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Westminster Hall

Volume 557: debated on Tuesday 22 January 2013

Westminster Hall

Tuesday 22 January 2013

[Dr William McCrea in the Chair]

Hospital Services (South London)

Motion made, and Question proposed, That the sitting be now adjourned.(Anna Soubry.)

I am grateful for the opportunity to hold this debate today, Dr McCrea, and I am very pleased that other hon. Members are here in Westminster Hall to take part in it.

In the two and a half years that I have been the MP for Lewisham East, I have not known an issue to cause as much anger and concern as the proposals that are currently on the table to close the A and E department and the maternity department at Lewisham hospital. I know from my colleagues, my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock) and my hon. Friend the Member for Lewisham West and Penge (Jim Dowd), that in the 20 or so years that they have served the people of Lewisham, they too have not witnessed such outrage and disbelief over an issue.

Lewisham is not the only place in south London where emergency and maternity services are under threat. There has been a long-running dispute about the future of St Helier hospital, and of course changes at any hospital will always impact on neighbouring areas. Patients displaced by the closure of one unit have to go elsewhere. Children who are hurt and elderly people who have had a bad fall do not disappear into thin air; they still need treatment. Mums-to-be still need somewhere to give birth. It is not possible to close and A and E department that sees 115,000 people a year and axe a maternity department in which more than 4,000 babies are born each year and not to expect other hospitals to feel the impact.

This issue affects not only Lewisham but people across south London. The real problem is that there is no free capacity in the other hospitals close by to deal with the demand for hospital services that will be displaced.

I am grateful to the hon. Lady for giving way, and I congratulate her on securing this debate. She is making a very good point about the adverse effect that closing Lewisham hospital will have on neighbouring areas as well, especially, of course, with Queen Mary’s hospital also shutting both its A and E department and its maternity services.

Does the hon. Lady accept that the closure of Lewisham hospital will also have an impact on my constituency, including at Darent Valley hospital, with people seeking out A and E treatment or maternity services? In a hospital such as Darent Valley that already has its own capacity issues, there will be serious repercussions from closing Lewisham hospital—not only for the area that the hon. Lady represents but far beyond.

I very much agree with the hon. Gentleman, and I think that there will be a ripple effect across the whole of south-east London and beyond if the A and E department and maternity services at Lewisham hospital close.

I thank my hon. Friend for giving way and I join the hon. Member for Dartford (Gareth Johnson) in congratulating her on securing this debate.

On the impact on neighbouring hospitals, my hon. Friend will be aware of the importance—not only to local people but to London as a whole—of King’s College hospital. Is she also aware that the effective closing of maternity and A and E services at Lewisham hospital will hit like a tidal wave at King’s College hospital, because of the numbers of people involved. The health service estimate is that the number of people at King’s College A and E will increase by 45%. The staff at King’s College A and E do a very good job, but they will not be able to cope with a 45% increase in patients. The additional emergency admissions from that increased number of people at A and E will create such a strain on in-patient beds that the proposal is that in-patients—non-emergency admissions—will have to be shipped off to Farnborough hospital, which is an hour away on a bus and a train from Camberwell.

As for maternity services, the situation is even more pronounced, with a 54% increase envisaged in the number of women giving birth at King’s College hospital. The staff there simply cannot cope with that increase. At the moment, many women are turned away and told to go—guess where?—to Lewisham hospital.

The right hon. and learned Member for Camberwell and Peckham (Ms Harman) will know that interventions must be short. Certainly, however, the point she makes is well made.

My right hon. and learned friend encapsulates the issues in relation to King’s College hospital perfectly.

The fact of the matter is that millions of pounds will have to be spent at neighbouring hospitals to enable them to do the job that doctors and nurses at Lewisham hospital are already doing very well. Roughly £200 million has to be spent on making those changes happen, and that is not to mention the £12 million that has just been spent on Lewisham hospital’s A and E department.

In my view, this process is sheer madness. I do not think that there is any guarantee that money will be spent in the right places. If the predictions about where people will go after the closure of the A and E department and maternity department at Lewisham hospital are not right, we will end up spending money on the wrong hospitals. That could result in complete chaos. I cannot see the sense in the proposal, and neither can thousands upon thousands of people in south-east London.

The proposed closure of Lewisham’s A and E department and maternity department would also mean that two thirds of the building and land at Lewisham hospital would be sold off. These plans were hidden in an appendix to the initial proposals document, which was first published at the end of October last year.

I cannot overstate the opposition to these plans. More than 40,000 people have signed a petition against the closures; not one Lewisham GP is in favour of the changes; and the chair of the local commissioning group is also opposed to them. Put simply, these changes are unwanted.

I thank the hon. Lady for giving way, and I will make a short intervention, Dr McCrea, so that I do not get a finger-wagging from you. Frankly, GPs should be in support of these changes; support from GPs is one of the conditions that is a requirement for such changes. If they are not in support of these changes in Lewisham, that is a big problem.

The hon. Gentleman is, of course, referring to the four tests for service reconfigurations that his own Government have said must be met if changes are to be made. GPs in Lewisham are opposed to these changes, and they have been very vocal in making their case.

I am most grateful to my hon. Friend for giving way, and I join others in congratulating her on securing this extremely timely debate. She said a few moments ago that she did not understand where this plan had come from. Has she considered that it is merely a rehash of the scheme that NHS London tried to get past the “Picture of Health” review four or five years ago but failed miserably, both in the review itself and in the subsequent re-examination by Professor Sir George Alberti, and that in its death throes—NHS London only has a few months before it is extinguished by this Government—it is trying to get through the scheme to reduce hospitals in south London from five to four, and for no other reason than that it thinks that that reduction should happen?

My hon. Friend has a long history of working and campaigning on health issues in south-east London, and I agree with his analysis that the scheme that he refers to may have been one of the places from which these proposals for Lewisham hospital emerged. I said earlier that these changes are unwanted. In addition, I want to say today that they are also unfair, unsafe and unjustified. I will now take a few minutes to tell Members why that is the case.

Why are these proposals unfair? The closure of Lewisham’s A and E department and its maternity department has been recommended to the Secretary of State for Health by the special administrator to the South London Healthcare NHS Trust. In July last year, the special administrator was appointed to the trust, which is made up of the three hospitals to the east and south of Lewisham—Woolwich, Sidcup and Farnborough hospitals. The administrator’s job was to find a way to balance the trust’s books. It was the first time that a special administrator had ever been appointed in the NHS, and the first time that the unsustainable providers regime—that is, the process for sorting out failing hospital trusts—has been used anywhere in the country.

The trust had, and still has, serious financial problems. I should be clear: Lewisham is not part of the trust; nor does it share the trust’s financial problems. Lewisham hospital is a solvent and successful hospital. Its management has worked hard during the past five to 10 years to improve standards of care and to make the hospital more efficient. Yet, because Lewisham hospital is next to the South London Healthcare NHS Trust, because it has only a modest private finance initiative, so there are not as many constraints on the site as on the two big PFI hospitals at Woolwich and Farnborough, and possibly because of its location in relation to surrounding hospitals, the special administrator decided to recommend the closure of its A and E and maternity departments.

As I said, the draft proposals were published at the end of October. There ensued six weeks of the worst public consultation that I have ever seen. There was no direct mailing to the people affected, and there were opaque and complicated questions in the consultation document. There was not even a direct question about the closure of Lewisham A and E. To add insult to injury, there was no question at all about the sale of the land at the hospital.

Not only are my constituents up in arms about the so-called consultation, but they are rightly asking how Lewisham got dragged into this. Why does it have to pay such a heavy price for financial failures elsewhere? How can it be right that a process set up to sort out financial problems in a failing trust has led to services being cut at a separate, well-performing, financially stable hospital? I cannot answer those questions; nor can I explain why such a significant reconfiguration of emergency and maternity services is being proposed.

The statutory guidance to trust special administrators and the written statement that the former Health Secretary, the right hon. Member for South Cambridgeshire (Mr Lansley), made to the House when he enacted the special administration regime last summer clearly state that the process should not be used as a back-door approach to service reconfiguration. I laughed out loud when I read those words in the statutory guidance, because that is exactly what is happening in south London. If closing A and E and maternity departments is not a service reconfiguration, I honestly do not know what is.

I congratulate my hon. Friend on securing a debate on the hospital, which my constituents share with hers. When I brought the current Secretary of State for Health to the House to answer an urgent question, he seemed to imply that, in fact, reconfiguration is a major consideration. He said that giving details at that stage

“would prejudice my duty to consider the recommendations with care and reach a decision…I have made it clear that any solution would need to satisfy the four tests outlined by the Prime Minister…with respect to any major reconfigurations”.—[Official Report, 8 January 2013; Vol. 556, c. 169.]

The Secretary of State clearly does believe that reconfiguration is a major consideration. The next day, I asked the Prime Minister about the four tests, and he said:

“I specifically promised…there should be no closures or reorganisations unless they had support from the GP commissioners, unless there was proper public and patient engagement and unless there was an evidence base.”—[Official Report, 9 January 2013; Vol. 556, c. 313-14.]

My hon. Friend will agree that none of those tests is met in the trust special administrator’s proposals.

I do agree, and it would be incredibly helpful if the Minister confirmed when she responds to the debate that the four tests would apply to any changes made as a result of the TSA’s recommendations.

The thing that really sticks in my throat about the proposals to shut Lewisham’s A and E and maternity departments is that they are fundamentally driven by money. If we start by saying that a process is being set up to sort out the financial woes of part of the NHS, how can people ever have any confidence that the clinical input and so-called clinical evidence that come later have not just been moulded to suit the accountants’ bottom line, which was there from the off?

I appreciate that there are financial pressures in the NHS, and I accept that it cannot be preserved in aspic for ever. For example, I support the recent changes to the way in which emergency care in London is provided for major trauma, heart attacks and stroke. However, where is the evidence that the changes on the table will result in more lives being saved and better health care overall?

That brings me to my second main point: the changes are not only unwanted and unfair but unsafe. It is proposed to replace the A and E at Lewisham with an urgent care centre. Initially, the special administrator told us that the centre would see 77% of the people who currently go to the A and E. In his final report, that was revised down to 50%. Based on an analysis of their case load, doctors at Lewisham suggest that the figure would be closer to 30%, so who is right? GPs in Lewisham, including the chair of the clinical commissioning group, suggest that the number of people who would go to an urgent care centre at Lewisham has been overestimated. They suggest that they would be inclined to send people to hospitals where they knew specialist opinion was available.

If I was a mum and my five-year-old woke up in the middle of the night in dreadful pain, where would I go? Would I go to a place that I was not sure had the appropriate staff and equipment to deal with my son or daughter, or would I go to an all-singing, all-dancing unit in central London or at King’s? I am not a mum, but I know where I would go. If people do not use the urgent care centre, the extra demands placed on neighbouring A and Es will exceed the numbers forecast in the plans before the Health Secretary. Ultimately, there may not be enough capacity elsewhere for people to be seen and to be seen quickly.

I should add to that the heroic assumptions in the proposals about reducing the need for acute care in the first place. I am all for tackling the reasons why so many people turn up at hospitals, but I know how hard it is to change people’s behaviour and to organise adequate community-based care to reduce the need for acute admissions.

One hallmark of the work at Lewisham hospital is that extremely important steps have been taken to integrate with community care. That is relevant for the elderly, who may have to be admitted for a short time before going back into the community, and for the young people with mental health problems, who need there to be integration between those who see them when they have an episode and those who receive them back into the community. All that will be lost if the proposals go ahead.

My right hon. Friend is right to highlight those issues. I would add that the close working between Lewisham hospital and Lewisham council on child protection has been recognised across the country, and I would not want that to be compromised in any way if the proposals go ahead.

I fear that other A and Es will end up hopelessly overstretched, resulting in worse care for my constituents and many other people in south London. I am also concerned that although clinical evidence exists for centralising some emergency care, such as that for those who are involved in bad traffic accidents or who have suffered a stroke, I have seen nothing showing that better outcomes can be achieved by centralising care for other medical emergencies.

When I was in my 20s, my brother got bacterial meningitis. When he arrived in hospital, after an initial incorrect diagnosis by a GP, the hospital doctors said he had got there just in time—a few more minutes and he might not have survived. He had to have a lumbar puncture taken, and it was only after getting the results that he could be treated. It was one of the worst days of my life seeing a grown man lying in a hospital bed. We were unable to do anything, and we did not know what the problem was. That is why I worry about how long it takes people to get to A and E.

Closing the A and E at Lewisham will mean longer journeys for people who need access to emergency care. It is said that, in a real emergency, people will be in an ambulance, and that may be so, but anyone who lives in south-east London and who has ever been stuck in a traffic jam on the south circular will know how hard it can be, even for ambulances, to get through.

I have spoken at length about the plans to shut the A and E at Lewisham, but may I also raise the impact of the proposed closure of the maternity department? The A and E and maternity departments at any hospital are intrinsically linked. Sometimes things go wrong in labour, even with supposedly low-risk births, and emergency support needs to be available there and then to sort out problems.

More than 4,000 babies are born each year at Lewisham. There has been an 11% increase in the number of births at the hospital over the past five years, and the birth rate is rising. Unlike other health services, maternity care cannot be rationed or restricted. Nationally, we are witnessing the highest birth rate for 40 years—it is particularly high in areas such as Lewisham—and the Government want to close a popular and much needed maternity department.

Does the hon. Lady agree that the Government do not want anything at all at this stage, and that the Secretary of State has not made, and will not make, a decision until 1 February?

I acknowledge that a decision has yet to be taken, and I take this opportunity to press the Minister to confirm that the decision will be taken on 1 February. If it will be taken before then, it would be useful to know. We are here to present the case for refusing the recommendation.

My hon. Friend has been making a powerful case. I want to pick up on the Minister’s interjection to the effect that no decision has yet been made and to reinforce my hon. Friend’s point that if changes as fundamental as those proposed in the trust special administrator’s report are introduced but are not safe and do not have clinicians’ true support, we run the risk of repeating the very mistakes of the last reconfiguration, which created South London Healthcare NHS Trust, and which proved not to be as financially sound as was expected when it was proposed. That is a real risk, and I hope that the Minister will pay attention to it.

My right hon. Friend has consistently made that point in the House, and I totally agree.

It is a fact that maternity services in south London are under enormous pressure. In the 20 months between April 2011 and November 2012 providers of maternity services across south-east London suspended services on 37 occasions. Women in labour were therefore turned away from hospitals and told that they would have to go elsewhere. Of those 37 suspensions, 26 were necessary because of lack of beds. King’s College hospital also tried to suspend services on a further six occasions, but was unable to do so as no other unit had capacity to accept the women it was trying to transfer.

As the father of six children, I can tell the House from experience that nothing is more upsetting for a lady who is about to give birth than being shipped around when she tries to get into hospital. That is deeply upsetting to someone at such a fraught time in their life.

The hon. Gentleman makes his point incredibly well.

Just a few weeks ago, both King’s and Woolwich were sending women to Lewisham to give birth. Women should be able to give birth at their local hospital and should not have to go to one hospital for the antenatal appointments only to have to go somewhere else to give birth. With high numbers of teenage pregnancies and a higher than average proportion of older mums in places such as Lewisham that is doubly important. The proposal for a midwife-led birthing unit at Lewisham is not a genuine option for any woman who wants to give birth safe in the knowledge that she would have back-up obstetric support if it were needed. I am told that that would not be an option for first-time mums. If I were to have a baby in two years’ time, I would not be able to go to Lewisham. The report tries to convince me that I would have greater choice, but that is just a joke.

One of my main concerns about the proposals for maternity services relates to where, and to what extent, capacity will be enhanced at other hospitals to deal with the mums who would otherwise have gone to Lewisham. The proposals before the Secretary of State assume a relatively even redistribution of women from Lewisham to King’s, the Queen Elizabeth hospital Woolwich and the Princess Royal university hospital in Farnborough. However, historically, when Lewisham women have not given birth at Lewisham, their main hospitals of choice have clearly been King’s and St Thomas’s. If more women go to those hospitals, projected births there could exceed 8,000 a year. Those would be really big maternity departments, potentially requiring a double rota of staff and consultants to deal with them. The cost of a double rota in maternity units at King’s and St Thomas’s is not accounted for in the plans before the Secretary of State.

On that very point, does my hon. Friend accept that the trust special administrator has deliberately manipulated the figures, in both the draft and final reports, to mask the fact that the proposal would push King’s at least and probably Queen Elizabeth hospital, Woolwich as well over the 8,000 births a year mark?

I do not know whether the trust special administrator has deliberately manipulated figures, but the way that the figures have been presented looks quite suspicious.

The plans are completely unjustified. There has been much talk in recent weeks of the need for things to do what it says on the tin. The metaphorical tin with respect to the recommendations of the trust special administrator presumably says it will resolve the financial problems of the South London Healthcare NHS Trust and put the health economy in south-east London on a stable footing. I do not think the proposals before us do that. It will be necessary to spend £195 million on a one-off basis to make changes at hospitals in south London, to deal with the displaced demand for A and E and maternity care that will result from the closure of services at Lewisham. It is not clear to me where that money is coming from: which Department of Health budget is it to come from? Has the Treasury approved that non-recurrent expenditure? If it has not approved the required capital outlay, the plans fall apart. Perhaps the Minister can deal with that point.

The changes to the Lewisham site would involve demolition of the recently refurbished A and E, so that the land could be sold. Long after the A and E was knocked down, the hospital would still be paying £400,000 a year in loan repayments for the £12 million it borrowed to make the improvements. That is a bit like someone taking out a loan to do up their kitchen and knocking down that part of the house while still paying money back to the bank.

Another big question relates to the continuing year in, year out costs of the changes. The possibility of a double maternity shift at King’s and St Thomas’s, which I have mentioned, is just one example, and would surely add hugely to the bill. How much would it cost to implement a community-based care strategy to reduce the need for hospital services? Where is the money coming from?

If the proposed changes to A and E and maternity care in south-east London cannot be justified financially, do not result in better health outcomes and are unfair and unwanted, why on earth are we here to debate them today? The Government have consistently said that changes will not be made unless four specific tests are met, as my right hon. Friend the Member for Lewisham, Deptford and the hon. Member for Beckenham (Bob Stewart) have mentioned. In the present case, the tests are not met. The chair of the local commissioning group is opposed to the changes, as are virtually all Lewisham GPs. The process should result in strengthened patient and public involvement, but the current process has resulted in strengthened disillusionment among the public, and little else. Proposals should be based on a sound clinical evidence base—but the evidence base in the present case is virtually non-existent. It is also stated that the Government will not make changes to such major services unless doing so will strengthen and improve patient choice; the special administrator’s own report recognises that the proposals will result in a weakening of patient choice.

As I said earlier, the proposals are unwanted, unfair, unsafe and unjustified. Last week the NHS Commissioning Board announced a review of emergency care, to be led by the NHS medical director, Sir Bruce Keogh. I welcome that review, but what is the point of it if the Government are just going to push ahead with their proposals in south London? The chaotic handling of the process in Lewisham cannot be right. It rides roughshod over the wishes of the community and local clinicians. For the life of me, I cannot see how it is in the best interests of my constituents or the people of south London. I urge the Minister to reject these rushed and ill-conceived plans and to do as her party’s manifesto says:

“stop the forced closure of A and E and maternity wards, so that people have better access to local services”.

I am not asking for better access; I am just asking for the access that currently exists for people in Lewisham to be maintained.

This is an important debate, and I congratulate the hon. Member for Lewisham East (Heidi Alexander) on her speech, on securing the debate and, with her colleagues in Lewisham, on co-ordinating an effective and well argued campaign.

Along with all other south London colleagues, I have long taken an interest in health service matters, including reconfiguration. I have the scars of the battle to keep Guy’s hospital open, which we managed to do, although we lost A and E. I have often joined my neighbours, the right hon. and learned Member for Camberwell and Peckham (Ms Harman) and the right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell), to ensure that King’s College hospital improved, which, thank goodness, it has. But I have a more direct interest: my constituents on the eastern edge of my constituency in the SE8 postal district and along the edge of the boundary with Lewisham often go to Lewisham hospital, rather than to King’s or to Guy’s and St Thomas’s. Of my remaining constituents who use hospital services, some go to the Royal London hospital across the river, but most go either to Guy’s and St Tommy’s or to King’s, and the report makes it clear that there would be a major impact, particularly on King’s, if the proposals go ahead.

Obviously, legislation initiated by the previous Government and passed by the previous Parliament anticipated problems in a part of the NHS. Although Labour understood that need, the legislation has not needed to be implemented until now. The legislation has been implemented—to be honest, those of us in other parts of south-east London knew this—because there was a history of bad financial management in the outer south-east London boroughs and in South London Healthcare NHS Trust. We know that to our cost because, twice to my certain knowledge, the health budgets further in—in our parts of south-east London—had to be top-sliced to fund other bits of London, even though they are more affluent and we are less affluent, because of poor management elsewhere. There was better management both in my borough and in Lewisham.

My right hon. Friend the Member for Leigh (Andy Burnham), who was Secretary of State when the Health Act 2009 was passed, has made it clear that there was never any intention to use the legislation to address major reconfigurations. The legislation was meant to address a financial problem in a specific trust and not to encompass other trusts. Does the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) agree that we need to consider the NHS London-wide? That is where we must find solutions to the financial problems of one trust, quite differently from this particular case. The trust special administrator clearly could not find a solution by considering just the South London Healthcare NHS Trust, but we cannot have the inappropriate procedure that has now been adopted.

The right hon. Lady, who is my neighbour, raises an important issue. With the help of the Library, I have carefully examined the whole debate on the passage of the legislation, and that issue was not addressed. If she looks back at the debates and the notes on the National Health Service Act 2006, they are silent on whether a trust special administrator could or could not make recommendations that go beyond a trust. That may not have been in the mind of her colleague, the right hon. Member for Leigh (Andy Burnham), who is a former Secretary of State, but he did not say that on the parliamentary record, although I stand to be corrected. It seems to be an open question.

The current Secretary of State told us that he has had legal advice and that he will take further legal advice, but whether or not the legal advice is that the trust special administrator can go beyond the boundaries of the area affected, there is a stronger argument for the Secretary of State not following the trust special administrator’s recommendation—and that argument starts from the legacy of the last general election in terms of the parties in government and the coalition agreement on how to deal with closures of A and E, and not doing so from the top downwards.

Secondly, the Government have set up the four tests, to which the hon. Member for Lewisham East referred and which have not been met. The Secretary of State has been handed this matter on a plate; it is not of his doing and I am sure it is the last thing he would have wished for. The announcement that the trust was going into special administration was made by his predecessor, and the current Secretary of State has been given a report by someone he did not appoint but with whom he now has to work. He has no choice. He has to deal with it, but he made it clear in his answer to the urgent question from the right hon. Member for Lewisham, Deptford that the four tests, which both he and the Prime Minister have cited, must be met.

The first test—that the proposals must be supported by GP commissioners—fails before we even get to the other three. I have no reason to believe that a single GP commissioner in Lewisham is supportive—GPs elsewhere in London might be found but they implicitly do not comment—the whole idea of the proposal seems to be that if we are handing NHS decisions from the top to the doctors, we must do things that the doctors agree are the right decisions. So the proposal falls at that first hurdle.

Should I catch your eye later, Dr McCrea, I will address the four principles in more detail.

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) says that the Secretary of State’s predecessor set up the four tests, but does he not accept that one of the previous Secretary of State’s first acts just after the 2010 general election was to suspend the implementation of the “A Picture of Health” process that the South London Healthcare NHS Trust was undertaking? I am not saying that the process would necessarily have led to success, but its suspension undeniably made the trust’s task unbelievably more difficult.

I do not dispute that. I am not as close to the process as the hon. Gentleman. I did not follow those issues as closely, because the process did not directly affect my borough, although it directly affected his. I have taken advice from someone who has been involved over the years at Lewisham hospital and in NHS management, and the history of financial poor management in the South London Healthcare NHS Trust stretches back over 10 years. The advice I have received is that poor management should have been gripped seven or eight years ago, but the problems escalated. We are in our present position because of a legacy of poor decisions made over effectively a decade. Things might have been rescued by the Government at the beginning of this Parliament, but they clearly were not and we are left in our present position.

I have a few comments, and I do not want to take time from other colleagues who have a direct interest. I responded to the consultation to make clear the interests of my constituents. The Secretary of State invited those of us with an interest to see him, and we are grateful for that invitation, which we used, I hope, to put our case effectively. The right hon. and learned Member for Camberwell and Peckham and I, and those MPs whose constituents use King’s, have written to the Secretary of State further to that meeting to make clear our concerns about the impact on King’s of any closure of Lewisham A and E, irrespective of the change in maternity services.

There is an alternative approach, which I commend to the Secretary of State. I hope he understands the benefit of going down the alternative route, rather than following the trust special administrator’s recommendations. The alternative, which we explored at our meeting and which I do not believe was adequately answered by the trust special administrator or his colleagues, is that five of the six recommendations—excluding recommendation 5 on the site configuration—leave open the option of amalgamating NHS management between Lewisham and Greenwich. NHS management could then be allowed to work out the best configuration of services across the two boroughs in consultation with, and with the confidence of, the local authorities in question, which now have direct responsibility through health and wellbeing boards under the Health and Social Care Act 2012, and in conjunction with GPs to seek GP commissioning endorsement and support. I hope there would be much more public support than for the present proposal, as is understandable.

I hope that the Secretary of State will find that to be an appropriate solution. It may have a small financial disadvantage over the present proposals but, as the hon. Member for Lewisham East said in her speech and as she and her colleagues from Lewisham have made clear in their letters to the Secretary of State, the TSA’s figures show a financial gap of only £1.7 million from a break-even position if recommendation 5 were not to be followed, compared with a financial gap of £75.6 million if the recommendations were followed. There are knock-on effects, but we seem to be talking about a sufficiently small amount of money, with little risk of any other financially adverse impact, and if people are motivated to reach a conclusion quickly, that must be a much more satisfactory way of proceeding and much more in line with the four tests set out.

I wanted to give the right hon. Gentleman those figures, so I am glad he has put them on the record, because they are significant. Furthermore, there is real willingness in Lewisham, from the hospital, the GPs, the consultants and all the staff, to work for some kind of merger or co-operation with Woolwich that would reduce costs. Everyone is willing and happy to explore that, but in the right circumstances, in the right time frame and with appropriate consultation, which is what has been missing from the process.

I have no reason to disbelieve what the right hon. Lady says, but even more important is returning the decision to the people in the health service who are now meant to be leading it—the GP commissioners and others. That is what all of us, in different ways, believe needs to be done. She made an argument for the issue being London-wide, and that of course is the context, but the practicalities of travel and transport, whether buses, cabs, cars and trains, are such that south-east London works as a segment for health service use in a way that does not really cross over into other parts of London, other than to King’s. The only knock-on bits are the small amount of crossover to the London hospitals for specialist reasons, and some to King’s because it is so near—technically, it is south-east London, but it is in Lambeth.

Secondly, the precedent would be a bad one to set for those parts of the NHS that have been financially well managed, compared with parts that have been badly managed. Lewisham has been relatively well managed, being very nearly in balance. We rely on trusts to do their job locally and on people to manage local trusts, so we have to support those who do that job well and responsibly.

My last point is probably the most important. I have been to Lewisham A and E and visited patients there privately. It and the maternity services have developed a reputation for good clinical care of all who attend it. That was not the case some years ago, but it has been worked on, and not only physically. It has become a university teaching hospital, as well as being a local general hospital, and it has good community links—the point made by the right hon. Member for Lewisham, Deptford in her intervention. It has also built up a good reputation for integrating acute care, hospital-centred care, with community provision.

The Secretary of State could take the clinically easy decision to follow the trust administrator’s recommendation, saying, “This is what has been recommended, therefore I am following what I have been told”, but I hope that he realises the greater benefits to the local community and to the wider health economy and service of south-east London, as well as to the Government if they are seen to be listening to the people and to the GPs more than to the trust special administrator. I understand why the trust special administrator takes a hard line, because he is a health economist and his interest is finance. The Health Secretary, however, has a different job, which is to be responsible for the NHS in England, and that means making responsible decisions to secure a good NHS in all parts of south London and elsewhere.

I will be commencing the winding-up speeches at 10.40 am at the latest. Three Members are seeking to catch my eye, so I ask them please to be conscious of that in their contributions, because I would like to get as many Members in as possible.

I will attempt to be brief, Dr McCrea, given your exhortation and out of consideration for my colleagues.

I do not think that the Secretary of State for Health will proceed with the proposed plan, because it is so far off the rails. It is such a ludicrous proposition, so ridiculous in its scope and even its intent and such a shoddy piece of work, frankly, that the Secretary of State will not be so foolish as to proceed with it, even if he can blame his predecessor for lumbering him with it. We have to recognise the threat, however, and to do what we can to make the case against it. That is why, after 10,000 people turned up on the 24 November to march past the hospital to protest against the plan to downgrade—to eviscerate—Lewisham hospital, rather more will be out again this Saturday, marching past the hospital to Mansfield park in Catford, to express what my hon. Friend the Member for Lewisham East (Heidi Alexander) described as anger, although I go beyond that.

My hon. Friend was kind enough to mention that I have been in this place 20—now almost 21—years, but I was also involved with Lewisham council for 20 years before I came here, and, without doubt, the hospital proposal has raised more fury than anger—more so than any other local issue in all the 40-plus years that I have been involved in public life in Lewisham, even more than the madcap scheme of the Department for Transport under the now Lord Parkinson to further the south circular assessment study. That scheme had recommended widening the south circular to six lanes throughout, with eight lanes in some parts, right the way through the middle of Lewisham. People thought that was mad enough, but that pales into insignificance compared with the public response to the proposals that we are discussing.

What fuels the fury is not the incoherence of the plans, or even the gross financial assumptions—I have heard people call them heroic, but some of the claims are lunatic, and in pursuit of so little—but the sense of injustice, the unfairness of the scheme. Lewisham hospital, as in the recent past, has a strong commitment to safety, quality and patient experience. It has been rated in the top 40 hospitals nationally by CHKS—for clinical effectiveness, patient safety and so on—and has a strong record in achieving national and local performance targets. It is operationally lean, the reference costs index making it the most efficient trust in south-east London, delivering financial surpluses in each of the past six years—Guy’s and St Thomas’s trust, King’s College trust and, obviously, the South London Healthcare NHS Trust have not done that.

Our hospital has achieved the successful integration of acute and community services, fostering strong links with social care, and the people of Lewisham are already reaping the benefits. It has the reputation for strong and successful partnerships, so much so that many of the people at the Queen Elizabeth look forward to Lewisham management taking over to build links with commissioners, local GPs, the local authority, patients and staff.

Lewisham hospital, or University Hospital Lewisham, now part of the Lewisham Healthcare NHS Trust, with NHS London’s encouragement, was actively pursuing a foundation trust application when the process we are discussing interrupted and completely derailing that application. People are furious at the injustice precisely because Lewisham hospital has done everything in the services that it provides that could reasonably be expected of it by the Department and particularly by the people of Lewisham.

I want Lewisham hospital to survive as an institution, but I am not desperately keen on institutions for their own sake, important as they are. I am more interested in the services that they provide for the people they serve, and the hospital’s record is exemplary. To see that destroyed and devastated by the vandalism of the trust special administrator process is more than most reasonable people can stand or accept.

I have been inundated, as I am sure have my colleagues, with information from various quarters, and all has been hostile. One note from a constituent—I will not be too specific as I do not want to identify her, but she is a clinician at Queen Elizabeth hospital—who did not support the closure but does not want Lewisham hospital to be destroyed, said that the position at Queen Elizabeth hospital is dire, and needs strong leadership and a clear sense of direction and purpose, so that it too can provide the services that the people of Bexley, Greenwich and Bromley deserve. If the closure of A and E at Lewisham hospital goes ahead, 750,000 people in Bexley, Greenwich and Lewisham will have a single A and E department available. That would not be safe by any stretch of the imagination.

I can do no better than to quote an e-mail that I received just yesterday from the GP team in neighbourhood 4 of the Lewisham general practitioners clinical commissioning group that makes the case well. The group covers practices in Bellingham Green, Sydenham Green, Sydenham road, the Vale, Wells Park in Woolstone road, and the Jenner, which is in the constituency of my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock) and just the other side of the south circular road on the boundary between our constituencies. It says that closing

“the A and E will hit the elderly, disabled…and children of single parents disproportionately”

and that

“although an urgent care centre…will persist, its use its use will decline significantly as neither patients nor clinicians will have confidence to use an UCC unsupported by acute medical and surgical care”.

My right hon. Friend made that point elegantly. The e-mail continues:

“Loss of obstetric service will result in women in labour having to attend a different provider from their antenatal care, few women will choose this option, as both patients and clinicians are aware of the increased risk of disjointed maternity care and find it emotionally unsettling.”

It also says:

“The projected flows of patients are inaccurate and therefore so are the costings, our Primary Care survey across Lewisham showed 80%+ of patients would attend Kings, 10% St Thomas, 6%”

Princess Royal university hospital, Farnborough, and that only 4% of those currently attending Lewisham A and E would go to Queen Elizabeth hospital at Woolwich.

The point about going to Farnborough is that it is a heck of a long way from Lewisham, which makes it difficult. Public transport to Farnborough is not acceptable for people who are weak, disabled or poor.

I am grateful to the hon. Gentleman. He knows that many of his constituents attend Lewisham hospital, so the effect will be not just on people who are resident in Lewisham.

In view of the time, I will not go through the rest of my points, but suffice it to say that they are compelling, overwhelming and make sense. The problem with the trust special administrator is that he regards antagonism and opposition from local people, particularly clinicians, as a sign of his rectitude. One of our local football teams is Millwall, which is based in Lewisham, although the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) prefers to disguise that fact. It has an unofficial slogan, which is also a song to the tune of “Sailing” by the Sutherland brothers and was made famous by Rod Stewart. The words are:

“We are Millwall, super Millwall”


“No one likes us, no one likes us

No one likes us, we don’t care!”

I suspect that Mr Kershaw has taken that local aphorism as his inspiration because he could not have gone further out of his way to antagonise all the people of south-east London. The problem is that most Millwall football fans sing it as a joke, but Mr Kershaw clearly believes it. He has succeeded in antagonising and alienating not just the medical community, but everyone in south-east London, because the whole scheme is a shambles. He said that no one came forward with a viable alternative to his plan, which is why the final report is as it is. I can tell him that if they had £5.2 million and rising and the services of McKinsey, Deloitte, Ipsos MORI and other consultants, year 6 at Dalmain road primary school could have come up with a better scheme than his. I suspect that the Secretary of State has enough sense to reject it. Action needs to be taken to secure health services across south-east London, but this is not the way.

It is a pleasure, Dr McCrea, to speak under your chairmanship. I congratulate my hon. Friend the Member for Lewisham East (Heidi Alexander) on securing this important debate. I want to start by defending South London Healthcare NHS Trust. Its financial difficulties are enormous and there is no disguising that, so people have tended to roll up its performance into something that is failing on all fronts, but that is clearly not the case.

When the hospitals—Bromley hospital, Princess Royal University hospital, Queen Elizabeth hospital in Woolwich and Queen Mary’s hospital at Sidcup—were merged approximately four years ago into one healthcare trust, there were serious difficulties with clinical performance, but very quickly the trust improved its performance significantly, and so much so that it was one of the best performing on many indicators. That is why it was so sad that when the trust was put into administration, unattributable sources in the Department of Health put out rumours that that was about not just financial mismanagement, but the fact that standards of care were failing. That was completely and utterly untrue.

I go back several years, and I am on my fifth chief executive at my local hospital. All have gone through the same scenario as Mr Kershaw, and all have given me assurances about the areas—I will not go into them because I do not have enough time—where financial performance needed to improve and efficiencies needed to be made. Always, they made the point about the need to treat people close to where they live in the community and reduce pressure on acute services.

All have made that point, and all have needed to improve clinical performance. Just over a year ago, the South London Healthcare NHS Trust had only one case of blood-borne MRSA, which was the best performance in the country. The improvement in the quality of care under the new trust was significant indeed. Waiting times in A and E improved, and Dr Foster reported on a significant and consistent improvement in the standardised mortality ratios over a couple of years. On those performance indicators, it outperformed Lewisham hospital.

When the decision was made to put the trust into administration, its performance on quality of care for local patients was improving. Anyone who was concerned about care for local patients would have worked through the financial difficulties with the trust. It was a big ask in that short period to improve clinical performance as it did, to merge the hospitals as it did, and to improve financial performance as it was required to do. It was always a big ask, and I think it was impossible. That should have been recognised, and the Government should have worked with that hospital trust to work through those difficulties.

We all know that PFI has not caused this problem, but it has added to it. PFI accounts for roughly a third of the deficit, which is not to be ignored, but one issue that has come to light recently, in relation to PFI in general—not just in relation to South London Healthcare NHS Trust—is the effect that the manipulation of LIBOR has had on the rates that hospital trusts have had to pay, in terms of interest, as a consequence. I do not expect the Minister to have an answer to this question, but will she go away and consider what the cost implications of LIBOR manipulation have been for every PFI in the NHS? Are the Government considering taking legal action to retrieve any of that money, as is being considered in the USA?

I am conscious of time and I want to let the hon. Member for Beckenham (Bob Stewart) speak, so I shall move on. As has been said, the recommendations fail several tests, and they clearly fail the test of satisfying local GPs and receiving local GP support. The chair of the local GP commissioning body, Helen Tattersfield, wrote an article in The Guardian under the headline: “GPs are already wise to the scam of new commissioning groups”. She absolutely lampooned what is being proposed by the Government.

Does my hon. Friend realise that the Government have shifted ground on that? In the response that the Prime Minister gave to my hon. Friend the Member for Lewisham East, he said that the first test was

“the support of local GPs.”—[Official Report, 31 October 2012; Vol. 552, c. 230.]

However, the Secretary of State’s written statement, following the publication of the final report said that the first test was “support from GP commissioners”. The word “local” has disappeared, and what the TSA is trying to do is claim the support of commissioners from outside Lewisham to meet that test.

The point made by my hon. Friend is self-evident, but if I may, I will not be drawn down the road, because I want to get the next point on record.

Lamenting the fact that local commissioners have not been listened to, Helen Tattersfield says in her article:

“No argument has any weight, however, against the needs of a failing trust, foundation trusts and potential private companies eager to expand their areas of influence, and NHS managers convinced of the merits of their model of fewer larger hospitals. Those of us who have spent hours acquiring the skills supposedly to lead commissioning have been shown that, in fact, decision-making and influence remains where it always was: with central managers, computer-derived models and reasoning that takes no account whatsoever of human behaviour in real life. We are little more than window-dressing for central planning geared to the needs of large foundation trusts, and open to the interests of the private sector.”

That comment alone just about sums up where we are.

I will finish soon to allow the hon. Member for Beckenham to speak, but I just want to ask the Minister whether she will consider a review of proposed A and E closures across London. We are seeing a piecemeal, salami-slicing of A and E services, which is putting the safety of Londoners at risk. As we know, we have seen a 50% increase in people waiting in ambulances for 30 minutes or more outside A and Es to gain access, and we have seen a 26% increase in those waiting for 45 minutes. We know that they are under pressure, so before we see any closures, that review must take place.

We can pray in aid what the Lord Chancellor and Secretary of State for Justice said. The headline on the relevant article read: “Hunt faces Cabinet split over A and E closure after Justice Secretary blasts plans as ‘sticking two fingers up’ to patients”. We also have the right hon. Member for Sutton and Cheam (Paul Burstow)—the former Minister of State, Department of Health—who lamented, when he was still a Minister, the proposed closure of St Helier:

“This is a flawed conclusion from a flawed process. There is still a lot of water to flow under the bridge before final decisions are made. The panel have ignored the pressure on all the A and Es and maternity units in south west London.”

We can pray those people in aid to defend our A and Es, and the Government should go back and look again.

To make one last point, we have seen the closure of an A and E, despite the promises of local Conservatives. The Leader of the House of Commons, when he was shadow Secretary of State, was going to save the A and E at Queen Mary’s, Sidcup, but it never came about. Under “A Picture of Health”, there was a proposal to have overnight stay, elective surgery at that hospital. It was promised to my constituents, who welcomed it and wanted to see it. I ask the Minister to reconsider removing that planned service from that hospital, because it was beginning to work and people welcomed it. It will be a serious cut to the quality of health care.

No, I will not, because I want to allow the hon. Member for Beckenham to speak. It will be a serious cut to local services, and we should not allow that cut to go ahead.

I thank the previous speakers for allowing me to speak. I was not going to speak, but I felt induced to do so by the excellence of the debate. My constituency is bracketed: on one hand, we have Lewisham hospital, and on the other, the Princess Royal university hospital in Farnborough, so I feel very much like the piggy in the middle. However, we have the Beckenham Beacon, and if I have time, I will mention that at the end.

Lewisham hospital is excellent. Working within its budget, it has a good reputation and serves the local community, which includes people from my constituency. I really am against the idea of its role being changed. The idea that it becomes an urgent care centre is fine. When I asked the special administrator about that, he suggested to me that it was not much of a change, and the only real change was that people would not be admitted into the general hospital. That is not quite as I understood it. Now we do not have the specialist back-up, and there will be a big reduction in people being seen locally. Lewisham requires a hospital, and it should keep its hospital.

Travelling around south London is notoriously difficult, as we have heard. All the routes go in to the epicentre. The eye of the octopus is round about here, and so trying to cross London to go to various hospitals—particularly for those who do not have an easy transport option—is extremely difficult. I am thinking of the elderly, as it is very difficult for them to achieve what they want and get to a hospital—say, if they are sent somewhere other than Lewisham, when they live in Lewisham. I am very concerned about the idea that we can do away with maternity services in Lewisham. Some 4,000 babies is a heck of a lot of babies to cart off somewhere else, as I mentioned in an earlier intervention.

I finish by reminding Members that we have the Beckenham Beacon, which is only 70% used at the moment. It is an outstanding facility, and from what I have heard, I understand that the clinical commissioning group for Bromley intends to take up the services that are there now. However, I also commend the people looking at this problem to think about increasing the services of the Beckenham Beacon, to help not only my constituents but the people of Lewisham. I know that I have to stop now, Dr McCrea, so as I am a very good boy, I will sit down.

It is a pleasure to see you in the Chair, Dr McCrea. I congratulate my hon. Friend the Member for Lewisham East (Heidi Alexander) on securing this incredibly important debate. The future of accident and emergency and maternity services across south London is of genuine concern to a great many of her constituents and, indeed, for the wider area, as this is definitely an issue of real significance across the capital. I know from a meeting that I chaired with Labour colleagues before Christmas that it goes to the heart of their communities. I applaud the way in which my hon. Friend the Member for Lewisham East, our right hon. and hon. Friends and others from across the party divide have put together a campaign that highlights their constituents’ concerns in such a high-profile and persuasive manner.

It has long been accepted that difficult decisions might well be needed to secure the sustainability of health services in south-east London, as the challenges facing South London Healthcare NHS Trust are complex and of long standing. As we have heard, the proposals to close the A and E and downgrade the maternity unit at Lewisham hospital are intended to assist a neighbouring hospital trust to find its way out of significant debt problems. It is a highly controversial procedure, to say the least, because Lewisham hospital, as we have heard, is well respected and well managed and recently underwent a £12 million refurbishment.

The proposals also introduce wider considerations that could affect the whole of south London’s health care. At the same time as the trust special administrator has been reviewing services at South London Healthcare NHS Trust, plans for changes to management structures and the merger of services have been progressing, led by King’s Health Partners and three foundation trusts—King’s College hospital, Guy’s and St Thomas’s and the South London and Maudsley—in conjunction with King’s college London.

Any plans for the whole area need to take full account of all the potential knock-on effects on the quality of care that people receive, and they need to consider how the merger plans will affect the health economy right across south-east London and potentially limit other long-term options for changes in south-east London. The figures provided by my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) illustrate the real problems associated with some of the changes being presented today: a 45% increase in emergency admissions and a 54% increase in births at King’s if Lewisham closes. Those huge capacity issues would need to be resolved. The Minister needs to look carefully at those figures.

As we have heard today, there are real concerns among the local Members of Parliament about the future of services at Lewisham hospital, so much so that recently a delegation of local doctors and my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock) and my hon. Friends the Members for Lewisham West and Penge (Jim Dowd) and for Lewisham East presented a petition against the closure of Lewisham’s A and E and maternity departments to 10 Downing street. In only five weeks, the petition against the changes has been signed by more than 32,000 people, and the numbers are still growing.

We have also heard that, as part of the campaign, there have been a number of protest marches against the closures. I believe that there will be one this weekend. I am sure that that will attract equally heavy support as the earlier ones, which I believe from my right hon. Friend the Member for Lewisham, Deptford took place in rather grotty weather. Notwithstanding the snow that there may be this weekend, I am sure that the good folk of Lewisham will still be out in force.

I am intervening quickly to support what my friend—I call him that despite his being on the Opposition Benches—the hon. Member for Lewisham West and Penge (Jim Dowd) has said. This is a matter of fairness. It seems extraordinary that failing hospitals are being supported and allowed to continue essentially as they are, but Lewisham—a wonderful hospital that is within budget and is gaining an increasing reputation— is being kicked, slashed and destroyed. I just do not see that as right. It is a matter of fairness.

The hon. Gentleman is absolutely right. It is also telling that a very substantial number of GPs, including the chair of the new clinical commissioning group and the head of every single clinical area in the hospital, have written to the Prime Minister to express their concerns about the proposals. That clearly shows that the proposals do not have the support of local clinicians. I urge the Minister to read the very passionate article in Saturday’s Guardian online by Lucy Mangan as well. That helps to address some of those points.

As we have heard, more than 120,000 people visit the A and E at Lewisham hospital each year and more than 4,000 babies are born in the maternity department. With the prospect of the A and E being closed and the maternity unit being downgraded, a number of worries have quite rightly been expressed, not least because, as we have heard from my hon. Friend the Member for Lewisham East in the debate, Lewisham’s population is estimated to rise significantly in the next few years as a result of the huge increase in the birth rate.

As I have said previously, there is no doubt whatever about the unanimity among the professionals and the population about the importance of maintaining services at Lewisham hospital—something that Ministers have always stressed they would fully take on board. As we have heard in the debate today, the right hon. and hon. Members who represent the areas affected believe that the plans are based on inaccurate data and flawed assumptions and that the whole issue has been misunderstood and largely mishandled.

We have the final report from the trust special administrator, urging this closure at Lewisham, and the Secretary of State is to make the final decision by 1 February. However, it is difficult to understand how the Government can consider that that report constitutes a full strategic review of the sustainability of services across south-east London. Labour Members believe that the trust special administrator has overstepped its remit under the Health Act 2009 by including service changes to Lewisham hospital. In addition, the parallel work by King’s Health Partners on reconfiguration under three other south-east London trusts has yet to be completed.

It is quite concerning when the rules on making changes to hospitals seem to have been changed to allow back-door reconfigurations in the way that I have described, without the proper scrutiny and consultation that would ordinarily take place. Indeed, the trust special administrator used powers passed by the Labour Government in a way that was never intended. I take the point made by the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). Nevertheless, what has happened sets a worrying precedent whereby the normal processes of public consultation are short-circuited and back-door reconfigurations of hospital services could be pushed through. This is a worrying situation, as it takes the NHS over a very dangerous line and is potentially the first back-door reconfiguration in that manner. If it is allowed to go ahead in that way, it could mean that any hospital services could be changed for purely financial reasons, which has never been the case in the past. We need to ask where the clinical case for change is in these proposals.

The 2009 Act clearly says that administrators must make recommendations relating to the trust that is failing. That has not happened in this case. Reconfigurations need to be based on solid clinical evidence that they will save lives. Where there is a clear clinical case, I think that that is right, and we should look carefully at changes before deciding whether we should oppose them. However, the TSA’s actions are leaving a very confusing and worrying situation surrounding hospital reconfigurations.

My hon. Friend the Member for Lewisham West and Penge got it right. We are starting to see a situation in which primary care trusts are moving quickly to try to secure service changes before the clinical commissioning groups take over, and it is becoming all too clear that it is financial pressures that are starting to lead to closures and health service changes. That is clearly wrong.

On the four tests for reconfigurations, does the Minister really think that they have been fully met and does she believe that this change has the support of local commissioners?

As ever, it is a great pleasure to serve under your chairmanship, Dr McCrea. I congratulate the hon. Member for Lewisham East (Heidi Alexander) on securing this debate. I have about 10 minutes to respond to all the points. In the normal terms of any debate, there is an airing of conflicting views, different ideas and different points of views, but today there has been no such disagreement; we have had an outbreak of complete agreement among all the speakers and all those who have intervened. Everyone who has spoken this morning has done so with great passion and sometimes with ferocity in defence of the maternity unit and the A and E department at Lewisham hospital.

Let me make it absolutely clear that we are not in this position because of a Government decision or proposal, or as a result of some set of Government cuts. I made that same point a couple of weeks ago in an Adjournment debate that was called by the hon. Member for Lewisham West and Penge (Jim Dowd). I hope that those in the public domain who report these matters make that point very clearly, too. Anyone who seeks to make political capital out of this exercise does so at their peril, because, in many ways, this transcends party political divide and should not be used for party political advantage.

The trust’s special administrator published his report on 8 January, and a decision will be made by the Secretary of State for Health on 1 February.

Will the hon. Gentleman wait one moment, because it is extremely important that I put this on record? The Secretary of State will consider whether to accept the recommendations of that report and will reach a decision by 1 February. As a result of that, bizarre as it may seem to those who do not know the House, I am in some sort of peculiar purdah where I am not allowed to give any opinion of my own. It might be that that is a good idea, I know not, but those are the rules and I stick by them. I am not in a place, as the hon. Member for Denton and Reddish (Andrew Gwynne) well knows, to be able to say whether or not the four tests have been satisfied or, as I have said, to give my opinion. Sometimes, it is extremely difficult for an MP such as myself not to give an opinion.

Will the Minister confirm that the four tests are relevant? Will she also note that the Secretary of State has said, “on or before” 1 February? It would be good to have clarity.

I agree. In such cases, it is imperative that a decision is made sooner rather than later. What is most important—

I have not finished my sentence; do forgive me. What is most important is that the right decision is made after careful consideration. I am pleased that the Secretary of State was true to his word and had a meeting with Members who are rightly concerned about the future of Lewisham hospital on 14 January. I know that it was effectively a listening exercise, because he could not express an opinion. That meeting was held with Matthew Kershaw, who is the TSA, and his officials.

The Minister mentioned that a decision is to be made on 1 February, which is a sitting Friday. Statements can be made on a Friday, as we saw with the urgent matter last week. Sometimes, statements about issues relating to London can be made, but will the Minister accept that this is an issue of national import? Will she prevail on the Secretary of State to ensure that, whenever the statement is made, it is not on Friday 1 February? Will she give us that assurance now, or seek one from the Secretary of State?

That is a good point well made. I will ensure that the Secretary of State is fully aware of the hon. Gentleman’s views.

Why are we in this position? That was a question posed by the hon. Member for Lewisham East. Let us be absolutely clear about it. South London Healthcare NHS Trust has six PFI schemes. It is not as simple as putting all the blame on the PFI schemes, as some Members have suggested. The two largest schemes are at the Princess Royal university hospital in Bromley with a £30 million PFI scheme, and at Queen Elizabeth hospital in Woolwich with a PFI scheme of £29.1 million. The PFIs were signed off in 1998, but they certainly do not help the situation.

The trust is losing £1 million of public money a week. That £1 million could be better spent on improving and providing services to all whom these trusts seek to serve. This is a trust that has a £65 million deficit, the largest in the country, so doing nothing is not an option. No Government of whatever political colour would stand by and see the haemorrhaging of £1 million a week. When hon. Members gather again on Saturday for their protest, I hope that they make it absolutely clear to all the good people who attend to support their local hospital that that is the real financial situation. Often, when faced with such realities, difficult and tough decisions have to be made. The simple truth is—and I am sure that the hon. Member for Lewisham East will agree with me—that we cannot continue to have that haemorrhaging and a deficit of £65 million.

No one disputes the existence of financial problems, but the closure of A and E and maternity departments affects people’s lives and health. Will the Minister confirm that, were the Secretary of State minded to agree to the proposals put before him, the four tests set by her own Government will be applied?

I am happy to remind us all of those four tests and principles; they remain as firm as ever. First, any reconfiguration should have the support of GP commissioners. Secondly, there should be full public and patient engagement and proper consultation. Thirdly, there should be a clear clinical evidence base. Fourthly, any reconfiguration should be in support of patient choice.

The hon. Lady comes to the House to represent her constituents and to put forward their views, which she undoubtedly shares, and their anger and concern about their hospital. In her speech, she understandably uses the words outrage and disbelief to say that those four tests, in all or in part, have not been made. She speaks with passion and with detail about the lack of support from GP commissioners and consultants at Lewisham and beyond. She says that this is a hospital that has had many successes and a long-standing investment. She makes the point that, given all the arguments that have been advanced by her and other hon. Members, the decision clearly has no merit.

Let me mention here the interventions by the right hon. and learned Member for Camberwell and Peckham (Ms Harman), my hon. Friend the Member for Dartford (Gareth Johnson), the right hon. Member for Lewisham, Deptford (Dame Joan Ruddock), who speaks in accord with others in support of the hospital, and the right hon. Member for Greenwich and Woolwich (Mr Raynsford). There were speeches by the hon. Members for Lewisham West and Penge and for Eltham (Clive Efford) and by my hon. Friend the Member for Beckenham (Bob Stewart).

This is a very serious subject and I do not want to be flippant. The views of all are certainly taken on board. In due course, the Secretary of State will announce his decision. Therefore, as I said at the outset, I cannot be of great assistance in addressing the various comments that have been made, because I am not allowed to give my opinion. I should, however, mention the contribution of my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes)—I think that I missed him off my list. He gave a thoughtful and frank speech in which he talked about his concerns about the legislation that brought about the appointment of the administrator. He has looked at an alternative and he advanced that.

Finally, the hon. Member for Eltham calls for a review of A and E, but he should do so with great caution. There might be merit in that, but when one embarks on such a review, we have to make it clear that, in those circumstances, some tough decisions might be made, and everyone involved in that would have to sign up to it on that basis.

Personal Independence Payments

It is a pleasure to serve under your chairmanship, Dr McCrea. I am very pleased to introduce this short debate about personal independence payments and blind and visually impaired people, because although the Government have made some very welcome improvements to the descriptors in relation to people with sight disabilities, many questions remain, and I am afraid that my speech mainly consists of questions.

The principle of disability living allowance and—one hopes—of PIP is that it goes a little way towards levelling the playing field, enabling disabled people to do the things that non-disabled people take for granted. As my constituent, Alison, told me:

“Many blind and partially sighted people rely on DLA to meet the extra costs they face every day as a result of their sight loss. The help they get from DLA is not a luxury; it means that they can live independently. Without it, they would be unable to do everyday things that people with sight take for granted, like being able to get out to do food shopping, getting to doctor or hospital appointments, being involved in local groups, looking for work; in short, living a life that enables them to do more than just stay at home.”

So my first question to the Minister—it is one that has been raised with me by a number of people—is this: do the Government have any intention of means-testing PIP now or in the future?

The Government state that the receipt of PIP will be based on an assessment of individual need, and the support required as a result of the particular health condition. The new assessment will focus on an individual’s ability to carry out a range of key activities that are necessary to everyday life. But will the assessment be truly based on the needs of an individual or on the “condition” that they have?

We all know that disabilities can affect people in different ways. The first constituent who contacted me about this issue—she did so well over a year ago—is Margaret. Margaret progressively lost her sight over a period of time. Initially, she continued to work and even went to college. She used to take the local bus service, but she found that impossible as she was reliant on drivers seeing her white stick, and slowing down to tell her what number bus they were driving and whether it was the bus she was waiting for. Such experiences became too much for Margaret and she developed agoraphobia, making her unable to work.

Margaret is reliant on the DLA she receives to interact with the outside world and to communicate with her extended family, many of whom live outside her area. She has enhanced audio-visual equipment on her TV and computer, which allows her to send e-mails and enjoy TV programmes. That makes life just a little bit more bearable for her.

I thank my hon. Friend for giving way and for securing a debate on this important subject. Does she agree that PIP assessments must assess adequately the needs of blind and visually impaired people, and that there is a need on the part of Government to recognise properly the extra costs of mobility for people with severe sight impairment?

I thank my hon. Friend for that intervention, and I will go on to talk in much more detail about some of the issues that she has raised.

Going back to my constituent, Margaret, she says that without her current rate of DLA she would not be able to afford the TV and internet package that she has, which would make her even more isolated from family, friends and the rest of the world. Her partner and carer, Jim, suffers from serious mobility problems; effectively, they care for one another. They are very worried about the potential effect of PIP, and they are also worried that some bright spark at Atos or the Department for Work and Pensions will actually declare Margaret fit for work.

Let us compare Margaret with John, who has been blind from birth and depends on his DLA to live independently and get to work, or with Michelle, who lost her central vision in 2005 and took a while to get back into employment. Michelle told me that she is registered blind, but apparently she is not blind enough to qualify for higher rate mobility, although she uses a long cane and frequently falls over. There is also Barbara, who had to leave nursing in her early fifties because of deteriorating vision but who then worked part time as a support worker to blind and visually impaired students.

We know that eye conditions can be very different: some rob people of central vision; some block out other parts or make looking at life like looking through lace curtains; and some cause a loss of depth of vision. There are many different ways that vision can be affected. So my question for the Minister is whether PIP will be flexible enough to focus on individual needs.

Peter also contacted me to raise concerns that blind and partially sighted people who cope with their condition may be penalised and lose benefits because they have made the effort to cope and have been able to do so. He is worried that people who have coped in the past will now refuse to cope, so that they can retain benefits. What is the Minister’s view on that?

Let us focus on mobility for a moment. The criteria refers to familiar and unfamiliar routes, stating that an individual who qualifies cannot follow the route of an unfamiliar journey without another person, assistance dog or orientation aid, or cannot follow the route of a familiar journey. John and others have talked to me about the reality that, for people with severe sight loss, there is no such thing as a “familiar” journey. Let me quote him:

“What is a familiar route? For me there is no such thing as a familiar route. For me, “familiar” is based totally on sound and feel. These constantly change. No route is the same two days running - disruptions are caused by wind, rain, people and traffic and I cannot use sight to check that it is safe or to update my knowledge of the changing environment en-route. Feel, via a long cane, is disrupted by ice, snow, leaves and standing water which disguise important orientation points like kerbs and tactile paving. “Bin day” turns pavements into dangerous, practically impenetrable obstacle courses with heavy randomly placed bins. Despite Highway Code regulations, cars are often parked with impunity well onto the pavement, vans leave ramps down and rear doors flung wide open. These obstacles are silent, invisible to me. With no sight, no auditory warnings, I regularly walk straight into these and have the scars to prove it. There is a limit to the amount of adapting one can do! I am vulnerable when asking strangers for direction. They may be ignorant or undesirable. I have never successfully, independently accessed a supermarket because the act of moving around brings me into contact with all manner of objects and people which are in close proximity. I’m not aware until I have actually hit them. This is neither appropriate nor socially acceptable behaviour and causes me great anxiety. Trying to travel on a bus or a train throws up the challenge of accessing transport information and bus stops, finding the right bus, recognising stops, finding a space to sit or a person to ask. A talking mobile phone is indispensible but very costly.”

John very kindly took me on the “familiar” route from his house to the main road, which was an absolute education for me. Because he needed to access different surfaces to understand where he was on the route, he was unable to take the shortest route and in fact some of the places that he ended up walking were, for me, far more dangerous than the straightforward route; however, he needed to access different surfaces. In order to cross a piece of land diagonally, he had to ensure a piece of wall was in the middle of his back at just the right angle so that he would end up at the right position for the next stage of the journey. A walk that would take an able, sighted person 10 minutes took him about half an hour.

I appreciate that, with the change in descriptors, John will be entitled to the higher rate of mobility, but what about Michelle? She only has peripheral vision and cannot see at night. As for the daytime, she said to me:

“If I see a puddle, I don't know if it’s a hole or a puddle.”

I have mentioned Barbara, who is a long-cane user and who has talked to me about hazardous journeys where, for example, there are shared pavements or traffic lights that do not have audio or tactile light-changing indicators. Of course, there are also cyclists who do not adhere to lights or—it seems to me—any other elements of the Highway Code, and of course they are another danger. Does the Minister expect partially sighted people who always use a long cane for familiar and unfamiliar journeys to qualify for the higher rate of mobility?

Concern has also been raised that the criteria of being able to do something reliably—safely, to a necessary and appropriate standard, and repeatedly, in a timely manner—will not be in the regulations. They are welcome descriptors, but how can the Minister assure us that those criteria will not change if they are not explicit in the regulations?

I thank my hon. Friend for giving way and I congratulate her on securing this important debate. As she knows, guidance notes for the PIP assessors play a key role in ensuring that we get a fair deal for those who are blind or partially sighted. Will she press the Minister to publish those guidance notes as soon as possible?

I thank my hon. Friend for that intervention, because it is really important that those guidance notes are printed. However, I also question whether we actually need to put those criteria in the regulations themselves.

I thank the hon. Lady for giving way and, like other Members, I congratulate her on bringing this matter to the House. The Royal National Institute for Blind People and Action for Blind People have both indicated that they will be able to help people to fill in forms. Does she feel that the Government should consider assisting those organisations to help people to fill in forms and to get the forms right, so that the assessment can be right?

The hon. Gentleman raises a really important issue. All of this—particularly with the computerisation of the forms—will be far more difficult. These things are hard enough for people with visual impairment, but they will become even more difficult. Organisations that support people with disabilities are themselves facing tremendous cuts.

As Michelle told me—this is demonstrated by John’s journey time—everything, including cooking, ironing and inspecting food, takes a person with visual impairment longer. What weighting will be given to the time element?

I turn now to the daily living component. Many people have spoken to me about the extra costs of being blind or partially sighted, but some of those costs do not appear in the assessment criteria. A number of people talked about the damage caused to clothing by catching it on railings or overhanging trees, and by falls and such like. There seems to be no recognition of such additional costs.

The assessment criteria appear to award a relatively low score for aids and appliances. The Government state:

“This recognises that the majority of aids are relatively low cost”.

Blind and partially sighted people would hotly dispute that the majority of their aids are low cost. I have mentioned the talking mobile phone and enhanced audiovisual equipment on TVs and computers. Specialist IT software and hardware are expensive. What about talking scales, magnifiers, Braille machines, accessible telephones and all the other devices that people need to lead their lives? Even a white cane costs more than £20. Has the Minister considered other funding sources that could assist blind and visually impaired people if such costs are not met through PIP?

As regards cooking and preparing a simple meal, I am not clear which category blind and visually impaired people could expect to find themselves in. If they can only put a meal prepared by someone else in the microwave, what would they score?

Probably the most significant element in this section for blind and visually impaired people is the cost. By the nature of their disability, many will be unable to find the bargains that sighted people will. They will also have difficulty with use-by dates, and they will often not be able to see whether food is fit to eat. John told me he has to purchase ready-chopped, ready-grated cheese and ready-prepared meat. He has to buy in single-use portions, otherwise he will subsequently not be able to tell whether the food is fit to eat. Of course, all that makes food far more expensive. Is that taken account of anywhere?

What about the washing and bathing section? Focusing only on washing and bathing takes away the elements of grooming. What happens to those who need help with shaving, doing their hair or putting on make-up?

In the dressing and undressing section, will the criteria relating to needing assistance to select appropriate clothing apply to blind and partially sighted people who need someone to prepare their clothing in advance, even if they can dress themselves on the day because their clothes are already sorted by colour and type?

On reading and understanding symbols or words, will the Minister confirm that someone who can read at home with a magnifier, but who cannot read labels in shops or see signs in the street, will be deemed not to be able to read at all?

As regards engaging with other people face to face, what happens with blind and partially sighted people who need someone there to describe the environment? Would they be covered by the words

“Needs prompting to engage with other people”


“Needs social support to engage with other people”?

Of course, other, additional costs are involved in keeping a safe, clean home environment. Will allowance be made for the additional costs of paying people for cleaning, laundry and ironing?

Although the debate is about PIP, I ask for the Minister’s indulgence because I also want to raise concerns about people such as Alison losing incapacity benefit and being told they are fit for work. There is no denying that many blind and visually impaired people work, but some are unable to. Are blind and visually impaired people being put into the work-related activity group or taken off employment and support allowance altogether? I have received reports that they are losing DLA. If benefits are supposed to be about what people can do, and not their condition, how can such decisions be made?

Finally, Atos does not have a good reputation for evaluating the needs and capabilities of ill and disabled people. Following the Atos debate, one person wrote about his experience, saying:

“I suffer from RSD/CRPS”—

reflex sympathetic dystrophy/complex regional pain syndrome—

“(an incurable chronic pain syndrome in both feet) which leaves me in constant pain every day and has reduced my mobility. I scored 0 points at the WCA”—

the work capability assessment. He continued:

“You have probably heard of the artistic license the Atos”

health care professionals

“take in documenting the Work Capability Assessment. Mine was no different. The HCP missed out relevant information I divulged in relation to pain, mobilising and standing and sitting. None of the timing in the report was accurate and he even went on to add information about me that I never stated. Mercifully I covertly recorded it all so have an accurate record”.

That is the sort of experience that many people are reporting currently about their Atos assessment, so blind and visually impaired people are rightly worried. How will Atos be monitored? Will the destination of blind and disabled people migrating to PIP be logged, assessed and reported?

As the Government have stated, the likely outcome of the assessment of DLA recipients under PIP is that 510,000 people will have awards increased, 270,000 will have awards unchanged, 510,000 will have awards decreased, and 450,000 people will have no award. How many blind and partially sighted people does the Minister expect will gain, lose or get no award?

I apologise for presenting so many questions to the Minister, but I hope that she will be able to answer the concerns of my constituents and the thousands of other people who will be affected by the changes to benefits.

I congratulate the hon. Member for Bolton West (Julie Hilling) on securing the debate on such an important issue and welcome all the contributions that have been made. It is a pleasure to serve under your chairmanship today, Dr McCrea.

The UK remains a world leader in rights for disabled people, and we currently spend almost £50 billion a year on services and benefits for them. Those valuable support mechanisms enable disabled people to make their own choices and live as independently as possible. However, for those valuable services to continue to be available, they must be provided in a sustainable way that reflects the needs of disabled people in today’s society.

It is generally recognised by hon. Members on both sides of the House and by the Select Committee on Work and Pensions that disability living allowance needs reform, to reflect today’s understanding of disability better. DLA has not been fundamentally reformed since its introduction more than 20 years ago, and it is a complex, poorly targeted and inflexible benefit, for some. There is confusion as to purpose and sometimes unfairness in the awards that are given, which has damaged public confidence in the benefit. The changes in the treatment of blind and severely visually impaired people, from DLA to PIP, should be welcomed, for we are giving the clarity that the hon. Lady seeks.

If there had not been a need to deal with the faulty structure of DLA in the first place, it might have taken slightly less effort to bring about the changes that we need in PIP. There has been a rigorous consultation over nearly two years, taking into view representations from charities and organisations that have all had a say.

Will the Minister join me in congratulating the Royal National Institute of Blind People, which has campaigned extensively on the issue and has managed to get some concessions, although there is still work to do?

I will indeed congratulate the RNIB and other charities and organisations that have represented the needs of blind and partially sighted people. The hon. Gentleman makes a good point.

The approach taken in the DLA to recognise the mobility difficulties of blind and severely visually impaired people does not look at people as individuals; it looks at their conditions. What we are doing—and, I believe, what the hon. Lady seeks—is requiring that everyone needs to be looked at as an individual: how has their condition affected them? That really is what PIP is intended to do. It is personalised. It is about the individual: what help that person needs.

At the moment, for DLA, 50% of claimants do not have medical support for their condition. More than 70% have an award for life. We seek to serve the public, including the hon. Lady’s constituents, as well as we can by making an award that is personalised.

The hon. Lady’s first question was about means-testing: no, the award of DLA and PIP is non-means-tested and that is how it will remain. It is intended to help those people with the most barriers to overcome them and live independent lives. As I said, it is very much about the individual, about what is fair to that individual and about the needs arising from the condition. To that extent, it is very much personalised. It will be flexible enough to reflect individual needs—that is what PIP is specifically designed to do. It is about having clarity, so that people will be certain of what they will get, but also about flexibility.

I thank the hon. Lady for bringing her constituents’ concerns before the House, because that is what we are here to do, to put a face and a person behind the needs, so that we can explain things clearly.

Can the Minister answer my intervention on the hon. Member for Bolton West (Julie Hilling)? What can the Government do for RNIB and Action for Blind People to help people to fill in forms? Those organisations will be inundated with people needing help, so whatever assistance the Government can give will be money and time well spent.

The hon. Gentleman may not know that the people seeking the award can say how they would like the form delivered to them and in what context. If people so wish, they can be accompanied by someone from a charity or organisation or by a friend to help them with the assessment. The process is about finding out as much as we can about the individual to help with the assessment and the decision so that we can give the correct award. Again,

“reliably, repeatedly, safely and in a timely manner”

is key to the decisions—that phrase is in the guidance and in the contract with the providers. The hon. Member for Bolton West asked whether that could be put in regulation, and I announced before the Select Committee on Work and Pensions yesterday that we are examining whether that would be of benefit. The matter is with lawyers at the moment, because we do not want to introduce something that could go against what we are seeking to do, to ensure

“reliably, repeatedly, safely and in a timely manner”,

which is key to the assessment. We are therefore looking at whether it can be put in regulation or whether it is better staying in the guidance notes. The hon. Lady also asked about those notes, which will be published as soon as they can be, possibly by the end of the month.

This is a principled reform, which we have developed in consultation and collaboration with disabled people. We have listened to their concerns, and those of their representatives and organisations, and we have made a significant number of changes as a result of the feedback from groups that represent visually impaired people. Indeed, that was recognised by RNIB, which stated in its report to the secondary legislation scrutiny Committee that

“the final criteria include a number of significant improvements for blind and partially sighted people.”

We were told that our draft communication activity did not take appropriate account of the barriers faced by people who cannot access written information. As a result, we introduced an additional activity to assess ability to read and understand signs, symbols and words. Therefore, someone who is completely unable to read because of their disability—for example, because of blindness—will get eight points towards their daily living component score. The score from that activity alone will mean that they get the standard rate of the daily living component. That is only one of the criteria; there will be a further nine in that section.

We also acted on the feedback that the effect of visual impairment for people who use long canes was not appropriately reflected in the mobility activities and that the barriers such people face are similar to those faced by people who have a support dog.

I appreciate what the Minister says about people who are totally blind, but what about those who can read at home only with the use of a magnifier? A magnifier clearly cannot be taken to the supermarket or into the street. Will such people be deemed unable to read?

That will be recognised, because what an individual can do inside the house with a magnifying glass might be significantly different from what they can do outside the house, such as following a journey, reading signs or reading labels in a shop, all of which have now been taken into consideration and will lead to points being accrued during an assessment.

The final draft of the assessment criteria includes specialist orientation aids, such as long canes, in the “planning and following journeys” activity. Therefore, someone who is blind and needs to use a long cane to follow journeys, even in familiar places, will receive 12 points, which will qualify them for the enhanced rate of the mobility component.

We have acted on concerns about the speed of reassessment by extending the reassessment timetable, so that we can learn from the early introduction of PIP by fully testing our process. We will be able to consider the outcomes of our first independent review in 2014 and act on its findings before reassessing the majority of current DLA claimants. The extended strategy means that the main bulk of reassessment will not start until autumn 2015.

I thank the Minister for her generosity. On mobility, what about people who are severely visually impaired but who have some vision and who need to use a cane for familiar and unfamiliar journeys? Will they be entitled to the highest number of points?

Again, the benefit is based on the individual, so I cannot give an all-encompassing answer. We have taken on board all the factors that have been raised today, and they have been reflected in the assessment. We have made that very clear, and each person will be viewed on how they are affected by their condition. The likelihood is that the answer is yes, but we have to view people as individuals. There have been strong representations from all the blind charities and partially sighted organisations, and those representations are reflected. The news of how we have changed the assessment has been welcomed by the groups themselves.

We are also seeking to learn from the experience of delivering the work capability assessment—and, yes, from the failings that we have had to address—to ensure that we get PIP right from the start. As part of that, we are looking closely at the findings of both the independent reviews of the work capability assessment by Professor Harrington to see where we can improve the design of the PIP claim and assessment processes to make them better, more effective and a more positive experience for claimants.

I hope that I have reassured hon. Members that we have listened and acted on the concerns of visually impaired people and that PIP will take appropriate account of the barriers that they face on a daily basis. As material on the RNIB acknowledges, the changes now mean that the

“blind and partially sighted should see their needs recognised when PIP is introduced.”

Sitting suspended.

Taxation (Living Wage)

[John Robertson in the Chair]

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

Tax cutting is as much about politics as about economics. Of course, the economics have to work too, but here is a statistic that should worry us: the Institute for Fiscal Studies and the Joseph Rowntree Foundation have shown that almost all the growth in household income since 2001 was wiped out by the financial crisis. At kitchen tables up and down Britain, it feels as though the last decade of growth simply did not happen.

It is hard for any Government to tackle that situation. Why? Partly because we—I am talking about the Conservative-led coalition—have allowed our political opponents to caricature tax cuts as measures that are only for our rich friends in the City, rather than a means of creating and sharing the wealth in society. Now, more than ever, we have to show that tax cutting is a moral creed that is about lifting workers on low incomes out of poverty and creating jobs for the unemployed. Hence my campaign to restore the starter rate of income tax at 10p, which was scrapped in 2008 by the last Government.

I believe that restoring the 10p rate would help the coalition to counter the war cry of its political opponents that it is only interested in cutting taxes for millionaires. It would prove to the public that “lower taxes for lower earners” is not just a soundbite but that it can be a reality, first by raising the threshold to £10,000 and then by bringing back the 10p rate for the lower-paid.

The Treasury has confirmed to me in a written answer that the move would cost around £7 billion a year, if it benefited everyone. Interestingly, the Chancellor told the House last year that the same amount of money was lost when Labour brought in the 50p rate of tax, and that has been confirmed by the IFS. I am arguing that when the top rate of tax falls to 45p the extra revenue that the Government say will be raised ought to be put towards restoring the 10p rate of income tax.

Not everyone agrees with my view. The campaign for a 10p tax rate has been opposed from the left, from the right and by our colleagues, the Liberal Democrats. Let me deal with each one in turn.

When Labour was in power, its main response to low wages was tax credits. The aim was a noble one—to help the poor—but the policy was flawed. For example, Dr Jamie Gough from Sheffield university recently told The Guardian:

“Tax credits enable employers to pay below a living wage, and thus subsidise their profits.”

Tax credits have also left the Department for Work and Pensions with a hugely complex system of overlapping handouts that taxes workers on low pay only to recycle the money back as benefits. Reporting on tax credits, the ombudsman has said:

“Many are unaware of them and DWP staff often fail to invite claims.”

The idea is fine in theory, but many people lose out in practice.

Other people take a gentler approach. The Living Wage Foundation has been asking employers to voluntarily pay £8.55 an hour in London. Again, that is a worthy aim, and perhaps larger corporates can afford it, but what about smaller firms and micro-businesses that cannot? I am a supporter of the minimum wage, but recently the Low Pay Commission warned against forcing it higher, because

“Firms may be reluctant to create jobs by recruiting inexperienced or young staff, because they are put off by the increased wage bill.”

I am grateful to my hon. Friend for giving way and for securing this debate on an important subject. Does he agree that linking the personal allowance with the minimum wage would be an excellent way to take everyone who is on the minimum wage out of income tax?

My hon. Friend has an interesting idea, which I would like to explore further, but I believe that the focus of all the resources that the Treasury has, which of course are not much, should be on restoring the 10p rate, for the reasons that I will go on to describe. I have argued that we need a solution for everyone, not just for the lucky few. That is why I was pleased to see Kevin Maguire in The Daily Mirror today supporting the 10p campaign.

I congratulate the hon. Gentleman on securing this debate on an important subject. I want to take him back to the point that he was making about tax credits supposedly allowing employers to pay lower wages. Presumably the basis for that argument is that tax credits raise the take-home pay for the worker at no cost to the employer. However, why does he not employ the same argument to the tax reduction that he is advocating, which again will raise the take-home pay of workers? In a properly competitive labour market, would that not allow employers to pay less?

That is where the philosophical difference between the right hon. Gentleman and me lies; I believe that we need to move away from a handout society, in which people’s taxes are recycled to hand out to various groups, to a hand-back society, in which people are handed back their own money through the tax system.

Some people on the right, especially in the think-tank world, oppose the 10p tax rate on the grounds that it is not radical enough. They say that it might undermine the case for a flat tax in some future Parliament. The problem with that—again, as the IFS has set out—is that a flat tax would be deeply regressive and it would be hard to defend as fair. While that remains true, a flat tax is unlikely to happen.

For example, the IFS has shown that merging income tax and national insurance contributions to a flat rate would literally take from the poor and give to the rich, unless the state was shrunk to a size that is politically impossible. Where I agree with people on the right, and with thoughtful commentators such as Ryan Bourne from the Centre for Policy Studies, is that the Government must do much more to generate support for broader tax cuts. My point, however, is that surely the best way to achieve that is to show that tax cuts are moral—to use a Blairite phrase, “for the many and not the few”—and that they will help millions of hard-working people, not just millionaires.

I do not have any difficulty with the hon. Gentleman’s proposal that there should be a 10p tax rate; in fact, it was a Labour Government who actually introduced that rate. Regarding a living wage, which the hon. Gentleman alluded to, I understand that there are no proposals—certainly, they would not be put forward by Labour—to legislate for a living wage. It is a voluntary thing, and it is down to employers, in fact, to decide whether to pay it.

The hon. Gentleman also referred to the minimum wage. I can certainly remember in my constituency many years ago that under the previous Conservative Government there was—what was it called? I think that it was called a “family supplement”, or something, for people on low wages. On one occasion, which really led Labour to legislate for a minimum wage—

I will do in a minute. The fact was that in my constituency we had people on £1 an hour. As I say, I have no difficulties with the hon. Gentleman’s proposal, but whatever Government are in power, at the end of the day, the big threat is from the Exchequer. It is the Exchequer that will probably try to torpedo his proposal.

I thank the hon. Gentleman for his intervention. As I said before, I agree fundamentally with the minimum wage; it is a moral right that people are paid a certain wage, and I am glad that my party now supports that, but I have questions about the living wage. First, how do we set it? I believe that it puts enormous burdens on smaller businesses; the big multinationals will be able to deal with it. I do not want it to act as a disincentive to employment, and I believe that the burden of responsibility for the living wage should not be on businesses but on the Government: the Government should reduce taxation.

Frankly, if it is voluntary, then it is not forced on small employers. It is the big employers who can pay it.

Of course, if businesses want to pay their employees a living wage, that is all well and good; I would be delighted at that and would have no problem with it whatever.

My hope is that once the threshold reaches £10,000, we will consider bringing back the 10p rate for the lower-paid. Some Liberal Democrats disagree; they have suggested that the best way to help families is to raise the personal allowance even further, to something like £12,500 a year. I absolutely agree the coalition should fulfil its £10,000 commitment, but it would be unwise to raise the personal allowance even further. Everyone should feel that they have a stake in the state, and they should have some stake in the tax system even if they pay only a small amount, because they need to realise that public services are not free and that there is no magic money tree. My fear is that the Liberal Democrats want to pay for their policy, which will cost £14 billion if applied to everyone, by dragging even more workers into the 40p band. That is what has happened historically. The problem is that we will soon have families with not very high wages paying a marginal rate of 40p, and that will include police officers, shop owners, managers and senior nurses in the national health service.

That point goes right to the heart of my hon. Friend’s argument. The aim of this policy should be to encourage people on low incomes to take higher-paid work, to work longer hours and to start the transition up the income scale. That is why he is right that we need to introduce a 10p tax rate in the interim; otherwise, people will go straight from their tax-free allowance to being taxed on any income above that. Does he agree that, in an era where there is downward pressure on many benefits, some of which affects the working poor, the 10p tax rate could be a good counterbalance, so that people keep their income in the first place?

My hon. Friend is exactly right. What he is saying is that we will create a hand-back society, where we give people back their own money, rather than just a handout society, which recycles benefits through the tax system.

Taxing the people I describe at the 40p rate is a brake on aspiration, and it has hit single-worker families the hardest. We started this Parliament with about 3 million workers paying the 40p rate, and the number will be closer to 5 million by 2015. We should not add further to that figure, as my hon. Friend says. Restoring the 10p band is more affordable than raising the personal allowance to £12,500. Most low-income workers would still have a stake in the tax system, and it would avoid dragging more families into the 40p band. That is why I support it over the Liberal Democrat proposals.

The fundamental point is, as the Government say, that we lost £7 billion when the high tax rate went up to 50p. If we get more revenue from having a 45p tax rate, the moral thing to do will be to put those extra billions towards funding the 10p tax rate.

Of all the things the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) did, the one that genuinely amazed me was that he scrapped the 10p band, given what the Labour party stood for. I accept that he introduced it in the first place, but when I watched him scrap it, I genuinely could not understand why he was doing it. Overnight, the change crushed working people with a £232 tax rise. Why should the Government not set themselves the goal of reversing that unpopular decision? There is a strong case for doing so. As I said, tax credits are flawed; small firms cannot afford the living wage; a flat tax is not going to happen and is unfair; we do not want to drag any more families into the 40p band; and everyone should have some stake in the tax system.

I suggest to my hon. Friend the Minister that the policy would be popular, that it would be a symbol of the Government’s economic mission and that it would help to tackle the desperate stagnation in incomes that Britain has suffered in the past 10 years.

I congratulate the hon. Member for Harlow (Robert Halfon) on bringing this matter to the House for consideration. I want to give a Northern Ireland perspective and to discuss the importance of small and medium-sized businesses, particularly for my constituency, but also for constituencies across the rest of the United Kingdom.

Times are tough for many families throughout the UK. They face stagnating wages, coupled with rising costs. Many small businesses are struggling and cannot afford annual pay rises. The question in many families is, is it better to be in or out of work? The cold reality of the market out there has pressed many of them to make a decision about that.

The Government have shown that they are attempting to address the situation through the uplift of the personal allowance threshold. That should mean that approximately 250,000 workers on low pay no longer have to pay income tax, which has to be good news. The same uplift will also mean that most basic and higher-rate taxpayers will pay £47 less tax from April, after the Chancellor increased their tax-free limit to £9,440 a year.

The Chancellor has indicated that the steps the coalition has taken have increased the number of low earners lifted out of tax to 2.2 million. Again, that is good news, and things are going the right way. The amount of tax paid by people on the minimum wage will have been cut in half by next year. From next April, the personal allowance will rise by a further £235, so the total increase next year will be £1,335—the highest cash increase ever. Over the past two years, the Government have announced total increases to the personal allowance of £2,965, with the aim of reaching a £10,000 allowance in this Parliament.

I read the report of the debate about paying a living wage, which would help many people. Northern Ireland has the highest proportion of people earning below the living wage in the UK, at 24%, and is followed by Wales, at 23%. The lowest proportion of sub-living-wage earners is in London and the south-east; in both cases, it is 16%. However, the number of people affected in London is 570,000. In the north-west, it is also 570,000, while in the south-east, it is 530,000. In terms of the numbers, therefore, those are the most affected areas, but they do not compare with Northern Ireland in percentage terms.

A study showed that workers in the hospitality industry are the worst affected, with 90% of bar staff, and more than four out of five waiters and waitresses, or 85%, paid less than the living wage. The study also showed that 75% of kitchen and catering assistants, as well as launderers and dry cleaners, were paid less than the living wage. Similarly, 70% of cleaners and florists received less than the living wage. Clearly, those figures are of some concern.

There has been a whole range of price increases on things such as travel, as well as benefit cuts. In tax terms, would the reintroduction of the 10p tax rate offset that and take people to the level of the living wage?

I wish I knew how that would work. I cannot answer that question; the person who can is perhaps the Minister. I hope that that would happen, but I cannot say that it definitely would. Perhaps the Minister can comment on that when he responds.

Small and medium-sized businesses make up more than half the UK’s business population. As such, they are not a minority, and they should not be overlooked or ignored. That is what I want to focus on. The Federation of Small Businesses has said that Northern Ireland has the highest concentration of SMEs—companies with fewer than 250 employees—in the UK. There is not one business in my constituency that employs more than 250 people, so SMEs are very important for the people I represent. Those SMEs account for 81% of all private sector employment and 79% of all private sector turnover. In contrast, less than 1% of the private sector consists of large firms, which account for less than 20% of total employment and 21% of turnover.

Small businesses employ 65% of the private sector work force in Northern Ireland, compared with 62% in Wales, 48% in Scotland and 46% in England. Small businesses account for a greater proportion of turnover, contributing 60% of all private sector turnover, which is, again, higher than in Wales, at 46%, in Scotland, at 40%, and in England, at 36%. Some 54.5% of gross value added was produced by small businesses, which are those with nought to 49 employees, while a further 27% was produced by medium-sized enterprises, which are those employing between 50 and 249 people. In total, SMEs accounted for 81.6% of GVA.

Those figures indicate the importance of SMEs, which are critical for the future, particularly in my constituency. The Prime Minister has indicated that he wants to build up the private sector, but we need to do that before we try to downsize the pubic sector. The statistics show how essential those businesses are to the economy. I wonder how many of them could afford, in these difficult days, to up their wages bill when they are already struggling to stay afloat.

This year will be critical for a great many industries, in my opinion and the opinion of many others more expert than I am. I know of more than one business in my town that has downgraded from two shops to one, but which has kept the same staffing levels in the hope of reducing overheads and not having to make staff redundant. For the owner, the most important thing is not to make staff redundant—not to send people to the unemployment queue. He cares about his staff and does not want them to be out of work. However, he has children to feed, as they do, and if we asked him to pay his eight staff more wages, he could not. He would either have to lay some off, or close altogether. I know that that story is being replicated throughout the UK, as even businesses that were thought to be established call in the administrators and close their doors. Can we honestly expect the small retailer to take up the slack? We hope that he or she can do it, but we are not sure.

Can we force the onus of economic recovery on to shop owners, or does it lie in this place? I believe it lies in Parliament and with the Assemblies. We must encourage small businesses to pay their staff what they can; but there is also a need for decisions for growth and the encouragement of business investment in local economies, and for the creation of employment and spending power. A living wage is a great target to aim for, but that will be brought about not through legislation but through good governance from the House and the devolved Assemblies; the Northern Ireland Assembly has a particular role to play. We need to focus on those issues, and when economic conditions are right—which we hope will be soon—we can expect employers to play their part in making things better for their employees.

I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing this important debate. It is a great pleasure to follow the hon. Member for Strangford (Jim Shannon) who always speaks so passionately on behalf of his constituents in Northern Ireland. I noticed time and again from the statistics he offered that Northern Ireland and Wales are often classified as the poorest parts of the United Kingdom. That makes the 10p tax rate an incredibly important issue for my constituents in north Wales.

We must congratulate the coalition Government on the significant increase in the personal allowance. It has meant a huge cost to the Government, but it is the correct decision and it highlights the coalition’s strong belief that the best way to help people is to allow them to keep more of the money they earn. That is the big difference between the coalition and the Labour Opposition, who believe that the best way to help the poorest in society is to take money from them and give some of it back, depending on their circumstances. I strongly believe that we should try to ensure that people keep as much of the money they earn as possible. However, my hon. Friend the Member for Harlow made another important point: I support the aspiration of a £10,000 personal allowance, but we must ensure at some point that people understand that they must contribute to society.

I welcome the movement in the personal allowance, which means, for example, that the husband and wife who run a small business as owners of a small guest house in my constituency can earn £20,000 from it without paying tax. That is an incentive for them to work and make a success of the business; but it is important that people understand that there is a point where they must contribute towards what the state provides. It is all very well to ask and demand more from the Government, but there is an understanding, which includes everyone, of a need to contribute. That is why it is important to focus our attention, once the £10,000 personal allowance is secured, on continuing to support the lowest paid, but in a possibly more cost-effective manner. Let us be honest: a 10p tax rate would cost half the amount of an increase in the personal allowance. There would be an impact on more people. We should support the aim of securing a new 10p tax rate, because it would help the poorest paid but also emphasise the need for everyone who works to contribute to society at some stage. I strongly support that aspiration.

I have nothing but sympathy with the Minister on the issues that the Treasury faces. The previous Government left them with a terrible situation—and I am not talking just about the financial deficit. The complication beyond recognition of the tax system is frankly shameful. In a recent article Philip Booth included a table that highlighted the fact that the marginal tax and benefit withdrawal rates are now out of tune. That results in a situation where someone earning between £8,000 and £38,000 is paying, between benefit withdrawal, tax payments and national insurance payments—if that person has a family of three children—a 73% marginal tax rate. That then falls to 42%; then it goes up again if people earn more than £100,000, because of the personal allowance withdrawal. Then it goes down again. The progressive tax system, which everyone in this country believed in, has been completely distorted by a process in which benefits, personal allowances and so forth have been withdrawn in response to a financial crisis. That has left a distorted tax system that goes against something the coalition is strongly in favour of—the aspiration to support people who want to support themselves. It is difficult to see how a tax system that now has so many distortions is doing the job it is meant to do, of supporting such people.

The Treasury faces a huge job in dealing with the deficit, but in due course it will need to think carefully about how to make the tax system fairer, with a progressive element rather than the present slightly distorting effect. There are opportunities to change it. Universal credit will deal with many anomalies at the lower end of the income spectrum, but we must recognise our responsibility to see the tax system for what it is—a failing system whose distortions run counter to the work ethic. The counter-productive element of the tax system is reflected in the fall in the 40% tax rate threshold. The fact that it will hit people on an income of £34,000 from April is counterbalanced by an increase in the personal allowance, but we must be aware that people in fairly modest positions in society are now being expected to pay a higher rate of tax, something that previous generations would not have anticipated. We have a responsibility to deal with that issue. The important thing for the Government is to try to provide circumstances that will support people in work.

The Northern Ireland situation has been discussed, and it is similar to that in Wales. We need to congratulate the Government on the fact that the tax payments of a person on the minimum wage, for example, have been halved as a result of changes to the personal allowance. There is a question whether it is justifiable to call something a minimum wage while still expecting someone to pay tax on it. However, I want to sound a note of caution about the living wage. I support the aspiration, but I question the affordability of it. I specifically question the fact that local authorities in Wales are saying they will pay all their staff a living wage. Is that a reasonable way to deal with the issue? In effect, it is using money raised in taxes from people who are often not particularly well paid to provide a benefit for people in the public sector, who may have better benefits than other workers. I question that: by bringing in a living wage for some workers, the public sector in some local authorities reinforces the view that people who work for the public sector somehow deserve better pay than those who work in the private sector. I am hugely concerned about it.

There is a saying in Welsh, which I hope that you will allow me use, Mr Robertson: “Hael yw Hywel ar bwrs y wlad,” which means it is very easy to be generous with other people’s money. When I hear of local authorities in Wales that are thinking about taking that course, I ask them to reflect on where the money comes from in the first instance; because 75% to 80% of local government expenditure in Wales is from general taxation, so lower paid workers in other parts of the economy will be contributing to enabling councillors to feel good about themselves. The aspiration should be for people on comparatively low pay not to have to pay significant amounts of tax. Therefore the increase in the personal allowance, coupled with the 10p tax rate, would make a huge difference.

I support the aspirations behind the debate today, but we must consider the issues in the context of the complexity of the tax system, and the challenges to the Government in dealing with the deficit. However, a challenge that is equally crucial is to set out plans to introduce a 10p tax rate and deal with a tax system that is no longer progressive in the way it collects taxes from families. That may be something for a second term, but I am confident that there will be one. I am sure that after 2015 a Conservative Government will be able to deal with the anomalies and ensure that the tax system is fair to all—whether those at the lower end of the tax spectrum or a family earning perhaps £40,000 or £50,000 per annum.

I hope not to be as challenging for the Hansard reporters as my Welsh colleague, my hon. Friend the Member for Aberconwy (Guto Bebb).

It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing the debate. He is a worthy champion of such issues and I hope to give him my support.

Although my Cleethorpes constituency is best known as the premier resort of the east coast, it is a highly industrial area that takes in a large section of the Humber bank. Although there are highly skilled and well-paid jobs in some of the factories, my constituency, and indeed the region, is an area in which pay is considerably below the national average.

Seaside resorts are heavily reliant on part-time, often seasonal work. In some cases, that is not necessarily what people would like, but it is what is available. For other people, the work fits perfectly with their family responsibilities and is a useful supplement to the family income. The Conservative party has traditionally been the low-tax party, and so it should and must remain, but it must be low tax for all, with the emphasis on the low-paid. The coalition Government have done an awful lot in that respect, most notably through the massive increase in personal allowances. However, as my hon. Friend the Member for Harlow pointed out, we risk jeopardising much of the political benefit if we allow our opponents to paint us wrongly as the party of the rich and privileged.

The hon. Gentleman refers—rightly, I am sure—to the importance of part-time, often low-paid workers in his constituency, but does he accept that the coalition’s withdrawal of working tax credit from part-time workers has hit those workers very hard and represented a disincentive to work, which is contrary to his argument?

I acknowledge that that has not been welcomed by many of my constituents, but what is important is the balance the Government have achieved to support and supplement the incomes of the lower-paid.

My hon. Friend the Member for Harlow is to be congratulated on keeping this issue high on the political agenda. Indeed, it has been a theme of Conservative thinking for decades and, in recent years, it was taken up by my noble Friend Lord Forsyth, who argued strongly in favour of simplification in the tax reform commission’s report. Paragraph 6.1 of that report states:

“The personal tax system should be characterised by low tax rates and simplicity. Allowances, reliefs and loopholes should be cut where possible and compliance costs reduced. The least well-off in society should be taken out of tax altogether. Many of the lowest paid pay tax while receiving benefits and tax credits. This recycling of money is a waste of resources. It is a waste of time for the individuals and the government. It should be reduced and eliminated where possible. Personal tax rates are also too high.”

The abolition of the 10p tax rate by the previous Government in 2008 represented a tax rise of £232 for working people. For someone earning today’s minimum wage, the reintroduction of that rate would be the equivalent of a tax cut of some £250 a year.

Reducing the rate of tax is the most effective way in which the Government could contribute to achieving the living wage without forcing employers to pay more or creating further barriers to employment. It would also ensure that working people would keep more of their money in their pockets. When considered alongside the universal credit, a 10p tax rate would enable more people to escape their reliance on benefits. Of course, I recognise that achieving the 10p tax rate would have a significant cost—£6 billion, I understand—and I appreciate that Treasury Ministers must balance that cost against the potential boost to the economy derived from any tax cut, but a commitment to movement in that direction would be most welcome.

Today, in an excellent article on the “ConservativeHome” website—I am sure that Opposition Members have read it—my right hon. Friend the Financial Secretary to the Treasury, who, like many Government Members, has impeccable working-class credentials, says:

“We must be the party of ordinary working people. The party of people who want a decent job to support themselves and their families; the security of a home of their own where they can be stable and settled; reliable back-up from well-run, caring public services; and enough money left in their pay packets to afford a car, a holiday, savings for a rainy day and a reasonable pension in retirement.

These are not the demands of those who think the world owes them a living. It is an attitude to life distinguished by quiet responsibility, mutual reliance and family loyalties. That which is asked of government is…to provide a shield from risk and turbulence—instead of adding to life’s uncertainties.”

I would say that they are very Tory views, and I echo them 100%.

My parents were proud to describe themselves as working-class Tories. They came from the generation that had seen the war and the post-war years of austerity. It was a generation of self-reliance, and my parents took great pride in the fact that they were self-reliant. Whatever label we use—working-class Tories, blue-collar Conservatives or whatever—the policy advocated by my hon. Friend the Member for Harlow is a rallying cry that we can all welcome.

A commitment to a 10p tax rate would send the clear message that we are indeed all in it together. It would further cement in the minds of voters that Conservatives now, as always, represent all members of our communities, and it would also emphasise the damage done—if I may misquote Harold Wilson—by 13 years of Labour misrule. Such a commitment would send a clear message to my constituents in Cleethorpes and people elsewhere that in the future, as in the past, it is the Conservatives who can best help working people.

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

I commend the hon. Member for Harlow (Robert Halfon) on securing this debate on what is undoubtedly a crucial issue, not just for families on low incomes, but for our society and economy as a whole. We both share a great passion for promoting the importance of apprenticeships, and I believe we were among the first Members to employ an apprentice in our offices. Given today’s debate, it also seems that we share a passion for ensuring a fair distribution of wealth, for eliminating poverty and for creating incentives to work. That is why I am delighted that he secured the opportunity to debate this important subject, and particularly the benefits of a living wage, although I fear that our views diverge on the solutions that we would pursue to achieve those aims.

I commend hon. Members who contributed to the debate. The hon. Member for Strangford (Jim Shannon) made a powerful speech about the plight of low-paid workers and the striving private sector in his constituency. The hon. Member for Aberconwy (Guto Bebb) also made a comprehensive and powerful speech, although I dispute some of the issues that he raised, and particularly something that many hon. Members have talked about today—the idea of taking money away and giving it back.

No one, however, mentioned the impact of some of the Government’s changes. The strivers’ tax that was voted through by Government Members last night will have a devastating impact on many women across the country. Huge support is given to help women to cope with their child caring responsibilities and to support them to stay in work by making work pay, despite the significant costs of child care and taking maternity leave. That seemed to have been completely overlooked in the debate, so I wanted to draw attention to it.

At the moment, the key issue is the impact of the Government changes, particularly on low-paid workers. The Government present the rise in the personal allowance as a benefit for some of the lowest-paid workers, but the reality is that several of the measures announced in the Budget and the recent autumn statement are impacting on those very workers whom Government Members profess to want to support. After one does the maths, there is huge concern regarding making work pay for those people.

The hon. Member for Cleethorpes (Martin Vickers) talked about the withdrawal of tax credits and keeping more money in people’s pockets, but Government Members have overlooked the major issue of the increase in VAT, which has had a massive effect on many people’s pockets. There is talk about how people should be required to make a contribution, yet low-paid workers throughout the country are making a contribution every day because of the additional VAT that is levied on them.

I want to make a bit more progress on setting out our position.

I challenge the hon. Member for Harlow on his approach, given that he, along with Government Members, yesterday voted through a measure that is effectively a real-terms cut for millions of striving families throughout the country. He voted for £6.7 million in working-age benefits and tax credits to be taken away over the next four years, thus cutting such support in real terms. I will be interested to hear the Government’s response to his contention that the reintroduction of the 10p tax rate would be the solution to the devastating impact on many families of such changes.

We are all too aware that the economic situation in which we and the Government find ourselves is challenging, to say the least. As a result of the Government’s failure to generate jobs and growth, they are set to borrow £212 billion more than planned, and the Chancellor has had to admit that he is set to miss his target of getting the national debt falling by 2015. The Office for Budget Responsibility has revised social security spending up by £13.6 billion by 2015-16, which is the price tag of higher unemployment. Although it is welcome that the unemployment figures have fallen recently, if we look behind the headline numbers, we see that long-term unemployment is not coming down, and that unemployment rose in a third of England over the past month.

People are struggling to make ends meet due to a combination of under-employment, stagnating wages, rising food, fuel and child care costs, and the hike in VAT. The situation is leading many people to a point at which they are increasingly using food banks and are often forced to work two or even three jobs just to keep their heads above water. Only yesterday, an alliance of 100 energy companies, charities and businesses joined forces to warn the Prime Minister that Britain is heading towards a fuel poverty crisis as a result of the Government’s failure to tackle that problem properly, with perhaps up to 9 million homes affected by 2016.

We heard several interesting contributions about the living wage, especially from the hon. Member for Harlow. To some extent, they built on the debate earlier this month that was secured by my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) which, like the hon. Member for Strangford, I read with great interest. The living wage campaign has been around for just more than a decade, but events of recent years have meant that the policy has come of age and is now right at the top of the political agenda. There is no doubt that Labour’s national minimum wage transformed the lives of millions. The policy not only affected people’s personal finances, but meant that the Government had made a clear statement that there was a line under which pay for an hour’s work would be unacceptable.

The hon. Lady is being generous in giving way and I hope that she will not mind me restating my question, but I have not yet heard the answer. I am not asking for a policy, only whether, in principle, she and the Labour party are in favour of a 10p tax band or against.

The hon. Gentleman is well aware that Labour introduced the 10p tax rate. In the context of levelling out income tax and the personal allowance, the tax rate went from 22% to 20% and the 10p rate was abolished. There were various debates about winners and losers at the time, and there is no particular move at the moment to reintroduce the 10p rate. We are more concerned about the impact of the Government’s economic measures on low-paid workers, which the hon. Member for Harlow was discussing.

The Labour party’s approach has been clear—to tackle issues of low pay and to ensure that work always pays. We therefore want support for those who need extra help to make work pay, to keep them off benefits and to ensure that they can afford necessities such as child care so that they can stay in work. We have made our policy clear and we are therefore proud of what we achieved through the tax credit system.

I am grateful to the hon. Lady for giving way on this obviously difficult point. Having been in opposition, I fully understand her difficulties with people trying to bounce her into writing a manifesto commitment for the next election, but can she say whether the Labour Government made the right decision to abolish the 10p rate or, with hindsight, was that a mistake?

I appreciate the hon. Gentleman’s concern, but I am trying to discuss the premise proposed for debate today by the hon. Member for Harlow, which is people on low pay and the living wage campaign, so I will return to my point on the national minimum wage, which transformed the lives of millions. The policy is now taken for granted, but it was implemented in the face of often strident opposition, in particular by members of the Conservative party. Despite significant opposition at the time, however, it now seems to be universally accepted as an important aspect of our economy in ensuring fairness across the board.

The squeeze on people’s incomes and the ever-increasing cost of living, of which we are all aware and which we have all seen among our constituents, mean that for many the national minimum wage is simply not enough to make ends meet. Thus, a higher rate of £7.45 per hour outside London and £8.55 per hour inside the capital has been calculated by the Centre for Research in Social Policy as the level required to enable people to provide for themselves and their families.

On the minimum wage, although I was not in this place for the debates, my recollection is that the issue was about the scale and level of the minimum wage. My real concern was that the state was imposing a minimum wage on small businesses but also helping itself to tax from that minimum wage. Surely it is a good thing that the coalition is ensuring that people on the minimum wage are now paying significantly less tax.

Could the hon. Gentleman repeat his premise about how the Government are helping people on the minimum wage to pay less tax?

The point is simple. The Labour Government brought in a minimum wage, and yet the Government of the day helped themselves to significant amounts of tax from that minimum wage. In other words, small businesses in constituencies such as mine felt that they were being forced to pay higher levels of wages in order for the Government to be able to help themselves to tax. Surely this Government, by increasing the personal allowance so significantly, have reduced the tax take from those on the minimum wage.

I accept that the Government have increased the personal allowance, but their other policy changes have impacted on those very people whom they purport to be helping, with a real-terms effect on families up and down the country. In fact, the hon. Member for Cleethorpes admitted that his constituents are certainly not happy about some of the changes and their impact. I know for certain that my constituents would agree, but the shocking fact is that almost 5 million people across the UK are currently paid less than the living wage, and 3 million of them are women. The Government may believe that the way to motivate people on low incomes is to pay them less, and the way to motivate those on the highest incomes is to pay them more, but the Labour party believes that this is an issue of dignity at work and social justice.

My hon. Friend is doing a very good job of batting off the attacks from Conservative Members. Does she agree that the hon. Member for Aberconwy (Guto Bebb) must not be allowed to rewrite history? The Conservative party argued vigorously against not just the level of the minimum wage, but its very introduction. It said that it would destroy jobs, but after it was introduced, 1 million extra jobs were generated in the economy. I think the Government now accept the point, but the hon. Gentleman must not be allowed to get away with rewriting history.

I thank my right hon. Friend for making that important point. I said that there was fierce opposition, particularly from Conservative Members, when the national minimum wage was introduced, and he has given some colour to the debate that took place at that time. We are moving on to the next stage, and the Labour party is backing the living wage campaign, which is a perfect example of how we can deliver a one-nation economy in which everyone has a stake, and prosperity is fairly shared. That is why Labour councils are delivering a living wage throughout the country, despite straitened economic circumstances for many and in the face of swingeing Government cuts. We believe in doing the right thing for low-paid employees. Those local authorities include Islington, Lambeth, Wigan, Camden, Oxford, Preston, Southwark, Hackney and, from November last year, my city council, Newcastle, which is meeting the cost of paying the living wage entirely from a reduction in management costs.

Labour councils are paying a living wage because it is a powerful symbol of the change that the Labour party wants to see in our economy. We do not want the race-to-the-bottom approach backed by the Government, who seek to erode workers’ rights and make it easier to sack staff. We want to aim for a higher skilled, higher waged and more productive economy that can genuinely compete on the global stage so that workers are not forced into several jobs with no chance of spending proper time with their families.

It is vital that the Government, both central and local, take a lead, but it is not enough, as hon. Members have said, for just the public sector to implement the living wage. It is great news that around 140 private sector employers have taken that step, including notable firms such as KPMG, Barclays, Deutsche Bank, PWC, Lush, Westfield shopping centres and InterContinental Hotels Group. Many of those firms have been clear about the positive impact that paying a living wage has had on their companies. KPMG has reported higher employee morale, motivation and productivity alongside a reduction in staff turnover and absenteeism since the policy was implemented.

Does my hon. Friend agree that the really important commitment is not just that large organisations commit to the living wage, but that they require their contractors and subcontractors to do so? Otherwise there is a risk that they will simply outsource their low-paid jobs while taking credit for paying the living wage to their direct employees. We want everyone to have it.

My right hon. Friend raises an important point, and I will come to the Government’s approach to procurement in the private sector as the ripple of understanding of the benefits that the living wage can bring spreads to employers throughout the supply chain.

The hon. Lady mentioned some companies that have supported the living wage. That is all well and good, but they are big corporate companies that can afford to pay it. The issue for me is that smaller companies will find it much harder to afford to implement it. Surely the best way to help the lower paid is what the coalition is doing—cutting tax for low earners and taking 2 million lower income people out of tax all together. Is that not a much more effective way of helping the lower paid?

As I have said, the impact of the Government’s changes and the raising of the personal tax allowance have provided some help for those on the lowest wages, but the real impact has been detrimental. The figures from the Institute for Fiscal Studies show clearly that a family with one working earner will be worse off, on average, by £534 by 2016 because of all the tax and benefit changes that have been pushed through. I take on board the hon. Gentleman’s point, but the Government’s policies are hitting lower paid workers, not helping them.

I thank the hon. Lady for being so generous. She is right if she takes the benefits changes by themselves, but if she then looks at the lower tax for lower earners, the council tax freeze and other measures the Government have introduced, lower income workers will not be worse off in the way she describes.

That is certainly not the case in the studies that I have read on the overall impact of the tax changes that the Government have pushed through. The hon. Gentleman raised the important point about the best approach. I am sure that he is aware that the analysis by the Institute for Public Policy Research and the Resolution Foundation suggested that introducing a living wage could lead to a net gain to the Treasury of more than £2 billion a year when the costs of paying it throughout the public sector are set against reduced benefit and tax credit payments, and higher income tax and national insurance receipts.

As the living wage campaign takes hold, wins the arguments and wins over more and more companies, including those throughout the supply chain and smaller companies, it will improve the economy as a whole, and help to put more money in people’s pockets to spend in the local economy. That is vital when so many high streets and local companies are struggling. We have seen many worrying examples of high street shops closing. That compares with the suggestion of the hon. Member for Harlow to reintroduce the 10p tax band, which the Library estimates would cost around £6 billion a year. The cost of the hon. Gentleman’s approach is indeed high, particularly when set against the gains made to the Treasury from its ill-thought-through cut in support for low-paid families that was voted through last night.

The hon. Gentleman has set out his suggested approach for supporting low-paid workers. The Government’s approach needs a little more inspection at this stage. Last night, the striver’s tax was voted through, and according to the IFS, 7 million working households will lose an average of £165 per year. Indeed, its calculations show that the impact of the changes announced in the autumn statement between now and April 2015 will be to reduce the real-terms income of a one-earner working family by £534 on average by 2015-16. We know that a further 200.000 children will be pushed into poverty as a result of the uprating measures that were voted through last night.

Despite what the Chancellor may like to believe and some of the rhetoric from hon. Members on the Government Benches, it will not be so-called shirkers who suffer the impact of the changes. The Children’s Society has calculated that up to 40,000 soldiers, 300,000 nurses and 150,000 primary and nursery school teachers will lose out as a result of the 1% uprating decision. I have mentioned the impact of the mummy tax on women. The Government are not content that two thirds of those affected by the 1% uprating of benefits and tax credits will be women; they want to impose an effective tax cut of £180 on working women through their real-terms cut in statutory maternity pay.

Those are just a few examples of the Government’s warped priorities for workers on lower incomes, and there are many more. People are angry that they are being asked to pay the price of the Government’s economic failure when they are already struggling to get by, and when—all credit to the hon. Gentleman for raising this—the Government have decided to give a tax cut to millionaires. They need to neutralise the perception that they are giving tax cuts to the rich.

That point is well worn and made continually, and I am sure that all Members are aware of the top rate of tax being cut, but there is an element of financial amnesia here. As even people who only have a rudimentary understanding of economics will appreciate, the main way that wealthy people accumulate wealth is through wealth creation, rather than income, which is always variable. If we look at capital gains tax, the current rate is 28%, which is in stark contrast to the previous Labour Government, where venture capitalists were paying capital gains tax at a rate of 10%—often much lower than the cleaners who were cleaning their offices.

I appreciate the hon. Gentleman’s point. We always have to support business growth and creation. Unfortunately, many of the Government’s policies are impacting on individuals and on consumers who will buy the goods that such companies make. In reality, that is resulting in stagnation and no growth in the economy, which is taking the country backwards, not forwards, but I take his point on board.

I suggest that a simple and effective way of pulling off an image neutralisation attempt would be by not going ahead with that tax cut for the rich, and by not pushing through real-term cuts for people in work, but on low pay. The hon. Member for Harlow has put forward his alternative argument—the restoration of the 10p rate of income tax on income between £9,205 and £12,000. However, as he notes in his early-day motions, restoring the 10p rate of income tax would move workers on the minimum wage only

“about halfway towards earning the Living Wage”,

and that would be at a cost to the Exchequer of around £6 billion a year, according to the Library. I can see alarm bells potentially ringing in the Minister’s head at that prospect, particularly when the Government are forecast to borrow £212 billion more than they planned to borrow two years ago and are failing one of the key economic tests that they set themselves.

In conclusion, the Government have repeatedly stated that they support the living wage and encourage businesses to take it up where possible. That is laudable, and the Opposition agree that the living wage should not be mandatory, but we encourage as many companies as possible to implement it. I would be grateful if the Minister could provide us today with examples of measures that the Government have taken to encourage the uptake of the living wage, as well as specific examples of what firms are now doing as a consequence of the Government’s actions.

I know from my work on apprenticeships that the use of the public procurement system in encouraging take-up has been a particular area of interest for the hon. Member for Harlow. My right hon. Friend the Leader of the Opposition has suggested that we can learn from local government procurement to see whether central Government can use their buying power to insist that large firms winning major public contracts commit to being a living wage employer. I suspect that the Minister may cite EU procurement rules as preventing that from becoming a reality, but the European Commission has stated:

“Living-wage conditions may be included in the contract performance clauses of a public procurement contract ‘provided they are not directly or indirectly discriminatory and are indicated in the contract notice or in the contract documents’.”

Will the Minister clarify whether the Government have any intentions of taking that idea forward?

Finally, I would be grateful if the Minister outlined which Departments are now living wage employers and which are not. It is absolutely vital that the Government show leadership on that issue. Will he clarify whether the Treasury pays the living wage to all its staff?

Once again, I applaud the hon. Member for Harlow for securing the debate, and for highlighting the plight of low-paid workers and the squeeze on families in these straitened times. I am interested to hear the Minister’s response to the suggested approach; how that can be reconciled with the squeeze on low-paid workers that his Government forced through Parliament last night; and what his Government will do to encourage more businesses to pay their workers the living wage.

It is a great pleasure to serve under your chairmanship, Mr Robertson, and to respond to this debate. I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing it. He has such a reputation for being a strong representative of his constituents that it is not surprising that the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) might even believe that his constituency was named after him—I know that Harlow is a new town, but a change of name might not be appropriate. However, he does a splendid job on behalf of his constituents as a whole and he does a particularly good job of representing hard-working, low-paid people up and down the country. If I may, I shall describe them as strivers, and my hon. Friend represents them very well. He sets out the case for a 10p rate clearly, with great eloquence and understanding, and I hope to respond to his points.

I thank other hon. Members who have participated in the debate, particularly those who have made speeches: my hon. Friends the Members for Aberconwy (Guto Bebb) and for Cleethorpes (Martin Vickers), and the hon. Member for Strangford (Jim Shannon). I also thank other hon. Members who have participated through their interventions.

During my remarks, I hope to set out what the Government are doing to help the very people that my hon. Friend the Member for Harlow identified as being in need of support: those hard-working, low-paid individuals who are taxed in circumstances where they do not have a lot of money. None the less, they have income tax deducted from their salary, and I will set out what we are doing to help such people.

I would like to take us back to the abolition of the 10p rate, which has obviously featured heavily during our debate this afternoon, and set out a little more information about the arguments that were made at the time and perhaps discuss some of the difficulties that those of us who were in the House had in getting to the truth of the impact of the 10p rate’s abolition—perhaps I should say the doubling of the 10p rate of tax, because that, in truth, is what happened.

In 1997, the Labour party’s manifesto stated that it was Labour’s long-term objective to have

“a lower starting rate of income tax of 10 pence in the pound.”

In the 1998 Budget, the then Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), confirmed his intention to bring in such a starting rate

“When it is right for the economy”.—[Official Report, 17 March 1998; Vol. 308, c. 1104.]

The measure was implemented from April 1999, with taxpayers paying only 10p in the pound on their first £1,500 of taxable income. The rationale was to put work first and to ease the poverty trap, whereby people on low pay were discouraged from climbing the earnings ladder due to high marginal deduction rates. The 10p rate remained in place until the announcement in the 2007 Budget, which was the last to be delivered by the right hon. Gentleman. Those of us who were there will remember that the intention behind the abolition was pretty clear. It was a theatrical coup to conclude the last Budget by that Chancellor with a reduction in the main rate of income tax from 22% to 20%. Other measures were taken with regard to the indexation of personal allowances for those aged 65 and above and the retention of the 10% rate for savings income, but what was clear was that great, theatrical moment just before the then Leader of the Opposition stood up, not able to see all the details, and there was this surprise tax cut. Of course, questions then started to be asked about how that was to be funded in what was a fiscally neutral set of tax measures.

At the time, it became clear, once we saw the Red Book, that the Government estimated that the removal of the starting rate of income tax would yield the Exchequer an additional £7.3 billion in 2008-09, so where would the extra cash come from? It was a little difficult to get all the answers at the time. The Budget book at the time set out a list of all the people who would be winning from the changes, and the Budget statement said that four out of five households would either gain or remain in the same position as a result of the Budget measures, but we did not get much detail on the one out of five households that would lose.

The IFS confirmed that 5.3 million households would lose. A senior Treasury official, giving evidence to the Treasury Committee—I should inform hon. Members that I was a member of that Committee at the time—confirmed that that number was in the right ball park. The very next day, the Chancellor of the Exchequer came along to answer questions on the Budget. He was asked five times by my right hon. Friend the Member for Sevenoaks (Michael Fallon) about the 5.3 million households that were going to lose out, and five times he refused to confirm that number. There is a lesson to be learned from that whole episode. We should be more transparent about the impact of policy decisions, and the present Government have taken significant steps to do that.

In the light of that commitment to transparency, will the Minister give us his estimate of how many people lost out through the vote last night?

The reality is that one has to look at all the measures that we are undertaking, which is what I would seek to do. It is worth pointing out that working households will gain an average of £125 in 2013-14 as a consequence of all the measures that we are undertaking. The right hon. Gentleman raises an important point—I shall return to the 10p rate in a moment—but let us remember the context in which we are having this debate now about the steps that we can take.

I will set out a case about the way in which the Government have taken substantial steps with regard to the personal allowance to help low-paid workers. We have done that at a time when we inherited an enormous deficit, and we have had to make difficult decisions about how we reduce that deficit. We have been clear in the distributional analysis of where the contributions are coming from. The facts are very clear. The top 20% of earners are making the biggest contributions, not just in cash terms but in relative terms, to reducing the deficit.

Let me return to the people who lost out from the abolition of the 10p rate of income tax. People under the age of 65 with non-savings income between £5,435 and £19,355 would have paid more, because they lost more from the abolition of the 10% rate than they gained from the cut in the basic rate. It is worth reminding ourselves that a Labour Government took that measure and that those low-paid workers would have paid more tax. The loss was greatest, at £232 a year, for someone earning £7,755—the top of where the 10% band would have been. Those most affected by the abolition of the 10p rate appear to have been those below the age of 65 with an income under £18,500 who were in childless households. The effect was greatest on those households where no individual was above the age of 60, because the household would not then benefit from the higher winter fuel allowance. That is the legacy of the last Budget of the right hon. Member for Kirkcaldy and Cowdenbeath.

Let us now consider what we have done in this difficult financial situation. We should remember that 2007 was still the age of apparent plenty; we have been in a much more difficult situation. Rather than reintroducing the 10% rate of tax, we have taken steps by increasing the personal allowance; we have taken real steps towards making the first £10,000 of income free from tax. I am grateful to a number of hon. Members for supporting that policy this afternoon. Since 2011, we have announced successive increases in the personal allowance, totalling £2,965. That includes a £1,100 increase announced in the 2012 Budget and a further £235 announced in the autumn statement last month. Following those announcements, the personal allowance rises by £1,335—the largest cash increase in history—to £9,440 from April 2013. Taken together, those changes will benefit 25 million individuals and provide a real-terms gain of £443 to most basic rate taxpayers in 2013-14. More than 2.2 million individuals with low incomes will have been taken out of income tax altogether.

I shall give some more examples of how the changes work. Let us take the context of the national minimum wage. My hon. Friend the Member for Carlisle (John Stevenson) referred to the personal allowance matching the national minimum wage for full-time employees, but let us examine what has happened to a person on the national minimum wage in full-time employment. In 2010-11, someone earning the national minimum wage would have had earnings of £10,979 and paid income tax of £901. In 2013-14, someone earning the national minimum wage will have estimated earnings of £11,691 and pay estimated income tax of £450. In other words, their bill will be halved. Another way to look at it is that, in 2010-11, such a person would have been able to work only 22 hours a week tax free; they can now work 29 hours a week before starting to pay income tax.

Another way to look at the situation is by comparing the approach that we have taken in increasing the personal allowance with the approach that the previous Government took in doubling the 10p rate of income tax. I talked about those who earn £7,755 a year and lost the most—£232 a year—as a consequence of the doubling of the 10p rate in 2008-09. In that year, an individual would have paid £344 in income tax. Under the present Government, in 2012-13, such an individual, with income adjusted for inflation to £8,299 a year, will pay about £39 in income tax—not £344 but £39 in tax, which is a saving of £305. In 2013-14, again with income adjusted for inflation, such an individual will pay no income tax at all. That is a contrast that I am very happy to highlight.

The Minister is setting out an interesting argument. Is he therefore making the case or suggesting that the Government will support the hon. Member for Harlow in his call for the reintroduction of the 10p tax rate?

The argument that I am making is about the contrast that can be drawn with the approach taken by the present Government, who have focused on reducing the tax bill for low-paid workers. That could be done in different ways, but we have undoubtedly, as a Government, reduced the income tax bill for low-paid workers. That compares favourably with the approach taken in the last Budget of the right hon. Member for Kirkcaldy and Cowdenbeath, in which he introduced a measure that increased pretty substantially the amount of income tax that low-paid workers had to pay. It is worth highlighting the point that we as a Government have done more, in very difficult circumstances, for those low-paid workers than the previous Government did.

I think that my hon. Friend the Member for Harlow agrees that we should meet the £10,000 target. The debate is then about where we go next. I will not be drawn into going beyond the firm commitment that we have in the coalition agreement and that has been evidenced by the steps that we have taken at every Budget and in the last autumn statement to make progress towards meeting that £10,000 target for the personal allowance.

My hon. Friend has set out very clearly the case for focusing on reintroducing a new lower rate. There are pros and cons of such an approach, and the debate on that will continue. As he would expect, I will not make any commitments on the matter. Clearly, there is a substantial fiscal cost in reintroducing a 10p rate of income tax. However, the Government’s values are clear. The overall cost of the personal allowance by the end of this Parliament will be around £9.5 billion a year as a consequence of the measures that we have taken. Clearly, where we can, we have been prepared to take substantial steps, at quite significant cost, to reduce the income tax bill for those on low earnings. That is something of which we should be proud, and as a number of my hon. Friends have said, we should be communicating that out there, because it demonstrates our values.

I give credit to the Government for everything that they have done to help those on low incomes get out of the tax bracket altogether by increasing the thresholds. I entirely understand that the Minister will not want to predict what might happen in the future, but, looking to the recent past, will he explain what the Government believe the advantages are of lifting thresholds as an alternative to a 10p tax rate? In other words, why did the Government decide to lift the thresholds rather than reintroduce a 10p rate?

There is a case for simplicity in focusing on the increase in the personal allowance. My hon. Friend the Member for Cleethorpes quoted the Forsyth Commission, which looked into this matter, and there is a question why we should ask people who are on quite low wages to be contributing income tax. I appreciate the arguments that everyone should make a contribution, and I do not in any way dismiss them, but when we are asking people earning such relatively low amounts to pay income tax, there are the significant questions of work incentives and simplification. The Government must bear those in mind when considering whether to reintroduce the 10p rate. There is a debate to be had on both sides. There are pros and cons both to personal allowance increases and to a new lower rate. In our coalition agreement, we rightly set out our determination to get to £10,000. Fiscal drag had brought more people into income tax than was right, and we have rightly made it our priority to address that.

Does the Minister accept that raising the tax threshold to £12,500—the minimum wage—would cost around £14 billion, whereas reintroducing the 10p tax would cost between £6 billion and £7 billion?

I should perhaps check the numbers, but I believe that my hon. Friend is in the right area. Those are, I think, the realistic costs. I am not here to make any further commitments beyond what we have said in the coalition agreement, but it is right that we have this debate. It is also right that we acknowledge that we are all trying to do the same thing, which is to reduce the tax burden on those hard-working, low-paid workers who have to pay more tax, partly as a consequence of a specific decision taken by the previous Chancellor in 2007 to double the 10p rate.

We are nearly at the end of the debate, and I am conscious that the Minister has not really addressed any of the issues that relate to the living wage and what the Government might do to promote that policy as well.

The Government are supportive of the living wage, which the hon. Lady has described as commendable or laudatory. However, unlike the Opposition, the Government do not believe that it should be mandatory. She appears to be in search of a dividing line on that issue. [Interruption.] I am pleased to see her shaking her head. There is cross-party consensus that the living wage has a useful role to play. We support it; we welcome it when organisations adopt it; but we do not believe that it should be mandatory. There are risks involved. In some circumstances, it might increase the cost to the taxpayer in higher salaries, and in others, it might result in higher unemployment. That is why we do not think it should be mandatory and why, I assume, she feels the same way, unless she has a different rationale.

I was seeking clarity on the questions that I raised and whether the Government are taking positive steps to promote the living wage.

It is very much for organisations and institutions to determine their own remuneration policy. We support such a wage in principle, but we will not make it mandatory, and there is cross-party consensus on that.

I turn now to the other steps that we are taking to support the low-paid workers whom my hon. Friend highlighted so well in his remarks. We have helped local authorities to freeze council tax for three years in a row, and we are proposing to set the council tax referendums thresholds at 2% for 2013-14.

I cannot, of course, go through a debate with my hon. Friend without referring to fuel duty. He is a keen campaigner on that point and he will be well aware of the steps that we have taken to ensure that average pump prices are currently 10 pence per litre lower than if we had implemented the fuel duty escalator. They will remain at least 10 pence per litre lower over the remainder of the Parliament than they would have been had we stuck to the plans that we inherited. In practical terms, it will cost £5 less for a typical motorist to fill their tank today and £8 less by the end of the Parliament.

We are taking numerous other steps to ease the load on those on low and middle incomes. We have capped average regulated rail and Transport for London fare increases at RPI plus 1% for the third year in a row. We have increased the basic state pension by £5.30 last year, which is the biggest cash increase ever, and we have introduced a triple guarantee, to ensure that it will increase each year using the increase in earnings, prices or 2.5%, whichever is highest.

I am conscious of the time, so let me say that I congratulate my hon. Friend on securing the debate and all the other attendees on their excellent contributions. As I have said, I think that my hon. Friend and I agree that the Government should reduce the tax burden on people on the lowest incomes. Our focus has been on increasing the personal allowance. I am confident that our policies, both on the minimum wage and the personal allowance, are exactly the right ones to achieve that.

Sitting suspended.

Dementia Services (Gloucestershire)

In the dementia debate in the House a fortnight ago, sadly I was tail-end Charlie and time prevented me from contributing a Gloucestershire perspective, so I am very grateful for this opportunity to put that right. I am also very grateful to the Minister for coming to Westminster Hall this afternoon.

Dementia can be an emotional topic. In that earlier debate, many Members—mostly female Members—from all parties in the House talked about the very human side to the disease. It was a reminder that we are no more and no less than a reflection of those we serve; a mirror of the human sadness and strength that are part of the disease of dementia. Perhaps it is not given to men to be as open or as eloquent as women in discussing our experience of family suffering. However, I will embarrass my father briefly, for he looked after my mother at home through many years of dementia. And after my mother’s death, when I said that I could not have done what he had done, my father replied quietly, “You never know what you can do until you have to.” It falls to our generation to “have to” do something about dementia, before we too—one in four of us, including one in four of us in Westminster Hall today—are overtaken by this disease.

In Gloucestershire—an ageing shire—the need is even more pressing. So there are three areas that I would be grateful to hear my hon. Friend the Minister’s views about in this brief debate, and two on which I would like to share our practice in Gloucestershire. Then I will finish by issuing an invitation.

The first area is research. It is good that Government research expenditure has doubled, and that the Aricept brand of new drug can delay the speed at which the disease spreads. However, although that is valuable—not least for giving families a chance to plan—Aricept may not work for much more than a year. Furthermore, although the Government have recently invested £22 million in research into 21 new products, can my hon. Friend the Minister confirm that it may be years before we know if any of them are successful? Since the goal of a cure is such a precious one—way beyond even the estimated heavy financial cost of treating sufferers, which is about £19 billion a year—can he also say if any drug development is close to the stage where the NHS could really financially back its development? On this issue, surely everyone would love to see science and Government working together to back a winner.

I will intervene, if for no other reason than to give the hon. Gentleman a chance to catch his breath.

In Northern Ireland, dementia diagnosis is at 63%, which is well above other parts of the UK. The support services are not as high; in other parts of the UK, support services are much higher than they are in Northern Ireland. Does the hon. Gentleman agree that it is time there should be a UK strategy that takes all the diagnosis and support services together, and that develops a strategy not only for Gloucestershire but for Northern Ireland and the rest of the UK?

I am grateful to the hon. Gentleman for that intervention. I know his constituency well, and I am sure that there are points on which we could exchange information. My hon. Friend the Minister will have heard and noted his comment: it is probably a subject for a separate debate, and we may come back to that issue another day.

Secondly, I want to talk about diagnosis. Currently, less than half of people with dementia in England are formally diagnosed with the disease, even as dementia affects more of us. Gloucestershire is the county with the highest number of people with dementia in the south-west, and it has one of the highest diagnosis rates in the region. However, although the number of people diagnosed with dementia in Gloucestershire rose by 12% last year, to 4,037, another 4,800 people in the county are thought to have the condition but have not yet been diagnosed. Consequently, although the diagnosis rate of our primary care trust is good regionally, at 46%, one can see that we have a long way to go in absolute terms, especially if the county council is right that our population of people over the age of 75 will increase by 30% by 2022.

Where is the best practice currently in the country? Could my hon. Friend the Minister tell us from whom we can learn best how to drive up diagnosis rates within tight budgets? As the Alzheimer’s Society says, low-ish diagnosis rates prevent sufferers from accessing support and medical treatments that can help them to live better with the condition.

The third area is care. In the main debate in the House a fortnight ago, other Members spoke about the link between dementia and care, and about the growing need for a “fair” solution to the problem of caring for an ageing population. Again, it falls to our generation to resolve this situation. Across the country, the number of people over the age of 65 is set to double during the next 20 years, and in counties such as mine the rate of growth will be worse, and faster.

I know that, in the wake of the Dilnot commission’s proposals, the Government will make formal proposals shortly about how they believe this issue can be settled. I wonder if my hon. Friend the Minister can say anything today about whether dementia will have a part in that process, and whether it will perhaps encourage the speed of implementation of the plans that the Government are considering.

At the same time, will my hon. Friend the Minister join me in congratulating Gloucestershire county council for entirely ring-fencing its budget on adult social care during these difficult years of local government spending freezes? In the last debate in the House on dementia, we heard from several Members whose authorities were not doing that, and it would be interesting to know how many other authorities are doing the right thing for the most vulnerable—a group that definitely includes dementia sufferers—as Gloucestershire has been doing.

I have promised to mention two local initiatives on dementia, as I believe they show that Gloucestershire may be leading the way. First, I pay tribute to the development in Gloucestershire of the community dementia nurse, or CDN, service, which was launched in December 2011 by the 2gether NHS Foundation Trust. The CDN service provides specialist and direct dementia support to GPs, with each surgery in the county being allocated such a nurse.

Secondly, we are fortunate to have a local charitable foundation, the Barnwood Trust, and it is working closely with the Gloucestershire clinical commissioning group, which has won £500,000 from the NHS dementia challenge to create dementia-friendly communities. That means having community workers who are trained as dementia link workers—people who are connecting to local communities.

On that point, does my hon. Friend agree that it is quite often the local voluntary community groups such as the Mickey Payne Memorial Foundation, which was set up by my constituent Caroline Dearson, that are leading the way in spreading best practice, support networks and awareness within their communities?

My hon. Friend is absolutely right. Community groups, such as the one in her constituency that she has mentioned and championed, are exactly the groups of people that are driving forward best practice at the local level. Of course, if they are able to win funds from the NHS dementia challenge then so much the better, because those funds would enable them to spread their good deeds further.

In Gloucestershire, we also benefit from local charities. The Guideposts Trust’s dementia web for Gloucestershire is a web-based support site that provides information for people with Alzheimer’s and other forms of dementia. We also have two very good-value day centres, one run by Age UK Gloucestershire and the other by Gloucester Charities Trust. They enable people to stay in their own homes for longer, while at the same time enabling them to meet friends and access general facilities, and enabling their carers or loved ones to leave them safely for a couple of hours while they go shopping.

Lastly, there is a very helpful purple butterfly recognition scheme for dementia sufferers that the Gloucestershire Hospitals NHS Foundation Trust has introduced in both its hospitals, Gloucestershire royal hospital and Cheltenham general hospital. Therefore my constituents are benefiting all round from an increasing range of services and ways of managing and dealing with dementia better.

However, that is not to say—as my hon. Friend the Minister will understand—that all is perfect, or that we are necessarily doing all the best things that can be done. The important thing is that the barriers are down. All of us can talk openly, in my county and across the country, about dementia. There is no stigma and no shame, just shared sadness and sometimes that surprising strength that I alluded to earlier.

I am sure there are other things being done elsewhere that I would like to know more about and that my constituents would benefit from. So I would be grateful today if my hon. Friend the Minister could do a favour to us all—I mean all parliamentarians—by giving some ideas of the best practice that he has noticed in different ways of handling the disease and managing the suffering that goes with it. Even if he cannot do so comprehensively today, perhaps he can do so later by letter.

Sometimes, too, our own cities and towns need to widen our eyes, stretch out beyond us and allow us to see ideas from further afield that we can bring back, and the Minister can help to steer us. What role, for example, is there for faith groups? Who is doing the best work across different ethnic minorities? Are there particular extra sensitivities, such as elderly immigrants reverting to the languages of their youth, of which we need to be more aware? What more can be done to support GP surgeries in diagnosing dementia? How can people be enabled to stay in their own homes for longer without that feeling of helplessness if something goes wrong?

Finally, like all good pitches must, this speech ends with an invitation for the Minister to visit Gloucestershire to see what is happening; to meet the Barnwood Trust and hear its ambitions and vision for what it might be able to do; and to share with us what he likes, what he has seen across the country and what we can perhaps do more of. I would be delighted if the Minister can accept my invitation, because dementia matters very much to all of us in Gloucestershire, as it does to him, and we want to continue being adventurous by pushing the boat out and actively considering new ways to help people living with this ghastly disease and their families, who are so intimately affected by all elements of it. As I said at the start, we never know what we can do until we have to do it, and we must do it.

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

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing the debate and on speaking about his family’s experience—about his mother’s experience of having dementia, and about the role his father played caring for her and the strength that he gained when the moment arose to cope and get through it. My hon. Friend’s speech was moving, if somewhat breathless at the start—it was excellent to see him arriving in the Chamber just in time.

My hon. Friend is committed to ensuring that his constituents have access to high-quality care whenever and wherever they need it. He has demonstrated his commitment through his work as a member of the all-party group on dementia, which does really good work to raise awareness of the condition in Parliament and beyond.

We know that some 800,000 people in the UK have dementia, and that number is expected to double over the next 30 years. The consequences of that growth will be substantial, so we must recognise the scale of the challenge that we face. The Government are committed to meeting that significant challenge by providing high-quality care for people with dementia combined, crucially, with strong support for carers.

My hon. Friend talked about the role of carers, and we often have to stop and remember the impact on a loved one of someone getting dementia and then having that loss of recognition. We must understand how distressing it can be for someone to cope with that, and sometimes with changing and challenging behaviour, when they may have been married for a long time. We owe an enormous debt of gratitude to the army of carers who continue to give their care, love and support, sometimes under difficult circumstances. We will transform dementia services, achieve better awareness of the condition, and offer high-quality treatment at every stage and in every setting.

I will not go over much of the ground that I covered in last week’s debate because I know that my hon. Friend is well versed in many of the things we have achieved nationally. I should recognise the fact that some good work started under the previous Government, who produced one of the first dementia strategies in the world. The work that we are doing means that we are one of the leading countries on this but, as my hon. Friend said, we must recognise that there is much more to do.

My hon. Friend will be conscious of the dementia challenge that the Prime Minister announced last March, but an awful lot has happened since then. For example, we have set aside £54 million for the NHS to support dementia diagnosis in hospitals. We have asked local areas, through the NHS mandate, to set ambitious targets for improved dementia diagnosis over the next two years. Each area must understand its position on undiagnosed cases and set about dealing with the gap.

We have set aside a further £50 million to make health and care environments more dementia-friendly. We have launched a national advertising campaign to raise awareness, to reduce the stigma attached to dementia and to encourage people to contact their GP if they experience symptoms of dementia. Such contact often involves having that first, difficult conversation with a loved one about the need to see their GP to explore whether there might be dementia.

Does the Minister feel that lessons could be learned from the other regions of the United Kingdom, such as Northern Ireland, where a clear dementia care plan and strategy are in place? If the lessons learned there are beneficial for Gloucestershire and other parts of the United Kingdom, why should we not exchange information?

I think that the hon. Gentleman said in his earlier intervention that the diagnosis rate is quite good in Northern Ireland. I applaud the work that is done there, but the support services might not be as good as in some parts of England, Wales and Scotland. We are learning about these things together, and there must be close collaboration between England, Northern Ireland, Wales and Scotland. Scotland has done good work to achieve high diagnosis rates. It has also introduced the concept of dementia advisers, which my hon. Friend the Member for Gloucester talked about in relation to his county. We need to be willing to learn from anywhere and, critically, not to reinvent the wheel, so I am absolutely up for collaboration with colleagues in Northern Ireland. Just a week ago, the Secretary of State announced a year of dementia awareness to improve understanding of the condition and diagnosis rates nationally.

Let me deal with research. My hon. Friend the Member for Gloucester said that the Government are doubling the amount we spend on research, although it must be said that that is coming from quite a low base, compared with other conditions. One of the difficulties is that we cannot just make a massive increase to the amount that we spend, because building the research community’s capacity to do the work has to happen hand in hand with any increase.

There were several things I was unable to cover in detail during the recent debate granted by Backbench Business Committee because we ran out of time—my hon. Friend was a victim of that. One of them was research, on which we have genuine cause for optimism. A lot of the media narrative has been about high-profile failures of research, but there is positive and encouraging news out there.

Before I give some examples of that, however, I should mention one thing. My hon. Friend talked about the importance of the scientific community and the Government collaborating closely to meet the challenge we face. Last autumn, I spoke at a conference that brought scientists from not just the UK, but around the world, together with the Government and interest groups, such as charities that campaign on this issue. Such a useful gathering is a way of bringing the best brains to bear on this subject, so that collaborative work must continue.

On 21 December, the Government made £22 million available to 21 pioneering research projects to boost dementia diagnosis rates and to trial groundbreaking treatments. The funding was designed to cover all areas of scientific activity that are relevant to dementia across the fields of care, cause and cure, including prevention. For example, we can do a lot to prevent the condition of vascular dementia from ever starting, so if prevention is possible, we must be much smarter. We have also provided £36 million for a new National Institute for Health Research dementia research collaboration to work on better treatments and care for, and understanding of, the condition, as well as £9.6 million to expand the UK Biobank. Last year there were potentially interesting developments in treating early-stage dementia, particularly in Alzheimer’s disease.

As drug companies continue to invest in research, there is now a real prospect of a treatment within the next decade—that seems to be the time frame we are dealing with—that could have an impact on helping to slow or prevent the disorder, if it is caught early enough. For instance, there have been key recent developments from Eli Lilly, which is conducting an additional phase 3 study of a new drug for patients with mild Alzheimer’s disease. I have also heard about promising plans to expand the testing of a drug for patients with pre-dementia.

My hon. Friend rightly emphasised the importance of sharing best practice, of avoiding reinventing the wheel and of encouraging innovation, which is vital for improving dementia care. I am delighted that Gloucestershire benefited from the additional funding of £10 million from NHS South West. It is by learning from the innovative projects that he describes that we will find out what works and how we can improve services.

My hon. Friend asked me to highlight examples of best practice of people taking the lead on dementia. One involves the fire and rescue service, which has made a pledge to take action to increase the safety of people with dementia. That is a critical area, because someone living with dementia can be at risk, and the fire and rescue service can do a lot to help them to remain safe. The service has made a commitment to raising awareness among staff. Already 28 services have signed up, and I applaud them for that work. In addition, Tesco has made a commitment to increase dementia awareness and understanding among its staff and worked with the Alzheimer’s Society to produce a DVD to achieve that. The moment when a customer gets confused about change or forgets their PIN is the one when a caring and understanding approach from the checkout operator who is coping with them is particularly important. It is encouraging that companies such as Tesco are prepared to do such work.

When my hon. Friend mentioned the demographics in his constituency, that rang true for me, because my constituency, similarly, is rural with an elderly population. I am pleased that the diagnosis rate in Gloucester has risen from 40% to more than 45% in the past year but, as in many places, there is still massive room for improvement to match the best performing areas, such as Islington, where the diagnosis rate is 75%. There is an enormous gap between the best and the worst, and a long way to go. We have developed an analytical tool to support the NHS to achieve an increase in local diagnosis rates, and we are working with the Royal College of Psychiatrists to assure and improve the quality of memory services when the actual diagnosis takes place.

I join my hon. Friend in paying tribute to some of the excellent work in his area, which is in many ways mirrored by that of the Norfolk and Suffolk Dementia Alliance, which is led by an inspiring guy called Willie Cruickshank. He demonstrates the difference that can be made by bringing all parts of the system together. In his area, there is now a comprehensive, multidisciplinary memory assessment service that provides support to primary care and outreach to communities. We must ensure that we bring down waiting times, which are far too long in some areas.

Community dementia nurses and advisers are working closely with GPs throughout the country. Last week, I met a group called Uniting Carers, which is part of Dementia UK, which talked about the fantastic work of Admiral nurses in many parts of the country.

Sometimes the problem for carers arises when they reach the point at which they admit that they can no longer look after their loved one who has dementia, because it can be difficult to choose the right kind of care home or environment. The gap at such a point might need to be filled by the voluntary sector or Admiral nurses, as the Minister was describing, to help people to ensure that they are putting their loved one into a suitable and dementia-friendly environment.

I absolutely agree, and that is a role for an Admiral nurse or equivalent, or for dementia advisers, who are now in place in Gloucestershire, my own county of Norfolk, Suffolk and other parts of the country. It is of real value if someone is able to go into the home to provide practical advice to the carer and the person with dementia.

Fantastic work is ongoing to bring district councils, volunteers and community groups together to establish a network of memory cafés. The care home support team supports staff with training, development and management guidance. There is county-wide education for carers and a carer emergency respite scheme, which provides an agreed plan of personal support to the cared-for person.

My hon. Friend the Member for Gloucester raised the important issue of ethnic minorities and faith groups. At last week’s meeting, I met an Indian woman who spoke movingly about how she and her father were cast aside by their local community once he had received a diagnosis of dementia. It is critical that stigma is challenged in all communities. She also explained how her father had reverted to his mother tongue, which further complicated his care arrangements and made a difficult situation more difficult.

I want to consider how we can give specific help to people such as that woman. There is a role for everyone in society to improve the lives of people with dementia, which includes faith, community, and black and minority ethnic groups and charities. My hon. Friend is aware of the plan to sign up 1 million dementia friends by 2015, which will have dramatic effect on spreading awareness throughout the community. All such groups have a role to play in creating the dementia-friendly communities we want to see. Only through all of society—not just government—coming together will we improve the lives of people with dementia and their carers.

Regarding my hon. Friend’s kind invitation to visit, he may be interested to know that the Secretary of State and I are between us embarking on a road show to every region in the country, involving conferences and visits, to bring people together to drive change at a local level. I will certainly pass on my hon. Friend’s suggestions to the team that is planning the visits and the south-west regional event, and I will ensure that he is kept updated.

I am encouraged by the commitment shown in Gloucestershire, as in other parts of the country, to tackle the problems that we face. I was pleased to hear that Gloucestershire county council had ring-fenced funding for social care so that money is prioritised in that most critical of areas. We are expecting an announcement soon on funding for and reform of social care, and that will start to help people to cope with dementia and the costs incurred as a result of it. Although the challenge remains great, the collaborative effort demonstrated by the NHS and its partners in Gloucestershire, including businesses, community groups and volunteers throughout the county, is showing how concrete steps can be taken to improve dementia services and to enhance the day-to-day lives of people with dementia and, crucially, their carers.

Under-occupancy Penalty (Wales)

Thank you, Mr Robertson, for the opportunity to have the debate.

Before Christmas, social tenants in my constituency were sent a letter telling them that under Government changes in April they will have to pay more rent or move on, because the Government have deemed that they are under-occupying their home. They are victims of what is now called the bedroom tax. As all hon. Members know, such letters have gone out throughout Wales and the rest of the United Kingdom, and they have caused huge fear in my constituency.

I asked for this debate because I am horrified by some of the stories that constituents are telling me about what this policy will mean to them, their family, their future and their home. For decades, many people in communities in my constituency have cared for and cherished their homes, where they have brought up their children and cared for their grandchildren. Their homes are full of memories of lost loved ones. The fear is palpable, as the reality of what these changes will mean sinks in. One woman said when I knocked her door during the week that she received the letter from Newport City Homes, “Why did I get this? I thought it was about the scroungers, not about me.”

In April, those tenants face the stark choice of paying £40 to £80 a month more for having one or more spare bedrooms, or moving to a smaller property. There is evidence that many cannot pay as the cost of living and benefits cuts hit them. In a Welsh study, one tenant said that they are already “not living, but surviving”. What is more, there is a chronic shortage of smaller houses, particularly in Wales.

Will my hon. Friend pay tribute, as I do, to Duncan Forbes of Bron Afon who has highlighted some of the nonsense of this tax, particularly people going into one-bedroom houses? In Blaenavon in my constituency, 85 tenants will have to go into one-bedroom houses to avoid the tax. It will take 17 years to rehouse them.

I thank my right hon. Friend for his intervention. He is right. Will the Minister look carefully at the report from Bron Afon in Torfaen, because it highlights specific examples of why the policy will hit Wales particularly hard?

There will be two levels of reduction. Those who are under-occupying by one bedroom will lose 14% of their housing benefit, which is equivalent to a loss of £12 a week. For those under-occupying by two or more bedrooms, there will be a 25% reduction, equivalent to a loss of £22 per week. In Wales, 46% of all housing benefit claimants of working age in the social rented sector will be hit, compared with a UK average of 31%.

The Department for Work and Pensions says in its own impact assessment that 40,000 tenants in Wales will be affected by the bedroom tax with an average loss of income of £12 per week. Like many of the Government’s benefit changes, this is hitting Wales disproportionately hard. With tax and benefit changes to be implemented by 2014-15, households in Wales can expect to lose 4.1% of their income on average or about £1,110 per year on top of rising food and heating costs.

Some 1,794 Newport City Homes tenants have received letters telling them that they will be affected, and a further 421 who rent from Monmouthshire Housing Association have received letters in communities like Caldicot, which is in my constituency. With 4,220 on the Newport common housing register and 2,536 on the Monmouthshire common housing register, it is not rocket science to realise that there is not enough social housing for people to move to. Of the Newport City Homes tenants who are affected, 359 have two bedrooms too many and 1,435 have one bedroom too many, 916 of them will be looking for one-bedroom houses or flats and 823 will be looking for two-bedroom properties.

Newport City Homes has only 1,264 one-bedroom properties in total and 2,680 two-bedroom properties. This week, just 36 properties are advertised on the Newport housing options website, so people have very few choices. Whole estates in Wales have very few one or two-bedroom houses.

The hon. Lady is making the case clearly for the urban context, but does she agree that in rural areas such as mine, which have faced a housing crisis for years, people face even less choice? I am sure that she will mention the fears that people living in houses with adaptations for disability have raised. Although more money is coming from the Government, it is less than clear how it will reach our constituents.

I thank the hon. Gentleman for his intervention. I will come on to mention that later in my speech. Other hon. Members have raised the issues of people with disabled children and of rural housing. As he says, there is very little housing stock available for people to rent anyway.

Let me talk about the Underwood estate, on the outskirts of Newport. It has 138 three-bedroom properties, 45 two-bedroom properties and no one-bedroom flats, apart from 12 that are reserved for pensioners and disabled people. In the past, we needed larger properties, so that is what councils built. Wales will be hit hard because of a relative shortage of smaller housing. Newport is clearly not alone, as many housing associations across Wales face the same issue. Scarcity of larger properties is a problem in big cities in England, but in Wales, there is a scarcity of smaller properties.

I congratulate the hon. Lady on securing what is undoubtedly an important debate in a Welsh context. The point that she makes about the shortage of smaller properties in Wales is one that I fully accept. Does she share my surprise therefore that the Wales and West Housing Association has decided that the coalition Government’s policy will be imposed on all tenants regardless of whether or not they are on housing benefit? Surely, that is a restriction on people who might be willing to pay the going rate for a three-bedroom house.

I am here to talk about under-occupancy and housing benefit. I appreciate what the hon. Gentleman is saying, but I want to continue to press my point.

Even if someone is able to move from a community such as Underwood, they will often leave behind family who are able to care for their children while they work. I cannot be alone in often meeting people in my surgery who seek houses near their parents precisely so that they can have help in looking after their children. Those with two children of the same sex under 16 could have to move to a two-bedroom property. In somewhere such as Underwood, the likelihood is that the children would have to move schools, with all the disruption that that would cause.

My hon. Friend is making a powerful point, and I congratulate her on securing this debate. Does she agree that there is an inflexibility in the system? Children of the same sex but far apart in ages might have to share a bedroom. Single parents are also penalised, because they often do not have rooms for their children to stay in.

I agree with my hon. Friend and I will come on to make those points. Again, the study by Bron Afon in Torfaen highlights such cases.

Faced with no social housing and the need to stay in a community, it is hardly surprising, but none the less shocking, that one of the findings of a survey of social housing tenants by Bron Afon was that some tenants had concluded that the only possible solution for them was to eat two meals fewer a week to make up the shortfall. They felt that that was the only area on which they could economise.

Does my hon. Friend not think that realistically many families are going to fall behind with their rent, with the result that they will find themselves moved into smaller properties or, at the end of the day, homeless? What does she think that our local authorities can possibly do with their limited resources to deal with a sea of people who will have nowhere to go?

I thank my hon. Friend for that point. It is true that housing associations, local authorities and the Welsh Assembly will be under stress because they will not be able to mitigate the effects of this policy.

With a chronic shortage of available housing, many tenants appear to feel that there is no alternative but to be forced into arrears or to resort to desperate measures such as payday loans or loan sharks. Families will be forced into financial difficulty and rent arrears. Steve Clarke, chief executive of the Welsh Tenants Federation, estimates that 10% of tenants who will be affected are already indebted to their landlords who are seeking repossession orders. The double whammy of rent arrears and the increases could mean that 4,000 present themselves as homeless. This is against a backdrop of food banks in Newport giving out hundreds more parcels a month and food crime up 26% over the past two years. We are talking about people stealing washing powder.

The Government appear to think that people will find it easy to get extra hours of work or to find an elusive job. They think that lone parents with small children should go out and seek lodgers. In fact, the findings of the hotline of Community Housing Cymru— “Your benefits are changing”—found that 13% of people who rang would consider downsizing and 8% might consider a lodger. However, 79% said that taking on a lodger or moving were not suitable options and that they would apply for discretionary housing payments.

I believe that £7 million has been allocated to Wales, which faces a potential loss of £25 million. That is the Government’s answer to those who cannot move. There is a limited amount of money from the Government towards those payments, but once it has been used, no other payments can be made. I take the point that was made earlier about the fact that there has been no clarification of how the money will be spent. The deserving might miss out if they happen to be in need when the fund has been exhausted. There has been no compelling analysis of the impact that the changes will have on individuals, and the Government’s response of setting a finite budget without knowing whether it will be sufficient is as callous as the bedroom tax itself.

Does my hon. Friend agree that one of the most telling aspects of the legislation is the fact that there are no exemptions for severely disabled people? The fund that is available will be quickly used up by, for example, adults with severe learning disabilities who, in all genuineness, cannot take lodgers, because their needs and circumstances are not conducive to sharing accommodation.

I agree with my hon. Friend’s important point, which we have to bear in mind. Those who have had disabled adaptations to their property would, if forced to move, need another set of disabled adaptations, and it is not clear what will happen with discretionary payments in such circumstances.

I am grateful to my hon. Friend for giving way for a second time. She has referred to the report by Bron Afon, which states that the total budget for discretionary housing payments in Torfaen is just under £53,000, or £6.62 per housing benefit claimant.

My right hon. Friend makes a telling point. When that money has gone, it has gone, and it is a small amount of money; it is a drop in the ocean compared with what is needed.

With no money to spare and no chance of social housing, tenants might look to the private rented sector. If the stated aim is to save money, the policy has no logic. In many areas of Wales, the policy encourages tenants to move to more expensive accommodation in the private rented sector, which will increase expenditure, even with a reduced local housing allowance. In Torfaen, for instance, every private rented property is more expensive than the Bron Afon rented properties. The situation is clearly ridiculous, and a cursory look on the websites for private rented accommodation in my constituency tells that tale.

Those arguments are well rehearsed, but they are becoming more pressing as the policy becomes more real for many people in Wales. I visited a constituent before Christmas who lives in a small two-bedroom house in the community in which he grew up and his family still lives. He was made redundant last April from his manufacturing job of 20 years, and he now finds himself on housing benefit. He is a proud man who has lost his job and now faces losing his immaculate home of many years. He currently pays £321 a month, and there is only one one-bedroom property in Newport on the housing options list for which he could possibly be eligible to rent this week, and that would cost him £350 a calendar month. If he is still unemployed, that increased rent would still be covered by housing benefit at a cost to the public purse of an extra £341 a year.

One Bron Afon tenant is a former serviceman with post-traumatic stress disorder, and his benefit has been cut because he is deemed fit to work, even though he has serious depression. His daughter hopes to go to university, but her decision will be heavily influenced by what happens to her father’s benefit. The spare rooms of those in our services are not out of the policy’s scope, which will have a huge impact in south Wales.

I have met a divorced father who has his kids to stay at the weekend. One of the hardest-hit groups will be parents who live in two-bedroom houses and who have access to their children. If they are under 35, they will be expected to share accommodation, which may be the only housing left to them, with all the child protection issues that raises. That is a whole other subject.

In Wales, registered social landlords expect a large loss of revenue, and those running large arrears will be under pressure to make people homeless. That in turn will put pressure on local authorities to house people presenting themselves as homeless. The Welsh Assembly has made money available under the homelessness grant programme to assist financial inclusion work and projects with Shelter, but that will not be able to mitigate the very real impact of the reforms in Wales.

There are so many unintended consequences for individuals such as foster carers, people with disabled adaptations and parents of disabled children. I am sorry that there is not time to do them justice.

A constituent from Alway specifically asked me to say that he considers the Prime Minister to be Dick Turpin without the mask. Many in the Government think that paying an extra £20 a week towards rent will be the difference between going out for dinner and staying at home, but for many on low incomes, it will be a case of heating or eating. People will have to pay up when they cannot afford it and then get into debt or move out and away from their community. This is a policy that in the long run cannot cost less in Wales and will do nothing to help local housing pressures, as the pressure is on the smaller properties already.

Regardless of the rhetoric, the fact is that the people worst affected are parents who share access to their children; grandparents who provide essential child care for their grandchildren, allowing parents to go to work; and even the brave men and women serving in our armed forces. The Government simply do not understand how this policy will affect people, and what is worse, they do not seem to care. We used to talk about the poverty trap; we are now talking about the property trap.

I congratulate the hon. Member for Newport East (Jessica Morden) on securing the debate. It is good to see the number of hon. Members who have taken part. I will try to respond to the points that she has raised. In general, I will take interventions from her but not from other hon. Members, until we get near the end of the time.

Let me set the context. Obviously, we want to focus on the impact of the policy on Wales, and I want to respond to some of the particular points made by the hon. Member for Newport East, but for the record, the Government are seeking to take £18 billion a year of what we spend on social security and tax credits because of the vast amount of borrowing that we had to deal with. It is not that the Government woke up one morning and thought, “Wouldn’t it be nice to cut people’s housing benefit?” We have to stop a situation in which for every £3 the Government were raising in tax, they were spending £4. That is unsustainable. It is not fair to the children whom we are expecting to pay our debts. That is why the Government are looking to save money on social security.

Housing benefit is a vast and rapidly rising bill and inevitably had to be looked at, so within the housing benefit budget, what can be looked at? We have looked at private sector rent. We have looked at shared accommodation for younger people. Within the social sector, there are two reasons why spare bedrooms—where they are spare bedrooms—need to be looked at. The first is the unfairness between social tenants and private tenants. At present, a private tenant cannot have housing benefit for a property with spare bedrooms. They can have housing benefit only for a property of the size that they need. However, a social tenant living next door can have housing benefit for a bigger house. That is an unfairness. At a time when we are trying to take costs out of the system to deal with the deficit, being fairer to private tenants and not giving social tenants an advantage over and above the advantage that they already have through a subsidised rent is an issue of fairness.

There is also an issue of fairness in the system in relation to people who are overcrowded. There was absolutely no mention in the hon. Lady’s speech of people who are living in overcrowded accommodation. If we have a limited social housing stock—frankly, successive Governments have failed to build enough social houses; it is a finite stock and a social house, with a subsidised rent, is a very valuable thing—we owe it to those who are overcrowded to make maximum use of the housing stock.

Getting from here to there is a painful and difficult process. I accept that, but many housing associations and social landlords around Britain have been creative and imaginative—I accept that the position will be different from area to area—about moving people who were in overcrowded accommodation into family homes and finding places for people in under-occupied accommodation to move to. It is not a static case—on the register this week, there are only so many empty properties. Social landlords have to start getting to know their tenants much better than they have in the past. All too often, they have not done that. That process—I accept that it will be a difficult transition—should lead to better use of the social housing stock.

Will the Minister accept that it is possible to be creative without being cruel? It would be possible to work far more closely with housing associations in relation to asking them to do more about under-occupancy, but the broad-brush approach that will be taken in April will hurt many people.

The right hon. Gentleman says that it is about saving money. I do not apologise for the fact that we have had to save money, because otherwise we would just pile up debts for our children, and that is not progressive, wherever someone is on the political spectrum.

On the hon. Lady’s specific point, yes of course, in theory, successive Governments have tried to work with housing associations and social landlords, and it has not worked, because we have the best part of 1 million empty bedrooms paid for by housing benefit at the same time as we have thousands of people in overcrowded accommodation. The challenge is therefore to use the need to save money to create fairness between private and social tenants and to create fairness between people who are living in overcrowded accommodation and those who have spare bedrooms.

No, I want to respond to the hon. Lady. She said that these are the lifetime homes of some people, and I entirely accept that. That is why we have exempted pensioners as a group. A set of pensioners have spare rooms, living in the home that they have occupied all their lives, and we are not touching them for the reasons she gave.

Those who are below pension age can clearly respond in a range of ways. It will be different for every person. For example, we are often told that some people in social housing or on housing benefit are in work, and the average £12 shortfall in Wales is the equivalent of two hours at the minimum wage, so for some people, as the hon. Lady said, it will be a matter of working a few extra hours. I accept that that is not an option for everyone, but it is for some. Others might have the opportunity to do a part-time job, if they are not currently. She said that some would not be able to take in a lodger or tenant, but some can. I had a constituent ring me up to say, “I am in a three-bedroom house, I live on my own and I have just had one of these letters. What shall I do?” We started talking and she said, “To be honest, my brother and sister-in-law would quite like to move in. Can we do that?” Yes, they can, and that would be using the house to much better effect. That will not be right for everyone, but there will be a range of responses. The system is geared so that if people have a boarder or sub-tenant—most social landlords should allow a sub-tenant, in an organised way—they get to keep at least the first £20 a week of the income. Those are all options, which will not work for everyone, but there is a range of them.

The hon. Lady mentioned Bron Afon and Duncan Forbes. I have looked at some of the case studies. One of them is just wrong. In the case she mentioned of the ex-serviceman with a teenager who might go off to university, provided she is not away for more than 13 weeks at a time, she can have the bedroom. That means that social landlords have to be good at communicating with their tenants. I have seen good examples, although I have also seen some bad ones. The other examples may well be true but I saw that case and it jumped out at me, and I thought, “That is not right”, although there is a description of how distressed the man was. Someone has a duty to know the rules—we have to communicate them effectively, but so do the social landlords. I have seen letters sent out by social landlords that are excellent, that explain the rules and what discretionary housing payments are, but I have seen others that do not even mention discretionary housing payments. We have to ensure that social landlords up their game.

I must respond to several points on discretionary housing payments, which are crucial. The right hon. Member for Torfaen (Paul Murphy) cited a figure of £50,000, £54,000 or something. The figure for that local authority for the year we are talking about, when the policy comes in, is not £50,000 but £193,000. That is when the policy comes in. Clearly, the point of discretionary housing payments is not to make up everyone’s shortfall, or we would not make any money out of the policy—we would not be saving any money—but it is for the hardest cases.

There is an issue to do with whether we try to prescribe in primary or secondary legislation the exact categories of people whom we want to help, of which one is people with major disabled adaptations. We could have done that, but the second that is done and we try to define a substantial adaptation, we get someone whom we did not think of just the wrong side of the line and someone whom we did not need to include on the right side of the line. For example, if someone has had stairlifts, extra rooms, widened doors and all the rest, it is pretty obvious, or if someone has had a handgrip, it is pretty obvious, but what about all those in the middle? Rather than us in Whitehall trying to define for every local authority, for every sort of adaptation, that this is in or this is out, we have trusted local authorities.

We have given the money specifically for people who have had disabled adaptations or, to give another example, for foster carers; for some of the other housing benefit changes as well, we have given the councils a pot of money and said, “You know your local people. You can meet people case by case.” Thus, a lone or separated parent who has the kids regularly and needs that room, and nothing else can be done, could go to the local authority for DHP. We were not going to try to prescribe for DHP, however; we were not going to legislate for such things as whether so many nights qualify or whether there are certain arrangements for the kids. The idea is that the local authority treats people as individual human beings and meets their individual needs. The pot is not unlimited—

I really want to respond to the hon. Member for Newport East, because I have other things to say about the points she made.

We tried not to prescribe in a rigid, central, one-size-fits-all way, but to make substantial extra money available so that people could respond individually.

Does the Minister accept that the pot of money is very small compared with the number of people we are talking about? If the aim of the policy is to use the housing stock better and to save money, it will fail on both counts. As we have mentioned—it would be helpful if he could address this point—the pressures in Wales are because we have larger properties and few smaller properties, and because people will pay more in private rents.

On whether people pay more in private rents, a lot depends on where the people who occupy the houses that have just been vacated come from. For example, if someone is in overcrowded private rented accommodation, on which they are claiming housing benefit, and they move in to reduced rent social housing property, that saves us money, so a lot depends on the dynamics. It is not a static situation. The hon. Lady said that this is not much money, but take her local authority of Newport: last year, in 2011-12, Newport got £47,000 towards DHPs, and next year, it will get more than a third of £1 million.

Of course, it is not enough for everybody who will lose, because the policy is part of trying to reduce the deficit.

The hon. Lady made other points about the lack of suitable housing stock, and that is a long-term issue that needs to be addressed. Housing associations and local authorities, when looking at the future housing stock, need to consider unmet need. Of course, there is a lead time on that, but if we just sit and wait, it will never happen. Yes, this is a trigger to tackle the deficit, but it is also a trigger for a much more rational allocation of the houses we already have, and for a much more rational building policy, so that we build homes that meet the needs of the people we have. All too often in the past, that has not happened, and it is time that it did.

The hon. Lady asked about the impact on Wales, and she is right that we are talking about roughly 40,000 households. The average loss in Great Britain as a whole is about £14 a week. In Wales, because rents tend to be lower, it is about £12 a week.

My hon. Friend the Member for Ceredigion (Mr Williams) mentioned rural communities. We will evaluate the impact of the policy over a two-year period, but with interim reports that we will publish across England, Scotland and Wales, and across rural, urban and suburban constituencies. As a consequence of debates in the House of Lords on the Bill as it went through, we agreed—we were well on the way to doing this anyway—proper evaluation, so if there are particular issues in Wales or in rural areas, we will have the chance to respond, for example, by adjusting the allocation of discretionary housing payments. That allocation has been set for 2013-14 but not beyond, so if we learn things during the year, we can look at whether we need to change the allocation. We could change the rules of the scheme. Obviously, that is a more fundamental change, but we have a fairly flexible lever if we get early signs that there are problems in particular areas.

We are trying to support social landlords, so we have worked with the Chartered Institute of Housing to produce a toolkit for landlords called “Making it Fit”, which provides an overview of how different social landlords are responding. The last thing I want to convey is that the change will be easy for people, that there will not be people who find it difficult, and that it will not be disruptive. However, there is a difference when social landlords engage, get in there early and get to know their tenants—for example, those who sit with their tenants and say, “Are you claiming all the benefits you are entitled to? Could you be getting disability living allowance, for example, which would top up the household income?” There is chance to have a constructive engagement with tenants to find out their needs and what is happening. Many social landlords do not know whether their tenants are even there, or whether they are sub-letting. A lot of beneficial things that need to happen could happen as a result.

Does the Minister accept that with the report, that is precisely what Bron Afon has done? It has spoken individually to every single person who is affected, and in the report, there are the harrowing personal stories that people have told.

I accept that Bron Afon has been out and talked to its tenants, and if that has triggered the process, it is a good thing. As I said, I have some doubts about at least one of the case studies, and in terms of some of the other case studies, I hope that the housing association has explained what discretionary housing payments are, because I think, from memory, another one had a disabled adaptation, or something like that, and that is what DHPs are for. It certainly was not a criticism of Bron Afon, but there are social landlords who are upping their game, engaging, and trying to generate extra revenue through benefit take-up. They are being creative, looking at the private market, and they are moving people around. They accept that the change is coming and are not simply saying, “Oh, this is terrible”, but doing something constructive. I welcome any housing association or social landlord that does that, and they deserve credit.

I have mentioned the discretionary housing payment money. The particular people we had in mind are those with disabled adaptations and foster carers, but the local authority has discretion to use it in individual cases. I do not belittle the impact that this significant change will have. We need to save money, but we have the potential to make better use of our social housing stock to deal with not only under-occupation, but overcrowding, and to be fair between social and private tenants. At a time when we are trying to take very large sums of money out of the housing benefit bill to deal with the vast, yawning deficit that was not dealt with, we need to look at this area but manage the process, and that is what our research and use of DHPs is designed to achieve.

Sitting adjourned without Question put (Standing Order No.10(13)).