Thursday 28 February 2013
[Nadine Dorries in the Chair]
European Regional Development Fund
[Relevant documents: European Regional Development Fund, Second Report of the Communities and Local Government Committee, HC 81, and the Government response, Cm 8389.]
Motion made, and Question proposed, That the sitting be now adjourned.—(Nicky Morgan.)
It is a pleasure to serve under your chairmanship for the first time, Ms Dorries. The all-party report on the European regional development fund was literally that, because all Committee members agreed with it. That is the way it should be. We took evidence, and on the basis of that evidence, we came to our conclusions. The attendance at this debate probably reflects the fact that all members of the Select Committee on Communities and Local Government are happy for me to speak on their behalf about the report and raise the few issues on which we took a slightly different view from those eventually indicated by the Government in their response. The Committee was unanimous in valuing the ERDF, which has clearly done excellent things in many parts of the country, particularly the poorer parts, which, for the obvious reason that that is what the ERDF is designed for, have benefited from the scheme.
One of the first things that we examined is the fact that although everyone thinks that the ERDF is good and has done good things in the areas where it has been spent, no one can actually prove it. There was certainly little hard evidence about the ERDF’s actual impact. What is better because of it? What jobs and facilities exist now that would not have been there if not for the ERDF? The Government gave us a helpful response indicating that they are now doing more work to monitor and evaluate this round of the ERDF. That should be done some time this year, and it will then feed into any proposals for spending during the next ERDF spending round. That is welcome. Does the Minister have any further information on that evaluation study? What is it likely to cover, when is it likely to report and when is it likely to be made public? I think he has promised that a copy will be sent to the Committee for our consideration. It would be helpful to have that further information.
The Committee considered the changes that had occurred. Clearly, we do not want to get into a debate— I am sure, Ms Dorries, that you will pull me up if I do—on the wider issue of the benefits or otherwise of the abolition of the regional development agencies, but it clearly changed the control of ERDF funding, the responsibility for which was given to the Department for Communities and Local Government.
While my hon. Friend is still on the question of all-party consensus and before he strays away from it to the abolition of the RDAs, does he acknowledge that the Heseltine review, which has a good deal of support across the parties, recognises the importance of EU funds such as the ERDF as a boost to economic growth and structural change?
Absolutely, and I will say a little more about it later. It is probably consistent with the European Commission’s recommendations on trying to improve how European funds are spent by pulling the various funding streams together at a European level, thus enabling simplification within the UK, and allowing that funding to be controlled and brought together with other funds at local level, including through local enterprise partnerships. That would be entirely compatible with and would boost the direction of travel for which Lord Heseltine has been arguing. That is an important and valid point.
My hon. Friend will forgive me if he plans to move on to this, but it is critical to know how the now-secured ERDF funding will be spent and the degree of local discretion, decision-making and flexibility, particularly at the LEP level or, in our case, the Sheffield city region level. I hope that he will encourage the Minister and his colleagues in the Department for Business, Innovation and Skills to give us maximum localist discretion.
That is absolutely right. I was going to touch on that a bit later, but I am certainly happy to do so now. It is important that the European Union has recognised that, and it is important that Departments are prepared to do so. The challenge for Ministers is getting an overview and ensuring that the totality of available funding in the ERDF budget is spent, while giving local flexibility to ensure that it is spent on the right projects and in the right ways to benefit local communities. It is always a challenge for those of us with a localist bent who want more decisions to be made at a local level to ensure that that is done so as to keep national commitments and spending budgets intact.
I come to the DCLG’s responsibility. The evidence that we had—it was clear, and I do not think that there was any dissenting evidence—showed that by and large, the switch from RDAs to DCLG, as an administrative exercise, had been well managed. However, there were one or two examples of potential delays. We asked the Government to examine those, and the response was, “We can’t find any evidence of delays.” The Committee was a bit concerned—that concern has grown—that Ministers were a little complacent in saying, “We’ve got 98% of the money committed.” By “committed”, they meant projects in the pipeline as well. It was not all contractually committed; “committed” also meant projects that were moving forward but had not been finally signed off. Historically, with the ERDF and similar budgets, to hit the target of 100% spending, it has probably been necessary to have more than 100% commitment when moving forward.
Since our report, it has come to our attention that the west midlands ERDF local management committee identified some problems with spending for which there had apparently been a commitment. The committee’s minutes for September 2012 indicate on the performance of venture capital and gap funding projects that most investment grant projects had
“made few investments at this stage and are slipping between 50% and 92% from their original profiles. There can be no confidence at this stage that forecast ERDF will be spent this year, and this will have a significant impact on priority 3 in particular”.
That problem was identified in the west midlands. Does the Minister know whether it exists in other areas? If it does, he probably should not be surprised, as a survey by the Local Government Association also found similar problems. It said that two thirds of councils responding were not confident that match funding was available for the rest of the ERDF money available. More than half had projects that had fallen through or were considered to be at risk of doing so. Clearly, there are issues.
In Sheffield, we have been trying to get Government funding for flood defences, following the serious floods of 2007. We welcome the commitment from the Department for Environment, Food and Rural Affairs to find that money. When we were arguing early last year, we were told that ERDF funding would be necessary but that none was available; no one could find a penny. Miraculously, £1.75 million was available later in the year. I do not know where the money was found—it probably floated down the River Don and into the hands of civil servants.
The money was clearly available; ultimately, DEFRA found the money in its budget. We did not think that ERDF funding was available, but it is widely known that civil servants ring up local authorities across the country on the QT and whisper, “Have you got any projects available? We may have a bit of ERDF slippage elsewhere that we could do with spending.” We had assurances from Ministers 12 months ago that all was well, all was committed and there were no problems. Of course if it is 98%, not everything is contractually committed. Even contracts have slippage. A year later, slippage will occur. That could have been anticipated. I am surprised that Ministers were as reassured as they appeared to be by the information at that stage.
I assume the minutes from the west midlands are replicated elsewhere. The Minister has probably not had a chance to look at those minutes or to ask for minutes from similar bodies across the country, but he may find that similar concerns have been expressed.
My hon. Friend makes an important point about areas not spending and taking full advantage of ERDF funding. Of course, the availability of match funding is critical, but does he accept—he may have addressed this in his report—that there is an understandable caution among local authorities and local bodies given their experience in recent years of the European Commission changing its auditing benchmarks? Some projects have found that clawback is required, which has caused problems for the Department, local funders and local projects.
I am well aware of such problems in Sheffield. That was not particularly drawn to our attention in evidence, but, in a slightly wider sense, we considered the problem of match funding itself.
We stepped into the slightly controversial territory of the abolition of the regional development agencies, which were clearly a major source of match funding. The funding was flexible and available at the local level, but it has now gone. Our attention was drawn to the problem caused by the absence of match funding. The ministerial response was, “There are local authorities, universities and businesses.” It may have escaped Ministers’ attention that local authorities are not overwhelmed with spare cash to find match funding. Universities are in a slightly difficult financial position, and the private sector is also cautious.
One of our concerns is not merely that there may not be enough match funding to deliver the total spend of the ERDF but that the constraints mean that the range of projects that might go ahead may be determined by the particulars of the match funding. We will not necessarily get best value, therefore, because the schemes that might give best value are not the schemes for which match funding is easily available, which is a problem that Ministers have not addressed terribly well.
I appreciate that the Minister was appointed after our report was published and that he is new to the issues. We suggested that the regional growth fund should have a ring-fenced element identified for match funding because it would give the sort of flexibility that has been lost with the abolition of the RDAs by providing a pot of money so that the best value projects might more easily obtain the needed match funding. There would then be the local flexibility mentioned by my right hon. Friend the Member for Wentworth and Dearne (John Healey), which the Government ought to consider. They removed such flexibility from the table and said, “It is not something we want to do, and it is not our policy.” They should have another look. The last two things Ministers would want are an underspend or money being spent on things that do not represent value. There is agreement on that, but the Committee was driving at how best to reach that position.
The Committee welcomed, as the Government did, the European Commission’s changes to common provisions regulation, which simplified the way in which different funding streams, such as the ERDF and the social fund, may be brought together to reduce the complexity for applicants. That should also give better value by allowing the local flexibility that my right hon. Friend mentioned. We welcome the push to harmonise the regional policy funds and the idea that responsibility could be devolved to bodies such as local enterprise partnerships.
The Committee is generally in line with the Government in seeing no problem with conditionality on individual projects, and it is right that those projects are properly assessed and audited, despite the problems caused by changing the goals of auditing, which my right hon. Friend mentioned. If projects do not do what they say on the tin, the money may be clawed back. Conditionality on individual schemes, and holding a bit of money back until they are proven to be spending appropriately, is right.
We agree with the Government—or the Government agree with us, because it is that way around—that conditionality on a country basis is wrong. The UK is not a member of the euro, and we are not part of the growth and stability pact. There is general agreement that, for ERDF purposes, applying conditions to the UK that are attached to that pact would not be right.
As a Committee, we believe that there is merit in transitional arrangements for regions where GDP is between 75% and 90% of the EU average. Having a cliff edge where regions below 75% get something and regions above 75% get nothing is not right. The Government, however, disagree and feel that all ERDF funding should go to the poorest areas. I declare an interest because south Yorkshire is one of the areas that has benefited from transitional arrangements, or their equivalent, in the past.
Have the Government analysed the potential effect on European funding in the UK of ruling out transitional areas altogether? That is not going to happen, because the EU is proceeding with the transitional areas, but the Government seem to be shooting themselves in the foot by denying UK regions the possibility of European funding through a transitional area designation.
Does my hon. Friend find it remarkable that, right up to the very last moment of the recent budget negotiations, the Government were opposed to any transitional region status as part of the budget settlement? In fact, it is because of the determination of other countries to see such arrangements in place that 11 regions across the country, including the one we share in the Sheffield city region, stand to benefit. May I tempt him to go a little further by urging the Government to consider switching their attitude by embracing the fact that we have such funding for the next seven-year period? Let us ensure that we make the most of that funding.
I hope that will be the case. Clearly, we are where we are, and we ought to spend the money properly. Government support would be most welcome. Did they think through their opposition to the transitional regions? Did they consider the net impact of such resistance on the UK and our economy? Their position seemed strange.
When we discuss Europe in Parliament, battle lines are increasingly drawn on a party basis, but that is not always so. The report was all-party, and it was agreed by all members of the Select Committee. We looked at the issue of ERDF funding and Britain’s contribution, which is a net contribution to the total ERDF budget. We were supportive of the United Kingdom as a relatively rich country contributing to ERDF spending in the poor regions of the EU. That was accepted and not a problem—that is part of what the EU is all about, to rebalance our total European economy and to give assistance to the poorest regions. We did look, however, at the fact that the United Kingdom gets money back from the European Union; because we are a net contributor, in effect we are paying money over to Brussels and Brussels is paying it back to us. There is a way in which that position can be improved.
We talked about repatriation and thought that the Government would be all in favour of that. The Prime Minister recently made a speech about taking certain powers back to the United Kingdom from the European Union, and our suggestion would fit in with that. Strangely, it was something that the previous Government was trying to achieve as well. No one is arguing that that would be easy to achieve, and we would probably not get a majority for it in the next spending round anyway, but we thought there was a better alternative to passing money backwards and forwards and to having a set of European rules and a set of UK rules. The British Government could make a commitment: “This sum of money we would be transferring to Brussels and having transferred back to us, so we commit over the spending period of the European Union, over the next seven years, to spend that amount of money in the UK. We commit to spend it on those regions that are identified as either below the 75% level or with the transitional region status, but we will do so in line with our own developed policies in this country.” It could be scrutinised by the EU but, essentially, we would not have to pass money backwards and forwards, or to have another level of direction from the European Union, and we would save on administration and double layers of bureaucracy. That seemed to be a remarkably sensible recommendation, and we do not understand why the Government do not get it.
We thought that the Government had a general objective to bring powers back. We can disagree about what that might involve in the round, about referendums and their timing and about all such issues, but the Committee felt that that practical measure was a sensible proposal, which would mean less bureaucracy, less transfer of funds and more decisions made locally, but with the UK Government committed to ring-fencing the money, so that it is identified and committed for seven years and committed for spending in particular areas.
In stressing the fact that what my hon. Friend urges on this Government, the previous Government committed themselves to doing, I do not want him to gloss over an important difference. The previous Government made exactly the commitment, in arguing for that repatriation of structural funding, that he is urging this Government to do as part of the overall argument. We made the commitment that we would ensure that the amount of money due to the UK through the European structural funds would be secured and guaranteed to those areas as part of our argument to Europe about repatriating such powers and decisions.
Absolutely. It was repatriation within an overall European commitment to be consistent in the amount of money we spent and the areas in which we spent it, as well as in the general purpose of that spending.
The Government response was that the Treasury cannot commit for seven years. Of course it can. The Treasury is committed to the European budget and our contribution to it over seven years. The Treasury therefore makes such a commitment anyway. Why it could not ring-fence money in the way that we recommended seemed an inadequate non-response to what we thought was a practical, sensible proposal.
I have been through the Committee’s major recommendations. There are clearly areas of agreement with the Government: the value of ERDF funding; the simplifications proposed by the Commission; and doing things more locally. There are major issues on which the Government response was not as good as we might have hoped: whether we can guarantee that the money will be spent; the availability of match funding and the distortion of spending through non-availability; the transition areas; and repatriation. Perhaps the Minister can offer some further explanation in due course on those matters.
It is a pleasure to serve under your chairmanship, Ms Dorries, for the first time. I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts) on securing the debate and on the excellent report that his Committee produced. I hope that the Government will look at the report and implement its recommendations.
The European regional development fund is clearly an increasingly important funding stream in a time of austerity, when funds from other sources are under pressure. That brings about its own issues, and local government funding cuts are making life increasingly problematic in enabling local authorities to find the match funding necessary to draw down the important ERDF funding stream. I regret to note that the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis), when he was on the “Today” programme this morning, was urging even more reductions in the years ahead, even though we have already had unprecedented funding cuts to local government. That will obviously make life even more problematic for those councils that seek to secure the funding stream through the ERDF.
I have spoken to a number of colleagues in local government, and there is some anxiety and cynicism about the possibility of an underspend. I am reassured to some extent by what I have heard in my hon. Friend’s contribution and by what I understand Ministers are saying about ensuring that the fund will be spent in total, without an underspend. That has not, however, stopped the anxiety or the cynicism expressed to me by colleagues, who are concerned that under the terms of the UK rebate any unspent European funding or a proportion of it—two thirds of it—is clawed back by the Treasury. The fear is that that might be an under-the-radar funding cut being sought by Government over and above the cuts that they have already made to local authorities around the country.
Last year, there was concern about an underspend of up to £1 billion, but I believe that that is now not likely to be the case. Nevertheless, as my hon. Friend referred to, there is significant concern about projects falling behind or being in danger of collapsing altogether, and a significant sum remains uncommitted at the moment. Two thirds of local authorities are already anxious about their ability to match-fund, so any further reductions in funding will be even more problematic. With 50% of councils falling behind with projects, there is obviously a major problem to be addressed.
For the record, although the debate is not about the abolition of the RDAs, they clearly played an important role in dealing with ERDF funding in the past. My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) tabled a written parliamentary question last year, which was responded to by the Minister for Housing, the hon. Member for Hertford and Stortford (Mr Prisk). My question is about value for money under the new regime, because in his response, he said:
“The net cost per job for the Regional Growth Fund (RGF) was £32,000 in round 1 and £34,000 in round 2. As set out in the NAO Regional Growth Fund report published on 11 May, the detailed appraisal process is in line with HM Treasury’s Green Book and reflects good practice. As set out in the NAO Regional Growth Fund report, the average cost per net additional job generated by Regional Development Agencies occurring as a result of spend between 2002 and 2007 is £28,000, with wide variation between schemes.”—[Official Report, 24 May 2012; Vol. 545, c. 896W.]
Job creation, therefore, is clearly costing up to £6,000 more per job under the new regime than pertained under the old RDA regime. That is a source of concern, particularly when finance is tight. I wonder what the Minister will say in response to that and whether there are any ways in which the Government could assist in obtaining better value for money, or at least the value for money that the previous regime achieved under the old regional development agencies.
There has been a transition of ERDF administration to the Department for Communities and Local Government, but another concern that has been expressed to me is that the teams responsible for administration are quite small, and that might lead to difficulties.
But will it be value for money if it leads to delays, and results in value-for-money comparisons of jobs created costing several thousand pounds more than under the old regime? The Minister may argue that it is a tighter ship, but if in the long run it does not provide the same value as previously, it should be looked at.
Will the Minister outline how any delays that have been reported will be tackled and what support and assistance he will give to local authorities to deal with them and iron them out. How will he address the shortfall in match funding that local authorities have articulated? The point has been made that two thirds of local authorities are concerned about the availability of match funding. On the “Today” programme this morning, the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth, called for even more reductions in funding for local government, and that will create real tension. How will the Government assist in addressing the shortfall in match funding that we are all aware of?
Will the Minister allow the regional growth fund to be used as a match-funding source, and what steps is he taking to enable novel projects to proceed? I understand that there is anxiety because novel projects may be sacrificed to facilitate the spending of available money by supporting less complicated projects that are easier to deliver. What assurances can he give on that? Finally, what is he doing to maximise the impact of ERDF funding in areas such as Cornwall and the Isles of Scilly where there are particular problems? Perhaps he will outline what steps he can take to ensure that this important fund delivers the maximum impact.
It is a great pleasure, Ms Dorries, to serve under your chairmanship, and it is a great pleasure again to be in the Chamber debating with the excellent Chair of the Select Committee on Communities and Local Government. I thank him and the cross-party members of his Committee for their excellent work and this excellent and helpful report. I also thank him for his thoughtful contribution today in which he was broadly supportive of much of the Government’s work in this area. He was very supportive of ERDF funding and the work that it achieves, but he rightly asked some questions. I will pick up some of them in more detail in a moment.
I agree with the Chairman and his Committee that the research to which he referred is important, so that we are absolutely clear about what arrives as a result of ERDF funding in the creation of businesses, jobs and so on. It is really important. We have commissioned Regenerist Ltd to do that work for us. It is under way and will be completed by the summer. I give a commitment here and now that we will share its report with the Committee.
I do not want to become too bogged down in debates about the European Union and my right hon. Friend the Prime Minister’s negotiations, which have delivered an extremely good deal for this country. You would call me out of order, Ms Dorries, if I did so, but the purpose of objecting to transition regions was that we believe —I suspect that the Committee Chairman shares this view—that European structural funds should be used predominantly to help the least well off, whether in this country or Europe.
We believe that making additions to the pot could have increased the cost to this country and not delivered. Having said that, because of the work that my right hon. Friend the Prime Minister did so successfully in his negotiations with the EU about the funding deal, it has been possible for the transitional regions to go ahead. I will say later how we will get the best use of the next funding stream to ensure that those transitional regions, with other parts of the country, benefit to the greatest effect, taking in part the Committee’s advice.
I am grateful to the Minister, but I think he may be trying to deflect me in cueing me for this intervention. He referred to the successful negotiations on the EU budget from the UK’s point of view, but does he recognise and will he confirm that up to the point of agreement the Government remained opposed to a transition regions category?
I will confirm that. At the last minute, when we got the deal that we thought was in this country’s best interests, we were able to cease opposition to transitional regions. We now have them, and we will make effective use in those regions of the money that becomes available. We will do that in ways that were recommended in part by the Committee, and I will return to that if I can.
I welcome that confirmation and reassurance about now wanting to get best use from those funds. That will be welcomed by the local authorities in the 11 areas that may gain. They are led by all political parties and have worked effectively together to support the case for those transition regions in future. Perhaps the Minister will assure them that they will be a central part of the discussions about how best to use ERDF money for the next seven years.
In simple terms, I am very happy to give that assurance.
I am delighted to have this debate because there is a good-news story to tell about how we are making use of European funds, particularly ERDF money. All hon. Members present know that, with the European social fund, ERDF is one of the two European structural funds aimed at reducing disparities between and within member states. I want to say a little about the past as that has been touched on, a little about the present and, as questions have been asked about it, a little about the future.
All hon. Members present know that ERDF funding is an important part of our growth agenda, and during the current 2007 to 2013 funding period—hon. Members are aware that we are dealing with calendar years—it represents some £2.7 billion in England.
As the report focuses on England, it is only to England that I am referring; responsibility for the use of those funds in the devolved Administrations is not subject to our deliberations today. The funding represents £2.7 billion in England, which is matched with equivalent funding from other sources, and that is delivering jobs and businesses right across England.
Since the 1994 programme began, England has received some £8 billion from the ERDF over the three programme periods that have occurred, up to the end of this year. That has supported growth in a variety of different ways, creating jobs and supporting businesses. Just to give a flavour, the 2000 to 2006 programme supported more than 6,800 projects, created nearly 180,000 new jobs and helped more than 200,000 small and medium-sized enterprises. That is a serious contribution to growth by any standards.
A whole range of different projects have been supported. Some are large and high-profile, such as the very well known Eden Project in Cornwall and the Manchester Metrolink. Others have been much smaller and focused on the needs of communities, such as a project in Leicestershire that coaches women to help them become entrepreneurs. The ERDF has supported innovation, such as through a project in Cambridgeshire, which uses hemp to create lightweight components for industry. I could give many other examples that illustrate the different ways in which the ERDF contributes to growth.
The Government’s first priority when they came into office was to sort out some of the financial liabilities that had been left by the previous Administration. Poor management had led to a situation in which auditors from the European Union were basically imposing financial corrections on England—on our Government—totalling some £236 million for the 2000 to 2006 programme. That quarter of a billion pounds would have to have been met by the taxpayer. However, because of the excellent work done within my Department, we have now got that figure down from £236 million to just £14 million, and we are working to try and resolve that small amount as well.
So far, the 2007 to 2013 programme has delivered more than 42,000 new jobs and more than 11,800 new businesses. It is absolutely on track to achieve the target of creating more than 135,000 new jobs by the end of the period. The period of the funding stops in 2013, but the programme rolls on to 2015, by which time the money has to have been spent. The programme has already contracted with projects to deliver more than 31,000 new businesses, which is twice the number set at the beginning, in 2006.
As the hon. Member for Sheffield South East (Mr Betts) —the Chairman of the Select Committee—rightly pointed out, we brought the management of the fund into the Department following the abolition of the regional development agencies. We introduced standardised management systems to ensure that the same procedures were followed right across England, so that we can track our liabilities much more accurately than in the past. That has resulted in some efficiencies in the resources that the Department uses to administer the programme, and ensures that the risks of ineligible expenditure are reduced. I hope that that answers the question asked by the hon. Member for Derby North (Chris Williamson). We are leaner, but fitter, and we are more efficient in delivering good value.
As the Chairman of the Committee will well remember, when the European Commission gave evidence to the Select Committee last year, it was asked how we had managed the transfer from the RDAs to the Department. As the hon. Gentleman acknowledged, the European Commission said that it had been “well managed” and considered that we had done a good job in handling the transition. I was delighted that the hon. Gentleman confirmed that, but as he said, it is not all perfect. There are concerns in some parts of the country. He gave the west midlands as an example, so I can help him by giving the most up-to-date figures—I know that he always likes to be kept up to date.
The situation in the west midlands is that we have now contracted £254 million of the allocated funding of £328 million, leaving £74 million to be contracted. So far, we have created 7,404 jobs, and we are contracted to deliver 17,704, despite the target having been only 11,550. From that information, I hope that the Committee Chairman gets the clear indication that we are confident that the west midlands is now very much on track—not only to deliver, but to deliver more than was originally targeted.
I think that that was a reassurance from the Minister, but I got the point that £74 million was still not contractually committed, and presumably there are similar figures for other regions. Does the Minister have a total figure for money that is not contracted, and if it is all right in every region, why are civil servants ringing round, saying, “Can you deal with underspends from other regions?”
Let me answer the hon. Gentleman’s question and another one. He also asked, “Would it not make sense to slightly overplan, in case there is some slippage?” In terms of the £74 million, I can tell him that negotiations are under way for some £83 million of contracts, so we are well on the way to using up the money and getting the match funding, which he is concerned about. However, because he has recommended it to us, and it is on his advice, we are going slightly over the top to allow for the slippage that he thinks might occur.
I hope that the hon. Gentleman will commend us for what we are doing. If he asks me whether I have got the information for all the other regions, the answer is yes. He can take his pick, and I will happily give him the answer for each and every one of them to demonstrate that, in every part of the country, we are now on target to deliver what we are committed to—and in many cases, to deliver more than we were originally expecting to achieve.
I am more than happy to take account of the hon. Gentleman’s request. I will not make an absolute commitment immediately, because it may be more helpful, on advice, to defer doing so until we are further along in some of the pipeline negotiations that are well under way. In broad principle, however, I have no objection to making the information available, but I hope that he will allow me to consider the most efficient time to do so—for his benefit, as well as that of his Committee and all Members.
I am not sure why the Minister wants to delay. He offered, here and now, to read out the figures for any region, so the figures are available. It would help to have them now; if the Minister wants to update them in due course, he can do that as well.
The hon. Gentleman is getting a little uptight about something that is very simple. I hope that he would agree that I am taking a responsible position: I am saying that I am more than happy to make the information available, and I am merely adding that I will seek advice on the most propitious time to do so. New data that will give us a clearer picture may be expected tomorrow. That is all I am saying. I will make the information available as soon as possible.
I am grateful and I do not wish to pester the Minister with interventions, but he did just say that he would give the information at the time most convenient to the Select Committee and the House. That time is now. As my hon. Friend the Member for Sheffield South East (Mr Betts) rightly said, we would like the picture now and the Minister does have it. If more projects and commitments are in the pipeline, that is good—let us have an update on those at an appropriate time as well.
I hear what the right hon. Gentleman says, but I have given my answer. I will consider the matter and make the information available as quickly as I can, following advice.
I have already said that I think that we are doing remarkably well. It is great that the European Commission thinks that we have handled the transition very well, and I am delighted that the Chairman of the Select Committee broadly agrees with that. I am also sure that he will join me in praising how we have arranged to be able to use ERDF funds to help us with one very important issue that will assist with growth—the roll-out of high-speed broadband. We have been working closely with my hon. Friend the Under-Secretary of State for Culture, Media and Sport to ensure that that is delivered. In fact, there will be a contribution of some £165 million from the fund to help with that aim. Already, 80% of the allocation has been contracted.
I also want to touch on the future, because that is very important. All hon. Members who follow this issue with interest will know that there are several themes in the 2014 to 2020 programme. We will ensure that we make the most effective use of the funds, and one way we will be able to do that is by following the advice of the Select Committee about bringing the various pots together to provide much greater flexibility in the way they are used. The Departments responsible are working very efficiently together in planning for that.
It will, however, be important also to take on board the concern expressed by the right hon. Member for Wentworth and Dearne (John Healey) about ensuring that, wherever possible, there is local determination of how the funds can be used. That is why we will be using the local enterprise partnerships as the basis for much of the work. We have agreed that they will be the building blocks of the 2014 to 2020 programme. They will be working with a wide range of other interested parties, but they will be in charge of that seven-year set of allocations. However, as I said, there will continue to be local input from a wide range of sources to ensure that local priorities are being met.
We are learning from the mistakes of the past to ensure that we do not saddle taxpayers with large new bills and that the programmes are efficiently and effectively managed in the way we have demonstrated we are now managing them. However, it seemed to me that the real excitement envisaged in the Select Committee’s report was about being able to pool the funds to ensure maximum effect.
We can envisage a scenario in which, for example, a derelict building can be brought back into use and businesses encouraged to make use of it; I am thinking of start-up businesses. People in the area can be provided with the skills necessary to get the jobs in those start-up businesses. By bringing the funds together, we can use the European funds collectively to deliver on that vision. That is what the issue is about.
I want to end by addressing one other point raised by the Chairman of the Select Committee—repatriation. He spent quite a lot of time on that. Let me just say to him that we looked at it. We discovered that it would not work and that it would involve financial penalties. But that does not mean that that is the end of the matter, because we know that the hon. Gentleman feels very strongly about it. It is clear that his right hon. Friend the Member for Wentworth and Dearne feels very strongly about it, and no doubt the hon. Member for Derby North, who speaks for the Opposition, feels strongly about it. That is why the Prime Minister has established a Committee that is considering the whole issue of the European Union and competences. This is one of the areas that will be considered.
There might be an opportunity for change in the light of any further information that the Select Committee, its Chairman or any other hon. Member provides that group working on this issue, but at the moment we have concluded that it is not in the best interests of the people of this country to go ahead, because it would end up costing us money and delivering far less than we are currently able to deliver.
The ERDF has been of enormous benefit. Given the bringing together of the funds, the slimmer, tighter and more efficient management organisation, the local decision making that will come through the LEPs to deliver what local people really need and the opportunity provided through the transition regions to spread the money fairly across the country to meet needs in all parts of the country, the future will be a very exciting time. We have done well so far, and there are very exciting times ahead.
I thank the Minister for what in almost all respects was a very positive response to the Select Committee’s report. First, I thank him for his commitment to send to the Committee the results of the evaluation of ERDF spending, which he has already contracted to do. That will be most welcome when we get it. It is a difficult task, as we appreciated in our report, but it should be worth while, to enable spending in future rounds to be even better targeted, so we welcome that completely.
Secondly, on transitional regions, the Committee thinks that the Government were simply wrong in their initial objections, but I am pleased to hear the Minister say that transitional regions will be there for the next spending round and that the Government will fully commit to ensuring that the money is properly spent in those regions, with the full engagement, asked for by my right hon. Friend the Member for Wentworth and Dearne (John Healey), of the LEPs and local authorities in those regions. That is most welcome.
The Minister offered reassurance about the Government’s commitment to ensure that all the ERDF money was fully spent. Again, that is welcome, although the Minister did act as a bit of a tease. He was saying, “I’ve got all this information here. You can have any bit that you want. Just ask for it.” I then asked for it all and was told that it might come in due course when the time was right and subject to the advice of those who advise him. Well, yes, okay, we will have to leave it at that for this afternoon, but we look forward to receiving the information in the Committee and in the Library at an early date, so that we can be reassured on those matters.
I still think that some projects with the best chance of delivering value might not go ahead because of the non-availability of match funding. The Government must address that problem; we have not got to the bottom of it this afternoon.
I have two final points. We welcomed in our report the pooling of the spending pots. The Government are clearly seized of the importance of that. Using the LEPs as building blocks is very welcome. That relates to my right hon. Friend’s point about the Heseltine report. I would warmly welcome such funding or funding through the Heseltine measures being further devolved to local areas, for the LEPs and local authorities to build on, together with European and city deal money, and we might eventually move to the idea of community budgets as well. I think that the Select Committee will look at those issues.
I apologise that I did not pick up the point about the Heseltine report. I am sure that the hon. Gentleman will understand that, with a Budget to come in the very near future, I can only give him an assurance that that issue will be addressed at that time, when an announcement will be made. I clearly cannot say anything more about that at this stage.
Again, that sounds like a helpful response, but we will wait and see. We will start to see a different landscape of European funding decisions being made flexibly, together with other pots of money, to make a real impact locally. That is a move forward that can be welcomed.
Finally, on repatriation, I am not sure where the penalties came in. It certainly was not an issue that the Government raised with us. However, it is an issue for the future. It seemed to the whole Committee to be a sensible suggestion. I hear from the Minister that, in principle, it has not been ruled out. It will be looked at in future in terms of relationships between the UK and the European Union. That is to be welcomed as well.
I thank the Minister for his response. We will await further information from him and await the reports of the review, and we might return to the issue in the Select Committee in due course.
Nuisance Phone Calls
[Mr Dai Havard in the Chair]
It is a pleasure to serve under your chairmanship once again, Mr Havard. I thank the Backbench Business Committee for selecting this subject for debate and those Members who supported me in seeking parliamentary time, especially my hon. Friends the Members for Beckenham (Bob Stewart) and for Cleethorpes (Martin Vickers), who turned up to make representations before the Committee. It is also good to see my hon. Friend the Member for Thurrock (Jackie Doyle-Price), who has raised this issue in the past, as well as many other colleagues.
I have been overwhelmed by the response I have received since applying for this debate. I am sure that more Members would have been present today were it not for the Eastleigh by-election, which is a subject that I might briefly return to later. More than 100 MPs responded positively to my suggestion of a debate on the subject and there has been significant interest from the national and regional newspapers and network and regional television outlets, which clearly shows that nuisance calls are a problem that needs to be resolved. The matter might sound straightforward, but it is complex and ever-changing. I referred briefly to Eastleigh, and we all need to confess, both as individuals and as political parties, to the role that we play in generating even more nuisance phone calls.
Let me explain the background to my interest in this subject. Although I have a specific interest in ICT legislation, I did not appreciate the significance of the issue until a constituent explained his predicament. A retired individual from Cowbridge in my constituency in the Vale of Glamorgan, who is regularly at home during the day, highlighted the fact that he could receive more than a dozen calls from sales and marketing companies during working hours and throughout the evening.
I initially assumed that the Telephone Preference Service would resolve the matter, but after researching the issue, I started to appreciate its complexity. Anyone who wishes to stop unsolicited calls can register with the Telephone Preference Service, which makes it against the law to call consumers who are registered on the list unless they have given prior consent to do so.
Ofcom has the responsibility for maintaining the Telephone Preference Service, which is administered under licence by the Direct Marketing Association. The Information Commissioner has the responsibility to follow up consumer complaints and take action against those companies that are breaking the law. That sounds pretty straightforward, providing that each party lives up to its obligations. However, the situation is not so straightforward. To complain about an unsolicited call, we need the caller’s telephone number. Caller display or dialling 1471 should enable a complaint to be pursued. The privacy and electronic communication regulations require the caller to identify themselves when asked, but it appears that most withhold their number, making it almost impossible to identify them unless the receiver is prepared to endure the marketing pitch, which is undesirable to many. In many circumstances, the caller will simply hang up when the receiver asks for their identity at the outset.
The situation does not stop there. Many calls are silent or abandoned, and that is because call centres use automated diallers. That technology dials more numbers than there are agents available, to maximise the time they spend speaking to consumers. It is only when the consumer answers the phone that an agent will be connected. If an agent is not available there are two options: the automated system can leave a message, which is considered to be an abandoned call, or it can drop the call without a message, which is considered to be a silent call. Both are irritating, but a silent call can be intimidating or even frightening to some constituents. That situation is compounded when the number is withheld, preventing a complaint from being made.
There are two issues here. First, many call centres do not adhere to the rules laid down by the Telephone Preference Service or the privacy and electronic communication regulations. Secondly, withheld numbers prevent a consumer from complaining. Even if a company is committed to following the PEC rules, loopholes remain. If someone is registered with the TPS, it remains legal to call them to conduct a survey as an excuse. Another way of getting around the rules is to use the “permission to call” loophole, which is where someone who may have bought a product in the past has not ticked the box to exclude their data from being passed on to “carefully selected partners”. The reality is that their data have been sold on to another company that might have some tenuous relationship with the original company. It does not even stop there.
There is also a third dimension: calls from overseas. Calls being made on behalf of UK companies should also adhere to the privacy and electronic communication regulations. There is evidence that they do not, but there is a further problem when they are not acting on behalf of UK companies.
It is little wonder that I received such a response to this debate given the number of complaints. Ofcom shows that 47% of adults experienced the silent call treatment during the last six months of 2012, which is up by a quarter on the year before. In July 2012, there were some 10,000 complaints; six months earlier the number was a third of that, which shows that the problem is increasing at a remarkable rate. A survey by Which? magazine found that 76% of respondents were still getting lots of nuisance calls despite being registered with TPS. It is safe to make the assumption that there would be even more complaints if the callers could identify the number from which they were called.
The regulatory responsibility is split and not straightforward. The Information Commissioner’s Office is responsible for enforcing companies to comply with the rules, and Ofcom has powers to deal with the silent or abandoned calls. Let me give credit to the Information Commissioner and to Ofcom. Both have made some efforts to challenge and fine those responsible for such calls. I have to stress that they were extremely slow to respond, but I welcome their late efforts none the less.
My hon. Friend is getting to the nub of the argument. There are regulators responsible for policing such activity, but as with any regulatory breach, regulators have to be fleet of foot in dealing with transgressions, or companies will just carry on with them. Would my hon. Friend like to see a much more aggressive approach on behalf of the regulators, so that action is taken sooner?
My hon. Friend shows great interest in these issues and makes an extremely valuable point. I have already mentioned that Ofcom and the Information Commissioner’s Office have been slow to respond to the problem, and as my hon. Friend highlights, the position is ever changing. Not only are telephone numbers changing but so too is technology. Although I welcome Ofcom’s five-point plan, which it would probably cite in response to the criticism coming from the Government Benches, it is not a game changer. The plan is helpful and welcome, but it will not make a significant difference to most people, particularly as it is an ever-changing situation.
I have serious concerns about the regulatory responsibility being split between two bodies. It causes confusion to the consumer and adds nothing to the prevention or resolution of the problem. Having one body—probably Ofcom—would be much more efficient. The issue of withheld numbers, however, is central. Technology improvements allowed caller ID to be introduced in 1994, and at that time a consensus developed that callers should be able to withhold numbers if they wished. Key reasons related to the need to protect people receiving calls from charitable groups, such as those supporting victims of domestic violence, and to the need for the police to contact someone without disclosing their identity. At the time, there was no major issue with nuisance calls, and it is fair to say that contact centres have now abused the protection that was intended for the greater good.
Nuisance calls could be compared to someone knocking at the door wearing a mask or a balaclava. Would we answer the door to such an unknown caller? Of course we would not. Why, then, do we allow the same thing to happen over the telephone? Ironically, door-to-door salesmen from some of the companies Ofcom has criticised must show identity cards. In recent years, some of those companies have used them as a marketing ploy to demonstrate how responsible they are. Salesmen are therefore showing ID cards when they call at the door, but nothing similar happens when they use the telephone.
Many people have been forced to ask their telephone operators to block all withheld numbers—for a fee, of course. That can leave individuals in a vulnerable position. GP practices, police stations or other essential service providers do not always display their number—possibly with good reason, possibly not—so constituents may refuse to answer the telephone.
Some innovations and new telephones can overcome part of the problem, but there needs to be a shift in policy to protect the consumer. One option is that organisations that wanted to withhold numbers would need to show they had good reason for doing so and to get Ofcom’s agreement. That, of course, should not apply to domestic users. We need to recognise that that will not always deal with certain situations, given technological developments and the ever-changing situation. Voice over internet protocol and the international calls that I mentioned are particularly problematic.
I am not a fan of legislation for the sake of legislation, so I ask UK firms to play their part voluntarily. They should not only adhere strictly to the regulations, but go further and introduce higher standards, possibly in the form of a code of conduct. It would be a good start, for example, if they agreed to stop using withheld numbers, rather than being forced to do so through legislation. Using withheld numbers is in their interests, not the consumer’s interests, so if they really want to react to consumer demands, that would be a good start.
Telephone network operators also have a part to play. They could establish a system that made it possible to identify callers using withheld numbers. That would allow complaints to be made to Ofcom or the Information Commissioner. Legislation may well prevent the caller’s number from being given to the receiver, but the network operator will often know what the number is. A simple system could be introduced to allow a consumer to make a direct complaint to Ofcom, with the telephone operator advising Ofcom what the number is. Those innovative, straightforward proposals would resolve many of the problems.
As I said, the situation is extremely complicated. I have not even got on to texting or calls to mobiles. However, my comments demonstrate the problem, which has increased partly as a result of payment protection insurance and partly as a result of the claims that have been made for many other things. Given that the data that have been published show a trebling of nuisance phone calls in one month alone last year, we can assume the figure is even higher, and it would be much higher still if the receiver of the call could complain because they had the telephone number. I am grateful for Members’ support.
It is a pleasure to serve under your chairmanship, Mr Havard. I congratulate the Backbench Business Committee on bringing this debate before us. Many of us have been contacted by constituents about this subject in the past weeks, if not months.
Anger over nuisance calls is growing, and rightly so. The latest Ofcom complaints data show that complaints to the Telephone Preference Service increased 150% from July 2011 to July 2012. Many of my constituents have regularly received nuisance calls that are supposedly from within the UK. They are told there is something wrong with their computer and that the caller is qualified by Microsoft to fix it for a fee. They may also be asked for personal details, but the details some people reveal are passed on, and, lo and behold, those people then receive another call, about anything from what they do in their leisure time to their choice in shoes.
A constituent told me of a call they have received, which starts with the words, “This is an urgent message about your personal pension.” It goes on to say, “Press 5 for immediate action,” at which point, the person receiving the call can be signed up to something. The message then says, “Or press 9 to be removed from our database”, although the company will, of course, do no such thing, and the person will receive the calls over and over again. Dialling 1471 in the hope of finding out who is calling just results in hearing, “We do not have the caller’s number.”
Thousands of people up and down the country have to deal with this every day, and many of them are elderly. For many vulnerable and elderly people, nuisance calls are a menace, and one that puts them at risk of fraud—just as if a crook or pushy salesman had turned up on their doorstep offering to sell them this, that and the other. People are experiencing this every day over the phone.
A growing number of nuisance calls come from overseas, and there seems to be no way of protecting the British public from them at the moment. Many people have been victims of terrible scams and have lost money, which they can ill afford to lose at this time.
In 2010, Parliament approved an increase in the financial penalty available to Ofcom to enforce its rules on nuisance calls, from £50,000 to £2 million. Yet, there is still no real action. The Information Commissioner’s Office has fined just one company in the past 18 months. Studies show that 76% of people who have suffered from nuisance calls were still receiving unsolicited calls despite being registered with the Telephone Preference Service.
What is being done, therefore, to improve the situation? The TPS makes it clear on its website that there has been a rise in the number of unwanted calls made to people registered with it. However, it says that most of them originate from companies that deliberately ignore the law or disguise their identity.
As the hon. Gentleman mentioned, many of these nuisance calls are generated overseas, which means that the firms taking advantage of the information the calls produce are deliberately getting round the regulatory system here. Would the hon. Gentleman support what I would like to see, which is the naming and shaming of high street firms that pay overseas companies to do exactly that?
I understand the hon. Lady’s point, and I share her concern, but I would like to go a bit further than just naming and shaming.
The TPS has no enforcement powers, but it does send its complaints to Ofcom and the Information Commissioner’s Office each month. However, despite the TPS sending more than 1,000 complaints each month, the ICO has yet to issue a fine against any company.
What does the law say, and who enforces it? Ofcom has powers under the Communications Act 2003 to deal with the persistent misuse of a communications network or service, which includes the generation of unsolicited and silent calls. The ICO enforces any breaches of the Privacy and Electronic Communications (EC Directive) Regulations 2003, which cover rules about unsolicited electronic marketing messages sent by telephone, fax, e-mail or text. Regulation 19 requires organisations making automated marketing telephone calls to have the prior consent of the person being called. That means that live marketing calls cannot be made to anyone who has indicated an objection to receiving them—for example, by registering with the TPS.
What, however, is happening in reality? Constituents have told me time and again that, despite registering with the TPS, they are still plagued by cold calls. The safeguards are therefore doing little to protect them. Ofcom has fined nine companies for making silent calls, but if the companies persist it must be because, in spite of the fines, it is worth their while. Over the 10 years for which Ofcom and the ICO have had the relevant powers they have been used only rarely against the many companies known to be breaching the requirements.
Apart from an apparent general reluctance to act, the regulators tie their own hands by the policies that they set. To give just a few examples of the complexity of those policies, Ofcom uses the persistent misuse powers only against those who it finds have failed to follow its policy that no more than 3% of calls may be abandoned. All other reported misuse, including making millions of silent calls within the 3% limit, is tolerated. The ICO requires that the direct marketing purpose of the call be explicitly declared. However, a caller collecting information about an individual for direct marketing purposes may say that they are providing public information or conducting a survey.
The maze of regulations does not help. We need one clear point of contact with the power to act and enforce the law. While there are different regulators and different Departments in charge, there will always be loopholes for the companies to abuse and exploit. I fear that legislation may be the only step that we can take to curtail nuisance calls in the long term. I call on the Minister and the Government to bring about a single, simple point of contact for any individual wishing to protect their privacy from unwanted calls, texts, faxes or e-mails.
It is a pleasure to serve under your chairmanship, Mr Havard, and a special pleasure that this debate is stopping so many of us having to make nuisance phone calls to a small place called Eastleigh, on the south coast; otherwise we should all probably be in call centres having to do that.
The easiest and most fertile targets for nuisance phone calls are the elderly, like me. About 30% of householders in my constituency are retired home owners. They provide a happy hunting ground for fraudsters. Rob Vale and his team in trading standards at Bromley council suggest that the battle over nuisance phone callers is constant, unremitting and growing. According to Bromley trading standards, two particular scams have been perpetrated over the past two years. One is the Microsoft scam. The victim receives a phone call from someone, often with a foreign accent, who says that there is a bug in their computer. The fix requires the victim to log on to a website where their computer is then under the hoaxer’s control. A fictitious problem is then placed on the computer and the victim is told that it will cost, say, £120 for it to be fixed by a download or, indeed, that regular maintenance by the fraudsters will be needed.
The second scam involves debit or credit cards, and everyone has heard of it. Fraudsters telephone claiming to be from the police and saying that the victim’s debit or credit card has been cloned. The fictitious police ask for details of the account, normally also giving a fake police telephone number so the victim can check that they are genuine. However, they stay on the line until that phone call is made, so they keep control and continue the deception until they get the bank details.
Both the present and previous Governments have been more than aware of the problems caused by nuisance phone calls. Ofcom and the Information Commissioner’s Office as regulators have powers to act, and the maximum penalty, as we have heard, has been increased to £2 million. Ofcom set out an action plan on 8 January for improving the service to victims. Generating unsolicited telephone calls is an offence, but it remains planned and persistent. Only one company has been fined £50,000; but I think everyone present would want more fines. The problem continues.
As I understand the matter, the Information Commissioner’s Office is meant to carry out enforcement for the Telephone Preference Service and receive complaints and notification of breaches. As we have heard, there are problems when the companies involved are based abroad. It is then difficult get a grip of the situation; but there must be something that the experts can suggest. For example, no doubt the calls are being made from abroad for the a British company; somehow we must get to the British companies that are authorising the activity. What I find odd is Ofcom’s current advice to recipients of unsolicited sales and marketing calls from overseas, which is to contact the overseas company making the call. How great is that for a little old lady—or little old gentleman? I am not trying to be sexist.
A big problem arises when people have given consent in the past. I often book rail tickets, when I visit one of those constituencies that have by-elections, on the internet. When I fill in the boxes on the internet form I am always asked if I would like to receive further information. It is easy to miss that box or tick it by mistake, but once someone has done that apparently the Telephone Preference Service may not be able to help. That is sad.
I have inquired locally, and trading standards in Bromley have tried to get a grip of nuisance phone calls with various measures. When they hear of a problem, they rapidly get hold of the originators of cold calls and warn them off; they have set up a system for banks and building societies in the Bromley area to contact trading standards if elderly people begin to make unusual withdrawals or to do things that are not typical of them; they have delivered 70 talks in the past year to the elderly warning them about the dangers of nuisance and cold calls; they have sent out packs to elderly residents also warning them of the problem; and of course they use the local newspapers and radio to alert people to scams. I mentioned Rob Vale, the head of standards at Bromley, who does a very good job. He reckons that such measures have probably saved the elderly about £1 million in the past few years, which is great. Those responsible have done so well that The Municipal Journal has awarded them a commendation for their efforts. They are a model.
I am conscious of the time, and the fact that I should soon shut up. I believe that either Ofcom or the Information Commissioner’s Office should get much tougher about nuisance phone calls. After all, there is the power to do so. However, if that does not happen, we should consider setting up a nuisance calls agency as advocated by the Fair Telecoms Campaign. That, in its turn, should get a grip on the problem.
It is a pleasure to speak in the debate, and I congratulate all those hon. Members who pressed for it. Several of us have been raising the issue of nuisance phone calls in various ways. I am sure that the hon. Member for Edinburgh West (Mike Crockart) will be pleased to know that one of my constituents congratulated me on taking up the issue and mentioned his campaign in conjunction with The Sunday Post. I am sure that he will say more about that.
People are concerned about a number of issues, and a range of constituents have contacted me. An elderly couple wrote to me to ask for advice about what they could do, because they were receiving persistent calls. They said in their letter to me:
“How can we stop phone calls which we consider to verge on the disruptive and the invasive? This week, since Monday, we have received seven of these calls.”
That might not seem like a lot of calls, but for an elderly couple such as my constituents, who live in sheltered housing and who would normally receive calls from family and friends but who are suddenly receiving an influx of calls and do not know who they are from or what they are about, it can be quite concerning.
I gave that couple advice at that stage. They contacted the Telephone Preference Service and were told that that was the correct thing to do. However, part of the problem was that the calls originated from offshore and the TPS could do nothing about them. Of course, the couple were then quite concerned because it seemed as though nobody was really taking the issue seriously.
As well as the nuisance calls, of course, there are the other types of calls that have already been referred to as scams. Again, one of my constituents wrote to me to explain that a couple of years ago she was constantly phoned for a few weeks by a company that said there were problems with her computer. Eventually, after a number of those calls, she gave in; she thought that what the company said must be correct. She gave the company information, allowed it to log on to her personal computer and then it started to tell her about all the serious problems she had with her computer and began to ask her for money. Thankfully, she then realised that something was wrong. None the less, she continued to receive calls from the same company, despite making it clear that she had no wish to receive any such calls in the future. Her number was ex-directory, and she was registered with the TPS.
Another issue was raised with me recently by constituents. I hope that the Minister will consider it seriously, as he has done with the other problems that have been raised. A number of constituents have contacted me because they are concerned about what they say are companies calling them about either the green deal or some of the energy offers that are available. The problem for my constituents is that they are not immediately able to identify whether those calls are genuine calls made on behalf of—as they see it—the Government or, indeed, on behalf of a company that is seeking to persuade them to apply for Government grants before providing them with the business. There seem to be some grey areas in terms of what is marketing and what is actually selling. That is something that it would be useful to look at.
One of my constituents, who is pretty savvy about these issues, received a call telling her that she could miss out on lots of Government grants, so she told the caller that, of course, the green deal is not about grants but loans, etc. The caller then tried to continue with the call, by claiming that they were not trying to sell her anything at all. Afterwards, she googled to get the information about the company that had called her and discovered that it was indeed a company trying to sell her products. Again, she was left feeling that the protections that exist did not particularly help her.
Offshore calls are another issue that people will be familiar with. I know how difficult it is sometimes when I am calling people, or when people are calling me, for them to understand me; having a fairly broad west of Scotland accent, it can be fairly difficult for people to do so. I was on a call last week and I had to try to spell out the name of my home village of Mauchline to someone in another part of the UK, and that was pretty difficult. Again, we can imagine what the situation is like for vulnerable people or elderly people. They are concerned because they do not know what the call is about and they have been asked to give information, perhaps even details such as their date of birth and their bank information, ostensibly for market research or marketing purposes.
I am grateful to the hon. Lady for making some extremely valuable points. She mentions vulnerable and elderly people. Does she agree that people of working age, who might not be at home during the day, might not appreciate the scale of this problem because many of these calls are made in the daytime? Vulnerable people, including older people who may well be vulnerable, are disproportionately affected by these nuisance calls.
That is a very good point, and I think that it is why we as MPs get so many people coming to us who are in that category of vulnerable people. However, some of my constituents who are at work during the day complain that the calls are targeted for the period immediately after they return home, after the schools come out or perhaps at the traditional tea time in certain parts of my area, between 5 o’clock and half-past 6. Basically, people are saying, “We get in from work; we sit down; and the phone goes.”
Older people are advised to get caller identification, but not everyone wants to do that because they might not necessarily understand the technology or want to judge whether to answer a call. People simply want a system whereby, if they say that they do not want to receive unsolicited calls, somebody somewhere takes their request seriously, does something about it and puts in place a system that works.
I do not have much more time left, so I will finish on the point about multiple responsibility. Different agencies and organisations have different responsibilities, and people are split between contacting BT or their phone company, before they are told to contact the TPS and then perhaps Ofcom. People just give up and say, “It’s all too difficult,” and I have not even started on the number of texts that people complain about, particularly ones about payment protection insurance or PPI. Perhaps that is for another day and another debate.
It is a pleasure to serve under your chairmanship for the first time, Mr Havard, and I, too, thank the hon. Member for Vale of Glamorgan (Alun Cairns) for securing this debate.
I should start by declaring an interest that has already been mentioned. For the past six months, I have been running a “no to nuisance calls” campaign with The Sunday Post in Scotland. In that time, we have secured about 20,000 signatures on a petition, which I presented to Downing street two weeks ago. Nevertheless, the number of signatories is still growing, and I am sure that it will grow in the aftermath of this debate.
As a brief aside, I am also in the process of forming an all-party group on nuisance calls. Many Members will already have received an invitation to join me in that group, and I ask anyone else who wants to join to contact me.
The overwhelming response that I have received to the campaign is a clear demonstration of how strongly people feel about nuisance calls, and by nuisance calls I mean unwanted live marketing calls, as well as silent calls, abandoned calls, spam texts and recorded messages. My constituents have contacted me in great numbers to share with me their stories of unscrupulous callers, as well as to complain about the companies that pester them day in, day out. Indeed, only yesterday, I discussed this issue with a colleague, whose young children now shout, “It’s PPI,” whenever they hear the phone ring. Clearly, we are a country under siege and something has to change.
I have not come to Westminster Hall today with an exact proposal about what structures should be changed, what legislation should be amended, what Department should be responsible or even what powers are missing, although I hope that the proposed all-party group will look at those issues. However, what is clear from talking to Ofcom, the Information Commissioner’s Office, BT and Ministers is that absolutely no one thinks that the present system is working. So of all the potential solutions to this problem, doing nothing is not one of them, but neither is working more collaboratively, which I fear is where the Minister is heading. Consequently, I welcome the opportunity that we have today not only to discuss the problems, but to highlight some of the work that has already been done to address them and to agree a way ahead.
I want to quote a couple of short paragraphs from those who have signed my petition. First, one signatory said:
“You just can’t get through to these people to stop hassling you. I get phone calls when I’m driving, eating, working, even in the shower.”
It is unclear whether he actually had his phone in the shower with him. He went on:
“They ring day after day and won’t take ‘get lost’ for an answer. You ask them to take you off the database and they don’t.”
Another signatory said:
“I am signed up to the TPS, but am fed up with calls from PPI firms, car warranty companies who seem to have access to my name and type of car, “Microsoft” callers...and silent calls. Time to ban these. I don’t need to claim PPI, have never had an accident, don’t need to sort out my pension or anything else they phone about.”
Those two responses are fairly typical of the comments that we have received.
Nuisance calls, spam texts and other forms of unsolicited contact are an annoyance for most people, but as has already been said, for many vulnerable and elderly people, they are also a menace, and one that puts them at risk of fraud just as much as though a crook or a pushy salesman turned up at their door. So I want one single, simple point of contact—a regulator—to take in all forms of unsolicited contact, and a single, simple point of contact for any individual who wishes to protect their privacy from unwanted calls, texts and faxes.
Ofcom has recently attempted to make it clearer to consumers how they should make a complaint if they are bothered by nuisance calls. When I heard about that, I imagined a small A5 or even A6 guide that I could keep next to my phone for when the inevitable call came, perhaps something like the document that I am holding now, which I compiled for constituents in Edinburgh West, to put on the inside of their doors in case they were confronted by unwelcome cold callers. Instead, I found this document—[Interruption.] I cannot imagine a better example of why reform is so badly needed.
There should be a simplified, single regulator with a single point of contact. The public seem to have the appetite for that. The current web of regulations allows companies constantly to find new ways to contact people who have opted out of receiving such information. The Minister has said in meetings that we need to give consumers greater clarity, so that they know who to turn to, but putting the responsibility on consumers is unacceptable when the regulations are such a maze.
Far from the situation outlined by other hon. Members, the ICO has begun to show its teeth. It issued fines for cold calling to three companies for the first time a couple of weeks ago. Last year, the first fines were issued for spam texts for a company that was part of the growing industry that texts numbers to promote PPI and personal injury claims. The ICO is doing much more, with a few initiatives in the pipeline, including working with global phone companies to agree a memorandum of understanding to allow information to be shared, as it has already done with the claims management regulator, and considering intervention points relating to personal data—all the points at which data from someone who, for example, completes a survey while shopping online are used. Working together, regulators can trace the data from the start to the end of the process. That will give a better understanding of where the intervention points are and will highlight any gaps in legislation. There is also an investigation into what changes need to be made in terms of data protection, to allow the ICO to use complaints collected by consumer groups, such as Which? and citizens advice bureaux, rather than having to collect individual complaints.
People throughout the UK are worried about nuisance and silent calls and spam texts. We have an opportunity soon, in the Communications Bill, to make significant inroads into dealing with this problem, but only if the Minister is prepared to be bold and act in consumers’ interests. I hope that we will hear from him about bold intent and not merely timid tinkering at the edges.
It is a pleasure to serve under your chairmanship, Mr Havard. I congratulate the Backbench Business Committee on bringing this debate. It is reassuring to hear calls for stronger and more regulation from all hon. Members in the Chamber in this instance. I will not try to cover the excellent points already made by hon. Members from all parties about why we need better regulation.
I have two declarations of interest to make. I implemented calling line ID, as an electrical engineer, and I worked for Ofcom before first coming into the House. Those two areas correspond to the two brief points that I should like to make.
As an electrical engineer, I implemented calling line ID and the withholding of calling line ID for many business systems across Europe and the world. Calling line ID is a useful facility; we should not blame the technology. Having implemented it, and having written the code for it and looked at the bytes that carry information across telephone systems, I know that even when the calling line ID is withheld, the number is still present and is still sent. The hon. Member for Vale of Glamorgan (Alun Cairns) mentioned that it is technically possible to ensure that the numbers of those who make nuisance calls are obtained, whether through the equipment manufacturers or regulation, or a combination of both. I should like there to be an industry working group on this. The industry should be able to take relatively simple steps to ensure that the numbers of those who make these calls are recorded and are available, so that regulatory enforcement can be carried out.
I worked for Ofcom for six years before first entering Parliament. I yield to no one in my admiration for Ofcom, not even the Minister—sometimes we get quite competitive about this. Ofcom is an excellent organisation, with fine people who are highly qualified—great economists and technologists—but when it is considering what resource to spend on enforcement, it will necessarily consider the impact of the harm that it is trying to address and will look to calculate that harm in economic terms.
In this instance, Ofcom may be severely underestimating the harm that results from nuisance calls. Like many hon. Members in the Chamber, I have been contacted by constituents who suffer these calls, and I have my personal experience to go on. I registered with the TPS service, of which I was very aware, working in telecommunications, yet I receive up to 10 silent and nuisance calls every week on my fixed land line. For me, they are a nuisance and an irritation, but for those who are more vulnerable and less comfortable with technology, they can be worrying and upsetting. We may be underestimating the cost by not considering the cost to society and our economy of increasing the mistrust of technology in this regard.
We are already aware that many demographics are reluctant to go online. There are 10 million people in this country who rarely or never use the internet. Nuisance calls, together with spam and other harm, which we have considered today, increases the mistrust of technology in our society, and this represents a barrier to getting more people from particular demographics online. That is a brake on our economy. This issue can only get more important. In future, technology will become increasingly a part of our lives. We already think it is a part of our lives, and some of us already find it difficult getting away from our mobile phones and tablets, but that will increase.
It is essential that Ofcom, and the Minister and this Government, send a strong message to people throughout the country and to businesses that a person’s phone, PC or tablet is, just like their home, their castle. They should be able to be secure and unmolested. I hope that the Minister takes that message away with him.
I congratulate my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) on securing this debate and thank all hon. Members for their wise contributions, which have shown considerable consensus.
The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) mentioned the need for stronger regulation, but we are looking for more regulatory activism, because there are already quite a lot of powers for regulators on the statute book. We are after more compliance and more enforcement, and we should perhaps look at the regulators’ tools. In my intervention on the hon. Member for Inverclyde (Mr McKenzie), I mentioned the regulator having the power to name and shame companies that are flouting and abusing regulations. I should like to see more naming and shaming, because significant high street names are engaging in some of these abuses.
I want to focus on the activities of ambulance-chasing lawyers and claims management companies, which are among the worst perpetrators of nuisance calls and have had a boom with PPI mis-selling. It is becoming abundantly clear that the next area of expansion is accident compensation. As Members will realise after the Mid Staffordshire report and as I know from being a member of the Public Accounts Committee, the field of health compensation is growing like Topsy. It is so cheap for companies to make randomly generated calls that that will be the emerging nuisance.
We have seen how prevalent daily hounding is by text, e-mail and telephone. Which? reports that 74% of people have been contacted in that way. As we have mentioned, it is the most vulnerable people—the people at home and not working—who are being plagued the most by this menace. Let us call it what it is: harassment. Numerous calls can be made during a day.
Sometimes consumers unwittingly find themselves entering into contracts that cause them significant financial detriment and are fleeced for payments without any service being delivered. Which? told me of an 87-year-old housebound gentleman who was quite deaf and frail. He was on the Telephone Preference Service register, had not taken out any loans for years and had no PPI, but during a call, he was persuaded to give his credit card details to a claims management company, which promptly relieved him of £250. I call that theft. The regulatory system needs to be able to take prompt and severe action against companies that engage in such activities.
In the time available to me, I want to highlight what consumers can do, given that the regulators are being a bit lily-livered about dealing with the issue. Richard Herman has fought back successfully against being plagued by such companies. The man is a complete hero of mine. He hit the headlines last year when he successfully brought a claim against PPI Claimline in the small claims court for compensation for the nuisance calls that he received.
I must advise hon. Members that the even better news is that Richard Herman has done it again. He was recently cold called about his accident. He played along with the caller, who—illegally—would not say who they were, kept plugging away and asking the question and eventually discovered that they were from a 260-person firm of solicitors called Scott Rees. Mr Herman contacted Scott Rees on the phone and advised them that he would charge them £10 a minute for any further time that he spent being contacted by the firm or its lead-generating system. Sure enough, the firm called him again, so he took great pleasure in invoicing it for £230 and received a cheque. Consumers can fight back. Good luck to Mr Herman; he has obviously found himself a nice little earner.
Mr Herman has set up a website at saynotocoldcalls.com, where he outlines a six-point plan to deal with cold callers. It is probably much more use than the advice that Ofcom gave to the hon. Member for Edinburgh West (Mike Crockart) and a fraction of the length. Mr Herman’s first point of advice is to record the telephone call and then to play along to find out the company name, advise the company that it will be invoiced £10 a minute if it calls again, wait for it to call again and then send it an invoice and sue in small claims court if it does not pay. Thanks to Mr Herman, there is a precedent.
We would all do well to advise our constituents that that is the way forward. When cold callers get to Mr Herman, it will cost them, but he says that it would deter them more if penalties were higher. That comes back to what we have all been saying about the regulators taking more action where detriment occurs. Much more should be done in terms of spot fines to curb such behaviour. Until we start showing that we will take action against cold callers, they will continue; it is just too profitable for them not to do so.
We might need to examine the activities of companies that present direct debit instructions to banks, which leaves consumers exposed, and to consider codes of practice in that regard. Telecommunications providers that allow scammers, particularly from overseas, to use our network have a big role to play. We are aware of other abuses that involve re-routing through UK numbers, the owners of which are often presented with significant bills. I hope that the Minister will consider that bigger issue and engage with other Ministers about it.
As we have discussed, there are lots of regulatory underlaps in this area, and many different agencies are involved. That is the challenge for the Minister. As we have heard, we have a good opportunity now to tackle the issue. We have all had enough of such attacks on our privacy, and we must engage with the industry on behalf of consumers, who do not deserve this nuisance.
It is a pleasure to serve under your chairmanship, Mr Havard. I, too, congratulate my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) on securing this debate. It is obvious from the exchanges so far that the present system is failing and totally unsatisfactory. It does not work in any meaningful sense. If we are to stop the plague of unwanted and unsolicited calls from which we all suffer, something must be done—and quickly.
Like colleagues, I have raised the issue in the House on numerous occasions, the last of which was 8 November, when after my question to the Leader of the House I received a response from the Minister. We all know the Minister to be effective and diligent; I sense he hears a “but” coming. I quote from his letter to me:
“I share your concern about this issue and fully understand the nuisance this causes your constituents. I agree that we need a more effective system which ensures that consumers are effectively protected against such calls.”
He goes on to say:
“I am aware that enforcement of the protections offered under PECR has not been very effective”.
That is certainly true, and from what we have heard I think that other Members would endorse it.
I do not want to be too critical of the Minister, as he has indicated that he is determined to push ahead with improvements. Indeed, he continues in his letter:
“I have pushed for improvements in this area.”
I am aware that efforts have been made, but numerous suggestions have also been made in this debate. We must limit how many times a company can call a particular answer machine to once every 24 hours. I understand that that has been knocked about and debated previously, but if it could be enforced, that would be a major step forward. I also understand that efforts have been made to clarify existing policy on issues such as calculating abandoned call rates, when an information message is to be played and what information it may or may not contain.
Ofcom has also made it clear that it is willing to tighten regulations further on answer machine detection technology, which is improving all the time, if such calls continue to cause harm. I assure Ofcom that they are continuing to cause concern, and I hope that it will act more robustly in future.
As we have heard, the Information Commissioner’s Office enforces breaches of the privacy and electronic communications regulations and of the Data Protection Act 1998 when a company uses a person’s name and number. If I read regulation 19 correctly, it requires companies making automated marketing calls to have the prior consent of the subscriber being called. Live marketing calls cannot be made to anyone who has indicated a general objection to receiving such calls or informed the caller that they do not wish to receive them.
As we heard from my hon. Friend the Member for Beckenham (Bob Stewart) before he had to leave, there is also an issue about ticking the box on other forms and whether that counters one’s entry on the Telephone Preference Service register. Clearly, when they have registered with TPS, people think that that is job done. Many unsolicited and silent calls arise through the use of automated systems used by commercial call centres. Silent calls are of particular concern to the vulnerable and elderly. Any automated calls—those where the recipient of the call does not have the chance to speak to a real person—must be made with the consent of the recipient, and the identity of the caller must be included.
Ofcom’s revised statement of policy, of September 2008, specifically identified abandoned or silent calls as examples of persistent misuse:
“An abandoned call is where a connection is established but terminated by the caller even though the call has been answered by a consumer. Our policy is that these calls should play an information message to inform the consumer who made the call.”
What happens if that information message is not played?
As we have heard, such calls cause particular distress to the elderly and vulnerable. More than 70% of complaints received by Ofcom about silent and abandoned calls are from recipients who have received two or more silent calls a day from the same company, often over a period of days or weeks. Ofcom estimates that more than 22% of the population have experienced silent calls on their landline in the past six months.
The aim must be for a system in which our constituents do not need to complain because they can register with the Telephone Preference Service—that is it, job done, no more calls. If the calls did keep coming, there would be a clear breach of the rules and action should follow.
I have seen statistics that indicate that TPS operates with an 85% success rate; I can only assume that I, and most of my constituents, fall within the other 15%. Such calls seem to come in phases, with flurries of activity. PPI has been a particular plague in recent months, but people do not need such middlemen. If people go into their bank and fill in a claim form, the cheque will come to them in the post without having to send 10%, 20% or 50% to the middlemen.
The TPS does not affect automated diallers and recorded messages, so it recommends registering with Silent CallGard. That also confuses people. We need a much simpler system.
I am of an age at which I can remember knocks on the door from door-to-door salesmen selling anything from brushes to the “Encyclopaedia Britannica.” Nuisance calls are a modern menace equivalent to those door-to-door salesmen. Our constituents need a single point of contact with adequate resources and full powers to regulate that nuisance industry. When will that happen?
It is a pleasure to serve under your chairmanship, Mr Havard. I congratulate the hon. Member for Vale of Glamorgan (Alun Cairns) on securing this important debate. The fact that hon. Members on both sides of the House have spoken demonstrates that he was right to press for the debate. He set out clearly the technical issues that we are facing.
I am also grateful to my right hon. Friend the Member for Doncaster Central (Ms Winterton), who first drew the problem to my attention. She is demonstrating her concern by sitting here and listening to the debate, which will not end in a whipped vote. What would demonstrate greater commitment than that?
Nuisance calls are a rapidly growing problem, and their number has trebled since the general election. I hope the Minister is paying attention, because this is one issue on which he cannot say, “What did you do for 13 years?” The fact is that this is a new problem for which he needs to find a new solution.
Some 47% of adults surveyed say they have received nuisance calls. The hon. Member for Cleethorpes (Martin Vickers) is absolutely right that it is shocking that 76% of people who have signed up to TPS are still receiving nuisance calls. That shows that, even when people behave perfectly sensibly and responsibly, they are still pestered, even if they have not displayed the degree of entrepreneurialism recommended by the hon. Member for Thurrock (Jackie Doyle-Price).
The seriousness of the problem was demonstrated in the speeches of my hon. Friends the Members for Inverclyde (Mr McKenzie), for Kilmarnock and Loudoun (Cathy Jamieson) and for Newcastle upon Tyne Central (Chi Onwurah). The calls are not only a nuisance; they can become threatening to some people, and they can also lead to serious financial frauds and scams. That is why it is important that the Government take serious action.
The briefing from Ofcom on its work is interesting, but Ofcom, too, is asking for changes to the regulatory framework. Ofcom would like to be allowed to share information with the Information Commissioner’s Office, which highlights the problem—we need a single regulator, a single port of call. Sharing information will not be enough; we need one place where people can go with the confidence that they will receive a proper answer. What discussions has the Minister had with his colleagues in the Ministry of Justice and the Department for Business, Innovation and Skills on introducing one seamless operation to address this scourge of modern life?
Ofcom also mentioned the difficulty of addressing the problem of nuisance calls given its limited resources. The Minister is responsible for cutting Ofcom’s budget by 28%. When he did so, I am sure he thought it would be a cut without consequences for the general public because Ofcom is part of the Government machinery that is invisible to ordinary members of the public. In practice, such cuts have real implications, and he must think about whether Ofcom has the resources it needs to address nuisance calls.
I reiterate what other hon. Members have said: Ofcom should be the lead institution, because people have heard of Ofcom. But it is not simply a question of beefing up Ofcom; we also need a new framework based on the important principle that people are entitled to their privacy and should be in control of their own personal information.
As my hon. Friend the Member for Newcastle upon Tyne Central said, the issue is not only with nuisance calls but with people’s use of the internet and new technology in general. One of the main inhibitors when people go online is their anxiety about loss of privacy, and nuisance calls are another good example of that. The Government, who are pursuing a policy of digital by default, must energetically address that anxiety.
Members on both sides of the House agree that unwanted calls are a nuisance and that we need a fresh approach. Will the Minister say something about the forthcoming communications White Paper, which has been rather delayed, and commit to including nuisance calls in that and in new legislation? We hope to see a framework and outline for those things in the Queen’s Speech, so that we can get moving on the problems.
I hope the Minister will be able to address the following issues in the White Paper. There should be a single complaints portal and a single regulator. There should also be changes to the rules on consent. At the moment, withdrawing consent is difficult once it has been given. If a person gives consent to a firm, the firm can carry on using that consent, even if the person subsequently signs up to the TPS. The firm can also sell on those data. We must enable people to retract consent simply and straightforwardly. I would also like the Minister to explore the possibility of ensuring that third-party marketing consent expires after three months.
It would help if the Minister said a little more about the monetary penalties available. Does he believe that the ICO needs to have stronger powers to issue fines and monetary penalties? These firms have an interest in making a high number of calls. They have a financial interest in exceeding the 3% of abandoned and nuisance calls permitted under the existing regulations. As long as they have a financial interest in doing so and it is difficult to tackle the technology, they will carry on doing that, so the only way to deal with it is for a strong, powerful financial disincentive through the fines mechanism.
Finally, we need to address the technology question. I was pleased to hear my hon. Friend the Member for Newcastle upon Tyne Central, who probably knows more about the technology than anyone else in the Chamber, say that it can be done. With a number of the culture, media and sports policy issues that we have debated, the initial stance of the industry has been, “Oh, it is not technically possible to do that,” although it has then turned out to be possible.
Hon. Members have suggested that even if the telephone number of the caller cannot be released to the recipient, the recipient should be able to complain to Ofcom and refer to the call, so that Ofcom can trace it. That is sensible. Another suggestion, equally important, is that mobile phone companies should be able to provide consumers with spam-filtering technology, to help them to tackle the problem of spam text messages, which all of us have received about PPI.
This is an important issue—we agree on that—and it is a new issue, so I am not blaming the Minister for not having dealt with it earlier, because he could not be expected to have that much foresight of the situation. The problem having now arisen, however, we clearly do not have the necessary institutional and legal machinery in place, so he needs to act. I hope that he will make a commitment to act in the forthcoming communications White Paper.
It is a pleasure to appear under your chairmanship, Mr Havard. I thank my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) for securing this important Back-Bench debate and hon. Friends and hon. Members for their valuable contributions, including the hon. Member for Inverclyde (Mr McKenzie); my hon. Friend the Member for Beckenham (Bob Stewart); the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), whom I have met to talk about the issue; my hon. Friend the Member for Edinburgh West (Mike Crockart), who is running a prominent campaign and whom I have also met to talk about the issue; the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), whom I meet regularly to talk about a range of issues because, as the hon. Member for Bishop Auckland (Helen Goodman) rightly pointed out, she is the one in the House with the technical knowledge; my hon. Friend the Member for Thurrock (Jackie Doyle-Price); my hon. Friend the Member for Cleethorpes (Martin Vickers), or previous Friend, because he clearly thinks I am doing a useless job, although he can get back into my good books by making a helpful intervention about what a marvellous job I am doing; and of course the hon. Member for Bishop Auckland. All those hon. Members made vocal contributions, which means that they are regulated by the Information Commissioner, whereas the right hon. Member for Doncaster Central (Ms Winterton) made a silent contribution by being in the Chamber to monitor proceedings, so she is technically regulated by Ofcom for the purposes of the debate, and that goes to the nub of the problem.
Without wishing to turn the debate into some kind of tit-for-tat exchange with the hon. Member for Bishop Auckland, with whom I would like to say I have a good relationship on the issues we cover together, the problem is not new, although it is becoming prominent. Let me make no bones about taking the problem seriously. I know it is a problem from my own postbag, because, of the correspondence with the Department by hon. Members, I suspect that the majority is about nuisance calls, although I have not done an actual stock-take. All hon. Members contributing to the debate have made it clear that their constituents are genuinely affected by the problem, from those finding it mildly irritating to vulnerable people who find it sinister and intimidating. We must do more to tackle it.
Let me make a small contextual point: not all marketing calls are a bad thing. In this country, we have a successful direct marketing industry which is worth £14 billion—mail as well as calls—and employs almost 400,000 people. We must therefore recognise that it is an important industry and that, in many cases, a direct call can help a consumer. To return to the main point and to the thrust and mood of the debate, however, we must do more to combat the menace of silent and unsolicited marketing calls.
As I implied at the beginning of my remarks, and many hon. Members including my hon. Friend the Member for Vale of Glamorgan have made the point, there is some confusion in the regulatory structure. The Information Commissioner’s Office is responsible for the Privacy and Electronic Communications (EC Directive) Regulations 2003, the result of a European directive. It is therefore responsible for live marketing calls, when someone calls people at home, and for automated recorded message calls, when a recorded person calls people at home. Ofcom has stepped into the breach—I think well—to deal with silent and abandoned calls, which are not directly regulated but are now covered by Ofcom because it has powers to deal with persistent misuse by telecoms companies. That is where Ofcom’s role exists.
In 2010, we made an important change, by increasing the fines available. I will not make a party political point because that process was already under way under the previous Government; I am sure that a different Government would also have increased the fines. A penalty of £50,000 for persistent misuse is clearly chickenfeed to a large multinational company; that has been increased, so Ofcom can now fine up to £2 million. In May 2011, we gave the Information Commissioner’s Office for the first time the power to fine, so that it can now fine companies up to £500,000 for serious breaches of the privacy and electronic communications regulations. Previously, it could only issue a fine of up to £5,000 through a magistrates court. The new powers, which came into effect about a year ago in January 2012, once the ICO had updated its statutory guidance, are being used and have resulted in substantial fines, such as the £440,000 imposed on two illegal marketeers. These are, therefore, to an extent early days for the use of the powers, although that may sound odd. I meet regularly with the ICO and with Ofcom to discuss what they are doing to work together and to use the powers. I am confident that we will see more fines.
It is worth remembering that the ICO and Ofcom are not in a position simply to be told about a breach and issue a fine the next day. They have to go through due process and they have to be sure of their facts. Although I suspect that that is frustrating, in particular for people who are watching the debate and want to see action and more fines, I am confident that there will be more fines along the way. That is quite depressing, however, in a funny way, because it shows the problem is continuing.
I too share the frustration that two regulators are involved, which is something that we want to look at in our White Paper. Now that I know that the Labour party’s position is that Ofcom should be the single regulator, I invite the hon. Member for Bishop Auckland, as well as all stakeholders and those interested, to make a response to our White Paper. We will not set out our definitive position in the White Paper, but we will set out the options. The Government being a co-ordinated and seamless machine, as we know, it is the case that the ICO is covered by the Ministry of Justice, while Ofcom is covered by the Department for Culture, Media and Sport, although a young, energetic and vigorous Minister is stepping into the breach to cover both issues and to be with hon. Members in the debate today.
I meet regularly with the ICO, Ofcom and the Telephone Preference Service. One thing they have done in the light of those meetings is to improve the information available on the internet. It is now relatively straightforward to navigate the Ofcom and ICO websites. On the Ofcom website the nature of the call received is detailed, and if it falls to the other regulator a button can be clicked to go straight through to it, and vice versa. They are co-ordinating their work.
It is important to go through some of the other issues. The hon. Lady referred to a single regulator. I hear what she says about consent, and I will certainly have a closer look at that. It is clear that authorised consent must be obtained from a consumer before contacting them, but it is also clear from the debate that hon. Members have the impression that some companies are playing fast and loose with that. It is possible to impose a fine for breaching that requirement, but I will look in more detail at how consumers may seek redress.
I make it absolutely clear that companies are required to provide calling line identification when they call, and if a UK company uses an overseas call centre it will fall within the regulations. It is of course much more difficult to deal with a company that not only uses an overseas call centre, but is based overseas with no UK operation. Better technology is coming forward to identify companies that withhold their number, and I am sure that hon. Members saw in BT’s useful brief that better technology is available for phones and the services from telephone companies to prevent some calls getting through.
I welcome the steps that companies such as BT are making, but does the Minister agree that asking people to pay to protect themselves is unacceptable? The cost of a twin set of new BT phones is £70, and many people do not have £70. Are we creating a two-tier system in which those who can afford it can avoid calls, but those who cannot afford it cannot?
BT is a private company and needs revenue to pay for the services it provides. However, I have regular meetings with it and I am happy to take the cost issue up with it. New technology always seems to be expensive initially, but the more people take advantage of it, the more likely it is to come down in price.
I agree with my hon. Friend. As I said, I have regular meetings with the ICO and Ofcom to find out what they are doing. We introduced fines, and we have increased them. We are working to co-ordinate the work of Ofcom and the ICO. These measures are important, and in the White Paper we will address in detail some of the options.
There is more we can do in the interim. As hon. Members know, legislation takes some time. As I said, I regularly meet the ICO and Ofcom, but I will extend those meetings to include stakeholders. They will include BT and other major telephone companies, as well as important stakeholders and consumer groups. As well as having the power to take action, it is right to publicise the opportunities that are available for consumers, and to work with consumer groups and telecoms companies to publicise what redress is available.
It is also important, as some hon. Members said, that we continue to hold to account companies that persistently abuse the system. For example, the ICO stated on its website that it has invited some companies to attend meetings with it to discuss their compliance with the privacy and electronic communications regulations. Those companies include Weatherseal Home Improvements, The Claims Guys, We Fight Any Claim, British Gas, Scottish Power, Anglian Windows, and TalkTalk. One or two of them are certainly improving their procedures as a result of the embarrassment of being included in that list.
I thank my genuine hon. Friend for his important intervention.
Time is running out, and I am aware that my hon. Friend the Member for Vale of Glamorgan wants to sum up. Let me make it absolutely clear that I take the problem seriously. I know from my postbag how serious it is for hon. Members and their constituents. I am aware of the difficulty of effectively having two regulators, although the ICO takes the lion’s share of responsibility across this landscape. I regularly meet the ICO and Ofcom to co-ordinate action. We have introduced fines in the past two years, so they are relatively recent. They are being used and they will be used in future, but due process must be followed. I give a commitment to the House now to have regular round-table meetings not just with the ICO and Ofcom, but with a range of stakeholders such as BT and consumer groups. Finally, we will set out our proposals for change in our White Paper.
I thank hon. Members for their contributions to the debate. I particularly thank hon. Members who are leading campaigns to deal with the issue. I regard them as allies and supporters, and I hope that they agree that we can work together on this important issue.
We have had an extremely successful debate, and I think there has been a significant shift in the Government’s position. I want to show my appreciation to the hon. Member for Inverclyde (Mr McKenzie), my hon. Friends the Members for Edinburgh West (Mike Crockart) and for Cleethorpes (Martin Vickers) and the hon. Member for Bishop Auckland (Helen Goodman), who focused on the complexity of the current position and demonstrated the cross-party theme for action.
I was particularly interested in the response of my hon. Friend the Member for Beckenham (Bob Stewart), who focused on the part that trading standards can play. However, that demonstrates the complexity of the matter—they are yet another body that can help. I congratulate him on his work with trading standards in his constituency, and the part that they are playing.
The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) focused on the vulnerability of many receivers of these calls. Elderly people are disproportionately affected because they spend more time at home. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) has great experience of the technology available, and said that more can be done technically to identify the telephone numbers of people who withhold them.
My hon. Friend the Member for Thurrock (Jackie Doyle-Price) highlighted Mr Herman, who is a champion of this campaign. Without question, he has managed to get his own back on some operators—and more power to his elbow. The more we can highlight and champion him, the more confidence that will give to victims of these calls.
A common theme has been the call for a single regulator. The Minister responded positively, and indicated the direction of thinking. We need simplicity and certainty, and we must put the consumer at the front of the issue, not the companies. There is a balance to be struck because not all marketing calls are wrong. There is a part for them to play, but it must be proportionate and within the regulations.
With changing technology, Ofcom needs broader powers so that it can react to circumstances as voice over IP becomes more of an issue and technology develops in ways that we may not even be aware of at the moment. The Minister is absolutely right to say that the private sector has a part to play. I am grateful that he talked about his meetings with the ICO and Ofcom and that telephone providers and operators will come forward. It is exceptionally important to act in co-ordination.
Sitting adjourned without Question put (Standing Order No. 10(13)).