructure, or (b) the carrying out of works in respect of existing water or sewerage infrastructure.”
In further proposed subsections, there are various conditions, one of which is:
“Financial assistance may be given in any form and in particular may be given by way of—…grant…loan…guarantee…indemnity…the provision of insurance, or…the acquisition of shares in or securities of a body corporate.”
My first amendment, amendment 4, proposes:
“Financial assistance may only given under subsection (1) if the financing of the infrastructure is being secured by a group company which has adopted the equator principles.”
I shall come back to that.
Secondly, I want to test the Government’s reaction to amendment 5 and my proposal:
“Financial assistance must not be given to any company which has a debt to equity ratio of more than 65%.”
That precise figure is relevant, but there is a much bigger issue about what the financial past and present of a company should be if it is to receive Government support.
My third amendment, amendment 10, states:
“The Secretary of State may only grant financial assistance after a business plan for the proposal infrastructure has been approved by Ofwat”—
“and the National Audit Office…The business plan must demonstrate that the company carrying out the infrastructure has adequate capital resources to complete the…project.”
I appreciate that the right hon. Gentleman’s debate is not entirely abstract, but on amendment 5 how would the Government be able to judge financial assistance on the basis of that debt to equity ratio? Presumably, assistance will come in different tranches, so any group company’s activity might at various times fall on either side of any category that the right hon. Gentleman has in mind, and any assistance might be for a specific project in different tranches. Does he not feel that his amendment would over-complicate what he is trying to achieve? Will he detail precisely how he thinks it would operate?
Some of this is quite technical, but these are important issues. The reason I chose that figure, which is not a matter of precise science but a starting point for debate, is a Financial Times article in 2006 suggesting that Ofwat’s expectation was that gearing levels for Thames Water should remain below 65% for any project. There was then a debate, in public, between Thames Water and its owners—they have a history in this matter—and the regulator as to what the percentages of borrowing against capital, borrowing against income, and borrowing against profits should be. The company should have sufficient capital to fund the project and should not be giving away its capital by way of dividends so that it has to look elsewhere for funding that it could have had if it had not been paying out capital that it had acquired previously from its investments.
The right hon. Gentleman will be aware that Thames Water is looking to secure a large-scale investment from a Chinese sovereign wealth fund. Is he concerned that such an investment—this is a specific case, but it could apply generally to anyone who was getting such financial assistance—would help to distort, and could, at particular levels of investment, deliberately distort the debt to equity ratio in such a way as to negate any benefit created by the provision that he hopes to put into the Bill?