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Westminster Hall

Volume 564: debated on Tuesday 18 June 2013

Westminster Hall

Tuesday 18 June 2013

[Martin Caton in the Chair]

Unpaid Internships

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Randall.)

It is a great pleasure to serve under your chairmanship, Mr Caton. I begin by thanking Mr Speaker, not only for allocating the time for the debate, but for his personal commitment to this whole agenda, which I will discuss later in my speech and for which I am very grateful; it has made a huge difference. I am also very grateful to colleagues from all political parties for coming along this morning. We have a good turnout, which indicates that the issue engages all parties and is very much a cross-party matter of concern. I have been grateful for support from Members of all parties, as I have tried to get consensus on this issue, so that we can move towards change; that support has been very valuable indeed.

Today I am speaking on a topic that I am really passionate about: the scandal—scandal is a strong word to use, but it is a scandal—of long-term unpaid internships. Nobody in this House would disagree that internships can be a valuable way for young people to get their foot on the career ladder, be it in the world of politics, journalism, public relations, the law, or fashion, or in any other kind of occupation. That is more important than ever, given the current economic climate, and given that more than 1 million young people are unemployed. We are not just talking about people who may have had a difficult upbringing and struggled at school; university graduates and even postgraduates are really struggling to find work.

Internships offer a chance for a young person to demonstrate to an employer their ability and suitability over a set period, usually at least three months. Young people apply for an internship hoping that—if they do well and like the company, and the company likes them—there could be a permanent job for them at the end of the period. However, my big problem with many of the internships currently on offer is that they are unpaid.

Recently I have seen figures that estimate that 92% of arts internships and 76% of internships in the public relations industry are unpaid. Some might say that is perfectly reasonable, given that there are no guarantees that the intern will be suitable for the role in the long term. However, the big problem is that the overwhelming majority of these roles are in London, which is the most expensive city in the country for people to live in. The London Evening Standard recently found that the average rent in London was poised to break the £1,000-a-month barrier, so three months working for free could cost an intern more than £3,000, just for accommodation, and that is without other living costs such as food and transport. Very few young people will have that kind of money saved up to enable them just to get by while they are doing an unpaid internship. Only those who already live with family in London or can call on the bank of mum and dad will be able to take up unpaid internships; that discriminates against a huge proportion of young people on the basis of geography and wealth.

Take someone from a less well-off household anywhere outside London who may have worked hard and scraped the money together, through loans, to get a degree. They have real talent to offer and they are more than capable of doing an internship in the industry that interests them—say, fashion—but how on earth can they possibly afford to work for free in our capital city? I spoke to one young woman recently who had an internship—I think it was with Karl Lagerfeld—and she worked for 12 hours a day, sewing sequins on couture gowns that retailed for £5,000. I asked her what her terms and conditions were. She did not receive a penny in payment. She said, “We very often get pizza and occasionally we get shouted at,” so it was not a very good environment at all.

I thank my right hon. Friend for championing this important issue. I take on board her points about young people from outside London, but does she not agree that even in constituencies such as mine, which is close to Westminster, many young people need to contribute to the family household income, and unpaid working is a real problem? Sometimes even they cannot do it.

My hon. Friend makes an extremely good point, and she has been a champion for the social mobility agenda for many years. The principle of working for free is wrong, irrespective of the circumstances, in London or outside London. I will just qualify that by saying that short-term work experience placements are perfectly suitable. However, long-term unpaid internships, wherever the intern lives, are wrong.

I congratulate the right hon. Lady on raising all these issues. I also thank Mr Speaker for allocating the time for this debate. Does the right hon. Lady share my concerns about social mobility, because this is about social mobility? Also, does she think that there are perhaps lessons to be learned from the history of the Bar? Initially, to get a pupillage, a person had to pay 200 guineas, but in 1975 that system was abolished and bursaries began to be introduced. Now there is a requirement to ensure that a pupil—who has to work as a pupil to become a barrister—is paid. That is perhaps something that other professions could learn from.

I am grateful to the hon. Gentleman for that intervention. I am also grateful to him for supporting Mr Speaker’s parliamentary placement scheme, to which the hon. Gentleman has shown a real commitment. He makes an interesting point about the law. I think that most of us would feel that the law might be one of those professions that had not made as much social progress as others. However, it is not just among barristers that there has been progress: some of the big law firms in London are now very conscious of the need to bring in a wider pool of talent to ensure that they are getting the very best people. As for barristers’ chambers, I will cite an example in a moment of something that I do not feel is right. Nevertheless, they have made significant progress.

I thank the right hon. Lady for giving way to me a second time. Does she agree that this issue is about getting a first step on the ladder? A person cannot get to the second step unless they get on the first step.

I absolutely agree. That is why this is about social mobility, because if someone cannot get their foot in the door as they do not have money or connections, or do not know the right people, it will be virtually impossible for them to use their talent and realise their potential. That is why I feel quite angry and passionate about this issue, and it is why I am so pleased that many Members share that passion and try to make a difference, as the hon. Gentleman clearly does.

I congratulate the right hon. Lady on bringing this matter to the House for consideration by us all, and on the way she is introducing the debate. Does she feel that there is perhaps a need to change the mindset of big business and others who employ interns, to ensure that they give interns a minimum wage? Although internships are a good opportunity for young people to gain experience, for many of them, unpaid working is a real financial burden on them and their families. Is there a need for a sea change within big business?

I could not agree more with the hon. Gentleman that this issue is about behaviour change and changing the mindset. In the past, not only in the media or the law but in this House—I will come on to discuss this House—there was a culture of having unpaid internships, and I do not think that people really considered the impact on the young people.

We are making progress on this agenda. There are many companies now that, for good business reasons, want to access a wide pool of talent. Also, they feel that it is morally wrong to exploit young people through unpaid internships. If we look at some of the big consultancies, such as Ernst and Young, PricewaterhouseCoopers and Deloitte, and some of the big insurance companies, including AXA and Aviva, or some big construction companies, such as CH2M HILL, they are all now paying their interns. I congratulate them; they are leading the way. Some of this behaviour change is about naming and shaming the people who are doing the wrong thing, but it is also about praising the people who have been prepared to put their money where their mouth is and do the right thing. That is why I think we are making progress.

I congratulate my right hon. Friend on securing this debate. It is absolutely vital that we discuss the issue, and that we see urgent change. She has talked on two occasions this morning about the pool of talent. She also mentioned the vast array of companies and organisations that unfortunately still have unpaid internships, of which a majority are in the creative industry sector. Does she share my concern that that will lead to a reduction in the pool of talent, and will impact on one of the most important sectors in the UK economy, and that that could have long-lasting implications?

My hon. Friend makes a very interesting point. In fact, I think that we have an Opposition day debate tomorrow on the role of the creative industries in our regional economy. The evidence is overwhelming that creative industries are making a significant contribution to the GDP of this country; at the last count, I think they contributed 7% of our GDP, so they are really important.

Also, we very often find that the most creative people come from difficult backgrounds, and that because of their life experience they have a different perspective from other people. I met a fine art student recently. It was heartbreaking, because she clearly had talent, but she was devastated; she said to me, “I can never be a fine artist because of the culture of unpaid internships.” I think she could be a future Monet or Pissarro, but we will never see what she could paint, and she will probably end up doing a fairly normal job, yet she was incredibly creative. That is a great pity, and it is damaging us as a country, as well as damaging those individuals.

I apologise for not being able to stay until 11 am. I congratulate my right hon. Friend, not just on obtaining this debate and on her passion on this issue—I have never been in a meeting where she has not shown passion—but on the enormous amount of work she has done on the Speaker’s programme and on the Social Mobility Foundation.

We have all been in a dilemma in the past. I am committed to what my right hon. Friend is doing and will sign the pledge, but in the past we have all found ourselves not just having short-term volunteer work experience placements, which, as she says, is acceptable, but taking young people from university, on occasions—it is a long time since I have done this—on placements as part of a sandwich course, paying expenses, not realising what the burden on young people would be. In the light of the social mobility tsar’s reflections this week, would it be appropriate to work with universities with access programmes to ensure that resources are made available for those who are expected, and want, to take sandwich-course placements, including in this House?

I am grateful to my right hon. Friend and return the compliment: a lot of my political passion has been mentored and guided by him. I have never been in a meeting with him when he has not been passionate—occasionally angry, but determined to make a difference, which is welcome. As ever, he makes a practical suggestion. A number of hon. Members have contacted me, saying that during certain modules on university courses, students have to come to Parliament for up to three months and little support is available. Student loans are in place for that period, but we should be discussing that with the university sector and, if it is a compulsory element, more support ought to be available. Perhaps our campaign can take that forward in a practical way. I am grateful for my right hon. Friend’s suggestion.

It is important that we in Parliament collectively get our house in order, as far as this internship matter is concerned. We should, at the very least, pay a small amount of money to our interns and ensure that they are properly trained up, hopefully to get a permanent job, either in our office or someone else’s.

I appreciate what the right hon. Lady is saying and agree with the great thrust of it. I thank her particularly for the positive things she said about a number of City institutions that are trend-setters in this area. However, is she concerned that if we regulate to outlaw free internships, the risk is that rather than enhancing social mobility, there will be a black economy in internships, which will be taken up by those who are wealthy enough to rely on parents? How would she ensure that that unintended outcome of what she is proposing was avoided?

I am grateful to the hon. Gentleman for raising the issue, and for his advocacy for change, particularly in the City. He has put his finger on an issue that many people raise with me: if we regulate, do we drive the issue underground and exclude more people? There comes a point when a moral decision has to be made. Are we comfortable asking people—often young people—to work for nothing? It is worse than Victorian. Some 100 years ago, people used to pay to be apprenticed to a master, and used to pay for their articles and pupilage, as the hon. Member for Birmingham, Yardley (John Hemming) said.

There is a point at which, as political leaders, we say what is right and wrong and then get people to change their behaviour. We should have some regulation, although I would not do a lot of regulation in this field. I suggested that we outlaw the advertising of unpaid internships, which in themselves are unlawful. At the moment, people can advertise things that are unlawful, which is farcical for legislators. We have to make a moral and political decision, and then get behaviour change, led by good companies and firms, and good advocates, who will go with us. There are 100 companies in the Deputy Prime Minister’s social mobility compact; that is a massive swathe of people who can be our advocates and ambassadors.

On the idea of driving internships underground, at the moment 95% of people are excluded anyway. If companies use word of mouth, they will not be able to bring in those from other areas of the country, or those who do not have any money. Sometimes, we just have to stand up and be counted.

Given that not paying people is unlawful under the national minimum wage regulations, and given that under the Serious Crime Act 2007 encouraging a crime is unlawful, I wonder whether advertising an unlawful thing and encouraging people to do it is already a crime. Perhaps the right hon. Lady’s efforts in this area could simply enforce the law.

I was going to say that I love clever lawyers’ suggestions; nevertheless, I love clever suggestions. If people advertising were complicit in an unlawful activity, perhaps we could look at aiding and abetting and being accessories; all those things are now going through my mind. I do not think that we are necessarily in that territory. I am grateful to Her Majesty’s Revenue and Customs for taking this issue more seriously, at the instigation of the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), who has pressed HMRC to fast-track enforcement; I will come on to that later in my speech. More can be done, but the hon. Member for Birmingham, Yardley, makes an intriguing suggestion, and I am pleased that we have it on the record in Hansard that it might be worth considering.

Does my right hon. Friend agree that we have to guard against one important thing? If we move the threshold for people applying for positions that we hope would be paid or supported through a particular scheme, we could make it more difficult for children and young people from difficult backgrounds to reach the threshold, passing the interviews. We have to make sure that moving the entry point does not exclude some people from certain backgrounds.

My hon. Friend makes a good point. Social mobility is about young people’s journey all the way through, from primary school to secondary school, to further and higher education and to their first interview and their first job. It is sometimes difficult for people to pass on the first occasion, in front of an employer, if they do not have the social skills to be able to impress people. Sometimes in our education system, we might do well on academic qualifications, but increasingly the evidence is that people with soft skills—team building and relationship building—impress employers most and end up getting the job. My hon. Friend makes an important point. That is why we need more mentors, role models and support, all the way through that journey, to ensure that the cleverest and brightest of whatever background can come through.

On that point, I am from a challenging background; I was at a school that was at the bottom of the league tables, and I understand the sentiment behind this debate, but as a Member of Parliament and a former business owner, I was always being offered enthusiastic interns when I did not have permanent positions. On five occasions, vacancies came up by coincidence and I snapped up the intern. They all went on to have senior management positions, with four of them going on to be officer/managers. It is about gaining those skills. The key is using interns constructively; encouraging them to apply for permanent jobs from day one, even if that means that they have interned only for a couple of days when an opportunity comes up; and, crucially, being constructively flexible and supportive while they are working.

I am pleased to hear from the hon. Gentleman. Sometimes in this House, our policy positions are rightly coloured by our personal experience, which we bring to politics and Parliament. I share some of the hon. Gentleman’s difficulties. I applied for 300 jobs when I first came out of college—no connections, no interviews. It was a difficult time. That is part of the reason why I am so passionate about this issue.

I am glad that the hon. Gentleman has employed people, and really glad that they are doing well. However, the people who could afford to do the unpaid internships will be a tiny proportion of people in the country, because most people cannot come to London, cannot afford accommodation and cannot afford to be part of that pool, even, and are therefore excluded. A few weeks’ work experience is fine, but people are routinely advertising for 12 months’ unpaid internship. I know young people—there are interns in the audience today—who have done a series of one-year unpaid internships. They have worked for two and three years for no pay. It is ludicrous and simply wrong.

I absolutely understand the right hon. Lady’s point about people advertising 12-month unpaid internships, which is not acceptable. However, the point about flexibility is that people might be able to intern for someone in the evenings, after they have done their stop-gap, part-time job. There is always an opportunity for people to round the edges off; employers just need to be flexible, to support people and to allow them that opportunity.

I agree entirely. I would say to employers that part of that flexibility and support is pay. If a student is doing a part-time job to get through university and an internship in the evening, that is not acceptable—that is not a life worth living. There must be some payment of the intern, who is working for the employer, in their company.

If I might disagree with my hon. Friend the Member for North Swindon (Justin Tomlinson), I am still a business owner, and I employ more than 250 people. I believe it is better to select people on their abilities, rather than on their parents’ wealth. Does the right hon. Member for Salford and Eccles (Hazel Blears) agree?

I apologise to the hon. Gentleman; could he repeat his question? I was just reading a note from the Clerk.

The point I was making is that I am still an employer, and I employ a large number of people on their abilities, not their parents’ wealth.

I am delighted to hear that. I am also delighted to hear the debate we are having. It is important that people give their personal views when we have a debate. From that, we get behaviour change. I have been campaigning on this issue for the past two years, and I have seen people’s opinions change. Some people started out by telling me, “We think these things are acceptable” or “We think the jobs will go underground”, or by raising other problems, but we have achieved significant progress. I am therefore delighted that we are having this debate. Incidentally, the hon. Gentleman has a significant record as a successful business person, so an employer’s business need not suffer if they pay their interns. In fact, it could prosper because they are doing the right thing: they get a great reputation, their brand is improved and they make significant progress.

I join others in congratulating my right hon. Friend on obtaining the debate and on the tremendous campaign she has waged. Her exchanges with hon. Members on both sides of the Chamber demonstrate the power of her argument. On the one hand, there is the moral case that it is simply wrong for a business that uses people to exploit them by taking their labour for nothing. On the other hand, investing in young people’s talent is in the interests of not only businesses, but the wider economy. My right hon. Friend sets out the argument neatly under those two headings.

I am grateful to my right hon. Friend for his support. When we start a campaign, we sometimes think the forces ranged against us will be implacable and that we will never make progress. Through a combination of attrition, tenacity, determination and, sometimes, the fact that people just want us to shut up, we do start to change attitudes. Most people actually want to do the right thing; the issue is how we encourage them. It is a bit like the national minimum wage. When the Labour Government brought it in, everybody said that it would cost 1 million jobs and that people would not be able to sustain their businesses. The people who did not pay the national minimum wage undercut the good companies that did, and we have exactly the same thing with interns: good companies are doing the right thing by bearing the cost, while other companies, which are doing the wrong thing by not paying young people for their work, are getting a financial competitive advantage. We went on a journey with the national minimum wage; we are now on another journey, and I hope many more people will join us.

Does my right hon. Friend share the concern that I feel when hon. Members talk about interns supporting their internship by doing paid work in the evenings or at weekends? Unfortunately, that is difficult for people with caring responsibilities. It was carers week last week, and millions of people who care for a parent or child might want to get on the career ladder but cannot, because they cannot do that extra evening or weekend work to support their unpaid internship.

My hon. Friend makes an extremely good point. Life is difficult enough, but it must be virtually impossible for someone with caring responsibilities to get a foot on the ladder. At a time when so many young people are unemployed, we should be giving them stepping-stones to success, rather than putting further barriers in their way. It is a hackneyed phrase, but we need a level playing field so that people are not discriminated against on the grounds of wealth, class, background or caring responsibilities; they have as much right to do well as those in different circumstances. The fact that someone has privilege or wealth should not give them an unfair advantage, and many of us on both sides of the House came into politics because we believed in a different kind of society. This issue is an opportunity for us not only to exhibit our values, but to do something practical about putting them into practice.

The right hon. Lady rightly said that many companies increasingly want to do the right thing, although it is perhaps fair to say that it is easier for a company employing 250 people to do the right thing. My slight concern—I do not wish to indulge in special pleading—is that, in the creative industries, such as fashion, which the right hon. Lady mentioned, and some of the smaller media industries, it is almost part of the economic model to have a whole lot of interns coming into play. I am in no way trying to defend that behaviour, but if we are to move forward, particularly with legislation and regulation along the lines the right hon. Lady would propose, we need to make the case more strongly to such companies than, perhaps, to City-type firms, which very much buy into this agenda. Has she any thoughts about how we can make that point to companies and, essentially, tell them, “Your economic model simply will not be viable for the 21st century”?

The hon. Gentleman, who has extensive experience of business, makes a good point. Let me use an example I was going to use later. I have recently discovered that Universal Music UK now pays all its interns above the minimum wage and in line with the London living wage. Morna Cook, its director of human resources, has said:

“We pay everyone who joins us above the national minimum wage and in line with the London Living wage. It’s only fair that they are paid for the work they do. Most importantly it also means that anyone can apply, not just those who live in London or can afford to work for free—we’re a diverse business and it’s important that’s reflected in the people who work for us.”

Universal Music UK is a fantastic leader in the field, and it is doing the right thing.

I recently saw a piece by Julie Walters, the famous actress. She said she was increasingly worried that working-class people could not come through the acting profession because of the culture of unpaid internships and that middle-class people had to adopt working-class accents to play working-class parts in the theatre. Goodness me, what state are we in if that is happening? If we cast our minds back 50 years, we could not find black actors, and people had to pretend to be black to take up some roles. We are in the same place with people from working-class communities.

In fashion, Stella McCartney is now paying her interns. Again, she is a great leader. If we have people in the creative industries saying, “I used to have unpaid interns, but now I’ve seen the light, and I know the right thing to do,” they can act as real role models for change.

On the point about fashion, I have been working with the fashion industry in Shoreditch, which is a large fashion hub. A lot of work is being done to create proper, paid apprenticeships so that people are grown into the jobs. I completely agree with the hon. Member for Cities of London and Westminster (Mark Field) that there are still real challenges, but there is a move in the right direction, and we should recognise that, on the grounds that we should applaud the good as well as condemn the bad.

I am grateful to my hon. Friend for making that point. Fashion, like journalism, is beginning to change. Martin Bright, who runs an organisation called New Deal of the Mind, has been a real leader in getting more apprentices and young people employed on proper terms and conditions in the whole range of creative industries. He has done a fantastic job in making that happen.

I would be delighted to give way to my hon. Friend. Unfortunately, I did not see her because she was on my wrong side.

That is very rare for us both. I join everyone in paying tribute to my right hon. Friend for the work she is doing. Did the hon. Member for Cities of London and Westminster (Mark Field) not put his finger on the nub when he talked about the economic model that exists? He was talking not about internships, but about companies using young people to do jobs that are not training opportunities. Does my right hon. Friend agree that we could learn from the voluntary sector, which I came from, where a clear distinction is made between business-critical work and value-added work in understanding what it is appropriate to ask a young person to do as part of a work experience placement, for example, and what it is appropriate to pay somebody for? Indeed, young people should at least be given the national minimum wage, and employers in the public and private sectors not doing that should be held to account.

I could not agree more. That is one of the issues that goes to the heart of the matter. Is a company employing somebody who should be doing a job with set hours, set responsibilities and set tasks? If so, that person is a worker, and entitled to the national minimum wage under the law. Someone who is a volunteer is to a great extent entitled to come and go as they please. They give their labour because they believe in a cause. They may get excellent work experience, and many voluntary sector organisations do the right thing. We need a bit more clarity—and this is something I want to ask the Minister about—on the distinction between a worker and a volunteer. However, companies, and some voluntary organisations, although not the majority, have designed an unsustainable business model. The situation is the same as with the national minimum wage: people had a business model that depended on paying people £1 or £1.50 to do a job. A business that cannot run without exploiting people is not being run in the right way. People need to change the model they work on. If good companies can do it and make a profit, everyone else should take up that challenge.

I congratulate my right hon. Friend on securing the debate, which has been excellent so far, and will, I am sure, continue to be so. Access is the key. Whereas internships may be a barrier to access, work experience and the provision of work placements encourage it. We need to make that distinction.

Absolutely. I have been trying to think hard about the distinction, because I am an advocate of work experience. There are many people in my constituency who perhaps have not worked since leaving school. Perhaps their parents did not work, and in some cases their grandparents did not. They know nothing about the world of work, so work experience, for which they must get up and have discipline, behave themselves and work in a grown-up fashion, is essential to their personal progress. The issue is when a work experience placement becomes a long-term job. That is the point at which exploitation begins.

In France, after someone has worked in a position for eight weeks, they automatically become entitled to the national minimum wage. We could consider such a period. We need to get the distinction right. In my constituency I run something called Kids without Connections. Fifty local employers give four weeks’ work experience to youngsters who have never done any work. They get a record of achievement and a reference. They all come to Parliament. It is the first time they have ever been to London. We make a difference to some of those young people. Half of them have been taken on in full-time jobs. That would never have happened without a work experience placement, so that employers could see what they could do. I am a total fan of work experience, but in some cases it crosses the line and becomes exploitation, through clever titling of an unpaid internship.

My right hon. Friend is right in everything she says. Does not all that she has described play a pernicious role in Westminster and politics? Only for the children of the wealthy is it affordable to take on a long-term unpaid volunteer post or internship. Those people go on to get special adviser jobs, which are rarely advertised by any political parties, much to the shame of us all, and they end up as Cabinet Ministers. We end up with a tightly-drawn circle—

It is exactly the same in your party, as well, madam.

The circle of people who rise to the top of British politics is small, and getting smaller.

My hon. Friend could be making the speech that I made three years ago to the Hansard Society, when I said I was increasingly worried about the transmission belt—people working in a Minister’s office, becoming a special adviser, getting a safe seat and within three weeks of the election becoming a Cabinet Minister. The next morning when I walked into the Cabinet I was not the most popular person. James Purnell and my right hon. Friend the Member for Leigh (Andy Burnham) used to sit next to me. Everyone said “Are you having a go at me, Hazel?” I said, “Certainly not.” Eventually I looked round the table and said, “I think, ladies and gentlemen, you’ve made my point.” That situation was the very reason that when I came back to Parliament I set up the Speaker’s parliamentary placement scheme, for people from working-class backgrounds. In a democracy there is a need for people who can bring different life experiences to the table. No commercial company would want every one of its directors to be from the same background. Increasingly, the business case for diversity is being made strongly.

The right hon. Lady is generous with her time. I apologise for not being here for the beginning of the debate, but I was at another meeting. I congratulate her on the debate, which is important.

Do we need a clearer definition, to distinguish between work experience and internships? We are all very positive about the value of work experience, but sometimes the argument becomes all about the wealthy versus the poor, and that is not the issue. I started with nothing. My parents gave me no money; but I still went out and built my own connections, and asked about things, and tried to get work experience in that way. When I go into schools in my constituency I speak about building networks and connections. I say, “If you are struggling to get work experience, e-mail me, and I will try to help you find it.” Such things are important to build on.

I completely agree with the right hon. Lady about the long-term—

I am grateful to the hon. Lady for her intervention and also for taking one of our Speaker’s scheme interns, who has flourished. I know that she has given that young person a great deal of personal development time.

The hon. Lady makes a good point: it is up to everyone to make the most of their connections. The difficulty is that some people come with ready-made connections, and some find things more of a struggle. That is relevant not just to professions, but to anyone getting their next job. When we set up the future jobs fund there was a statistic that I found amazing, which was that seven out of 10 people get their next job from someone they know; only one or two get it from the jobcentre. Whether someone wants to be a plasterer or a joiner, it is about having wider connections and knowing some people. We are trying to give people the incentive and ability to make connections. It is far less likely that someone from a poorer background will know a lawyer or doctor or member of a similar profession. Therefore, it is much more difficult for such people to make those connections.

My right hon. Friend has given a great account of her work. She mentioned the future jobs fund, and we have been talking about the dependence of the creative industries on unpaid interns. I was privileged to see how a network of creative businesses in London, from the Royal Opera House to the National Portrait Gallery and others, used the future jobs fund to establish a paid internship—they called the interns apprentices, although they were not full apprentices—sharing the learning between those different companies. They brought those young people in from the jobcentre, and they flourished. Those same young people then put on a jobs fair for others like them, to look at how they could get into those industries. When an opening is given to the less standard young people, they open the doors to others.

My hon. Friend makes a good point, with her characteristic optimism and belief in the future, which is what the debate is all about—a belief that young people’s talent and skills can make a difference. Often, particularly in the creative industries, people take a different slant on life because they have not come from a traditional background; and then the best music and drama happen. The role of the arts is to challenge people’s perceptions; so why not have young people in there, who are the best at challenging many of us whose views have become perhaps a little established? My hon. Friend makes a fantastic point, and I am reminded again of Martin Bright’s organisation, which did a huge amount with the future jobs fund. With so many young people unemployed, it is sometimes said that it is difficult to find the money to support people. However, if we do not, we shall lose a generation of talent, and the country cannot afford that.

I wonder if I might make a little progress with my speech now, although I am grateful for the interventions of hon. Members, many of whom, I know, are not able to stay for the whole debate. It has been helpful to hear their different points of view. I want to give not boring statistics but a few bits of evidence, now that we have heard about the principles of the debate. A couple of surveys have been carried out recently. One was for the European Youth Forum, and it painted a pretty depressing picture, in which just over half of all the interns surveyed had been paid at all; 41% of those who received some money found that their remuneration was insufficient to cover day-to-day living expenses; and in total a quarter were able to make ends meet. Nearly two thirds relied on financial support from their parents.

In another poll conducted by Survation for Unions21, 84% of people over 35 said that a young person in their family could not afford to do an unpaid internship in London. That is a massive exclusion barrier. The culture of unpaid internships is now so widespread that many young people no longer think about applying because they know that they will not be able to meet their living costs during the internship. Young people who have played by the rules, worked hard at school and taken on thousands of pounds of debt to get a degree are finding themselves cast aside in a career market that now often values experience over qualifications. Alan Milburn reported in March 2012 that more than 30% of newly hired graduates had previously interned for their employer, with that figure rising to 50% in some sectors, so unless someone has their foot in the door, it is very unlikely that they will be able to get a full-time job.

Many jobs are offered on the basis of whom people know, rather than what they know, which immediately puts people from families that do not have a background in a particular area at a disadvantage. It is interesting to see the controversy that has recently surrounded the appointment of the Government’s new social mobility tsar, James Caan. I welcome his appointment, but on the day he was appointed there was a story about him employing his two daughters. He said that his daughters had worked in other industries, that they had shown their worth and that they could therefore make a great contribution to his company, but the eruption of that furore shows how such things go to the heart of people’s sense of unfairness. People will always want to help their children because that is a natural instinct, but I ask employers and business people such as the hon. Member for Cities of London and Westminster to think twice; excluding people who deserve a chance will damage their business because they are not accessing the talent pool. I hope that in his new position Mr Caan will be able, from his own personal experience, to be a good advocate and ambassador for opening the field to people beyond family members, thereby ensuring that the wider field of talent is drawn in. I hope to meet him fairly soon, and I am sure we will have an excellent discussion about what he can do in his role.

There have been a couple of examples of parents being able to bid in auctions for unpaid internships for their family, which is pretty shocking. The Guardian recently reported that parents at Westminster school, which is a private school with pretty high fees, bid more than £650 for a mini-pupillage with a criminal barrister—[Laughter.] Perhaps I should say a barrister in criminal practice. Such auctions fly in the face of aspiration and social mobility.

Does my right hon. Friend share my concern that, in the very same auction, the Government’s adviser on high streets, Mary Portas, was also offering one of these unpaid internships that was going for hundreds of pounds?

Goodness! I do not know whether that was an unpaid internship in Mary Portas’s lingerie factory making ladies’ knickers, but it may well have been. I would tell Mary Portas or anyone else to think again, because the internship could have been offered with the best of motives to try to give people some experience, but who can bid £500, £600 or £700? Someone may well have benefited from work experience or an internship with Mary Portas because of her skills, entrepreneurship and experience—that would be a fabulous opportunity—so perhaps we should encourage her to offer a paid internship to someone from a disadvantaged background, which would be a fabulous thing to do. We shall see what happens. I am grateful to my hon. Friend for raising that issue.

There are compelling practical reasons for having paid internships. I remind people that long-term unpaid internships are against the law. Sometimes we get away from that point. Anyone doing a job that involves set hours and set responsibilities is a worker and is entitled to the national minimum wage—I do not know how many times I have to say that—and Her Majesty’s Revenue and Customs has a responsibility to make that crystal clear, which I know the Minister is pushing. Many businesses that I meet are genuinely confused: they do not know what the rules are and they would welcome some certainty about the difference between volunteers and workers and about who is entitled to the national minimum wage. I know the Minister is hoping to issue some guidance, which will be incredibly helpful. HMRC is doing more enforcement work, which is very welcome.

HMRC has stepped up its game. We have recently had information that, during the past year, HMRC has ordered nine firms to pay a total of £200,000 to people who had worked for them as unpaid interns. Over the past year, more than 26,000 workers have been paid back a total of £4 million after action by HMRC on breaches of national minimum wage laws and some of the nearly 1,700 complaints relating to unpaid internships. We are seeing a bit of a step change, but I would like to see HMRC, rather than responding to complaints, take a more proactive stance so that when it sees adverts that it thinks cross the line between volunteering and unpaid internships it proactively investigates those companies, rather than simply waiting for complaints. It is very difficult, almost impossible, for young people to make a complaint when they are perhaps hoping to get a full-time job with the company with which they are interning. Credit to HMRC for what it is doing, but, as we say in the Labour party, “A lot done; a lot more to do.” We want to see more action.

I pay tribute to the fantastic work being done by Gus Baker, Ben Lyons, the people at the Intern Aware and Internocracy campaign groups and all the mainly young people who have got themselves organised and decided not to wait for us politicians to take action but to get on with it and make a difference.

Gus came to the meeting that we had with the Minister earlier this year. We were grateful for her receptive response. She has recently handed a list of 100 companies to HMRC so that it can take action. I feel that we are making progress. This time last year, a third of the opportunities for young people advertised on the Government’s graduate talent pool website were unpaid; we are now down to some 3% or 4%. Things are changing dramatically. A few years ago, many unpaid jobs with Members of Parliament were advertised on w4mp; now it is just the odd job. Usually when I contact a Member to explain what is going on, the adverts come down. There are still one or two outliers in Parliament, and we encourage everyone to do the right thing.

I introduced a ten-minute rule Bill to outlaw the advertising of unpaid internships. The Bill did not make a huge amount of progress, as is sometimes the case with ten-minute rule Bills, but it enabled us to raise the issue. We got cross-party support, and if the Government can find time to amend the national minimum wage legislation— perhaps through secondary legislation, as I know how difficult it is to pass primary legislation—I encourage them to do something. We should say that it is not right to advertise something that in itself is unlawful. The law has ended up in a ridiculous state, and changing it would send a clear message to those who advertise unpaid internships that they should not do so.

I am delighted that Monster and Totaljobs, which run extensive online recruitment companies, have recently decided to take down any advert for unpaid internships or unpaid opportunities, and they have done that themselves because they think it is the right thing to do. I praise them for their leadership on the issue. The chief executive of Monster will talk to all his colleagues in the online recruitment industry to try to ensure that they all take similar action, which would be a huge step forward. Those companies operate multinationally across Europe, and they are standing up, being brave and doing the right thing.

The good companies are doing excellent work, but I was a little concerned to read recently that Wigan Athletic and Reading football clubs were advertising for highly qualified people to undertake unpaid roles as sports performance analysts. They are clubs with multi-million pound budgets, and such practices are totally unacceptable. I like to think that there was some sort of mystical karma in the fact that they both ended up being relegated from the premier league. Perhaps that was their just desserts.

We have talked about a few Members of Parliament who are still advertising for long-term unpaid internships, which is one reason why I proposed the Speaker’s parliamentary placement scheme. I put on record my gratitude to Mr Speaker for giving his backing, to the Minister for her support and to the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), who has been a supporter from the outset. We have been able to bring 10 people a year to work in Parliament. We are now recruiting for our third cohort. They get paid £18,000 a year and get help with housing costs from Unite, which is a very generous firm that provides student housing and has allocated some lovely flats a 10-minute walk from the House of Commons. Probably they live in better conditions than most people working here. They work four days a week with an MP, and on Fridays a personal development programme helps them learn how the House works, how a Bill is passed, how to make speeches and so on. Some of them have gone on to fabulous opportunities.

I am grateful to my hon. Friend the Member for Slough (Fiona Mactaggart), who has taken one of our students, who has done so well in his placement. Yesterday he appeared in a film on the “Daily Politics” programme, and he did a fabulous job. He was a great advocate and ambassador.

I congratulate the right hon. Lady on her work on that scheme. Ellen Wright, who works in my team, has developed tremendously throughout and has managed to find fully paid work elsewhere; unfortunately, I did not have enough budget for her to stay on the team.

I know that Ellen has enjoyed her placement and has gone on to get an excellent job. She now has the basis for a good career. Who knows? We may one day see her back in politics, which would be amazing.

I thank the Government Equalities Office, which this year has supported the scheme financially for the first time. We have also been able to bring some people with disabilities to be part of the scheme, which has been tremendous for us. I hope that that financial support will continue; I think that the Equalities Office has been satisfied.

My speech has gone on for a long time, perhaps due to interventions—I know that a lot of people could not make speeches, so I hope that has been appropriate. Today I am launching a scheme about Parliament called “Let’s Get Our House in Order”. If we are to provide leadership on the issue, I want us to do as we say rather than simply urging other sectors to do the right thing. We have to show that we are doing the right thing. Many Members have said that they will come to sign our pledge—I promise it is not for temperance; it is for doing the right thing—in room W3 off Westminster Hall between 12.30 and 2 o’clock today. It is a promise to pay our interns.

I reassure Members who have had unpaid interns in the past that that was in the past. We are talking about changing the culture. Everybody is capable of redemption, in my view. I would not want any Member to feel because they have had an unpaid intern that they cannot possibly be part of the campaign. We would love those Members to be part of it, because they will have been on the journey with us. Mr Speaker himself took on a young woman some years ago as an unpaid intern. She was from his constituency and was desperate to come, and as she had some financial backing, she was able to do so. Mr Speaker will say that he would never do that again. He now knows that it is not the right thing, because it excludes the vast majority of people. At the very top of the House is somebody who has changed his mind because of his personal experience.

It sends a great message to the rest of the business sector that unpaid internships have no place in Britain in the 21st century. They exploit young people, deny them the chance to pursue their hopes and dreams and perpetuate the existence of a system and society in which it is where people come from, not where they want to go, that dictates their future. I started by saying, and I still think, that internships are a scandal in a country that supposedly prides itself on fairness and equality. We should put an end to that practice for the future.

It is a pleasure to serve under your chairmanship, Mr Caton. The right hon. Member for Salford and Eccles (Hazel Blears) talked about redemption. Being a bad Catholic, one can deal with that, I hope. I join everybody else in congratulating her on her success and drive with the Speaker’s scheme and the wider issue of internships. I declare an interest: when I went to university in the 1970s, I do not think that there were internships. Because there were so few graduates, we just went into the market. I did not know anything about internships.

The figures that the right hon. Lady and others quoted seem to show that internships work. An article the other week said that university graduates on an internship scheme or some other kind of work are three times more likely to get a job, and that 61% of graduates in internships tend to get a job in that company or profession. Whatever the system is—we have imported the word from the United States—it appears to work. We must then ask what various hon. Members have asked: how do people get into the internship game?

I will declare another interest. I was a teacher for 37 years, including in social priority schools. In other schools, the drive was to give people confidence and push the talented ones to get somewhere. The hon. Member for Hackney South and Shoreditch (Meg Hillier) hinted at my experience of teaching in Leytonstone, where students could see the towers of the City of London, but, because of their background and circumstances, never dreamed that they could enter it. As she said, if there were an internship system, their families could never have afforded to say, “You can take six months,” or however long, while keeping them at home.

I am now the Member of Parliament for Lancaster and Fleetwood. Many of the students I see at Lancaster university could never dream of taking an internship in London—the great capital, the centre of most of the great professions and businesses—because, as everybody has commented, accommodation costs alone would wipe out their money, let alone the costs of feeding oneself and so on. It is just not possible. Arriving here as a new Member of Parliament, I saw how many people were in the system and knowledgeable about it, because their families were knowledgeable about it and could support them through it, and I began to ask questions.

The penny dropped when I saw an article in the London Evening Standard in 2010 about an auction of internships in the creative industry, including in top fashion companies—at a charity event, to be fair—for £10,000 or £15,000. I thought, “Out of the people I represent and the people I used to teach, who could ever afford to get into this game, even at the smallest level?” There was something wrong. In Parliament, which is supposed to set an example, although I know it sometimes fails to do so, the same system operated.

In the same week that I read that article, I listened, as all politicians do, to the “Today” programme. Suddenly, there was Baroness Morris of Yardley—Estelle Morris as was—chatting away with the right hon. Member for Salford and Eccles about the issue. Then I wandered into Parliament, and who was walking down the corridor but the right hon. Lady? The last time she and I had spoken was during a heated debate on television, when I was the Conservative opposing her and we had done the usual political thing. The fact is that across parties, we shared a common view that something was wrong.

People have rightly talked about equity—that is the passion behind the issue—but, as other hon. Members have said, it is also about the talent that we are losing through the system. This is a competitive world, a global race and all the rest of it. That talent is unable even to take a first step. Part of that first step—as everybody has said, it is also about money—is knowing that the system exists. We need to get that right. Being a Conservative, I do not want too much regulation, but we need to make the terms understood and to advertise them across the system.

To return to the students and pupils whom I taught in the east end of London, most of them would not know about internships unless teachers introduced the idea, and most teachers came from my generation and did not know what internships were. How were the students ever to learn that that system operates in most top businesses and professions as an add-on to graduation and a way of getting in? They lacked the knowledge even to start. It is a double issue.

I accept the restrictions. We must consider the definitions of internships and work experience. I am pleased that Her Majesty’s Revenue and Customs is now working on that, but we must also sort out how we can advertise in schools and universities, so that everybody with talent can see that they need to use that system to maximise their talents and contributions. There is a knowledge and advertising agenda. I also liked the right hon. Lady’s compliments to the Social Mobility Foundation, which has done a lot of work on the issue and is doing much with the Government agenda to get the system right.

How do we advertise the subject of internships? The right hon. Lady is proposing that Parliament sets an example, which would itself be a big advertisement: there is a thing called internships and, whatever a person’s background, they have a chance of getting in on this system. That is really important. As she said, paid internships are spreading through the House; I do not know the numbers or whether this figure is correct, but I saw the other day that 40% of internships are still not paid, which is enormous, and that unpaid system is still going on. If we have internships, we have to get right how they are termed in the House, even though that is a small-scale thing.

I do my own scheme, as well as supporting the Speaker’s parliamentary placement scheme. Every year, I keep some money aside to give someone a chance and to pay someone from Lancaster university to do a month in Parliament. I pay the minimum wage and all the rest of it. I have a rolling programme, so the interns appear to the Independent Parliamentary Standards Authority as paid employees. Anyone who looks at my numbers thinks I am a bad manager, because I have a huge turnover of people, in particular in summer and autumn, but they are paid internships. We need to get the House regulations right for what Members of Parliament are trying to do, so that no one can misconstrue things. I might be a bad manager, I do not know—ask the staff who work for me—but at the moment it looks as if I have a big turnover in staff. We need to get small things such as that right.

It is important for the Minister to get in, but I shall emphasise my main points: first, the equity issue; secondly, the loss of talent throughout the country because people are not entering internships; and, thirdly, when we begin to get this right and finally set an example in Parliament, we need to advertise what is going on throughout business and the professions. Internships are not some odd thing, but are part and parcel of business and professional life. Every student in school needs to know that internships are part of the system.

I am about to call Ms Creasy. I would be grateful if you could resume your seat by 10.40 am, so that we have adequate time for the wind-ups.

Thank you, Mr Caton. I promise you that I shall be brief—uncharacteristically, perhaps.

We have already spoken at length about the fantastic work that my right hon. Friend the Member for Salford and Eccles (Hazel Blears) has done on the subject of internships. I feel equally passionately about it, as a former youth worker and as a former intern. I had an internship at the Fabian Society in 1995—if anyone present, perhaps my right hon. Friend, was getting the society’s mailings at the time, that was me, with my blood from the paper cuts. I clearly learned a lot in the year I was there, but it was different, and we need to understand how the culture has now changed. That was back in history—the shadow Minister is looking at me, so I shall say back in 1995—but things have changed substantially since then. As a youth worker, I was horrified by the stories that young people told me about the requirement to work full time for six or seven months or more without pay, perhaps with occasional expenses. They did not see anything wrong with the system, because everyone had to do it. That is what we have to change.

My internship was pre-national minimum wage. The widespread abuse of young people who want to get a step on the ladder is bad not only for them, but for employers, because the badge of having done an internship is being devalued as a result of the changes. It is no longer as clear to employers as it should be that people who have done an internship have had a training opportunity to learn and develop their skill set, so that they are worth talking to—an internship used to be a badge of quality.

The question is how to get the best and to avoid the worst in such a scenario. I have worked in the voluntary sector, so I see some simple rules that we can learn from; it is not rocket science to fix the problems. I made an intervention about the difference between business-critical and value-added experiences; the issue is not only about whether people are being paid, but whether, when they do an internship, they are learning skills and developing themselves as an individual, so that they are someone who a future employer will look at and think, “Actually, that is someone who I want to have in my work force.” The voluntary sector is clear about what a volunteer can do and, frankly, businesses should learn from that. For a key, business-critical role in their industry, they should not be relying on someone who has not had the requisite training and who might not be able to take the pressures or deal with the possible demands. Offering people opportunities through value-added experiences, however —to learn about what we do, complement what we do and see what else is happening in the industry—is a very positive thing to do.

Today, therefore, I want to add to the debate how we get our own house in order. Having had experience in the voluntary sector and the community, as well as my personal experience, I am extremely concerned. Seeing how things operate in Parliament, I am frightened that some of the progress made in recent years is being put at risk by some of the decisions of our mutual friend, the Independent Parliamentary Standards Authority. Hon. Members have already discussed our concern that some MPs are advertising unpaid internships—as many as 260 MPs, according to some suggestions—but 183 MPs are definitely using the voluntary internship agreement. I looked into the issue and talked to IPSA about it, but I have real concerns, because a number of Members of Parliament and I have applied for additional support; there has been an increase in casework, the business-critical work that I need to do as an MP for a community facing a lot of pressures, because of the changes in policy in recent months.

IPSA accepts the case for me and other Members of Parliament to have an extra member of staff, but it refuses the funding, arguing that its job is not to deal with the shortfall in funding for MPs or with the increased pressures faced by them. A member of staff at IPSA even suggested that I might make up the shortfall by using unpaid internships. If we acknowledge the increasing pressure on MPs’ offices, we must recognise the resulting temptation for Members to deal with the consequences. I myself had to make some difficult decisions about what correspondence and activities I cannot undertake, because I do not have the staffing complement to deal with them. Having been an intern and feeling so strongly on the matter, I will not use unpaid interns, and I have been clear with my community about that.

Does my hon. Friend share my concern that, under the IPSA arrangements, we can have an unpaid volunteer or whatever—essentially, an unpaid intern—whom, from a limitless budget, we can pay expenses? If, however, we want to pay a member of staff—I want to pay interns a London living wage—we cannot use that limitless budget to support the intern with travel and lunch expenses. Such a situation helps those people who do not want to pay their interns.

I agree. That is exactly the point that I am coming on to. If we look at the voluntary arrangements, I am concerned that MPs might inadvertently be getting on the wrong side of the national minimum wage legislation owing to such pressures. There needs to be recognition that MPs who want to do the right thing and to offer those skills and training opportunities must be able to support that.

I have looked at IPSA’s finances, and it consistently over-budgets for MPs’ staffing costs—there is a £7 million underspend in the system every single year. IPSA tells me that the money is not carried forward, but simply returned to the Treasury. I encourage the Minister to have some serious conversations about whether, given the commitment to fund the positions and that MPs are saying, “We need that support, we want to offer those training opportunities”, IPSA could look at the possibility of feeding the money into schemes such as the one put in place by my right hon. Friend the Member for Salford and Eccles. I also encourage the Minister to seek urgently the legal advice given to IPSA about MPs’ voluntary arrangements, to ensure that no MP is inadvertently breaking the national minimum wage legislation and that there is clarity about what we can ask someone to do. MPs should be advised about internships and about value-added versus business-critical work.

We also need to look at university placements. I have been offered young people who want to do nine months in my office, unpaid, for a university placement. We must be clear that we can tackle the problems and get our house in order in a number of different ways. They are not difficult or impossible to do; it would be good for Parliament to do them. We should open ourselves up to get quality staff, who will then have a badge of pride—the young people will have had an internship in an MP’s office and been paid, so their ability to live in our capital city would not have been at risk, and they will learnt the requisite skills. Anyone who has had to deal with and train young people knows that someone who does not have a good skill set and who has not had good training is twice as much work for an employer as someone who does come with experience.

It is therefore in our interest to get things right and to challenge IPSA to understand the pressure on MPs’ offices, to ensure that we really can get our house in order. If the Minister wants to see some of my evidence on the problems, I will be more than happy to share it with her. I hope that she will look favourably on my pleas for her help in this matter, so that we can be the beacon that we want to be.

It is a great pleasure, Mr Caton, to speak under your chairmanship in such an important debate. I pay tribute to my right hon. Friend the Member for Salford and Eccles (Hazel Blears), who has done so much in this House and in the country to highlight the plight of unpaid interns and issues relating to the world of work for young people. I thoroughly enjoyed her speech, and the passion with which she delivered it is unsurpassed in the House. It was a delight to hear what she had to say.

For some time, unpaid internships have been thought to be necessary for any young person who wants to fulfil their career goals, but they divide our young people into those who can afford them and those who cannot. I want to look at the scale of the problem. One poll has shown that two in five people aged between 18 and 24 believe that not doing an unpaid internship acts or has acted as a major barrier to them getting a job. Another survey showed that 40% of people who thought about applying for an internship reconsidered because they could not work for free, and 39% of people offered an internship had to turn it down for financial reasons. That highlights the problems with unpaid internships and what they do for young people’s aspirations and hopes.

Unpaid internships are rife in some industries. It was right to have highlighted some of the positives, particularly in the creative industries and others, but in those industries, young people are so desperate to start their career and get on the ladder that they often feel they have no other choice than an unpaid internship. The cycle is dismal: if someone wants to work in the fashion industry, for example, they must have experience before applying, and the only way to get that experience is to work in the industry for nothing. Even getting their foot on to that first rung of unpaid employment is not easy, and it may be more about who they know than what they know. Those are the key issues in this debate.

In his role as the Government’s adviser on social mobility, Alan Milburn reported last year that more than 30% of newly hired graduates had previously interned for their employer, and that rose to 50% in some sectors. That might be seen as a positive, in that some young people’s experience of an internship has taken them on to employment. The key to the problem is that when they are at university or leaving school, young people see that the only way of fulfilling their dreams and talents, and pursuing their desired career, is by taking an unpaid internship. That is where the cycle started, and it continues. I hope that this debate and my right hon. Friend’s work will stop that cycle in its tracks.

My right hon. Friend introduced a private Member’s Bill, the Internships (Advertising and Regulation) Bill, which was signed by my hon. Friend the Member for Hartlepool (Mr Wright), who is a member of the Opposition’s shadow business team and is a great advocate on the issue. When my right hon. Friend introduced the Bill, she said that

“for the sake of thousands of young people who are in similar circumstances today, whose hopes and dreams have often been dashed because they cannot do an unpaid internship, we must act quickly to ensure that they are treated with respect and given a decent start to their working lives.”—[Official Report, 5 December 2012; Vol. 918, c. 554.]

I could sit down now because that quote sums up this debate and all the issues relating to unpaid internships. However, I have a few more minutes, and I want to ask the Minister some questions.

It is appropriate to pay tribute to people outside Parliament who have done so much. They will be watching the debate, and some may be here listening. I know that I cannot draw direct attention to people in the Public Gallery, but I pay tribute to Intern Aware, Interns Anonymous and Internocracy, as well as the National Union of Students, who have done tremendous work in raising awareness among the press and the industry, and have met hon. Members. They have been formidable in raising the issues with us politicians directly.

It would be remiss of me not to recognise that this is a cross-party issue that has received support across parties, but conversely, some people have undermined the campaign by their actions in the House. I may go into more detail later. It is worth celebrating businesses that do well, and I was delighted hear from my right hon. Friend that Monster and other recruitment sites have taken it on themselves to do the right thing.

Part of the problem with where we are on the issue has to do with the rewards and success that people can get from paid internships. These programmes give young people a fantastic experience. All we are looking for in taking this forward responsibly is for interns to be paid properly for a day’s work. People providing unpaid internships exploit a loophole. I want to put on record the contribution of Kezia Dugdale, MSP for Lothian—I represent part of her constituency here—who offers paid internships at the living wage for three-month periods every three months. During her five-year term of office, she will have offered that opportunity to dozens of young people. Not only does she pay them the living wage, but she puts together a proper programme, which is another issue. If someone told me they would give me £10 if I could define “internship”, I am not sure that I could. However, one definition might be that it is properly paid with a proper programme of work allowing the intern to gain a tangible benefit.

It is important to recognise that people give up their time to volunteer without payment. Many charities and organisations that we rely on in our constituencies would find it difficult to operate without volunteers, but that is a completely separate issue, and goes to the heart of why we need proper definitions of “intern”, “volunteer”, “worker” and “employee”. The difference between “employee” and “worker” is difficult legal territory, which is where some of the big issues come into play.

I want to spend a few moments talking about the national minimum wage and its enforcement. I pay tribute to the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), for the strides she has taken in trying to resolve some of the enforcement issues with unpaid internships and some of the current more general enforcement issues. It is worth emphasising that, as my right hon. Friend the Member for Salford and Eccles said, under the national minimum wage regulations it is against the law to have someone working set hours and doing set tasks without being paid. There is an explicit link between the national minimum wage and unpaid internships.

It is worth reflecting on the Government’s slightly schizophrenic approach to the national minimum wage. Once upon a time, the idea of a minimum guaranteed wage for people in the UK was pie in the sky and highly controversial. Now, in light of its impact on family life, the economy and indeed this place, there seems to be consensus that the national minimum wage is an integral part of work and the UK economy, and it has cross- party support. However, without the previous Labour Government, there would be no national minimum wage, and that is one of our proudest achievements. If anyone asks what the previous Labour Government’s proudest achievement is, the national minimum wage would be at the top. When it was introduced, it helped to raise pay for more than 2 million people, and some 50,000 low-paid teenagers received a boost in income when the minimum wage for 16 and 17-year-olds was introduced in 2004.

Crucially, in 1997 the policy was opposed when the Labour Government were taking the National Minimum Wage Bill through the House, and it is strange that there are still calls from Conservative Back Benchers to scrap it. I hope that the Minister will give a cast-iron guarantee that it is not only here to stay, but is the foundation of the bottom end of our economy, building on what is achieved in the economy. In 2010, many Conservative Back Benchers signed a private Member’s Bill to scrap the minimum wage and to undermine it for younger people. That emphasises the whole issue of unpaid interns, and it would be even worse if the national minimum wage regulations could not be used to highlight this important issue.

Intern Aware has complained about several companies that have exploited loopholes in the national minimum wage legislation, and has reported them to the Department for Business, Innovation and Skills. Will the Minister update the House on what she is doing about enforcement? Will she also update the House on the 100 companies she reported for not paying the national minimum wage, and on what stage enforcement has reached? Will she also explain how many enforcement actions have been taken by HMRC on the national minimum wage over the last year, how many resulted in criminal prosecutions against companies, and how many companies were fined for breaking the law?

I have concentrated on the national minimum wage; at the crux of dealing with the issue of unpaid internships is enforcing the system and the regulations that are in place. It is against the law to advertise for something that breaches regulations, but people are still advertising unpaid internships in newspapers and online, and if we cannot enforce the rules that are in place to deal with that, we will end up in a very difficult place. I have already mentioned the ability to follow a proper programme, which is important.

In a world where the odds are already stacked against our young people—we see that in the unemployment statistics—we need the Government to be much more active in ensuring that unpaid internships are made a thing of the past. Otherwise, we will continue in a downward spiral, and the issue will be not what you know, but who you know and how much you can afford. That would be very bad for the economy and for our young people in the future.

I am delighted to serve under your chairmanship, Mr Caton, and I heartily congratulate the right hon. Member for Salford and Eccles (Hazel Blears), not only on securing the debate, but on her wider campaign—the “Let’s Get Our House in Order” campaign that is being launched today—and on the way in which she has driven the issue forward, leading to the launch of the Speaker’s parliamentary placement scheme. She has made sure that the issue is firmly on the agenda, and we are beginning to achieve some of the cultural change that we need to go alongside it. The determination, dynamism and passion that she has injected into the campaign has started to bear fruit. It is wonderful to watch, and I encourage her and hope that she will continue with it. I also welcome the strong turnout today. Not everybody has been able to stay, but the fact that 19 Members of Parliament from both sides of the House have come to a Westminster Hall debate is a clear sign that people feel strongly about the issue.

Internships can clearly play a positive role, as we all recognise, in people learning about the workplace, developing skills, or getting training, experience and networking opportunities. Employers can also benefit from fresh thinking in their organisation and, often, from finding great new permanent employees to join their team. Although a lot of the focus has been on pay, which I will come to, important points were raised by the hon. Member for Edinburgh South (Ian Murray) and by my hon. Friend the Member for North Swindon (Justin Tomlinson) about the quality of internships—about making sure that they are well structured and involve development opportunities, with the intern perhaps looking at different parts of the business, different types of tasks, and different skill sets over the time that they spend with an organisation.

We are trying to maximise good-quality opportunities by making sure that, first of all, the recruitment process is fair and open. The right hon. Member for Salford and Eccles mentioned the auctions that took place, which I find complete anathema. Such opportunities should be transparent and fairly allocated to those who will be best able to benefit from and contribute to the organisation as part of the experience. The process should be transparent and based on what a person knows, not who they know. Appropriate financial support should also be provided, which will depend on the nature of the opportunity. For a worker, that will be at least the national minimum wage, and good practice is expected, which will sometimes mean that the wage may even be higher. If the individual is a volunteer, it is obviously good practice to ensure that if there are out-of-pocket expenses, those are covered.

To give an example of a success, Channel 4 is offering 12-month internships for all ages. No specific qualification is required in advance—just talent and enthusiasm. All elements of its business are covered, whether someone is interested in going into the digital side, the marketing side, or commissioning, and all are paid substantially above the minimum wage.

To answer the hon. Member for Edinburgh South directly, the minimum wage is absolutely here to stay. It is a fundamental part of the protections that are important for employees in our society, and that is generally well accepted right across the House. That harks back to 1997, when I was certainly not eligible for the minimum wage; nor was I when it was brought in—I was 17 at the time—and I think he was in a similar situation, but thankfully we have moved on since then.

The Graduate Talent Pool website is definitely worth mentioning—if people want to go to it, the address is It is a way of encouraging employers, particularly small businesses, to offer graduate internships, and it ensures that those are available to the widest possible pool of recent graduates. It is free for employers and graduates, and it gives information and advice on all aspects of internships. The quality assurance process introduced in 2011 has really helped. It is a credit to employers, as the right hon. Member for Salford and Eccles said, that about 98% of the vacancies advertised on the website are paid; that shows significant progress.

I want to touch on the issue of definitions, which has come up in the debate. Although the word “intern” is a bit of an import and is not clearly defined, “worker” and “volunteer” are. The right hon. Lady set that out clearly. There is a checklist on—if someone searches for “worker checklist”, they can get the complete lowdown—but basically, if someone is offering their time of their own free will and they can come and go as they please, they are a volunteer, but if they are required to perform specific tasks and can be disciplined if duties are not performed as agreed, they are a worker. Each instance depends on the facts of the case, but that is clearly set out, both for employees and volunteers, and for employers or organisations offering opportunities, so that they are able to understand what category they fall under.

The hon. Member for Walthamstow (Stella Creasy) set out how the voluntary sector has managed to find good ways of setting out which opportunities can be offered to which individuals. The issue is that there are some exemptions; if an internship is part of a further or higher education course, or if the individual is a volunteer, the national minimum wage does not need to be paid. That approach gives the flexibility that we need, while providing significant clarity for all those involved.

On the point about advertising, which relates to definitions, I understand the sentiment behind saying that all such adverts should be banned. I also understand the point made by my hon. Friend the Member for Birmingham, Yardley (John Hemming) about whether the Serious Organised Crime Agency would like to get involved. I am not sure whether it would, but one difficulty is that the adverts are not always clear about whether the person will be doing the role on a voluntary basis or as a worker; indeed, they may be on a higher education course and doing the role as part of a placement in between years, so they could be exempt. Therefore, an outright ban may be a blunt instrument, but if people think that an advert is for an illegal role, I encourage them to report it to the pay and work rights helpline.

I welcome the meeting that we had to discuss the issue earlier in the year, because despite the fact that an outright ban might be a blunt instrument, more can and should be done. We and HMRC have commissioned work to identify the adverts that have the greatest risk of offering opportunities that breach the law. That online research is being done, and the 100 employers that seem to be at the greatest risk of offering such opportunities will be written to, to advise them of the national minimum wage legislation that applies, and that they may be breaking the law. That is an important step forward. I am keen to ensure that we analyse the success of that, and see how that perhaps changes behaviour. If we can encourage businesses and employers to recognise not only the risk that they may be running, but the moral case, which has been discussed today, that is a good route to pursue. It is important, however, to keep that under review and see whether we can achieve success in that way.

The hon. Member for Walthamstow mentioned the Independent Parliamentary Standards Authority. It is not for the Government to tell IPSA what to do, but I am happy to write to it and draw its attention to the debate. I am sure that comments have been made and concerns raised that IPSA would be interested to read. I encourage Members to use other channels in Parliament, such as the Speaker’s Committee for the Independent Parliamentary Standards Authority, which would be an appropriate way of taking up those concerns. When the budgets for staffing were increased in 2012, being able to pay interns was a significant reason for doing so. I know that because my hon. Friend the Member for Bristol West (Stephen Williams), who sat on a Committee that was discussing those issues with IPSA, pressed strongly for that, and it made a big difference, encouraging and facilitating a lot of the changes that we have seen.

Does the Minister share my concern that IPSA has decided not to take that issue to the Committee to discuss it, despite the numbers of MPs who are making that point to it?

IPSA is an independent organisation, but concerns have clearly been raised in the debate that need to be raised with IPSA through the proper parliamentary channels. I shall certainly write to IPSA and draw the debate to its attention.

I recognise that time is running away from us, so I want to focus on what we are doing on enforcement. The pay and work rights helpline, on 0800 917 2368, is where people need to go if they have a complaint. HMRC will investigate and it will then be in a position to take action. It is also important to recognise that HMRC can also respect confidentiality, so the fears that some might have about coming forward do not need to be realised, because the matter can be dealt with confidentially. Since 2001, civil enforcement has benefited more than 200,000 workers with minimum wage arrears of about £45 million.

It is also worth people being aware that they can make a complaint up to six years—or five in Scotland—after the situation has taken place. I encourage people to be aware of that, and I apologise that there is not more time to respond to more points.

May I just add that one organisation that has been absolutely fabulous on this agenda, and on the Speaker’s scheme, is the Social Mobility Foundation, of which I am a trustee? I ask the Minister to put on record her support for the foundation.

Invisible Walls Rehabilitation Programme (HMP Parc)

I am extremely pleased to be appearing here in front of you, Mr Caton. I appreciate that the Gower constituency is one where possibly few people end up in prison, but if they were to, the likelihood is that they would have the opportunity to serve their sentence in Parc, which is a local prison for Welsh offenders, so I am sure that your interest in this debate is similar to mine.

Not many MPs like to boast about their local prison, but then not many MPs have been invited to numerous presentations of awards for the staff and volunteers at their local prison. I have seen how a dedicated group of staff and volunteers at Parc have developed an innovative approach to rehabilitating prisoners in their care. Under the leadership of the prison director, Janet Wallsgrove, Corin Morgan-Armstrong and his team of staff and volunteers, along with numerous local organisations, have led the way in rehabilitative work. The team are very special, and their contribution deserves special recognition and wider implementation, which is why I am here today.

Invisible Walls is part of a wider network of support that Parc Supporting Families undertakes to make rehabilitation a central part of its work with prisoners. Underpinning that is a belief that a prisoner’s life does not stop once they are inside and that punishment should not apply to their family and especially not to their children. The payback for society from Invisible Walls comes from the fact that, for some prisoners, maintaining the family link is vital to successful rehabilitation.

As is always said in presentations about Invisible Walls, why bother? Why bother helping a prisoner to stay in contact with his family and children? Because crime, the consequences of crime and dealing with offenders is expensive. Reoffending costs anything between £9.5 billion and £13 billion a year. Those affected by crime—the victims and their families and the families of offenders—bear a cost that has a huge and lasting effect. Some 200,000 children in England and Wales have a parent in prison. That is two and a half times the number of children in care and six times the number of children on the child protection register. More children are affected by imprisonment than by divorce. The children of offenders are more likely to offend themselves. Six out of 10 boys with a convicted parent end up in custody themselves. The children of offenders are three times more at risk of mental health problems.

Let me quote the social exclusion unit:

“Research shows that the existence and maintenance of good family relationships helps to reduce re-offending, and the support of families and friends on release can help offenders successfully settle back into the community. Yet at every stage of a prisoner’s movement through the criminal justice system, families are largely left out of the decision-making process and rarely get the opportunity to support prisoners effectively.”

Invisible Walls has grown out of the work of Parc Supporting Families, which identified that engaging with a prisoner’s family had all-round benefits for the prisoner and their family, but especially for their children and the wider community. Invisible Walls has strong foundations. Parc Supporting Families first took over the running of the visits department. It changed both its physical space and how it feels to receive and to make a visit. The focus was shifted from simply being about security to engaging the family. Walls were decorated with prisoners’ artwork by the art intervention team—another team who have won awards for Parc. That was done in a café and a children’s play area, so that parents and children together can experience family-centred mealtimes, playtime and interaction.

Invisible Walls has three principal aims: to reduce the risk of reoffending and a return to prison; to reduce the risk of intergenerational offending; and to increase family and community cohesion. The effect that we often neglect is the effect that just one person with criminal intent living in a small community can have on that community, so increasing efforts to move an ex-offender back into playing a constructive and positive role in the community has huge benefits.

During the four years for which the project will run, 20-plus families a year will be identified for help. Those are families in critical need of support. They are families in which the father has a minimum of six months left to serve. Fathers must be drug free and undergo regular testing. They must sign a compact to undertake this often difficult and painful work. Prisoners are based in a dedicated family intervention unit. I must stress that both the prisoners and the officers who are engaged in this programme are not simply selected for it; they have to want to participate. It is no good asking either prisoners or staff who do not want to engage with this programme to take part.

The whole family are supported for as long as a year before release and, critically, for up to six months post release. The support comes in many forms. It includes advice on and support with parenting and physical and mental health support. Schooling, accommodation and substance misuse are tackled. Finance and debt and the issue of relapsing into offending are considered. Fathers are encouraged to build a relationship with their children. Individual and group sessions are attended. Prisoners talk, often for the first time, about their feelings and how their offending impacts on their family and community. This is often difficult work.

The Learning Together club teaches prisoners about what their children are learning in school. It helps them to engage with their children and their schoolwork; it enables them to help with their children’s homework during visits. Bedtime stories are recorded, so that children can maintain the link with their father while they are at home.

I must stress that the team at Parc are not working in isolation. The project is supported by a number of organisations and volunteers: Bridgend county borough council, the Wales Probation Trust, Barnardo’s Cymru, Harp Resettlement, Gwalia Housing and many others. Of special note is the £50,000 of funding that has come from the Big Lottery Fund. That was a first for the Big Lottery Fund and it is something that we should applaud. Changing prison culture from being inward facing to being outward facing, focusing on building relationships with outside agencies and maximising the opportunities that those relationships offer is not easy, either for prisons or for prisoners, and we must commend it.

I must tell you about one picture that I saw, Mr Caton. A child was asked to draw a picture of their family before they became involved in the scheme. The child drew mum on one side, the child in the middle and dad on the other side of the piece of paper. Between each of the individuals in the family was a closed door and, underneath, the child wrote, “They are arguing and I’m stuck in the middle.” After going through the Invisible Walls programme, the child was asked to complete another picture. This time, there were no doors, everyone was smiling and the child wrote, “Everyone is happy and we’re not arguing any more.” They say a picture paints a thousand words—those two pictures certainly do.

The Invisible Walls project and linked initiatives have proved successful. Successive inspection reports have focused on work with families as positive, with support for families being singled out for specific praise. There are not only inspection reports, however. The Welsh Centre for Crime and Social Justice, based in the university of Glamorgan, is undertaking an evaluation and research assessment of the scheme. That work began last year and will continue until 2015.

I ask the Minister to look at the research carefully and to consider how what has been put in place at Parc could be applied elsewhere. I want him to give an undertaking to look at what has been achieved and facilitate its future application. I understand that it has already been replicated at Her Majesty’s prisons Altcourse and Maghaberry in Northern Ireland. The staff at Parc have never been afraid to try something new, which is not always easy in state-run prisons. Private sector prisons—Parc is the only one in Wales—perhaps have such an opportunity, and we need to ensure that state-run prisons also have that opportunity. We might also remove the invisible walls between the quality work done in state and private sector prisons, and spread the capability to undertake such work across the prison estate.

As I have said, Parc is a local prison that accommodates prisoners close to home. That makes family intervention relatively easily and makes an Invisible Walls programme possible. I understand that the Ministry of Justice is working towards more prisoners serving the last six months of their sentence closer to their home area. If that period could be extended a little, there would be opportunities to assess prisoners for that work, which might prove most positive both financially and in tackling reoffending.

Wales has no prison for women, and more than 17,000 children are separated from mothers who are imprisoned in England. The plea from Welsh MPs is for the Minister to consider whether it would be possible to have something like the Invisible Walls project to work with women. Many of them are separated from not just their children, but their wider family, because of the distance between their family and where they serve their sentences.

Invisible Walls has generated new ideas, and there is a constant desire to improve and learn from the programme. One such idea is to build links between the prison and schools, specifically to support children whose fathers are in prison. Children of offenders experience a range of negative emotions, and are often vulnerable to being bullied and to becoming bullies, so they have an increased risk of exclusion from school. They may have experienced the trauma of witnessing an arrest, and they have felt the impact of being cared for by one parent.

Building a link between a school and the prison can help to counteract that trauma and to prevent problems from developing that might lead to the child ending up in the criminal justice system. The idea is very simple: the school signs an Invisible Walls accord, meaning that, when a parent is in prison, the head teacher identifies a single point of contact who is responsible for offering advice and guidance to children and primary carers confidentially. The person identified will almost certainly be the current child protection officer in the school, who already has the necessary training to fulfil the new role, while the prison would provide training, access to support online and an electronic library.

The scheme is in its early stages, but it has already gathered significant support. It might make a significant impact on the many vulnerable children at risk of becoming the next generation of offenders. I hope that the Minister will talk to the Department for Education and obtain its support. For the scheme to be established, it needs to be approved, so will the Minister personally give it his seal of approval? Will he undertake to talk to the Department for Education, so that the scheme can be rolled out to prisons across England? The cost is negligible, because the scheme builds on things and people already in place. It would make a difference to children and their families and, indeed, to schools and to the potential for education, because many people in prison have low levels of educational achievement.

Only if we think for the longer term and use projects proven to work will we bring down reoffending and steer the next generation away from prison. I appreciate that Invisible Walls is not a project for everyone, but it gives us the possibility of finding prisoners with whom such work could be undertaken and of making a huge difference to future reoffending. I look forward to the Minister’s response.

I congratulate the hon. Member for Bridgend (Mrs Moon) on securing this debate. On behalf of Her Majesty’s prison Parc and all the staff who work there, I thank her not only for how she made the case for the Invisible Walls programme, but for her support over a much longer period. The debate highlights an issue at the forefront of the Government’s plans to transform the criminal justice system.

The hon. Lady and I will be glad, as I am sure you are, Mr Caton, that crime has been coming down for some time. The overall level of crime recorded by the police decreased by 8% in the year ending December 2012, compared with the previous year. Such figures are encouraging, but they are not grounds for complacency. We can do much more to reinforce the downward trend, so that people can feel safe wherever they may be, at any time of the day or night.

As the hon. Lady pointed out, the key is to tackle reoffending by taking bold and effective steps to rehabilitate offenders—assisting, encouraging and guiding them away from crime into new, worthwhile and productive ways of life. That is precisely the intention of the Invisible Walls project at HMP Parc. It is worth saying that that matters because reoffending has been too high for far too long. Almost half of all offenders released from prison offend again within 12 months, and those with the very highest reoffending rates are prisoners with custodial sentences of less than 12 months. A staggering 58.2% of those released in the year to June 2011 reoffended within 12 months. The current system simply does not address the problem in the way we want, and many prolific offenders, with a host of complex problems, are released on to the streets with £46 in their pockets and little else, so the case for a new approach is clear.

We spend more than £3 billion a year on prisons, and almost £1 billion annually on delivering sentences in the community. Despite that investment, overall reoffending rates have barely changed over the past decade. The same faces come back through the system time and again, because most crime is committed by that relatively small number of prolific offenders. If we enabled them to turn away from crime, we could make a real difference.

As the hon. Lady will be aware, on 9 May we set out our plans in “Transforming Rehabilitation: A Strategy for Reform”, which took account of the comments received in response to the consultation paper that was published in February. The document sets out that, for the first time in recent history, every offender released from custody will receive statutory supervision and rehabilitation in the community. We are legislating to extend statutory supervision and rehabilitation to all 50,000 of the most prolific group of offenders—those sentenced to less than 12 months in custody.

The market will be opened up to a diverse range of new rehabilitation providers, so that we get the best out of the public, voluntary and private sectors, at local as well as national level. We will also introduce payment incentives for market providers to focus relentlessly on reforming offenders, giving those providers the flexibility to do what works, along with freedom from bureaucracy, but paying them in full only for genuine reductions in reoffending. We will create a new public sector national probation service, working to protect the public, and building upon the expertise and professionalism that are already in place.

Of particular importance, and of particular relevance to what we are discussing, is that we are putting in place an unprecedented nationwide through-the-gate resettlement service, which means that most offenders are given continuous support by one provider, from custody into the community. We will support the service by ensuring that most offenders are held, for at least three months before release, in prisons designated to their area. The hon. Lady asked me to consider how we might extend that period. It would, of course, be desirable to have the longest possible period of stability during a sentence, and she will be reassured to know that we hope that many people, particularly those sentenced to periods of 12 months or shorter, will be able to spend the entirety of their sentence in a local prison, which will enable precisely the sort of work we are talking about to go on with them.

The hon. Lady described how the Invisible Walls project seeks to help prisoners at Parc to avoid reoffending, and it also addresses the genuine risk that those prisoners’ children may themselves be drawn into crime. She rightly highlights what I think we all agree is a shocking statistic: six out of 10 boys with a convicted parent end up in custody themselves. The project involves an extensive programme of support to assist offenders to repair, develop and maintain healthy relationships while in custody, and the support continues after release. Prisoners who may be eligible to receive support are those who have no restrictions on contact with their children, and who will be resettling with their families in south Wales when they leave custody. That gives rise to the point about continuity.

As has often been observed—not least this morning—prisoners frequently have a wide range of complex interrelated problems that need to be addressed as part of a rehabilitation programme, and Invisible Walls helps offenders to find accommodation, employment, training, education and volunteering opportunities. As the hon. Lady says, the programme promotes physical and mental health—by addressing substance misuse for example—helps offenders to manage their finances, and manages offenders’ attitudes, thinking and behaviour, to give them the motivation to begin afresh.

The main focus of the project is on reducing reoffending and preventing prisoners’ children from turning to a life of crime by strengthening family ties. Research has shown that ensuring that a prisoner keeps in contact with his or her family while in prison has a direct effect in reducing the likelihood of reoffending. Some 7% of children in the UK will experience having a parent in prison before they leave school, and research shows that positive and regular contact with the imprisoned parent significantly improves a child’s outcomes, not only in school and at home but in later life.

An interesting aspect of what goes on at Parc is that prisoners are assigned a family integration mentor—FIM—who, as the hon. Lady knows, supports them and their family during the custodial period, and through the gate, into the community. The FIM links with other mentors, who help the offender and the family to address problems. Where we can arrange it, the support begins 12 months before an offender is released from prison and, crucially, continues during their first six months in the community. It therefore reflects very much what we have in mind for the system in the future, not just at Parc but elsewhere.

HMP Parc is operated by G4S, which set up the project in 2009 and, as the hon. Lady said, a number of outside agencies are now involved as well. She also referred to the invitation from Invisible Walls to schools in the Bridgend area to work with them to offer discrete and sensitive support to children with a parent in the prison, and she asked me to ensure that the Ministry of Justice has regular contact with the Department for Education. As she would expect, we have regular conversations about all the issues, and I will ensure that that project features in them, so that everyone, on both sides, is fully informed.

Part of the thinking behind the project is the need to move away from an inward-facing prison culture to an outward-facing approach, with strong partnership relationships with outside agencies, and that is precisely what our through-the-gate reforms are designed to achieve. What we can see going on in Invisible Walls is a good indication of the sorts of things that can work well elsewhere in the country too.

Invisible Walls received additional funding from the Big Lottery Fund in 2012 to expand the scheme from its original design, and that is an example of the sort of creative thinking we need if we are to make the big difference to reoffending that I spoke about earlier. The hon. Lady was right to point out that formal assessment of the project will not be complete until 2015, and we will carefully consider that assessment when it is available, but I hope that she can take it from what I have said today that we do not intend to wait for 2015 to see a number of elements of the project replicated in other places.

By opening up probation to a wider range of providers, we can bring additional skills and ideas into play, and the national probation service will retain its key role in managing risk, including the direct management of higher-risk offenders. The reorganisation of probation, and the creation of 21 new contract package areas, has presented us with an opportunity to consider release alignment. That is very much along the lines of what the hon. Lady was describing, regarding the continuity of approach that we all wish to see. It has long been recognised that closeness to home is an important factor in an offender’s resettlement process, and our reforms will strengthen existing rehabilitation services by drawing on the best the market has to offer and combining that with access to offenders at the start of their time in custody, and again before release. It might not be possible for certain longer-sentenced prisoners to stay in a local prison for the entire duration of their sentence because of needs attached to their sentence that can only be met elsewhere, but we intend that they be returned to a local prison for the few months leading up to their release.

Currently, 50,000 offenders each year are sentenced to custody for less than 12 months, and we anticipate that the majority of them will serve their entire sentence in a resettlement prison designated to their area. That means better continuity of supervision and rehabilitation services, as well as better family links and a network of prisons more specifically catering for the needs of that cohort of offenders.

Resettlement prisons are one strand of a comprehensive strategy of reform that seeks to tackle all aspects of reoffending. Invisible Walls displays the scope that exists for a wide range of organisations from the public, private, voluntary and community sectors to bring their skills to bear in enabling offenders to change their lives. I am glad that we have had the chance this morning to discuss the work of Invisible Walls and the wider context of offender management. No one imagines that changing entrenched patterns of offending is a simple matter, but the Government firmly believe that the measures we are putting in place will help to achieve a fundamental transformation, with enormous and lasting benefits for our society.

Sitting suspended.

Alcohol Licensing Advertising

[Mr Gary Streeter in the Chair]

It is a real pleasure to serve under your chairmanship, Mr Streeter. Earlier this year, the Government held a consultation on licensing notices. In essence, Ministers are considering scrapping the statutory requirement for those applying for an alcohol licence to advertise that application in their local newspaper. In this debate, I intend not only to raise the concerns of my local newspapers and of those in the constituencies of many right hon. and hon. Members, but more importantly to speak up on behalf of the thousands of people in my constituency who rely for much of their local news on our local newspapers.

It is a great pleasure to serve under your chairmanship, Mr Streeter. I thank my hon. Friend for securing this debate. May I emphasise that he is speaking on behalf of not only thousands of his constituents, but certainly mine in Lincoln, and thousands of my colleagues’ constituents across Lincolnshire who are served by the Lincolnshire Echo, and who obviously have the same concerns?

I welcome the intervention of my hon. Friend—a corridor friend—and I note how subtly he plugged his local newspaper. As it happens, I was about to say that my local newspapers include the Kent Messenger, Kent on Sunday, the Sheerness Times Guardian and the Sittingbourne News Extra. I have many local newspapers in my patch.

One of the most important sections in a local newspaper is the page set aside for statutory notices. To many people, that section is second only to the obituaries column, which is always the first to which they turn. The publication of statutory notices, such as for planning and alcohol licence applications, is an important revenue stream for hard-pressed local newspapers, all of which face increased competition from the internet.

An applicant for an alcohol licence is required to publish a notice in the local newspaper. From the same date, the applicant must also display a notice prominently on the premises for 28 days. Those requirements were designed to ensure that local communities were fully informed about, and given the opportunity to object to, alcohol licence applications, or to a pub, club, restaurant or off-licence applying to change the hours of its licence.

I congratulate my hon. Friend on securing the debate. Does he agree that notices that go into local papers can be noticed by not only objectors to applications but their supporters, so the drinks industry should not fear such notices?

I welcome the comment from my hon. Friend, whose constituency in Kent is also covered by the Kent Messenger, which he forgot to mention. He is right and, as I shall say later, newspapers not only carry the notices, but articles or editorials on the subject as well.

In the Home Office document, “A consultation on delivering the Government’s policies to cut alcohol fuelled crime and anti-social behaviour”, the section on reducing the burden of regulation on responsible businesses has a proposal to remove the requirement to advertise in local newspapers. Paragraph 9.21 asserts:

“The way people consume news locally is changing, both in its frequency and form. Local residents have opportunities to learn about applications online or by notices on the premises themselves.”

I have some sympathy with that view: there is no doubt that an increasing number of people have access to the internet, and people can read notices posted in a shop window, but I have some deep reservations.

To take the latter point first, reading a notice posted on the premises depends on the person wishing to read the notice knowing that it is there in the first place. It is of course possible that somebody might spot the notice by chance, and I suppose that the immediate neighbours of a proposed venue might notice one, but they would have to be pretty observant. New alcohol outlets or changes in licensing hours can frequently have an effect on the character or amenity of a wider area than the proposed site, but those who do not live in the vicinity are unlikely ever to see a public notice and will have no knowledge of an application.

On the suggestion that people can view applications online, I accept that for many people it is true that we live in a digital age. Indeed, in 10 or 20 years’ time, every home in the land might be connected to the internet, all local newspapers might deliver online editions and everybody might have access to the public notice section of their local authority website, but we do not live in the future. This is not 10 or 20 years’ time; it is now. Today, research shows that there is a real digital divide, in that 11% of adults in Britain still do not have access to the internet. More importantly, that figure is far higher among some income groups, geographic areas and age groups, particularly the elderly. For some elderly people, the digital divide means only the space between their fingers. Ironically, they take an interest in what goes on in their community, are likely to oppose an application for yet another pub, club or off-licence, and are more likely to read their local newspaper.

I want to back up my hon. Friend’s point. Is he aware that national, representative, independent research by GfK National Opinion Polls has found that eight times as many people read a newspaper in the past week as had looked at their council’s website? In fact, 29% of adults had not accessed the internet at all in the past 12 months.

I thank my hon. Friend for drawing that to my attention. I was aware of it, but I am trying in my speech to push aside all the statistics and to deal with the issue on behalf of real people with real concerns.

Another important consideration is that communities would lose one of their greatest assets. Local newspapers

“perform an incredibly important function in our democratic system.”—[Official Report, 12 November 2012; Vol. 553, c. 575.]

Those are not my words; that is what my right hon. Friend the Prime Minister said in relation to the Leveson inquiry. Indeed, the Leveson report said that local newspapers’

“contribution to local life is truly without parallel.”

The Newspaper Society estimates that the proposal could cost the already struggling local press industry between £6.2 million and £7.9 million a year. The Leveson report recognised that many local newspapers are no longer financially viable, but local newspapers report on stories such as local politics, occurrences in local courts, local events, local sports and the like, all of which would be thought too parochial to be reported by national or even regional media. In fact, it is through local journalism that some important issues are picked up by the nationals and brought to the nation’s attention. Leveson went on to say, of the local press, that

“their demise would be a huge setback for communities and…would be a real loss for our democracy.”

My concern is about not only the effect that the proposal will have on my elderly constituents and the local newspapers that they love to read, but alcohol licensing. We must ask ourselves why we have such stringent rules about who is allowed to sell or serve alcohol. It is because alcohol is a drug, and a very dangerous drug at that. Alcohol abuse can lead to addiction and often contributes to crime and antisocial behaviour. That is why it is controlled.

The Government are determined to cut alcohol-fuelled crime and antisocial behaviour, which is a highly laudable aim that I support. However, I find it hard to understand how reducing the alcohol industry’s requirement to get licences meets the aims of the Home Office’s policy of reducing the harmful effect of alcohol abuse on society. How will scrapping the statutory requirement to advertise alcohol licence applications in our local newspapers help ensure that those who sell alcohol are right and proper people to do so? How will loosening the current regulations ensure that we clamp down on the sale of alcohol to minors? How can the community find out about new licensed premises in their area or, even more importantly, applications for longer licensing hours, if they do not have access to the internet? The answer to that last question is their local newspaper.

Research shows that people take time to browse a newspaper and that many adult regular readers read the public notices section of their local paper. Publishing applications in local papers does not require readers to institute an active search for information; it is there in front of their eyes when they open their local newspaper. Public notices in local newspapers are published in a context that no other medium can deliver—a lively and engaging marketplace, both in print and online, which offers up issues such as the licensing of pubs and clubs for regular attention and debate. As I said to my hon. Friend the Member for Dartford (Gareth Johnson), we should remember that as well as printing the advertisement, local newspapers often run feature articles about contentious applications.

Let us ask ourselves another question: does the proposal save taxpayers’ money? No, it does not, because it is businesses, not local authorities, that pay for the advertising.

As the cost of these notices is not picked up by the taxpayer, there is no downside for the taxpayer in having such notices. Quite clearly, though, there is a huge downside for the taxpayer and the whole local community if newspapers such as the Dartford Messenger are not supported and therefore go out of business.

I agree with my hon. Friend. The cost of those advertisements is not a great burden on the businesses. It might be argued that the proposal would save taxpayers’ money. Fewer people will object to the proposed nightclub because they will not know it is proposed, which will save councils’ time. However, that is a rather cynical view, and not what the Government are aiming for. Indeed, the Government profess to want the public to be more involved with local decisions.

The Home Office’s impact assessment focuses on the small cost savings to the alcohol industry that might be achieved by scrapping the requirement. That assessment puts the cost of a relevant advertisement in a local paper at £450 plus VAT. It is worth pointing out, though, that the figure is disputed by the newspaper industry, which says that the cost is much lower than that. As someone who has had an off-licence and a restaurant in the past, I can say that I would never have paid £450 plus VAT for an advert in my local newspaper. However, even if that is the cost, it is not a huge burden to a small business, and it would hardly make a dent in a larger business’s overall advertising budget.

At a newspaper conference in December 2012, the Secretary of State for Communities and Local Government repeated his intention of sticking to the commitment that he made when taking up office, which was not to remove statutory public planning notices from local papers during the lifetime of the Parliament. How is alcohol licence advertising any different from statutory planning advertising?

To conclude, removal of the notices from local papers will erode the public right to know, and will damage local democracy. It will lead to licensing matters being decided without local knowledge and debate, and to the death of many local newspapers. I hope that the Minister will take into account my points when considering the results of the consultation and drop this proposal.

I am pleased, Mr Streeter, to serve under your chairmanship this afternoon. I am speaking slightly sooner than I anticipated, but that is to the good.

I congratulate the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) on securing this important debate. He made a compelling case for the continuation of statutory notices in local newspapers to inform local communities about applications for and variations to alcohol licences. I was particularly struck by his comments that came from his own experience. I think he said that he ran an off-licence and a restaurant and had experience of making applications for alcohol licences and paying for advertisements in local newspapers.

I was also pleased that the hon. Member for Lincoln (Karl MᶜCartney) was able to get in a mention for his local paper, and that the hon. Member for Dartford (Gareth Johnson) managed a mention in his second intervention. It is all to the good that we mention our local papers, and I will certainly be doing that in a moment.

On the current requirements, any premises looking to be granted an initial licence or to make a major variation needs to display a notice prominently on the premises and publish a notice in a local newspaper or, where a newspaper does not exist, newsletter. As we have heard, the cost of an advert is borne by the applicant, and such adverts are estimated to bring in between £6.2 million and £7.9 million for local newspapers each year.

As has already been said clearly and compellingly, the purpose of the requirements is to inform a community about licence applications to enable local people to have a say. It is important to remember that the Licensing Act 2003 gives the local community extensive grounds to object to a licence. There are four explicit grounds for objection: the prevention of crime and disorder, issues of public safety, the prevention of nuisance and the protection of children from harm. The right to object is fundamental to our licensing system, and anything that undermines that right is a regressive step.

The requirement to advertise is a significant cost to the licensed trade, but it is a cost only when a venue is looking to open up or make a major variation, which would normally be a licence extension. It is not a charge that is levied on long-standing community pubs unless they are looking to vary their licence. It is much more likely to be a fee encountered by a new venue in city centres, nightclubs, off-licences and supermarkets. That is important because a number of Members are, quite rightly, concerned to protect their local community pubs and not to impose further burdens on them. It is also important to note that the effect of ending that requirement is not a net benefit to industry. Rather it is a switch in resources from the local newspaper industry to the alcohol sector.

The Government propose to scrap the requirement to advertise in local newspapers. In future, people will have either to view the proposal on the premises or to actively seek out the information online, although unless they had seen the notice on the premises they would have no idea that they needed to check out the council website, as the hon. Member for Sittingbourne and Sheppey pointed out so effectively.

Research by GfK conducted on behalf of the Newspaper Society showed that the weekly reach of local newspapers was 67% of the population, compared with just 8% for local council websites, and, as has already been pointed out, many parts of communities do not have access to the internet. I was struck by the hon. Gentleman’s comment that for some people the digital divide means only the space between their fingers: they do not have access to the internet and would not know where to start to look on a council website. Could the Minister comment on that issue and say how the public will be informed about what is going on in their local area? Do the Government genuinely think that this change can be introduced without reducing the number of people who are made aware of new licences or variations to licences?

It is important that the Government recognise the unique role that local newspapers play in keeping a local community informed. In my own city of Hull, our local newspaper, the Hull Daily Mail, forms the basis of the local political discourse and is a well trusted source of news. The Hull Daily Mail is also very well read. It has lots of important local information, including licence applications.

I want to draw the Minister’s attention to two recent applications for lap dancing clubs in Hull. Although they were applications for clubs in the city centre, because of the nature of the establishments, people across the city may well have wished to object for a range of valid reasons. One was the proximity of the clubs to a boys school that is due to open in September. Because the school has a city-wide catchment area, those licences were of interest to many more people than would walk past the venue. Because the notification had to be advertised in the local paper, the whole community in the city could know about the application and so were in a position to object. Indeed, many people chose to object. What is more, the local paper followed up the story with an article after the hearing, to keep the community updated about what had happened. That was a proper dialogue, which informed local people and demonstrated the value of local papers.

I will now consider the measure that we are discussing today in the context of the Government’s alcohol strategy. I am delighted that the Minister is in Westminster Hall today, because he and I have debated the strategy over many months. In recent Public Bill Committees, we have spent a long time looking at the Government’s approach to dealing with alcohol.

The aims of the Government’s alcohol strategy are to reduce the social and individual harms caused by alcohol consumption, particularly health issues and anti-social behaviour. One of the features of the strategy is a general promise to rebalance the Licensing Act 2003 in favour of local communities. It does not appear obvious how preventing local communities from knowing about a proposed new licence will help to empower them. Perhaps the Minister can explain to me how it will do so, because it seems to fly in the face of that stated aim. It appears that the measure is much more about the “red tape challenge”—the Government’s desire to boast about reducing bureaucracy. In this case, they want to boast about reducing bureaucracy on the alcohol industry.

As I understand it, the measure has already been the subject of two consultations. The first consultation, which was launched in 2010, asked for suggestions as to how the Licensing Act could be deregulated. That consultation led to an impact assessment, which revealed the Government’s preference to end the requirement to advertise in local newspapers. However, nothing seemed to happen afterwards. In the second consultation, which was launched in November 2012, it was set out that one of the consultation’s four aims was to

“introduce stronger powers for local areas to control the density of licensed premises”.

However, the proposal that we are discussing today seems to limit the access of communities to information about new licence applications. Again, perhaps the Minister could comment on that issue.

One of the Government’s recent changes to the licensing system removed the vicinity requirement. That change, which was introduced in the Police and Social Responsibility Act 2011, means that someone can object to a licence application without having to prove a connection to a particular area. However, that measure is undermined by the removal of the requirement to advertise in a local newspaper, which prevents the wider community from finding out about a proposal.

Of course, it is important to look at the particular measure that we are discussing in the context of the wider alcohol strategy. We have to consider the change not only in the context of other changes to licensing but in the context of the local media market. I am unclear as to exactly what the Government are trying to achieve with this particular proposal. They have introduced a raft of changes to licensing. They have introduced both the late night levy and the early morning restriction order to try to increase the contribution of licensed premises to their local communities. The problem is that they expected local authorities to impose the levy and then give the money to the police. However, there is no guarantee that the money that has been raised will benefit the local community. Hence, as I understand it, no area has introduced a late night levy or an EMRO, and the £17 million that the Government promised would be made available for local communities has not yet materialised. Perhaps the Minister can update us on that issue.

The Government have also made a commitment to introduce full recovery of the costs of licence applications. An independent review conducted by Lord Elton found that the current shortfall in licensing revenue was approximately £17 million a year. So the Government have again committed to raising extra revenue from the licensed trade for the benefit of the wider community. Again, however, we are unclear as to what has happened to those plans.

Finally, there is the central plank of the Government’s alcohol strategy—minimum alcohol pricing. The Home Secretary came to the House to announce that policy; I think that she did so on a Friday, because it was so important. She then launched a consultation on the level of minimum unit pricing. Then she briefed the press that she had actually blocked the policy, which was her own policy. I am sure that the Minister will be able to tell us where the Government are in terms of introducing minimum alcohol pricing.

As we understand them, the Government’s stated aims are twofold: first, to empower the community to have a greater say in licence applications; and, secondly, to increase the contribution of the licensed trade to the wider community. However, the measures designed to achieve those aims have all collapsed, and today we are discussing the Government’s plans to do something that limits a community’s access to information about licensing and restricts the contribution of the licensed trade to the wider community.

It is important to consider the effect that this measure will have on local newspapers. The Government’s own impact assessment estimates that it will cost the industry up to £8 million in lost revenue. That is a big blow for an industry that is already struggling. A number of regional newspapers have had to close and many more are seeing their circulation fall to the point where they are on the verge of being unsustainable.

That situation creates several problems. The closure of local newspapers has resulted in significant news gaps, leaving areas without an adequate source of local news. The decline of regional newspapers is bad for communities, because it erodes the important role that newspapers have at the heart of local areas. The decline of regional newspapers is also bad for local democracy, as papers are no longer willing to challenge vested interests and hold people to account for financial reasons.

The decline of local newspapers is not because there is no appetite for local news or for the particular role that local newspapers play in their communities. Despite the decrease in circulation for paid-for regional newspapers, free local titles have seen significant increases. The latest circulation figures, for July to December 2011, show that 18% of free local newspapers increased their circulation. There is also huge growth in the number of online visitors to local newspaper websites. Those developments show us two things: first, local newspapers are under threat and need to find new sources of funding; and secondly, there remains a huge demand for local newspapers and the unique role that they play in serving our communities. Given those facts, the Minister should rethink implementing a policy that will seriously damage an already struggling industry and that appears to go against everything else that the Government’s alcohol strategy is meant to achieve.

It is a pleasure to serve under your chairmanship on this occasion, Mr Streeter. The hon. Member for Kingston upon Hull North (Diana Johnson) and I had the pleasure of serving under your chairmanship during the Public Bill Committee stage of the Protection of Freedoms Act 2012. It is good to see you in the Chair again today.

I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) on securing this debate today, and on providing an opportunity to debate the important issues relating to the advertising requirements that pertain to alcohol licensing. My hon. Friend is a strong supporter of local media. He is proud to be a true man of Kent. I welcome his using the opportunity to champion the Kent Messenger and other local Kent titles, whose influence even reaches across the borders to my constituency. I hope that the Bexley Times and the Bexley News Shopper provide some local competition to his titles, too.

I also thank my hon. Friends the Members for Lincoln (Karl MᶜCartney) and for Dartford (Gareth Johnson) for their interventions. The strength of support for the local press and local media comes through clearly in our debate, and I will deal with those comments later, feeding back on a number of points during my response this afternoon.

I welcome the hon. Member for Kingston upon Hull North to her place. As she highlighted, we had many happy hours together, debating the detail of alcohol licensing policy during the Public Bill Committee stage of the Police Reform and Social Responsibility Act 2011, when we highlighted a number of important points and added to the scrutiny of the Bill. Although I no longer hold the policy lead on alcohol, which is with my hon. Friend the Member for Taunton Deane (Mr Browne), the crime prevention Minister—he is not able to respond to this debate because he is in Committee—I welcome the opportunity to revisit some of the ground that we debated at that time. I had not appreciated that the hon. Lady was a Daily Mail reader, albeit the Hull Daily Mail.

Local newspapers have more than 30 million readers in the UK, through their print titles alone each week—some 61% of all UK adults—as well as 62 million web users a month. My hon. Friend talked about the immense value and importance of local newspapers and that was emphasised by additional contributions by my hon. Friends the Members for Lincoln and for Dartford, particularly on the benefit that they provide to people who do not have internet access.

Like my hon. Friend, I am also committed to a strong, local, independent media. I reassure him that this Government regard the independent local press as essential for local democracy, as it helps local people to hold their local council and other agencies to account. The Government have recently introduced measures in the Local Audit and Accountability Bill to protect the independent press from unfair competition from council newspapers—the so-called “town hall Pravdas” that disregard the code of recommended practice on local authority publicity. The code restricts the publication of council newspapers and news sheets to once a quarter, but some local authorities are disregarding it by publishing their newspapers as frequently as weekly, taking paid advertising revenue away from the independent local press. The new legislation will enable the Secretary of State for Communities and Local Government to direct authorities to comply with the code.

The Government are committed to tackling alcohol-related harm and developing a licensing regime in which the public have a strong voice. At the same time, we want to lift the burden of bureaucratic processes from licensing authorities and responsible businesses. The proposal to remove the relevant requirement on licensing applicants, many of whom are small businesses, was introduced to remove what some see as an unnecessary burden. I should like to be clear and say to my hon. Friend that there is no desire to prevent local people getting information about new licensing applications or playing an active role in the licensing process. This Government have done more than any other to increase the ways in which local communities and local people have a say in whether pubs and clubs should be open in their areas, and for how long. Ensuring access to local information about licensing is key to that.

As the hon. Member for Kingston upon Hull North said, I led on much of the Government’s legislation in the 2011 Act, to overhaul Labour’s Licensing Act 2003 and rebalance it in favour of local communities. We gave local people a stronger voice by scrapping the old vicinity test that the hon. Lady mentioned, so that, now, anyone can make representations and object to licensing applications regardless of where they live in relation to the premises. In addition, we made it easier for licensing authorities to respond to local concerns about irresponsible businesses selling alcohol and close problem premises down. We have lowered the evidence threshold for decision making and the burden of proof to show that a premises is causing public nuisance or crime and disorder, for example. That is helping to ensure that the appropriate balance is given to local communities to make those decisions.

We have also given responsible authority status to licensing authorities, ensuring that those are better able to respond to the concerns of local residents by taking swift action to tackle irresponsible premises, without having to wait for representations from the police or other responsible authorities. At the same time, we have given local health bodies a greater say in licensing and increased the availability of information about alcohol licensing online.

More than 40% of violent crime is alcohol related. In October last year, new powers were introduced and made available to help local communities tackle the problems of crime and disorder caused by late-night drinking. The late-night levy allows local councils to charge pubs and clubs opening late at night for a contribution to policing costs. The early morning alcohol restriction order allows for alcohol sales to be banned between midnight and 6 am, if there are local grounds to do so. The powers commenced on 31 October 2010. Many licensing authorities, including the London borough of Islington, and Newcastle, are considering carefully whether the late-night levy could benefit their area. They must also consult publicly before introducing the levy. I hope that hon. Members will note that Newcastle has already begun to do so. Early morning restriction orders, as I said, were introduced at the same time and allow councils to prohibit the late-night sale of alcohol. A number of licensing authorities, including West Lancashire and Northampton, are considering such orders for their areas.

The hon. Lady asked me about minimum unit price. She will know that my hon. Friend the Member for Taunton Deane responded to an urgent question in relation to this matter and highlighted that the Government are carefully considering responses to the alcohol strategy consultation. We will publish a response to that in due course, taking into account all the representations.

As well as measures to tackle alcohol harms, the public consultation recognised the contribution that the responsible alcohol trade makes to our economy and society. The Government sought views on ways to cut red tape in licensing for responsible businesses, while not, of course, undermining safeguards against the harms that alcohol can cause. The consultation sought views on a number of areas relating to proposals to cut red tape, including whether to give discretion for licensing authorities to develop their own simplified processes for temporary event notices and reducing the burden of alcohol licensing for certain types of premises that provide minimal alcohol sales as part of a wider service.

It is important, as hon. Members have said, to recognise that the vast majority of our pubs are vital community assets, contributing to the economy and providing local jobs, in many ways at the heart of communities, fostering strong social values and encouraging responsible drinking. The alcohol strategy reflects that. It is also notable that each pub contributes an estimated £100,000 annually to its local community. The Government are helping pubs through a wide range of measures. In the last Budget, we scrapped the beer escalator and cut alcohol duty, resulting in a pint of beer being 4p cheaper than if we had done nothing. We have also extended the business rates holiday for a further year, until the end of March 2014, and got rid of much of the red tape that frustrated landlords and kept them from focusing on what they are best at: running a business and managing drinking in a safe environment. Most recently, on 15 June, we announced that new CCTV guidelines will mean that pub landlords no longer have to pay for intrusive and costly surveillance cameras where they are not needed.

One proposal to cut red tape that the alcohol consultation considered—it has obviously been mentioned in the debate—related to whether to remove the requirement for applicants to place advertisements in local newspapers or circulars when applying for a premises licence, provisional statement or club premises certificate or for a full variation of a premises licence or club premises certificate. Some in the licensed trade found that burdensome and pointed to other mechanisms whereby local people could find out about new licensing applications.

I understand hon. Members’ concerns. Similarly, I understand the specific issues raised by my hon. Friend the Member for Sittingbourne and Sheppey, as well as his motives in calling for the debate. Adverts in local newspapers are one way in which local communities can find out about premises licence applications, and I note the contributions that have been made about the importance of that and the reach it provides.

I should highlight that there is a requirement for applicants to advertise information about a premises licence application by displaying a notice at the premises. That, too, can be a way of alerting a community to the fact that a licence may be being sought in respect of the premises. Alongside that obligation, the Government have added a new requirement, from April last year, for licensing authorities to publish details of such licence applications on their websites. Some licensing authorities have gone further than the strict legal requirements, and they proactively provide e-mail alerts to those interested in licensing applications. The Government’s guidance to licensing authorities encourages them to ensure they comply with legal requirements. We will look to ensure that licensing authorities consistently publish the relevant information. I recognise the points made by my hon. Friend, but it is important to recognise the changing ways in which information is provided and the importance of online platforms in communicating information. We should look at innovative ways of strengthening that further.

The Government’s consultation received a large number of responses from business, the public and local government. A number of arguments have been made for and against the proposal, and the Government are grateful for how the public have engaged and for the information that has been provided, including by those in the newspaper industry and the licensed trade.

The arguments in favour of abolishing the advertising requirements include the burden it places on licensing applicants, who must pay for the cost of the advertisements. However, others have pointed out—this is reflected in the mood of the debate and the comments that have been made—that newspaper adverts provide a valuable source of information for those who might not see notices on premises or licensing authority websites.

Let me be absolutely clear: the Government do not wish to remove the say that local people and communities have in the licensing process. There is an important balance to strike, and we must consider whether there are already adequate ways for people to find out about premises licence applications. We also acknowledge the role newspapers have as a central point for local information. That, and the other points I have mentioned, need to be weighed up by the Government as we consider our response to the alcohol strategy consultation. As I said, we will publish our response in due course.

I am grateful for the contributions that have been made this afternoon, which amplify some of the representations that have been made as part of the consultation. We will reflect further on the clear points that have been made in the debate. We continue to listen to the points that are flagged up. I very much hope that that gives my hon. Friend some reassurance that we take this matter very seriously and that the proposal in the consultation document continues to be given detailed consideration. We will continue to reflect on the proposals, and we will publish our formal response in due course.

Sitting suspended.

Railway Services (North Cornwall)

It is a pleasure, Mr Streeter, to serve under your chairmanship this afternoon. I am grateful for the opportunity to raise rail issues in my constituency.

If you cast your mind back, Mr Streeter, you may remember a joke in a 1980s Eddie Murphy film, “Coming to America”. A waiter brings soup to a table and the customer asks him to try the soup. The waiter says, “What’s wrong? Is it the wrong soup?” The customer says, “Could you try the soup?” The waiter says, “Is it too hot?” The customer says, “Could you try the soup?” The waiter says, “Is it too cold?” The customer says, “Please try the soup.” The waiter says, “Okay. I’ll try the soup. Where’s the spoon?” I have told that joke several times in the last few days when people have said to me, “Rail services in north Cornwall? There aren’t any rail services in north Cornwall.” When I requested the debate, I think that I filled in the form with the words “Rail services for north Cornwall”, but it makes the point that, although many people in north Cornwall regularly use rail services to get in and out of the duchy or to travel to points further west, none of those services runs within the current boundaries of the North Cornwall constituency, which covers the same area as the old North Cornwall district.

Before the last general election, I had the honour of representing the town of Newquay, which has the Atlantic branch line from Par. At the time, there was a debate about the success of Cornwall’s other branch lines in driving up usage. The Par to Newquay line had not had such success at that time, although looking at the figures for the services to Newquay again, it seems that the numbers on that line have risen, too, which is a welcome development.

In the North Cornwall constituency as currently constituted, the railways were victims of the cuts in the 1960s. The famous north Cornwall line, which Sir John Betjeman wrote about and enjoyed travelling on, left from Waterloo, not far from here, and went via Exeter and ultimately through north Cornwall. It had connections to Bude, and ran through Launceston and other places where many people would love to go to if the railway line still existed. It also went through Camelford and Port Isaac, where the “Doc Martin” series attracts thousands of tourists every year, and then on to Wadebridge and Padstow. The services on that line were victims of the Beeching cuts. In 1990, a small section of the former railway around Bodmin was reopened by the Bodmin and Wenford heritage railway. It is a popular tourist attraction and does a great deal to conserve the rolling stock and to bring people to that part of the world.

I want to focus today on how we might use existing railways better to meet the needs of my constituents and what the prospects are in the longer term of developing rail services again throughout the north Cornwall area. The operators of the Bodmin and Wenford railway have plans—they are not without controversy in the area—to extend their services to Wadebridge along the Camel trail by the River Camel on the former track bed. However, in doing that, they would seek to protect the Camel trail, which has become a well loved part of our landscape for cycling, walking and riding, and brings many tourists to Wadebridge, Padstow and the surrounding area. Any development would have to protect that.

I am also struck by the operators’ commitment to work to bring tourists to Bodmin town, too, which perhaps has not benefited from the Camel trail in the same way. I am told that Bodmin has the second largest inward commute of any town in Cornwall after the city of Truro. Of course, most of that is by car, although there are some bus services. The railway comes to Bodmin Parkway—it was called Bodmin Road when I was growing up in the area—and continues on the main line further south and west. If we were able to offer services along the Bodmin and Wenford stretch back to Bodmin general station, where the group’s headquarters are located, it would bring tourists and commuters into Bodmin and back out again at the key points of the commuting day. That would be a real benefit.

Cornwall council supports the exploration of that option. The current portfolio holder, Councillor Bert Biscoe, was also the portfolio holder at the tail end of the previous Administration. He is keen to provide a solution and council officers believe that that option could make a contribution to dealing with transport issues in Bodmin. I would welcome any support that the Government could give to taking forward such a proposal.

My constituents further north in Launceston and Bude are still some distance from the rail network. My office is in Launceston and when people visit from Government agencies or companies to talk about constituency matters or casework and ask what the nearest station is, they are often surprised to find that it is Plymouth or Exeter, or that they must overshoot Launceston into Bodmin Parkway and come back.

Most people in that part of the world would travel to Exeter St Davids and pick up the service there or perhaps to Tiverton Parkway and use the service there. Some people in Devon—your county, Mr Streeter—have been talking about what contribution a parkway station at Okehampton might make for people in west and north-west Devon, as well as the north and east of my constituency. Devon county council has considered that as part of the regeneration of Devon and believes that it could make a contribution. If more services were offered at Okehampton, it would bring rail services that much closer to Bude, Launceston and the surrounding area, so people would not have to drive into Exeter, which is busy at peak times, or continue around it for some distance to pick up services at Tiverton Parkway. It makes a great deal of sense to look at that proposal, although there may be arguments about resilience. If there were problems with the line further south in Devon, there would be an opportunity for people to connect with rail services to Exeter and to pick up the main line there. Much could be said for development there.

In my submission, with other colleagues, to the previous round of franchise discussions, I raised both those matters. I hope that the Government will consider them and that there is support for those changes and their potential for people in Cornwall and in Devon. In the longer term, it would be great to have the north Cornwall line back. That would be wonderful for tourism, but we must be realistic. There has been development along the track bed. We did not protect it in the same way as some other European countries protected lines when they mothballed them. We must deal with the situation that we have, but Councillor Biscoe particularly is supportive of looking at how to bring other forms of public transport back to north Cornwall to complement the buses that we still have.

Existing services to London are incredibly valuable. For people who have travelled from parts of the north coast—for example, to Bodmin Parkway to pick up mainline services there—the suggestion that they might catch a connecting service to Plymouth and pick up mainline services there would be unpopular because it would mean another change. I hope the Government will resist that. If we follow some of the plans set out by Cornwall council, we can protect the through services all the way to Penzance, which are incredibly valuable, and ensure that we tie in east-west commuter services through Cornwall to provide more regular services. People in my constituency who work in Truro, which is the retail centre for Cornwall and has big public service and public sector employers, often find that trains do not tie up with their shift pattern or their work pattern, so there is a big disincentive to using them, or a delay for those who must rely on them at the end or the beginning of the day. A lot more could be done if we can create more opportunities.

Cornwall council has had discussions with the Secretary of State, who kindly visited Falmouth recently and spent time with some of my parliamentary colleagues. Sadly, I could not join him on that occasion, but I have seen the case that was set out for him. Cornwall council is rightly proud of the contributions that it and the preceding Cornwall county council made in using European convergence and objective 1 money to improve rail facilities and ensure that we can up the capacity of the network in Cornwall, mainly in points further west, such as the Truro to Falmouth branch line.

There have been very impressive increases in numbers. Across the whole country, we have seen the rail network coming under increasing pressure as ever more people seek to use it—a welcome development—but branch lines in Cornwall have exceeded even that. They might be seen as backwater services, but the numbers have been upped significantly, and not just in terms of the tourist trade in Truro and Falmouth. We now have the university in Falmouth, which is increasingly bringing people into the area, so there are great opportunities to build on that work.

Cornwall has invested a great deal of money, alongside Government and European money, in securing those improvements. It wants to take that to the next level, so that growth, over and above the level of growth that we are seeing across the country, continues, and so that we get more people off the roads and on to rail services across Cornwall. The aim is not only to protect the nine through-trains a day, but to see a further 8% growth over the projected period. We aspire to having 23 mainline services a day along the length of the rail in the duchy, which would make the service much more attractive to use, as well as much more flexible for people’s work patterns and for tourists.

There are two issues about tourism and rail. The first is how attractive we can make it for people to come to Cornwall and to leave it, sadly, at the end of their stay. The second is about getting around Cornwall when they are there. If they want to explore all that Cornwall has to offer, they need frequent and reliable services to all the places that are along and at the end of the branch lines. If we can add to that with developments around Bodmin, or perhaps by bringing services closer to Launceston and Bude, we will make the area more attractive to tourists, as well as to local residents.

I welcome the fact that the coalition Government have invested a great deal in rail across the country, and that they are emphasising the importance of that for future economic development and in ensuring that we have a more sustainable way of getting around in general. However, Cornwall will not be at the forefront of electrification, so there are other ways in which we can seek to use Government investment creatively to encourage more people to use the railway. That has been done in previous years. The numbers are very impressive, but I hope that we can move forward again.

I hope that the Minister can support our two objectives. By bringing trains back into the town of Bodmin, using the heritage railway and working in partnership with it, we could bring more regular services to Okehampton, which would help us, and protect those through-trains, while offering more regular commuter services across Cornwall. With the delay in the franchise process, we have the opportunity to get it right, and I hope that the Government will be responsive to what Cornwall council and I are setting out.

It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate the hon. Member for North Cornwall (Dan Rogerson) on securing this debate on rail services in Cornwall and the lack of rail services in his constituency. He touched on a number of important issues, including his plea for Bodmin. He raised, both directly and indirectly, the issue of the First Great Western franchise, which obviously has a significant impact on the supply of services to Cornwall. I would also like to develop comments about community rail, which I think may benefit him. However, if he will forgive me, I will deal with those points in reverse order to the order that he took them in. I will begin with the First Great Western franchise, because it is important and has significant relevance to his constituents and others, not only in Cornwall, but along the whole route to London, including your own constituents, Mr Streeter.

The First Great Western rail franchise is a matter of keen interest, as is shown by the hon. Gentleman’s contribution. It is right that there should be so much interest in this franchise. It serves a huge number of communities and businesses, and the Great Western rail network has an important role in the economy of the many parts of England and Wales that it serves, not least Cornwall. Railway connectivity provides crucial support for jobs and growth. Delivering high-quality rail services is, of course, also a means of addressing road congestion and pollution by encouraging modal shift.

The hon. Gentleman set out with clarity the importance of the Great Western rail network to the county of Cornwall and, by implication, to his constituents who use the rail services. To respond to passenger concerns about crowding and to support jobs and growth, the Government have prioritised investment in our rail network, as he said.

The programme of capacity expansion to which we are committed is bigger than anything since the Victorian era. A number of the most ambitious and important changes will be taking place in the Great Western franchise area. Ultimately, those projects will generate major benefits for passengers and for the economy of all the areas served by the franchise. A major challenge for the operator of the franchise will therefore be to facilitate the efficient delivery of those programmes, and to maximise the benefits that they can offer for passengers once completed.

I am grateful to the Minister for giving way so early on in his remarks. He is rightly pointing out the Government’s commitment to investing in local services to increase capacity and so on. One aspect of that is works that are planned for control period 6, which is, as I understand it, from 2019 to 2024. Cornwall council is asking for that work to be brought forward to control period 5—from 2014 to 2019—to help allow those capacity improvements to be released. He may not be able to comment on that now, but I hope that he is aware of that desire on the part of Cornwall council.

I am grateful to the hon. Gentleman, and I will return to that later in my comments.

One of the success stories of Britain’s railways is the large number of additional passengers now using them. However, that can bring crowding. As Department for Transport statistics show, train services on the franchise have experienced some of the highest levels of crowding. I am therefore pleased that additional carriages funded by the Government have been introduced to First Great Western train services. Those include additional carriages for services in Cornwall and in Devon. I should like to highlight the role that the additional moneys provided by Cornwall and Devon and the Devon and Cornwall rail partnership played in securing that additional funding.

At the end of last year, flooding at Exeter and other weather-related incidents across the Great Western network resulted in disruption to train services, as both the hon. Gentleman and you in particular, Mr Streeter, will be aware, because of the proximity of your constituency. I understand fully the sense of isolation in Devon and Cornwall when transport links are seriously disrupted, and I recognise the economic and other impacts on people and businesses in the region. As the flooding experienced on the Liskeard to Looe line showed, the disruption affected parts of the network not highlighted by the national media.

The Government published the investment in rail programme last July, setting out aims for the industry over the next five-year planning period that included longer-term resilience. In response, Network Rail published its strategic business plan, which, among other things, outlined high-level measures to increase its expenditure on flood mitigation. Those plans are being reviewed by the Office of Rail Regulation, which will determine the level of funding and delivery obligations over the next five years.

To ensure that the Department for Environment, Food and Rural Affairs and Network Rail are aligned, and to ensure that a multi-agency approach is adopted when resolving flood resilience issues, DFT and DEFRA Ministers have corresponded on the issue, and officials from the two Departments will be working together with Network Rail, with the aim of driving the issue to a satisfactory conclusion. Network Rail continues to look at possible measures to improve protection of the sea wall at Dawlish. It is still not clear that reopening the former route would be an affordable or value-for-money solution.

All these factors show why the Great Western franchise is a key part of the new rail franchising programme announced by my right hon. Friend the Secretary of State in March. On 31 January, he announced the termination of the Great Western franchise competition on the grounds that the proposition was not the right one and to allow for a more fundamental review of the franchise proposition. That was in line with the recommendation made by Richard Brown in his independent review. Having considered the options for the Great Western franchise very carefully, the Government decided to extend the current franchise agreement with First Great Western for a further period of 28 weeks to October this year. At the same time, the Secretary of State announced that he intended to negotiate an interim agreement with First Great Western to ensure continuity of train services. On 26 March, he announced that the plan was to develop the franchise proposition further during an interim agreement period lasting to July 2016.

The franchising programme that we announced in March is the right one. We want to secure the best possible rail services for both passengers and taxpayers, and this programme confirms our belief that franchising is the way to do it. By publishing the programme, we have provided the whole rail industry with a long-term plan, covering every rail franchise for the next eight years. That gives certainty to the market and supports the major investments in the country’s vital rail network that this Government are making.

The Government are intent that the interim agreement period for the Great Western franchise should not be a time of uncertainty or stagnation. The Secretary of State confirmed, in his 31 January statement, that the Government would continue with their multi-billion-pound programme of investment in the rail network, regardless of the delay to the franchising programme. He also confirmed that the Department for Transport would seek to ensure, wherever possible, that the benefits for passengers previously sought in new substantive franchise agreements were not delayed.

Concerns have been expressed by a number of people, including hon. Members, about the potential effects of the approach taken to the specification of train services adopted for the now terminated Great Western franchise competition. Those concerns focused in particular on the potential loss of through services to London. I should like to confirm that the train service specification adopted for the now terminated competition will not be used during the interim agreement period to July 2016. As I explained, that period provides the opportunity for a more fundamental review of the franchise proposition. During the period to July 2016, therefore, train services on the Great Western franchise will continue to be based on the train service specification in the current First Great Western franchise. That means, among other things—I hope that the hon. Member for North Cornwall will be reassured by this—that through train services between London and Cornwall and the popular London to Penzance sleeper train will continue to be required.

Hon. Members, local authorities and other stakeholders have shown a keen interest in improvements to local train services in the west of England, and this is where I should like to pick up on some of the points made by the hon. Member for North Cornwall about Bodmin. Local authorities in the west of England have established an impressive record of contributing to improvements to rail services in their areas, as he mentioned. They continue to develop schemes, and the invitation to tender for the now terminated Great Western franchise competition included a number of priced options that would enable local authorities to take those schemes forward. In Cornwall, they included enhanced Plymouth to Penzance local services; the extension of St Ives trains to Penzance; additional Looe line services; additional Exeter to Okehampton services, which the hon. Gentleman mentioned; and the Tavistock to Bere Alston line reopening, which will have an impact on his constituents and other people living in Cornwall, even though that line is in Devon.

I should like to confirm that First Great Western has been asked to provide prices for the priced options callable by local authorities during the interim agreement period to July 2016. First Great Western will be required to co-operate with local authorities in the continuing development of those priced options with a later call date.

The Minister was setting out the Secretary of State’s admirable plan to ensure that any investment—any progress on improving services—should not be delayed by three years. If First Great Western wanted to invest in rolling stock, for example, could a mechanism be found whereby that could be transferred either to another provider or to First Great Western for the substantive franchise, rather than any investment being delayed until three years hence?

I hesitate to give the hon. Gentleman a definitive answer, simply because I do not want to mislead him, but my immediate reaction to the question that he raises is that there is the possibility that that could be looked at, although obviously I can give no guarantees as to the ultimate outcome of any proposals or investigations.

The hon. Gentleman was extremely keen to explore the possibility of regular train services being reinstated between Bodmin General station and Bodmin Parkway, along the heritage railway that has preserved that rail route, and I listened very carefully to him. First Great Western will be required, during the interim agreement period to July 2016, to co-operate with local authorities in the development of new schemes. We believe that it is important for local authorities, rather than central Government, to make decisions on local priorities, so local authorities should identify what local funding sources are most appropriate for a rail scheme and decide themselves whether to fund a rail scheme such as the proposed reinstatement of regular trains to Bodmin General. I assume that, in the light of that, the hon. Gentleman will be in swift and concentrated discussions with Cornwall council to see whether that proposal could be moved forward at local level.

I should like to take this opportunity to highlight the great work done by the Devon and Cornwall Rail Partnership, which is one of several designated community rail partnerships operating on the Great Western network. Those partnerships of First Great Western, local authorities and local communities have been highly successful at promoting local lines and improving facilities at stations. Those routes are seeing unprecedented levels of growth in usage. I congratulate all those parties on the success that they have achieved through those efforts. I hope that they will continue to work to move forward and to improve, where that is feasible and possible, rail services in the peninsula of the south-west of England.

The hon. Gentleman asked whether it was possible to bring forward works from control period 6 into control period 5. I would be grateful if he could leave that with me, because I think that there are some complications in being able to do that, but I will certainly give him a commitment that I will look at it and I will write to him once I have had an opportunity to investigate fully the implications and the reality of what he asks.

I hope that the hon. Gentleman will accept that a considerable amount of work is being carried out by the Department, Network Rail and the rail operators themselves to ensure that they continue the forward movement of improving and enhancing the provision of rail services throughout Devon and, particularly, Cornwall. I cannot guarantee that the hon. Gentleman will find, in the next five or 10 years, his constituency awash with railway lines and services, but I can wish him well in his discussions with Cornwall council regarding his proposals for Bodmin. I wish him every success in those discussions.

Thank you, Mr Burns. All the participants for the next debate are present, so we can move swiftly on to an important debate about funding for NHS patients in York and North Yorkshire, and it is a great pleasure to call Mr Hugh Bayley.

NHS Funding (York and North Yorkshire)

Thank you very much, Mr Streeter. At the end of April, the hon. Member for York Outer (Julian Sturdy), who I see in his place, and I met the health overview and scrutiny committee of City of York council to discuss the perilous funding settlement received by Vale of York clinical commissioning group. The meeting was also attended by Patrick Crowley, the chief executive of York teaching hospital NHS foundation trust, who said:

“The NHS system in North Yorkshire and York is on the brink of a crisis”.

At that meeting, the hon. Member for York Outer and I agreed jointly to seek a debate to discuss that crisis in Parliament. In the light of that, I hope, Mr Streeter, that you will allow the hon. Member for York Outer to make his own contribution to the debate. I am also pleased to see that the hon. Member for Selby and Ainsty (Nigel Adams) is present for the debate.

The funding for Vale of York clinical commissioning group has suffered a triple whammy. First, it started from the lowest base in Yorkshire and the Humber, because its predecessor body, the North Yorkshire and York primary care trust, received less money than any other PCT in the region. Secondly, the PCTs’ base funding was not split evenly between the five new clinical commissioning groups in north Yorkshire and York, and Vale of York CCG, which covers the city of York, received the lowest share of the funding. Thirdly, that meagre amount was top-sliced, because the former PCT had overspent its budget in the previous year. I will say a little more about all three issues, after which I will suggest an immediate remedy to the problems and a longer-term solution to the funding crisis.

The baseline funding received by PCTs in Yorkshire and the Humber in 2012-13 varied considerably across the region. North Yorkshire and York PCT received £1,475 per patient; Leeds received £1,550 per patient; Sheffield received £1,700 per patient; Wakefield received £1,800 per patient; and Barnsley received £1,900 per patient. Why did the other PCT areas get more? It was because the NHS funding formula allocates a base amount of money for each member of the public, adds or subtracts an element to reflect the age or youth of each person, and adds additional elements in respect of social deprivation. Areas of Yorkshire and the Humber other than north Yorkshire and York are deemed to face greater deprivation and, therefore, greater unmet health needs, and as a consequence they receive more money per capita.

The funding worked out through that formula, which reflects deprivation, was about £1,300 million for north Yorkshire and York in 2012-13. That sum was reduced this year by some £430 million, largely as a result of top-slicing for services to be provided on a national basis by the NHS Commissioning Board, which left some £865 million to be divided between the five clinical commissioning groups. However, they were not treated equally. Vale of York CCG received £1,050 per patient, whereas Scarborough and Ryedale CCG received £1,234 per patient, which is almost £200—20%—more per patient. The odd thing is that the same NHS foundation trust provides services for patients in Scarborough and Malton, which is part of Ryedale, and in the city of York. For some of those patients, however, there is substantially higher funding, which is likely to exacerbate the problems of postcode rationing. Some patients from the better-funded part of the patch will receive access to a wider range of treatments than those from the city of York.

How is the split justified? We are told that the funding was split between the clinical commissioning groups in north Yorkshire and York on the basis of the use that patients from their areas made of NHS services in the previous year. It is well known that middle-class people in more prosperous areas make greater demands of the NHS than do poorer people in deprived areas, so the two parts of the funding calculation for the Vale of York clinical commissioning group are pulling in diametrically opposite directions. The funding formula that allocates money to north Yorkshire and York reflects disadvantage, so north Yorkshire and York gets less than Barnsley, but the funding for the CCGs in north Yorkshire is split based on the use that they made of services, so relatively deprived inner-city areas of York receive less. The problems in those areas are not as severe as those in Bradford or Sheffield, but they are still greater than the problems faced by Richmondshire or Hambleton. It really is unfair to provide a baseline pot of money based on a lower allocation for north Yorkshire and York because it is deemed to have lower deprivation, but to choose the most deprived part of north Yorkshire and York and cut the funding further because people in deprived areas do not use health services as much as people in more prosperous areas.

I understand that when the funding body was determining how to split funding between the CCGs in north Yorkshire and York—indeed, across the country—it decided to use a demand-led formula rather than a needs-based formula, but it looked at what the results of a needs-based formula would have been. I asked the Minister whether he would release that information, but it was not readily to hand. If at least he released the figures on the north Yorkshire and York split, it would help us to work through with clinicians and health service managers in our patch whether the current double whammy, as I call it, is appropriate.

When the group of North Yorkshire MPs met the NHS on several occasions this year, did the hon. Gentleman feel, as I did, as though it was less than transparent with us about how any of the calculations were made?

All of us in north Yorkshire and York share concerns about the low level of funding for our patch. I share the hon. Gentleman’s concern about the lack of transparency, which is why it would be enormously helpful for the Minister to ask his funding advisory panel to carry out the calculation I have mentioned. That would illustrate whether there is a problem such as I have suggested, and it would help us to tease out an appropriate solution.

The third part of the triple whammy is that as a result of historical underfunding—under the previous Government as well as the current one—the North Yorkshire and York PCT had a deficit of some £20 million or £30 million year after year. As a consequence of the deficit in the final year of its operation, some £12 million was top-sliced from the baseline funding for the CCGs in our patch. I was afraid that that would happen, so on 4 July last year, I asked the former Secretary of State, the right hon. Member for South Cambridgeshire (Mr Lansley), whether he would guarantee that each CCG would start off with a clean balance sheet, and he replied that

“we, along with the NHS Commissioning Board, intend all the new clinical commissioning groups across England to start on 1 April 2013 with clean balance sheets and without legacy debt from primary care trusts.”—[Official Report, 4 July 2012; Vol. 547, c. 930.]

I do not think that anyone could argue that that was a slip of the tongue, because paragraph 3.2 of the Department of Health’s “Handover and Closedown Guidance” for 2012-13 states:

“CCGs will not inherit legacy debt.”

Furthermore, paragraph 4.5 of “The Operating Framework for the NHS in England 2012/13” states:

“CCGs will not be responsible for resolving PCT legacy debt”.

What should the Government do about this issue?

The first, and immediate, action should be to honour the commitment given to me in the House—similar commitments have been given to other hon. Members from north Yorkshire—and agree, as was requested by York’s director of public health in a letter at the end of April, that the Department of Health will “absorb and manage” the final north Yorkshire and York deficit, which is some £10 million to £12 million. I understand that that has happened in some areas, and has given those new commissioning groups a start without carrying debt that has arisen from management by predecessor bodies.

Secondly, I ask the Minister to assure us that in good time for next year’s funding allocation the contradiction between the needs-based formula that divides funding between the old PCT areas and the demand-based fix, which was used this year to divide the PCT patch budgets between the various commissioning groups, will be resolved.

It is a privilege to serve under your chairmanship, Mr Streeter. I congratulate the hon. Member for York Central (Hugh Bayley) on securing what is an extremely important debate for York and north Yorkshire.

The hon. Member for York Central, other hon. Members from north Yorkshire and I have tirelessly campaigned for some time to secure a fairer funding formula for York and north Yorkshire, so I am extremely pleased to be able to speak today about a matter that is so important to me and my constituents. The hon. Member for York Central has clearly set out the history of the primary care trusts—now the clinical commissioning groups—and their current deficit. However, despite the deficit having being reduced over the past 12 months, York and north Yorkshire CCGs—as the hon. Member for York Central mentioned—are still starting off on the back foot compared with all other CCGs across the country, and that is sadly resulting in a postcode lottery system for health care for our area.

As we know from the hon. Member for York Central, the disparity within the allocation of the funding formula is due to its failing to take into account the rural nature of our county and, most importantly, age.

I totally agree with my hon. Friend’s point about age. In north Yorkshire, we have one of the largest numbers of over-85s in the country, and the formula simply does not give enough weight to the ageing population. I would have though that it was as clear as the nose on your face that consideration must be given to the rural nature of a county and the degree of ageing of its population.

I entirely agree with my hon. Friend. That is why in my short contribution this afternoon I will focus solely on age.

We must note that under the previous Government the funding formula was changed and more money put into the national health service. In addition, deprivation was given more weight in the formula. On paper, ensuring that deprivation is the most important factor, seems, morally, the right thing to do. However, I believe that when that reasoning is put into practice it starts to fall down. The distortion within the funding formula has resulted in some areas being awash with money, leading to well-publicised vanity health care projects, such as the one in Hull, with its 72-foot ocean-going yacht at the cool price of £500,000. At the same time, York and north Yorkshire have consistently struggled, as ably put across by the hon. Member for York Central, to balance the books, which has resulted in their continuing to take difficult decisions about health care provision.

An example of such decisions is that the primary care trust had to stop offering routine relief injections for sufferers of chronic back pain. That decision has had a massive impact on the quality of life of many of my constituents—it has hampered their ability to work and has affected carers. I have raised that issue previously in this Chamber, yet people are again coming through my surgeries, as I am sure they are through the surgeries of other hon. Members here today, suffering from a lack of access to those important injections. The decision is consequently putting more financial pressure on areas such as welfare, and that far outweighs the cost savings made by local authorities under the funding formula. That demonstrates the lack of joined-up thinking under the current system.

It costs approximately eight times more on average for the NHS to care for a patient who is over the age of 85 than one who is in their 40s. York and north Yorkshire, as my hon. Friend the Member for Selby and Ainsty (Nigel Adams) has set out, has one of the highest population of over-85s in the north, and my constituents are really suffering under the current formula. York and north Yorkshire also has a high number of care homes, and a typical GP practice states that 50% of home visits can be taken up just by care home residents, even though that group makes up only 2% of the patients on its roll.

I therefore urge the Minister, through NHS England, to review the current funding formula, to ensure that age is given more weighting.

Was my hon. Friend not appalled, as I was, that when as a group of north Yorkshire MPs we sought clarification about why the NHS Commissioning Board had not given weight to the new Advisory Committee on Resource Allocation formula on age, we were told that the minutes of the meeting in which the decision was made could not be released, against the interests of all the people in our constituencies?

I entirely agree with my hon. Friend. The important thing, as has been mentioned, is clarity. We have not had clarity, and we really do need it, considering all the work that hon. Members have put into the issue in our patch.

The change we are discussing would guarantee a much fairer funding formula across the country, and ensure that funding went to those in most need and those who have the highest call on our invaluable national health service.

It is a pleasure to serve under your chairmanship, I believe for the first time, Mr Streeter.

I pay tribute to the hon. Member for York Central (Hugh Bayley) for introducing the debate and raising the important issue of health care funding. He, like all Yorkshire Members in the Chamber, is a great advocate for his constituents. It is important to debate such issues and, in particular, to look at perhaps the greatest determinant of need in the NHS, which is that many older people have very expensive multiple care needs—dementia, diabetes, heart disease—and to look at the very big human need, which is how better to provide dignity in elderly care. That is exactly why my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) adjusted the formula, slightly changing the weighting for deprivation, to reflect such demographic challenges.

My hon. Friends and the hon. Member for York Central will be aware that the responsibility for health care funding now falls to NHS England. I have committed NHS England to reviewing the funding formula, and I am sure that it will listen carefully to today’s debate on north Yorkshire and elsewhere.

It is important to highlight how funding flows work in the NHS, and it may be helpful to say a few words about how the new arrangements have changed the way in which funding is allocated. As Members have pointed out, the NHS is paid for by taxpayers, and the money is allocated to the Department of Health by the Treasury. For 2013-14, the Department has set key priorities for NHS England through the mandate. I will outline the priorities that will help NHS England to prioritise funding within the NHS, and aid in the interpretation and use of the independent data given to it by the Advisory Committee on Resource Allocation.

The first priority in the mandate is the focus on preventing people from dying prematurely by improving mortality rates for the big killer diseases to be the best in Europe, through improving prevention, diagnosis and treatment. There is a clear priority to improve the standard of care throughout the system, so that the quality of care is considered as important as the quality of treatment or the clinical outcome. That will be done through greater accountability, better training, tougher inspections and paying more attention to what patients say, so that we have a truly patient-centred NHS, which is as important as providing care and dignity of care for older people.

There is a clear priority to improve treatment and care of people with dementia, and to focus on the important role played by technology—particularly in rural areas, through telehealth and telemedicine—in delivering better care in the community for older people. A key focus is on improving productivity and ensuring value for money to make sure that our health care system stimulates and supports the local economy in relation to not only the obvious importance of keeping local populations well and at work, but the benefits that can be gained from synergies with the life sciences and the supportive and stimulating research from such important places as Cambridge.

The Department of Health has set the mandate and a clear sense of direction for the NHS, with the priorities that are clearly there. The Department then makes allocations to several health bodies, including Public Health England, Health Education England, the NHS Trust Development Authority and NHS England. For 2013-14, NHS England received £95.6 billion, and some of that money will then, in turn, be allocated to clinical commissioning groups, but allocations to individual CCGs and the formula used to decide them are now the responsibility of NHS England, which has the key role.

In making those allocations, NHS England relies on advice from the Advisory Committee on Resource Allocation, as Members have said. ACRA provides detailed advice on the share of available resources available to each CCG to support equal access for equal need, as specified in the priorities set out in the mandate.

NHS England does not, therefore set income on an equal cost per head basis across the whole country; allocations instead follow an assessment of the expected need for health services in an area, and funds are distributed in line with that, which means that areas with a high health need receive more money per head. Under the formula, the 10% most deprived areas received more than 30% more per capita compared with the 10% least deprived, as the hon. Member for York Central outlined in his comments about Barnsley.

The calculation is based on several factors. In particular, it is increasingly based on the age of the population, the relative morbidity and unavoidable variations in cost. The objective is to ensure a consistent supply of health services across the country: the greater the health need, the more money that will be received. I am sure that we all support that.

The shift from a PCT funding formula to a CCG funding formula resulted in changes to the allocation for each particular area in 2013-14, as the hon. Gentleman commented. Funding now often takes place at a more local level—at the CCG rather than the PCT level—which we hope will ensure better prioritisation for local health care funding, with the funding formula being more sensitive to local health care needs.

The CCG model covers only non-specialised hospital and community care, as well as primary care prescribing, but the older PCT model also covered the whole of primary care, specialised services and public health, the costs of which were transferred to NHS England. There is, therefore, no direct comparability between the old PCT funding formula and the new CCG formula, for the reasons that I have outlined.

Whenever there are historical funding problems, such as those we experienced in north Yorkshire, there are inevitably leaks or stories about potential rationing and cuts to services. In my constituency in north Yorkshire, there has been lots of media speculation that a hospital opened by the Duke of Gloucester less than two years ago might close or lose its minor injuries unit. I have an awful lot of respect for the Minister, because he has done the job professionally, but I urge him to press NHS England to consider the funding case for north Yorkshire and other rural areas, and to consider the special circumstances that we have to deal with.

I will of course continue to press NHS England and raise concerns, as we have with representatives from the area, about the funding challenges being faced in north Yorkshire. It is also important to be aware that, because of how the new system works, with a mandate that sets clear priorities, NHS England recognises the need for a review of the funding formula for not only north Yorkshire, but nationally.

I agree with the remarks of my hon. Friend the Member for York Outer (Julian Sturdy) and the hon. Member for York Central about ensuring that funding goes to areas of greatest health care need. NHS England will obviously want to take account of rurality, age, the needs of older people and the complexity of care when it reviews the funding formula.

The Minister says that Barnsley gets more money than north Yorkshire because of its higher level of deprivation, which I acknowledge, but why has the new formula given York less money than leafy Richmondshire and Hambleton, when York has higher levels of teenage pregnancy, drug addiction and deaths from asbestos-related diseases among people who had a career in industry. We have higher levels of deprivation than other parts of north Yorkshire, and yet we get less money. That cannot be right.

The hon. Gentleman makes a good case on his constituents’ behalf, but he should recognise that the Vale of York CCG—it serves not only his constituency, but others in the surrounding area—has received £357,891,000 which is the highest allocation in the area. He is right that its allocation is relatively lower per head than, say, that of Scarborough and Ryedale CCG, but I have outlined the factors that inform the capitation formula for funding, including density of population, and the obvious advantages of delivering health care in an urban environment.

I would be very happy to talk through such issues with the hon. Gentleman and my hon. Friends who are here today, and I am sure that we can arrange a meeting to do so in more detail than this debate allows. I also point out that NHS England will fundamentally review the funding formula to take account of demographics, age and rurality, which I am sure we all welcome. I look forward to meeting hon. Members in due course for further discussions and to see how I can assist them with the matters that they have raised.

Question put and agreed to.

Sitting adjourned.