Wednesday 10 July 2013
[Mr Jim Hood in the Chair]
Postal Services in Scotland after 2014
Motion made, and Question proposed, That the sitting be now adjourned.—(Greg Hands.)
After 2014, there are two alternative futures. There is the possibility of separation or of Scotland remaining within the United Kingdom. The debate must take into account which is more likely. I looked this morning at the William Hill website, and I see that it is 9:1 on that there will be a no vote in the referendum. Bookies are not in the business of losing money, so I think it is safe to assume that the bookies have got it right. Therefore the question of separation is now largely hypothetical.
I congratulate my hon. Friend on obtaining the debate in such a timely fashion, given the pretty dreadful announcements that we expect later this afternoon in the House. Does he agree that in this situation competitors should operate on a level playing field, and that the private sector should not be allowed to cherry-pick some of our greatest national assets?
Indeed. I intend to come on to that, but I want to make the initial point that now, as distinct from when I first applied for the debate, the question of separation is largely hypothetical. Therefore we need to discuss the future of postal services in Scotland in the context of remaining in the United Kingdom. Many of us who have been involved in previous elections have seen, either from our own party or the one that is now in government, a decapitation strategy, but I never expected to see the yes campaign operating a self-decapitation strategy, ejecting members of its leadership, as it is doing. It is now pretty clear that the yes campaign is no more than a sham. Essentially it is an SNP campaign for separation.
I want to turn to the question of the future of Royal Mail within the Union and under the present Government. I never thought that I would see a Liberal Secretary of State proposing privatisation of the Post Office, and a Liberal Minister supporting it in a Westminster Hall debate. Who—among those of us who can remember how Liberals previously campaigned for this post office to remain open, or in defence of that aspect of Royal Mail, always blaming someone else—would have thought that they would be the drivers of the privatisation of Royal Mail? A Liberal Secretary of State will this afternoon call for its privatisation. What a turn-up for the books. Well, well.
We must be clear about the Royal Mail’s position. It is clearly not a company in crisis. It has been suggested that it faces imminent danger, and that privatisation is the only answer. That is simply not correct. Its profits more than doubled in the past year, to £403 million from £152 million in 2012. Revenues grew by 5%. The Government, correctly, have taken over the assets and liabilities of the Royal Mail pension scheme, which saves the company £300 million a year. Parcel volumes are growing. Royal Mail, admittedly, used to be a letters company with a parcels business attached. Now it is the converse: essentially a parcels company with a letters business attached. Therefore, adjustments are obviously required. However, it is adjusting. Its business is expanding and it is doing exceptionally well.
Why, then, is there a drive by the Government for privatisation, fronted by the Liberals? Is it because, as has been argued, Royal Mail can have access to money only if it is in the private sector? That is clearly not correct. Network Rail, for example, which is essentially in the public sector, has access to private sector money and borrowing. When Moses came down from the mountain with the ten commandments, he did not also have the Treasury rules on a block of stone. Those rules were drawn up by the Treasury and can be changed by the Government. The Government—and particularly the Liberals, which I find particularly appalling—choose to argue that Royal Mail needs private capital and that the only way it can be brought into the business is through privatisation.
The Labour party is opposed to privatising Royal Mail. We want to clarify why the Government are in such a rush and are pressing forward with the proposal now. Is it simply because of the deficit in the Government finances, and because they want a large influx of money to pay for bankers’ bonuses? Should Royal Mail be privatised to pay for bankers’ bonuses? That is one of the questions to which we need an answer from the Government. There are credible alternatives to privatisation. There is no crisis to solve, and therefore it is inexplicable—other than that it is ideologically-driven—that the Government should be putting the proposal forward.
The obvious anxiety is that the universal service will come under pressure with privatisation. The point of introducing private sector finance will be to allow those in the private sector who buy shares to make a profit. They will obviously seek to enhance that profit by driving down costs, and one of the best ways for them to do that will be through the universal service obligation.
The Government have shown that they are willing to undermine Royal Mail at every opportunity by, as my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) said, allowing other people to cherry-pick the best fruits—the busiest areas—and drain funds from Royal Mail, so that it will not be able to cross-subsidise as an overall national service would. [Interruption.] We cannot have faith in a system of regulation. We have seen, for example, that the power company regulators have been impotent—[Interruption.] One of the Scottish National party Members keeps chuntering away. Would the hon. Member for Perth and North Perthshire (Pete Wishart) like to intervene, or does he just want to chunter?
Order. The hon. Member for Perth and North Perthshire cannot have a chat across the Chamber. If he wants to intervene he should do so, but he should not comment while a Member is on his feet speaking.
Thank you, Mr Hood. It is interesting that SNP Members choose not to intervene, but just to chunter from a sedentary position.
The Government claim that the universal service is enshrined in law, but I understand that that covers only the bare minimum, and we are of course aware that the Government cannot bind their successor. It cannot be guaranteed that future Governments will abide by pledges that are given now.
We have seen the Government’s bully boy tactics over imposing privatisation, and, once again, in the chuntering and shouting from the side, we have seen the SNP’s bullying. Is it time that we all stood up for what is right—for the workers and the people who use Royal Mail every day?
Of course we should stand together. Those of us who oppose the privatisation of Royal Mail should make our opposition clear and vote together against what is being put forward, to my astonishment, by the Liberals. We would normally expect an alliance in Scotland between the Labour party, the nationalists, the Greens and the Liberals against a Conservative Government who are proposing privatisation, but we are not in that position.
The hon. Gentleman makes an interesting case, but he must know that the SNP has stood against, and continues to stand against, the privatisation of Royal Mail, whether it comes before or after independence.
Yes, I am aware of that. That is why I am saying that I can see no reason why the hon. Gentleman’s party, the Labour party and indeed the Greens, who I understand also oppose privatisation, should not be campaigning jointly against the forces of darkness, as represented undoubtedly by the Conservatives. What surprises me is the way in which the Liberals seem to be aligning themselves with the forces of darkness on privatising the Post Office. A year ago, two years ago or three, four, five years ago, who would have expected that the Liberals would be the people proposing the privatisation of the Post Office in the House this afternoon? That is a disgrace. [Interruption.] If my chuntering friends from the SNP are willing to campaign with us, we will campaign across Scotland.
Will the hon. Gentleman give way?
I will give way to the chuntering Liberal.
It may be helpful if I correct the record. The hon. Gentleman just mentioned the privatisation of the Post Office, but it is important to be clear that this is not about the privatisation of the Post Office. Royal Mail is up for privatisation; the Post Office is absolutely not.
I thank the Minister for that clarification. I am sorry, but like many of us, I remember the days when Royal Mail and the Post Office were part of the same organisation. I sometimes have a tendency to use the names interchangeably. I excuse her from any suggestion that she is in favour of privatising the Post Office. However, she does stand charged of wanting to privatise Royal Mail. If she wants to correct that, I would be more than happy to give way to her again. [Interruption.] All right, there is silence.
I thank the hon. Gentleman for giving way once again. I remind him that we opposed privatisation when Labour tried to privatise Royal Mail, and we continue to oppose it now. In fact, I attended the Backbench Business Committee yesterday with his colleague, the hon. Member for North Ayrshire and Arran (Katy Clark), to ensure that we get a debate on privatisation as soon as we come back after the summer recess, before this pernicious Bill goes through.
I am not suggesting, nor have I suggested at any point, that the SNP supports privatisation. Despite our disagreement on those issues on which the SNP is wrong, we can work together to oppose the privatisation of the Post Office. I see no difficulty on that whatsoever. It is entirely possible to find ourselves in strong disagreement with people on some issues yet work together with them on others. I extend the clenched fist of friendship—[Laughter.] I extend the hand of friendship so that we are able to work together against the Liberal proposal to privatise the Post Office.
That’s the wrong name.
I am sorry. I meant Royal Mail.
I congratulate my hon. Friend on securing this debate. I am sorry to break the hand of friendship that he has offered to SNP colleagues, but does he not agree that actions speak louder than words? In 2009-10, the Scottish Government awarded £220,000 of contracts to DHL, which delivered 6,162 pieces of literature. FedEx was awarded £49,514 of contracts in 2010-11, and an £8 million contract has just been awarded to TNT, instead of Royal Mail. Does that not demonstrate the Scottish Government’s commitment to Royal Mail and its workers?
Goodness me! That is a surprise. I look forward to hearing from SNP Members, who are campaigning very strongly with us to oppose the privatisation of Royal Mail, as to why the Scottish Government, which they control, have been giving such contracts to the private sector. Goodness me, there must be some mistake, surely. [Interruption.] Are we going to get a correction? No, we are not. I can remember elections in which certain people sent mail through private companies, but those were just mistakes. Such things happen.
Let us be clear that a privately owned Royal Mail will undoubtedly apply downward pressure on the universal service obligation. We have seen that happen in Holland, for example, where the privately owned universal service is now likely to be reduced from six days a week to five days a week, with services being dropped on Mondays. We must recognise the alternative that lies in the private sector by looking at what private sector operators undertake at the moment. TNT, for example, operates on a principle of zero-hours contracts, whereby people who deliver for TNT are employed for zero hours. TNT constantly invites more people to the workplace than it needs on any given day so that it can guarantee itself enough numbers. That means, of course, as we used to see in the docks when they had the casual labour scheme, people are being turned away, potentially day after day, by privatisers who are treating workers simply as commodities, leaving those workers with zero hours on many occasions, which means they are unable to feed their family during the week. We can have little faith in the system of regulation, because nobody who understands the way in which the privatised industries have been operating has any confidence in the way in which they have been controlling those companies to date.
Finally—as you have previously indicated to me, Mr Hood, when a Member of Parliament says “finally” it usually means that he or she is about 40% of the way through their speech but simply wants to give their audience hope—I will address the question of the alternative future. As I indicated earlier, William Hill has odds of 9:1 on on there not being a no vote—sorry, I mean on there being a no vote. That is a bit like the confusion of Royal Mail and the Post Office.
The alternative future of separation calls into question the future of postal services in Scotland, and I understand that the SNP—rather than the yes campaign, because it has been marginalised, as we all know—has indicated that it intends to ensure a universal service obligation. My understanding is that the SNP has also indicated that there would be one price throughout Scotland, but it has not specified whether that one price would be the same price that applies in the rest of the United Kingdom, and I think it would be helpful if the SNP did specify that at some point. As we approach the referendum, there is an obligation for the SNP to clarify how it intends to fill the gap in financing Royal Mail in Scotland after separation, because that gap is presently filled by cross-subsidy from the rest of the United Kingdom. Operating a national service clearly involves cross-subsidy for rural areas, of which Scotland has a disproportionate number.
Is not Royal Mail an excellent example of the dividends of sharing and pooling resources to promote fairness within a strong UK?
Absolutely. Royal Mail provides a service, particularly throughout the highlands and islands and the most scattered rural communities in Scotland, in a way that the private sector does not. It is noticeable that when the Select Committee on Scottish Affairs investigated the provision of postal services to rural communities, which was quite some time ago—when the SNP was still on the Committee, before it took the huff and walked off—it was clear that the private sector was not delivering to those rural communities; it was refusing to deliver to a variety of postcodes where the costs were much higher than elsewhere. Royal Mail was the only one that would deliver to those communities at the standard and universal price, and it is the cross-subsidy system that makes that viable.
Those who would break Scotland away from the rest of the United Kingdom have an obligation, as we approach the referendum, to spell out exactly how much they anticipate would be required from Scottish taxpayers to meet the costs of the universal service obligation. They cannot say that they want European or continental standards of service while at the same time being unwilling to pay for them because they want to reduce taxation levels, particularly on business. That simply does not add up. People in Scotland deserve to know the truth.
I can remember when the arc of prosperity was being floated a while ago. That was in the days when the SNP was actually against being in NATO. But we have had two changes since then, if I remember correctly: the first was that membership would be automatic, and now Keith Brown has conceded that it would not be automatic. Things change.
None the less, the Scandinavians were held out as an example to Scotland. Are hon. Members aware that in Norway, a first-class stamp costs the equivalent of 103.9p? That is the Scandinavian model. Is that what Scotland will have after separation? I think that we deserve to be told. What will the price of first-class stamps be in a separate Scotland? Will posting mail to other parts of the United Kingdom cost the same as at the moment? It is far more expensive to post mail from Northern Ireland to the Irish Republic than to other parts of the United Kingdom. In those circumstances, the Irish Republic is a foreign country, as Scotland will be to the rest of the United Kingdom.
For completeness, I am sure that the hon. Gentleman will point out that sending mail from the Republic of Ireland to Northern Ireland costs the same as sending it within the Republic of Ireland.
That is a choice that the Irish made, but the cost of sending mail from Northern Ireland to the Republic is different. There is no guarantee at the moment about what will happen. Are SNP Members saying that they will guarantee that the cost of sending mail from any part of Scotland to any part of the United Kingdom after separation will be the same as sending it within the United Kingdom? If so, that must be costed. We cannot have people simply plucking uncosted promises out of the air.
My hon. Friend is making such a good speech that I hesitate to intervene. Will he address the issue of independence from the point of view of the workers from the Communication Workers Union who came to see us last week? Will he bear in mind the jobs, the pensions and the individual rights of such workers? What assurance do we have that those will not change if privatisation goes through?
I am grateful for that point, because it was my final final point. Those of us who support Royal Mail remaining within the public sector—again, I extend the fist of friendship to my colleagues in the SNP; we should be campaigning together on this issue, on which we agree—need clarification from the Liberals about what the future holds for those whose services will be privatised and those who work to deliver those services.
Many postal workers have spent a lifetime in devoted service to Royal Mail. Many have worked above and beyond the call of duty. Many postmen and women in rural areas provide an essential lifeline to local communities, doing things far beyond the normal routine that we might expect in cities. What future do they have? Will this Government guarantee that there will be no deterioration in terms and conditions? Do they expect that private employers will be allowed to drive down wages and conditions as TNT has done? Why are they prepared to accept TNT handling this country’s mail at the moment on zero-hours contracts? We need answers to all those questions.
I am enjoying the hon. Gentleman’s speech immensely. I am having great fun, and I thank him for securing this important debate. He challenged the Scottish National party about what we would do post-2014. He has challenged the Liberals and the Government about what they would do post-2014. What would the Labour party do? The Government are going to privatise today. Would the Labour party put Royal Mail back into the public sector? We need certainty.
At the moment, there is no certainty. As with a number of things, I anticipate that the Labour party will work up a manifesto for the next election. We will try to ensure that we have identified our priorities, and we will put those clearly before the people. In the meantime, we will do everything that we can to ensure that the change does not go through.
So you do not know either.
Well, that is an interesting point. Of course we do not know at the moment where we will be in 2014. We are putting all our efforts into ensuring that privatisation does not take place, so we are focusing on that. It is a bit like the question of the bedroom tax. Nationalists are calling on Labour to clarify whether we will reject it in 2015, when at the moment, the SNP could be doing something about it in Scotland by helping local authorities but declines to do so. It could pay the costs of the bedroom tax to local authorities and social landlords now, but it refuses.
That is the difference between us. At the moment, we are relatively impotent, regrettably, because we are not in power here or in Holyrood. The power lies, in this case, with the Conservatives and their front men and women, the Liberal Democrats. Did I mention that it is surprising to me that the Liberal Democrats are fronting the privatisation of Royal Mail? What a scandal that is. People ought to be aware of it—[Interruption.] There is no point in the Minister shaking her head. She is letting her tresses flow back and forth; I wish I could do that. None the less, it is a fact that the Liberals are selling off the Post Office—[Interruption.] Royal Mail; I apologise. We are opposed to that.
Mr Hood, I know that a large number of other Members want to speak, so finally—finally, finally—I thank you for your chairmanship of the debate so far.
I have four speakers on my list, plus the two Front-Bench Members. I ask Members on my list to be considerate of others, so that everyone has time to speak.
It is a pleasure to serve under your chairmanship, Mr Hood. I congratulate my hon. Friend the Member for Glasgow South West (Mr Davidson) on securing this important debate.
The twin worries for Royal Mail in Scotland are privatisation and separation; both are equally worrying for a high-quality service that we have come to love and expect. As I am sure we are all aware, a number of questions have been raised on a variety of subjects regarding Scottish independence from the United Kingdom, ranging from EU membership, NATO, currency, passports and many other universal British institutions. The list is extensive. We ask such questions to scrutinise the plans of those who would break up the UK and challenge their scaremongering. Today, we add Royal Mail to the list of questions about what will happen. Royal Mail is an institution residing firmly in that list. We should be told how well that important service would function if it were retained in an independent Scotland.
Currently, Royal Mail has 11,500 branches across the UK and employs thousands of people throughout Scotland. It is a crucial service, ensuring that UK businesses and the economy run smoothly. For example, Royal Mail estimates that it can deliver an average of 84 million items of mail every working day. There is no disguising the scale, the efficiency and, ultimately, the importance of that institution across the United Kingdom. Royal Mail serves not only big cities but the far-flung areas of our country. The price of a stamp guarantees delivery, regardless of difficulties encountered from dispatch to destination.
To give a bit of history, it all started way back in 1635 when Charles I made the postal service available to the public, with the cost of postage being paid by the recipient; I hope that that does not give the Government any idea. However, it took a further century before the uniformed postie was seen on the streets, delivering door to door—something that we have become accustomed to and expect from our postal service.
Upon the Union of the Crowns, one of the King’s first acts in London, where he had decided to move to and set up home, was to establish the royal postal service between London and Edinburgh. At last, Scotland was part of a regulated postal service and, as time passed, Scotland grew in confidence, prosperity and assurance of a reliable communications service throughout the UK. Eventually, all across Scotland, we have come to use and rely on Royal Mail.
The service has grown and changed over the centuries. Royal Mail is now an integral part of business and private life; we simply could not imagine life without it. I am of an age to remember the GPO—the General Post Office—an organisation inclusive of Royal Mail and British Telecom. British Telecom was part of the ’80s privatisation drive, which is being pioneered again, but even the late Mrs Thatcher considered Royal Mail worth keeping.
The universal nature of delivery means that small businesses can rely on Royal Mail and have confidence in the quality of service and delivery, regardless of where they reside on the UK map. We must debate what the Royal Mail would look like if Scotland separated from the rest of the United Kingdom. The questions that need to be encompassed include whether there will be continuity of employment in the mail service and whether the number of depots and jobs all remain in Scotland post-independence—or might we see job losses?
Was the hon. Gentleman not paying attention to the news this morning? The Government are going to privatise Royal Mail. What would he prefer—the Tories and the Liberals, with their privatised Royal Mail, or us, the people of Scotland, running the postal service to our requirements?
Labour is the only party to defend the universal service obligation. The debate is about what a postal service in Scotland would look like post-2014. The two challenges to Royal Mail are not only privatisation, as I have rightly pointed out, but separation.
In my constituency, the sorting office at Knowe road employs about 150 people working full time, with some part time. Working in teams, they deliver throughout my constituency, which is diverse, with some rural and mostly urban communities. Daily, the Inverclyde office receives mail by road from Glasgow, where the large city sorting depot employs many hundreds of people more, directing the mail across the country, and that is replicated in all Scottish cities.
Individually, our engagement each day remains with the postie. Well known to the community, posties deliver to our doors in all weathers, six days a week, and that brings me to the quality of service and the delivery six days a week. Under privatisation and, as well, an independent Scotland, would we be guaranteed a six-day service? Could it be maintained? After all, we have come to expect our Saturday mail delivery; if ended, what would be the impact on business?
The price of a stamp has already been discussed by my hon. Friend the Member for Glasgow South West. What price for first and second-class stamps? Would there be a first and second-class service in a separate Scotland? Would sending a letter or document to the rest of the UK be classed as overseas mail? If so, how much would that cost? Those are all questions that we need answered. Furthermore, how would that affect Scotland’s businesses? Has all that been taken into account?
What of our postcodes in an independent Scotland? Postcodes are used to identify our homes throughout the UK quickly. Would they be retained in their present form or, as we have already heard about in Ireland upon separation in 1917, would the postcodes be changed? What would our postcodes look like?
There is a risk that a new mail service would not be anywhere near the size, scale and complexity of Royal Mail at present. Royal Mail is clearly vital for business, the economy and our everyday life. Much as we need electronic mail to speed and support business, we still require the physical mail. The rise of the e-mail and its challenge to the physical letter is now being outweighed by the rise of online shopping and the resultant increase in parcel delivery. Will Scottish online shoppers be penalised? Independence will mean being outside the UK, so will the cost to deliver increase?
Surely, before the Scottish people vote on the most important constitutional decision in their history, such questions need to be answered, and as soon as possible. Who knows, but, bizarrely, the ever-increasing popularity of the postal vote could contribute to keeping the UK together and Royal Mail in Scotland?
This morning, we have highlighted yet another concern for Scottish people—the impending referendum in 2014 and the future of Royal Mail beyond 2014. From applying a stamp to a letter to recognising the postie coming down our street in distinctive uniforms and vans, we have become accustomed to and reliant on the Royal Mail service as part and parcel of being in the UK. After all, one of the first acts of the Scottish King on coming to London to unite the Crowns was that he sent the royal mail north. Like many Scots, he recognised a good thing when he saw one; we still recognise Royal Mail as a good thing, and we want to keep it.
Disruption to Royal Mail services across the UK will impact not only on the Scots, but on the rest of the UK. We must hear how the SNP intends to sign, seal and deliver a mail service in an independent Scotland.
So that I can get in all the speakers on my list, I am imposing an 11-minute limit on the next contributions.
I am pleased to appear under your chairmanship this morning, Mr Hood. I congratulate the hon. Member for Glasgow South West (Mr Davidson) on securing the debate. He made a speech that, by his standards, was encompassing; I could agree with most of what he said until, tragically, he veered off towards the end.
According to Project Fear in Scotland, we might imagine that from the day after independence, Postman Pat will be leading a convoy of little red vans, making a break for the border. That is utterly ludicrous. The assets of the mail service—the pillar boxes, the sorting offices and equipment, the vehicles and, above all, the hard-working and magnificent staff of Royal Mail—will still be in place and will continue, whatever the ownership structure.
The first point to make is that none of us can know for certain what Royal Mail will look like either in 2014 or on independence day in 2016. It is being privatised by the Government; the Scottish National party will fight privatisation, as we have always fought it, even when the Labour party proposed it. If we are unsuccessful, however, we will have to deal with the position that we find on independence. The only protection that the consumer will have, if the privatisation goes ahead, is from the regulator, Ofcom, which should not give any of us comfort.
The hon. Member for Glasgow South West discussed the universal service obligation, and I share his concern. Under the Postal Services Act 2011, Royal Mail is obliged to continue a universal service and is the only one to fund it. The Communication Workers Union has already expressed concerns that Ofcom is allowing trials of end-to-end deliveries from other operators, which will inevitably lead to the cherry-picking of profitable routes in urban areas and the inevitable pressures that that will put on rural and less affluent areas. That is a problem not only for Scotland, but for all areas of the United Kingdom.
What protection does the consumer have for the universal service obligation? Last year, Ofcom decided that price caps should be removed from all Royal Mail products apart from second-class mail. As a result, the only truly universal service is second-class mail. First-class mail could be priced out of the reach of many people, and already our stamp price is one of the highest in Europe. Just how many people and, crucially, small businesses will send mail first class?
None of that is the result of Scottish independence—that is happening now, under the United Kingdom Government and as part of the United Kingdom postal service, even before it is flogged off to a private operator. The Scottish Government have given a clear commitment that, with independence, Scotland will at the very least match the current terms of the universal service obligation.
Will the hon. Gentleman guarantee that the Scottish Government’s White Paper will set out in detail how postal services would operate in an independent Scotland? Will a full costing be attached?
The Scottish Government will set out their plans. The hon. Gentleman asks us to do that, even though his party is trying to form a Government in 2015 and yet will not tell us what Labour will do with the postal service, because the manifesto is still being written.
We are told that the highlands and islands could get higher charges. Have Members who say that read the Postal Services Act 2011, because that is already possible under the present system? Indeed, Royal Mail has already tried to introduce zonal pricing in some areas. Nothing prevents Royal Mail or its new private owners from introducing zonal pricing in any service, other than the universal service, which, as I have already explained, could be nothing more than the second-class service.
I took the matter up with Ofcom, which wrote to confirm to me:
“Ofcom does not have any powers to restrict Royal Mail from introducing this pricing variation related to user location, as the Postal Services Act 2011 limits our regulatory powers to universal services and access”.
That comes from the horse’s mouth. Members might think that I am the only one to think this, but the Communication Workers Union made exactly the same point.
Section 43 of the 2011 Act allows Ofcom to review the USO and to recommend, among other things, a review of the minimum requirements. It could reduce what is covered by the USO. That is not the future that we want in Scotland. Royal Mail should be a public service, and if it has not been fully privatised before independence, we will stop the process in Scotland. We have never accepted the mantra of successive Labour and Tory Governments that Royal Mail must be looked at as merely another business. It is an integral part of the country’s infrastructure and will be treated as such in an independent Scotland. Indeed, the postal operator must be recognised as an economic driver, especially in rural areas, and not as a drain on the economy in competition for the resources needed for schools and hospitals, which is how it is so often portrayed by the present UK Government.
An old claim is that somehow postal charges between Scotland and England will increase, but Members should be aware that postal charges are co-ordinated through the Universal Postal Union. Letters and packages that start with one designated postal operator can be passed to other postal operators in other countries, and they take responsibility for forwarding them. Under the universal postal convention, there is an obligation on each country to ensure that such items are quickly delivered on the same terms and conditions as its internal mail.
There is absolutely no reason why costs should increase in Scotland. The Scottish postal service will decide the cost of postage in Scotland and to other destinations. In Ireland, the Republic has an all-Ireland price, and there is no reason why something similar cannot operate in Scotland. It would become a member of the UPU, as have other countries that have gained independence.
Will the hon. Member explain why the Scottish Government make extensive use of TNT’s services?
The previous Labour Government used TNT extensively because procurement rules force many Governments and public organisations to use such services. I have already said that Labour tried to privatise the industry, but Labour Members seem to forget that. The previous Labour Government tried to privatise postal services; we opposed that; and we continue to oppose it. We will ensure that the Scottish postal service meets the needs of Scotland and the Scottish people.
I do not normally intervene from the Front Bench, but for clarity I want to put on the record the fact that the previous Labour Government would have kept the postal service in public hands. The public sector would have owned 60%, so it is incorrect to say that the previous Labour Government wanted to privatise Royal Mail.
I am sorry that the shadow Minister does not remember his own policy. Lord Mandelson proposed privatisation of 49%, not 40%. The hon. Gentleman may believe that the situation would have stopped there, but the clear intention was to privatise. What will happen if privatisation goes ahead? In the Netherlands, where the universal service provider—[Interruption.]
Order. The hon. Member for Edinburgh South (Ian Murray) and the hon. Member for Glasgow Central (Anas Sarwar) should remain in order while the hon. Member for Angus (Mr Weir) is on his feet.
Thank you, Mr Hood.
I understand that, under the Government’s proposals, there will be an initial public offering on the stock market, but there is absolutely nothing to stop Royal Mail falling into the hands of an alternative provider such as Deutsche Post or TNT, and the history of privatisation suggests that that is likely. When the energy companies, BT and British Gas were privatised, most of the shares in the first instance went to small investors, but now the companies are owned by large institutions. It is very likely that that will happen to Royal Mail.
It is also likely that in due course a provider such as Deutsche Post or TNT will become the owner of Royal Mail. That is not to be welcomed, given the attitude of some of those companies to the universal service. The Communication Workers Union made the point that in the Netherlands, where TNT, the universal service provider, is privately owned, within a year of the mail market being fully opened to competition in April 2009, the managing director of TNT’s European mail network declared that the USO was
“a kind of Jurassic Park and we should be rid of it”.
The company plans cut down its deliveries.
Will the hon. Gentleman clarify whether a separate Scotland would intend to renationalise Royal Mail if it had by then been privatised?
That is a bit rich when Labour will not tell us what it will do in 2015, but I will be clear. It is my view that we should do so, and that is one of the options that we will be looking at. We believe that it must be in the interests of the Scottish people and all areas of Scotland, and that that can be achieved only by public service. We have experience in Scotland of courier deliveries and what happens when the service is private. That is my view and that is what I shall be pressing for.
Country-to-country transfers are well understood, and Royal Mail receives 266 million letter post items and 1.7 million parcels from international origins. The system works perfectly well. In 2004, member nations of the UPU adopted a system aimed at covering their actual mail processing costs. There is absolutely no way in which a mail operator in the remaining parts of the UK could impose excessive charges on a mail operator in Scotland for mail delivered to or from Scotland or in transit to another destination, because the costs would be identical to those within its territory. Before anyone gets excited, all recently independent states had access to the UPU almost immediately on gaining independence.
The hon. Member for Inverclyde (Mr McKenzie) talked about the workers. In fact, Royal Mail employment in Scotland is below the UK average and there is scope for making a better service and creating more employment. There are also prospects for helping the Post Office, which is not being privatised but is important to rural areas. We will build a delivery service for social security and many of the things that have been taken away from post offices. We will be looking to help post offices. Although it is a reserved matter, the Scottish Government have a good track record of helping post offices with a diversification programme, rates relief and business bonuses.
My time is running out, so I will end by saying that it is true that there are real dangers for postal services in Scotland post-2014. That danger does not come from Scottish independence; it comes from remaining in the United Kingdom and seeing a postal service privatised by the present Government. I predict that in the unlikely event that the Labour party forms a Government at Westminster in 2015, it will do what it always does and decide that it cannot reverse the privatisation. Labour will just go along with what the Tories have done. There will be a privatised postal service in the UK if the Government’s proposals continue. In Scotland, there will be a postal service that works for the people of Scotland and the communities of Scotland. We will build that as part of independence.
It is a pleasure, Mr Hood, to see you back in your place this morning. It is good to see you back among us. I congratulate my hon. Friend the Member for Glasgow South West (Mr Davidson) on securing this debate. As chair of the all-party group on post offices, I want to concentrate more on our post office network in Scotland, and what is going on out there.
I know that today is a big day for Royal Mail, with the statement that we will hear in the House later. However, to people right across the UK, and particularly in Scotland, the post office network is a vital part of day-to-day life, keeping in mind also that the Post Office depends heavily on generating a significant percentage of its work through Royal Mail. The Government, with a fanfare, introduced a subsidy to the network and embarked on what they have claimed is a programme of no closures, but the picture out there is somewhat different in many of our communities. I will quickly go through some figures, and towards the end, I will raise one or two issues with the Minister.
We have just over 1,400 post offices in Scotland, which has 12% of the UK’s 11,800 post offices. Some 67.6% of post offices in Scotland are rural, whereas in the UK, 54.6% are rural. Some 32.5% of urban post offices are urban deprived, compared with just under 25% in the UK, and 28% of Scottish post offices are the only retail outlet in the area. Work done by what used to be Consumer Focus—now Consumer Futures—shows that 49% of the population in Scotland visit a post office once a week, while 58% of residents in accessible rural areas do so. Scottish post offices are visited once a week by some 60% of residents in remote rural areas, 63% of people aged 65 and over, and 63% of disabled people.
The Government produced plans for safeguarding the post office network, as I said. The social and economic changes, along with a withdrawal of Government services and growing competition from alternative service providers, have put serious financial pressures on the post office network in recent years. Between 2001 and 2012—I appreciate that the bulk of that time was under a Labour Government—26% of Scottish post offices closed. The figure UK-wide was 34%. Concerns about the future viability of the post office network led to Government proposals for the modernisation of the network. Published in November 2010, those plans were designed to make the network more financially secure and to prevent further closures. We need to keep in mind that all those businesses are small businesses, and people endeavour, as best they can, to produce a livelihood from the work that they are doing.
Let me deal with sub-postmasters’ income. The net Post Office pay is used to pay for the running of the post office, including the sub-postmaster’s own drawings, staff salaries, rent or mortgage, and any other overheads. In Scotland, the average net Post Office pay was just under £2,000 a month last year, which was down from £2,377 in 2009. That is a drop of some 19%.
The post office has traditionally been the key local outlet where the public can interact with government. I know that there has been a great fanfare of more government work—that is, local government, as well as central Government—but the income from providing government services across the UK fell from £576 million in 2005 to a mere £167 million in 2010. The Scottish figures reflect that massive reduction. The Government have, I would say—I am sure that the Minister will say differently—failed to deliver on their pledge. The few new services that have been introduced are one-off transactions available only in a small number of post offices. No new major government services have been awarded to post offices since May 2010.
I will provide some additional figures, for which I want to thank the National Federation of SubPostmasters. Research has shown that the overwhelming majority of Scottish sub-postmasters are making no income at all from certain services: 92% earn nothing from ID-checking services; 71% earn nothing from the passport check-and-send service; 59% earn nothing from Driver and Vehicle Licensing Agency transactions; and 92% earn nothing from payment services. Other services, such as the benefit cheques, or “green giros”, and national savings and investment products have recently been withdrawn from post offices.
Each and every one of us in this Chamber was delighted when, in November last year, the DVLA contract was awarded, or re-awarded to the Post Office, but the picture out there is somewhat different. Sub-postmasters are seriously worried that there is a precedent of falling rates of pay for transactions directly linked to all of that, and income is undoubtedly dropping even after having been re-awarded that contract. What lies ahead, later this year, are benefits and universal credit. The system that will be introduced contains no mechanism to allow some of the poorest and most vulnerable in our society to access their money—their benefits. We all realise that we have a job of work to do, as elected representatives, to protect some of the neediest and most vulnerable people in our communities and in society in general. If that money is finding its way into a Post Office account, will there be some way to ensure that peoples’ rent, utility bills and council tax is actually paid? Nothing is in place at the moment, and we are about to embark on that system.
I will tie up my comments quickly, but I want to come back to the point that I raised with the Minister yesterday, because I am deeply concerned that we do not appear to have the full facts and figures on what is happening out there with post offices. I will repeat what I said—I know that she has promised to come back to me in writing, but she has not done so yet, unless she has done some writing overnight. Will she share with us the number of sub-post offices that are temporarily closed or have had to move to an alternative, temporary service delivery system? Communities are desperately seeking answers.
Finally, I want to say that we did have another fanfare in the past two or three years, about the delivery of credit union services through post offices. That has disappeared; no one seems to know where it is. If there is about to be an announcement on the matter, it has been a long time in the making. I recognise full well that, under the previous Government, there were two closure programmes. I say to the Minister that I supported those programmes, because they were about service delivery across communities, with people having access. What we are seeing at the moment are temporary closures, with the Post Office desperately looking to find someone else to take on a post office that is sitting vacant. However, it needs to be understood that the income of sub-postmasters and sub-postmistresses has been so badly hit over the past two or three years that there is little wonder that no one wants to take up that offer of opening a business under the terms of a post office. We may not have seen a programme of closures under the current regime, but I worry that if we have another Conservative or Conservative coalition Government in 2015—heaven forbid—we would undoubtedly see a programme of closures like we have never seen before.
It is a pleasure to speak under your chairmanship, Mr Hood, and I congratulate my neighbour across the Clyde, my hon. Friend the Member for Glasgow South West (Mr Davidson) on securing the debate.
I know what privatisation is all about. I was a member of the General Post Office. That became the Post Office, which was then split up into the Post Office and British Telecom, which I became an engineer in. Of course, the Post Office has now been split up into Royal Mail and the Post Office.
More than 250,000 people were working for BT when it was privatised in the 1980s. I am not sure of the exact figure these days, but it is around the 90,000 mark. That gives some idea of what has happened to a privatised industry over the years. Some of those job losses would have occurred anyway because of new technology, but the same cannot be said for the Post Office, and Royal Mail and post offices have, sadly, seen staff numbers go down. Many hon. Members, particularly from the separatist party, have mentioned the CWU. I was a member of the CWU. I had the honour of being a member of that union back in the days when it was the POEU, the Post Office Engineering Union, and then the NCU, the National Communications Union, and a very good union it was too. Then I became a member of Connect, which was for the management side of British Telecom, and from there I became a Member of Parliament.
What could happen to the Post Office in the years ahead I do not want to think about. My hon. Friend the Member for Glasgow South West is right to say that the Liberal Democrats have taken on the role of head executioner and are being used yet again for legislation that is not what the country would vote for if it was given a vote on this issue. The Minister is another of my constituency neighbours; her constituency is to the north of mine. I look forward to it coming back to Labour at the next election and having a Labour neighbour next time round. Her party is doing its best to ensure that she is not re-elected.
We have seen already the cherry-picking that goes on in the post office industry. That worries me a great deal. As the Post Office is sold off, we have seen what services the Scottish Government are using. My hon. Friend the Member for Glasgow Central (Anas Sarwar) mentioned this. DHL delivered 6,162 items, costing £220,047, in 2009-10 alone. FedEx—it is important that we mention all these things—delivered 1,566 items, costing £49,514. An £8 million contract was given to TNT in 2009. The Scottish Government can say that they were adhering to the rules. I do not know that that is true. I am not saying that it is not true, but I do know that they cannot spout about how much they are doing to protect post offices and post office workers and at the same time undermine their jobs.
How does that compare with the present UK Government? They want to get rid of the Post Office. Hon. Members have said that the previous Government wanted to get rid of it too, but I say to them that it was Labour Back-Bench Members who stopped that privatisation or partial privatisation. It was not Liberals. It was not the SNP. It was not Conservatives. It was Back-Bench Labour MPs such as my hon. Friend the Member for Glasgow South West, who secured this debate, who spoke the loudest to try to stop that privatisation, and they did.
I just want to bring this clarity to the debate. Yet again, the hon. Gentleman has been talking about privatisation of the Post Office; I think that he means privatisation of Royal Mail.
No, I was talking about privatisation of the Post Office. Let us remember that the Post Office was split into Royal Mail and the Post Office. The next step of privatisation will involve the Post Office. The hon. Lady may be confused. Then again, I could be confused—that is always possible—but I do have some questions to ask her and I would like to know whether she has asked questions of the Scottish Government about exactly where we are in relation to privatisation of the Post Office. What will happen in Scotland in the event of privatisation? What about what is happening in 2014? Have the Government taken that into consideration, albeit that the bookies are giving odds of 1:9 on separation? We hope that we will not have that, but what are the implications for the free movement of post across the border?
Has the Minister asked the Scottish Government what they would do in relation to the free movement of post that has originated from south of the border or, for that matter, from Northern Ireland? What would the impact be on Scottish businesses in those circumstances? What planning have the Scottish Government done in relation to separating Royal Mail and the post offices in the event of a 2014 win on their part?
What would the impact be on jobs? We have heard that there are 12,500 jobs in the post office industry north of the border. We heard comments on this issue from the hon. Member for Angus (Mr Weir), whom I have a lot of time for. We have been on Select Committees together, and I respect him in a lot of ways. We do not always agree with each other—that is for sure—but he is usually worth listening to, although perhaps not so much today. I am trying to find out different bits and pieces of information and I have further questions for the Minister, but I do want to congratulate the hon. Member for Angus, because it would be churlish not to, on the early-day motion that he tabled, with the support of the CWU. It got cross-party support from 71 MPs. Funnily enough, there were no Tories, but he did get some Liberals, yet it is the same Liberal party that is helping to front up this future privatisation.
I do not wish to duck responsibility, but the Liberal Democrats in fact had argued even in the last Parliament that if Royal Mail was to succeed and compete, it would have to attract private investment and private capital and the best way to enable it to do that would be to privatise it, so it is not as if we are going along with a Conservative proposition; it is our policy that is being implemented by Liberal Democrat Ministers.
I thank the right hon. Gentleman for that intervention. When I am putting out my election leaflet in a few years’ time, that will certainly be in it. I know that the hon. Member for Angus and his colleague, the hon. Member for Perth and North Perthshire (Pete Wishart), will be doing the same, as will many other Opposition Members, so I thank the right hon. Gentleman for that clarification. It is important that we understand exactly what the position is, and I am sure that the Minister will back him up when she makes her contribution in a few minutes’ time.
Can I tell my hon. Friend that I saw a Liberal in my constituency once? We do not need to bother putting out leaflets against them there, but that was an incredible announcement from the right hon. Member for Gordon (Sir Malcolm Bruce). We are now being told that the Liberals are not simply dupes of the Conservatives in this matter; they are actually the drivers of the privatisation of Royal Mail. It is incredibly helpful to have that on the record. I am sure that they will pay a very heavy price for it at the next election.
I thank my hon. Friend for that intervention. He is probably right, but democracy is not always fair. It does not always work out the way we want it to. That said, it is our duty to ensure that the electorate are given all the information possible, and certainly Opposition Members will hold to account not only the Government, but the Liberals. In the last two general elections, the Liberals were second in my constituency, albeit more than 10,000 votes behind me. That said, they were still second. I would wager that they will not be second next time—we might have to give odds of 1:9 on that as well.
I say to the Minister that the rules were for guidance. I think that that will be appreciated. They were never supposed to be written on tablets of stone. They were there to guide, not to tell people what to do. Perhaps, when we are looking at the rules and things that have happened in the past and looking to the future, we can look to guidance, rather than strict rules, because one of the hardest things for any management or even any union is to be given rules that they think have to be abided by 100%, yet are used for guidance. In relation to some of the guidance, I would be inclined to ask what can be done for rural areas, the highlands and islands—generally, areas outside the city centres. I am very lucky; I live in an inner-city constituency, but I know that if Scotland were to become independent and the costs for postal services in Scotland were all to be grouped together, the people of Glasgow North West would pay an inordinate amount more than people in rural areas for service, because it will be cheaper to send stuff in my area and they will have to subsidise people outside my area. Will that be the case? Should it be the case? If not, what guidelines will the Government produce?
I will not go on, Mr Hood. I was going to mention other bits and pieces, but my colleagues have said almost everything. The only thing I want to say is that the Post Office means a hell of a lot to me. I was a GPO member and a Post Office member many years ago. I was on strike against privatisation for three weeks. I helped with picketing and making signs for picketing. It was never easy. Union members do not go on strike because they like strikes; they go on strike because they feel that they are being hard done by and they have a cause. If privatisation comes forward and all the people who want to invest in the Post Office look at what happened in the past, they will see that this is a different kind of privatisation, which may or may not make them money. If we are making money now in the Post Office, why would we get rid of it and put everything in jeopardy? Union members will feel hard done by and may take industrial action. I know that I will stand with them if they do, because they will be fighting for jobs.
It is a great pleasure to serve again under your chairmanship, Mr Hood. I congratulate my hon. Friend the Member for Glasgow South West (Mr Davidson) on producing in his wonderful fashion 25 minutes of wonderful speech defending not only Royal Mail and the Post Office, but the Post Office and Royal Mail as well. Time is short, so I will not run through the issues with the privatisation that is happening now at UK Parliament level; there will be a statement in the House at 12.30 pm, where the Government will lay out their plans for privatisation. It is important to be crystal clear about the Opposition’s position: we are 110% against the privatisation of Royal Mail. There was a debate in the House last week, so I will not run through the reasons for that position.
I am absolutely delighted that Liberal Democrats have said on the record this morning in this Chamber that privatising Royal Mail is Liberal Democrat policy, not only Conservative party policy. The Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) wrote a letter in 2009 to the Communication Workers Union, saying that he was against privatisation, so perhaps only Liberal Democrats are for it and the Conservative party is against it.
Now that the Edinburgh agreement has been signed and the referendum will happen in September 2014, Scottish people, Scottish politicians and civic Scotland—if I may use that unwieldy phrase—are asking serious questions about what services will look like post-independence if they vote yes. We always say that Scotland can of course be an independent country, but what kind of country will it be? I am waiting for the hon. Member for Perth and North Perthshire (Pete Wishart) to jump up or tweet to say that all we are doing is scaremongering, but we are asking the legitimate questions that the people of Scotland want answered. If he does not want to take my word for that, an article a few weeks ago by Lesley Riddoch, who is certainly a vocal supporter of the yes campaign, says that
“Scots will be jumpy about the possibility of losing access to the Post Office and Royal Mail. A generation of Scots grew up with Postman Pat and helped reverse the Post Office’s ill-fated transformation into Consignia.”
No one knows what postal service will look like in an independent Scotland. Even Lesley Riddoch is asking questions that the SNP and the Scottish Government have not been able to answer.
The postal network in Scotland is critical to not only the economy and business, but the people who live there. Whether a letter is posted from Orkney to Oxford or from Peterborough to Edinburgh—I should have said Perth to keep the peace going and please the hon. Member for Perth and North Perthshire—there is one cost and the exactly the same very high service standards. My hon. Friend the Member for Glasgow South West has already mentioned the one-price, equal service and that service standards for private companies are not as high, which has given Royal Mail an unlevel playing field to compete on against private companies. Statistics from the Federation of Small Businesses show that Scottish businesses rely on Royal Mail more than businesses in the rest of the UK—56% to 42%. That highlights a fact that we will talk about when we go on to other issues: Scotland relies on the Post Office and Royal Mail far more than other parts of the UK. There are proportionately more post offices in Scotland.
The statistics in the wonderful briefing from the National Federation of SubPostmasters speak for themselves. There are 1,415 post offices on Scotland, of which 67.5% are rural, as opposed to just under 55% in the rest of the UK. Scotland has 12% of UK post offices with 8.3% of the population, so we have proportionately more in Scotland. Those statistics alone tell us that the post office network, as opposed to Royal Mail, in Scotland is significantly more expensive to operate, because there are more post offices and more rural post offices. We know about the social side of post offices in rural areas.
We need to know what the SNP and the Scottish Government plan to do with postal services in Scotland. They have said that they will abide by EU directives. There are questions for a university thesis about whether we will be in the EU, but for the sake of argument, I shall use the hypothetical scenario that Scotland will be, so the EU directive covering the universal service obligation baseline will kick in. The UK has gold-plating on top of that baseline—the only EU directive that the UK Government support gold-plating—which says six days a week, one price, anywhere.
If the Scottish Government maintain the six-days-a-week universal service obligation, as they confirmed last week under questioning from the Select Committee on Business, Innovation and Skills, the next question to ask, after congratulating them on making one commitment, is, how will they pay for it? How much will that mean in subsidies for the post office network? How much will it mean in subsidies for the Royal Mail network? How much will a stamp cost in Scotland for internal and external mail? How much will it cost to post a letter from Newcastle to Edinburgh?
The hon. Member for Angus (Mr Weir) says that Ireland is covered by the same price, but that is Ireland’s choice; England’s choice could be that they will use cross-border postal services at international or European rates. It is England’s decision, not the decision of Scotland or the Scottish people.
We have looked at post office statistics. We heard from my hon. Friend the Member for Dumfries and Galloway (Mr Brown) about the extreme pressures at the moment on sub-postmasters and their incomes, which continue to drop. If Royal Mail is privatised, which will be announced this afternoon, there are grave dangers that the inter-business agreement will be either salami-sliced between now and its renewal in 2022 or disappear altogether. What do the Scottish Government guarantee will be the relationship between the Post Office and Royal Mail at separation? How much will it cost at separation and how much will the inter-business agreement provide to the post office network to maintain the incomes that my hon. Friend mentioned?
The hon. Gentleman asks lots of questions—obviously, the Scottish Government will have figures to answer many of them—but can he answer the same questions on what the position will be in the UK? There is uncertainty in privatisation and in the interaction between a privatised Royal Mail and the post office network and Post Office Ltd, if privatisation goes ahead.
Surely, that is a question for the Minister to answer. The Opposition are saying clearly that privatisation of postal services in the UK is wrong; we should not privatise Royal Mail, because of the threats to the inter-business agreement, the universal service obligation and the regulatory framework. The regulatory framework provides us with another example of issues that will have to be resolved. What will it look like? Who will regulate postal services in Scotland? What are the parameters under which the services will operate?
We are running out of time and I want the Minister to be able to answer the questions. The Opposition are constantly accused of scaremongering when we pose legitimate questions as simple as, how much will it cost to post a Christmas card from Edinburgh to Glasgow first class? I want to send one to my hon. Friend the Member for Glasgow South West. He is on my Christmas card list. I probably will send him one. How much will it cost? That is not scaremongering. It is a simple and straightforward question.
As we sit in this Chamber today, it is clear that the Scottish Labour party is the only party standing up for the universal service obligation in Scotland. The Conservatives and the Liberal Democrats want to privatise it, and the SNP has absolutely no answers to the basic questions about how it will be maintained. The message must go out loud and clear that, until the SNP can answer those basic questions, it cannot tell us how to maintain the universal service obligation and postal services in Scotland.
It is a great pleasure to serve under your chairmanship, Mr Hood. How apt it is to have a Scot in the Chair for a debate on the important matter of postal services in Scotland post-2014. I thank the hon. Member for Glasgow South West (Mr Davidson) for securing the debate, and for his wide-ranging introductory speech. We have covered a good amount of ground today; indeed, I wondered at times whether we were in a rerun of a debate from two weeks ago on the privatisation of Royal Mail. I know that the hon. Gentleman was unfortunately not able to attend that debate, but I hope he is able to be in the Chamber later today for the Secretary of State’s statement on this issue. The hon. Member for Angus (Mr Weir) mentioned that there may well be further opportunities for discussion in Backbench Business Committee debates, if the Committee so agrees, so I am sure that we will return to the issue time and again over the next few months, and beyond.
In 2014 we face an historic choice in Scotland—arguably the most important vote that Scots will have cast in decades. I hope that there will be a high turnout in the independence referendum, and I very much believe that the Scottish people will decide to reject the notion of independence because we are better off as part of the United Kingdom. It is important that over the next 14 months or so we continue to have a full and healthy debate about all aspects of what such a change would mean for everyday life in Scotland. The Government are, of course, making the case that Scotland should remain in the United Kingdom, and as part of that we are carrying out a programme of analysis across a number of Departments about Scotland’s place in the UK and how it contributes to, and benefits from being part of, the UK.
I am sure that right hon. and hon. Members are aware of the paper that the Department for Business, Innovation and Skills produced on 14 June, which demonstrated that Scotland and the rest of the UK benefit from the domestic market and the shared business framework that underpins it. The paper had a section on postal services as part of a more general consideration of infrastructure in Scotland. We take the view that we are better and stronger together as part of the United Kingdom. We are not making contingency plans for the Scottish people deciding to leave the United Kingdom because we do not believe that that will be the outcome, but it is absolutely for the Scottish Government to set out what would happen in that scenario, given that it is they who are advocating the change, and that is a challenge for the SNP.
We have had a fair challenge from the hon. Member for Edinburgh South (Ian Murray) about the price of a stamp for a Christmas card because, although we have e-mail these days, there is something lovely about sending and receiving Christmas cards and people want to know how much it will cost. There are question marks over what the cost would be in an independent Scotland.
The Minister says that the Scottish Government or the SNP have to make clear the cost of sending a Christmas card post-independence. However, under her privatisation proposals we do not know what the cost will be in 2016 for sending a Christmas card in the UK whether or not there is independence for Scotland, because there is no longer a price cap on anything other than second-class mail.
I welcome the hon. Gentleman’s intervention because it gives me the opportunity to confirm and clarify the situation. I appreciate that there are strong views on different sides about the privatisation of Royal Mail, but many wild stories have been going about. It is absolutely clear that the universal service obligation remains. The obligation is enshrined in the Postal Services Act 2011, which was passed by this Parliament. The Act sets out that there has to be a six-days-a-week service to every location at an affordable and uniform price. That provision is monitored by the regulator Ofcom, and will remain in place after privatisation. The exact same set of protections that is in place at the moment will, therefore, remain.
What is unclear, however, is what would happen in an independent Scotland. We do not know whether Scotland would be a member of the EU and therefore whether the EU postal services directive would apply. If we assumed that it did, there would have to be at least a five-days-a-week universal service—Ireland has such a service. Only five EU countries, including the UK, go beyond that and have a six-days-a-week service. We do not know whether it would be a five-day or a six-day service in an independent Scotland. The SNP says that it will give guarantees—I noted that from the speech made by the hon. Member for Angus—but it does not back up how it would do it.
This comes down to the basic economics point to which various hon. Members have referred, and which applies to both the Post Office and Royal Mail. What we have in Scotland is a different sort of demography and geography to that of the rest of the UK, which is something that the hon. Member for Glasgow North West (John Robertson) mentioned. His area is very urban, and the costs of the logistics of getting about to deliver letters are, therefore, lower than they would be in a very rural constituency. If one country has a higher proportion of rural areas and addresses than another—Scotland compared with the UK for example—the service becomes more expensive to operate, and that cost must be accounted for. An hon. Gentleman chuntered from a sedentary position, “Do you think that Scotland could not run a postal service?” Of course it could, but we need to know what the costs will be. To suggest that they would be the same as for running the service across the UK, where there is cross-subsidisation between more densely populated areas and rural areas to offset the higher costs in the latter, is to misunderstand the basic economics.
I apologise to you, Mr Chairman, for chuntering from a sedentary position and getting told off by you, and at the same time I congratulate you on the fantastic jumper you are wearing on this summer’s day.
I have a great suggestion for ending the uncertainty, and the bickering between the Lib Dems and the SNP, and that is to vote no in the referendum next year and return a Labour Government in 2015.
I agree with the hon. Gentleman, on half of his point at least.
I wonder which half. For clarity, I mean on the voting no to independence in 2014.
We have had queries about the price of a stamp and about the universal service operating for six days a week rather than for the number of days required by the EU. Those questions are for the Scottish Government. Indeed, the hon. Member for Glasgow North West outlined a whole host of questions that the Scottish Government need to answer.
I want to turn now to the hon. Member for Dumfries and Galloway (Mr Brown). I welcomed his contribution about post offices, a topic that was missing from this debate on postal services in Scotland. As I have tried to make clear, the subject under debate is a very separate issue to that of the Royal Mail. We have had a fair amount of confusion. Royal Mail and the Post Office are now separate entities. The latter is a separate company with its own board, which will be helpful to its ultimate success. We do not want to get confused, particularly when we are talking about privatisation.
The hon. Member for Glasgow South West said that he was astonished that Liberal Democrats were proposing the privatisation of Royal Mail. I accept that our 2010 manifesto was probably not high on his reading list, but it is bizarre to be accused of something being a huge surprise when it was clearly set out in our manifesto at the last election. We want Royal Mail to be able to access private capital so that it can provide a good service to customers because, ultimately, that is what is important, and when Royal Mail has to compete with schools and hospitals for capital it is not able to do that.
The situation for the Post Office is incredibly different. We are aiming for mutualisation, and the process is under way with a stakeholder forum that includes the National Federation of SubPostmasters, the Communication Workers Union, Government and others. It is important that we work towards a sustainable future for the Post Office.
Time is against me today. I conclude by saying that the post office network plays an important role in Scotland. The hon. Member for Dumfries and Galloway outlined some statistics and, as I promised yesterday, I will write to him on the issue he raised. The fact that Scotland has 12% of all post office branches and 15% of all rural branches shows that we have higher than our population share’s worth of post office services. Under an independent Scotland the service would, therefore, cost more, and the Scottish Government need to give answers to the Scottish people.
Police Treatment of Alleged Perpetrators and Victims
[Andrew Rosindell in the Chair]
It is a pleasure to serve under your chairmanship, Mr Rosindell. I am delighted to have secured this opportunity to explore the relative rights, in effect, of alleged perpetrators and perpetrators of crime, in contrast to the rights and treatment of victims and victims’ families. I particularly want to draw attention to a case that I have been pursuing for some time as a Member of Parliament. Not only am I raising this matter because it raises specific points relating to a specific case, but because of wider concerns and the ramifications and consequences for the treatment of other cases and for the rights and treatment of victims in those cases.
Developing this case has been a challenge, because I have, of course, taken my points to the Ministry of Justice, as I should, because parts of the case, and cases relating to how victims are treated in the criminal justice process, are within the curtilage and responsibility of that Department, and to the Home Office, because they also fall within its curtilage and responsibility. Over the years, I have, on behalf my constituents who have raised these questions—I will refer to them in a moment—had to pursue these matters through two Departments. I am delighted that the Policing Minister is here.
The questions are primarily concentrated on competence and on the discretion of the police in their response to capital offences, such as the ones that I will mention. Where are the rights of victims and families, where they potentially conflict with those of killers and alleged killers, or where a killer has already admitted guilt and admitted that they killed a person before their conviction? We are looking at the period in which decisions are taken that have consequences for the victims and the victims’ estate and record, before conviction.
Of course, we assume that killers’ rights are effectively surrendered, or at least subordinate to those of the victims. We believe, and the public would normally expect, that concern for, and consequences for, victims would be uppermost in our minds, and that we would go out of our way to support and protect the interests of victims.
I have two primary purposes in raising this case today. First, I seek to ensure that the rights of victims are not subordinated by the rights of perpetrators, particularly in cases where alleged perpetrators admit guilt or responsibility before conviction. This is especially the case in circumstances that involve the killing or murder of a family member. If a killer is next of kin, in my view they surrender their rights to have a superior claim over the victim’s other immediate blood relatives. Secondly, I wish to ensure that lessons arising from incompetence or failure—in respect of both the handling of the investigation and the lack of support for the victim’s family in the case of Claire Oldfield-Hampson, under Operation Ramsgate—have been learned, apologies given and systems improved.
I will refer specifically to the case of the killing of Claire Oldfield-Hampson, which I have mentioned in two previous parliamentary debates. First, I need to place this matter in context. The context, most recently, is the Home Secretary’s correct response to recent allegations about the investigation into the Stephen Lawrence case. That response is most welcome and I think that those who are concerned about the treatment of victims and their families will gain a great deal of succour and encouragement from it. After all, Stephen Lawrence was just 18 when he was murdered on 22 April 1993. We are talking about a case that goes back more than 20 years. It is right that, when further evidence has emerged and further allegations have been made, the Home Secretary has raised the prospect of ensuring that those matters are subject to further investigation and review. The killing of Claire Oldfield-Hampson took place in September 1996, but if some matters are still not resolved, I encourage my hon. Friend the Minister to look carefully at that case and, if necessary, instigate further reviews.
Just last month, the Home Secretary announced that the latest allegations of misconduct in the Stephen Lawrence investigation will be investigated by the chief constable of Derbyshire, Mick Creedon, as part of Operation Herne. She also announced the circulation of a new code of integrity for the police. My constituents and I are pleased for and supportive of the Lawrence family and hope that the principle of re-opening cases is not constrained by them achieving a certain level of televisual or media interest.
I repeat myself to an extent today and for that I offer no apology. I still need, and my constituents need, evidence that lessons are being learned and that improvements are being made, following clear failings on the part of the Cambridgeshire constabulary, which was responsible for investigating the killing of Claire Oldfield-Hampson. Even now, some issues of responsibility for her estate remain to be resolved. I believe that the law needs to be reviewed, to rebalance the respective rights of victims and alleged perpetrators, as does how the Home Office and, more specifically, the police conduct themselves in handling cases such as these.
We assume that killers surrender their rights and are given lesser rights than their victims. A victim and their grieving family should be given greater consideration and protection than a killer. That is what most people would assume. They would assume not that killers lose all their rights—they certainly have a right to a fair trial—but that consideration for victims would be superior to consideration for the killer’s sensitivities, particularly if the killer has already admitted that they perpetrated a crime. However, when a husband kills his wife, he continues to enjoy next of kin rights, and vice versa.
Should a child be placed with the killer’s family or with the victim’s blood relatives? Should the victim’s personal effects, diaries, estate and family heirlooms from before marriage go to the killer’s family or to the victim’s blood relatives? Who should have the greatest right of appeal against court rulings and sentences? In the interests of natural justice, people would expect the victim’s family to have the greatest rights and consideration, but they will be shocked to learn—as I was—that if a killer is next of kin, he enjoys greater rights than the victim’s family. The victim’s family even have to ask the killer for permission to give the victim a funeral.
I will provide a bit of background, although I know the Minister has already been given a great deal of material on this case. I have been raising issues on behalf of my constituent from St Ives, Joanne Bryce, for several years. Joanne’s sister, Claire Oldfield-Hampson, was killed by her husband, David Hampson, on 25 September 1996 at their home in the town of March, Cambridgeshire. He buried her body in the garden, and it was exhumed on 16 December 1998.
In what I have previously described as an “horrific injustice,” Hampson was convicted of the diminished charge of manslaughter, a charge that was mentioned to the family only a few days before the hearing. The plea was accepted because the Crown Prosecution Service and the judge, on the basis of the evidence that the police were able to gather and provide, ultimately accepted that Hampson had suffered the psychological effects of his wife’s nagging. My constituent, Joanne Bryce, points out that Claire’s character was completely vilified. Nine out of 11 national newspapers ran with the headline, “Nagging wife killed by husband.” It seemed that nagging was the capital crime and the killing was just a minor incident.
All that went unchallenged. Claire’s personal diaries must have included evidence of the family relationship. There were 15 diaries, but they were not used at all in the investigation. Much of the material in Claire’s diaries was not made available at the time or shown to the court. There was also video evidence of Felicity’s relationship with her mother, and Joanne has told me that 66 exhibits would have been placed in the public domain and subject to investigation, had there been a trial.
I know the Minister is not here to address the court case, but I raised the broader issues in a debate on Claire Oldfield-Hampson’s case on 8 January 2001 and in an Adjournment debate on 8 June 2011, in which the then Justice Minister, the hon. Member for Reigate (Mr Blunt), described the case as “mishandled,” which lets off Cambridgeshire constabulary and the CPS rather lightly.
There have been many questions and complaints about the competence of Cambridgeshire constabulary, and it would be easy just to brush the case aside and say, “Well, it’s a question of the competence of one particular constabulary, and those issues need to be looked at. They need to hold their hands up and acknowledge that they have failed, and they need to apologise for their failings.” It would be easy to draw a line there and to make that the end of the matter. Following the debate and the complaints raised by my constituent, Cambridgeshire constabulary asked Bedfordshire police to undertake an investigation into the case, and Bedfordshire police found that Cambridgeshire constabulary had seriously failed on a number of counts.
Cambridgeshire constabulary failed to provide a Home Office information pack to the victims of the crime. In fact, the constabulary provided the Home Office information pack to the family of the killer, arguing that they were victims, too, but it failed to give the information pack to the blood relatives of the person who was killed. The constabulary failed to let the family know that they were entitled to a family liaison officer. Apparently one was appointed, but the family were never told. The constabulary failed to identify to the family that there was a senior investigating officer.
We all know that we are not used to dealing with such processes, and we do not know what support the police are expected to provide. People cannot ask the question, “Where is our family liaison officer?” if they do not know that one is supposed to be provided. The last thing that people who are grieving, bereaved, angry, confused and sad about such a tragic event would know is their right to the kind of support that on this occasion the family clearly failed to receive.
There was a failure to provide information about the criminal injuries compensation scheme, particularly in relation to the funeral expenses. There was a failure to obtain evidence of Claire’s character, and, ultimately, the Director of Public Prosecutions wrote a letter to me a few years later, in 2003, apologising for allowing her character to be assassinated in court by the case in mitigation as a result of the police investigation’s failure to achieve a balanced inquiry.
There was a failure to investigate fraud and theft by the killer, too, because the police felt that, as they were going for the murder charge, fraud and theft were less important, and therefore they were swept away and ignored. The family were also denied access to their niece and granddaughter. Claire Oldfield-Hampson’s mother, Mary Oldfield, who was living in the area at the time that Claire’s body was exhumed, was unable to go back to live in the area and came to live with Joanne Bryce in my constituency.
The police also gave out to the media the address and phone number of Joanne Bryce without her permission. In reply to the Bryce family’s complaints about abusive phone calls from the killer’s sister, the family were told, “Well, she is a victim, too.” The family received one phone call at 10.45 pm on 16 December 1998 informing them that Claire’s body had been found and that she had been murdered, but no one offered any help. The family saw Cambridgeshire constabulary for the first time three weeks later.
Other matters of complaint and concern arise from the case. Joanne Bryce was told to get Claire’s bones moved from a hospital in Peterborough or the family would get a big bill. Of course, the family needed to get the killer’s permission before they could make contact with an undertaker or make arrangements for a funeral. How would anyone feel if they were told in those terms that they are responsible for resolving the matter but that they do not have the power themselves to ensure that the funeral takes place?
Cambridgeshire constabulary says that it investigated Claire’s bank accounts and that the documents were returned as not used by the CPS. When Joanne Bryce was advised by the bank manager that she must get copies of statements after the trial, she was told that those bank statements had never been asked for.
Victims’ families should not have to beg the killer’s family for family effects. All that my constituents have to remember Claire by is her wedding dress and an out-of-date passport. The war medals of her uncle, who died before Claire met and married her husband, her grandmother’s crockery, photographs and certificates were all denied Claire’s blood family, who were not allowed to enter her home. Meanwhile, the killer’s family, or indeed his girlfriend, could go in at any time and take things away.
If possessions of the victim are found years later in the hands of the police force, under the Senior Courts Act 1981, the family and victims should be advised and allowed to claim them. That was mentioned to me during the debate in 2011, the first time that my constituents were aware of that right. Those possessions should not have been sent to the perpetrator’s family, and the victim’s family should not have been told that the only way to recover them was by raising their own case in court through civil action, but that is effectively what the Bryce family were told about diaries dating back to 1983, long before the couple married.
I have spoken to many agencies about the issue, including Victim Support, which is considering it. Victim Support told me that when the next of kin is the perpetrator of the crime, it causes many issues, including, for example, for children’s carers, who must seek permission from the legal parent for even the simplest tasks, such as taking the children on holiday. However, the issue relates to family law, which is civil, not criminal. Unfortunately, neither the police nor other criminal justice agencies have control over the matter; it must proceed through family courts with the assistance of social services.
I am aware that the issue of next of kin falls into the rather murky territory of what next of kin means, because it is not specifically defined for all purposes. The forfeiture rule, which was mentioned by my hon. Friend the Member for Reigate during our last debate, is an instance of the wider principle that a person should not be allowed to profit from his or her crime. I do not think anyone is saying that in cases of domestic violence, profit is necessarily in the mind of the killer at the time, but taking advantage of the situation and disallowing the victim’s family access to the effects, estate and memory of their blood relative who has been killed is a matter that needs to be resolved. It is not a question of killing or murder in order to obtain the benefit of the estate for profit.
I have also heard from Refuge, which I am sure the Minister is aware is running a strong campaign at the moment to open a public inquiry into domestic violence in relation to the domestic homicide victim Maria Stubbings and many other cases. Refuge has a public petition that it is urging people to sign, and it is also supported by 38 Degrees.
The Government still need to address more issues than that of competence in this case. In my judgment, almost everything that could go wrong in the handling of an investigation and the relative rights of victims and perpetrators did go wrong in this case; everything that could be mishandled was mishandled. Cambridge constabulary make the calamitous Keystone Cops look like a highly professional and effective law enforcement agency.
Also—this is critical—I urge the Government to review the issue seriously and undertake a great deal of purposeful, although not lengthy, reflective work on considering how the interests of victims and their immediate blood relatives, particularly in cases of the kinds of killing and murder that I am referring to, can be balanced. They clearly have not been in this case. It is not just about mistakes; within the law, police do not have discretion to give victims and their blood relatives the consideration that they deserve. Between the point of arrest and the point of conviction, many serious mistakes are often made that can never be put right. They certainly were made in this case.
That is why I strongly urge the Minister and the Government, across both the Ministry of Justice and the Home Office, to consider the issue seriously and ensure, without denying alleged perpetrators the right to a fair trial, that victims’ interests are properly protected in such cases. I argue that we as a country should be taking a far more precautionary approach to protecting the interest of victims and their estate, and of blood relatives in killings and murders in cases such as the one that I have referred to. We can learn lessons from this case going forward. I fear that the same thing will happen again and again, that victims and their families will not have the right to redress and that when they do, it will be too late.
Although my constituent Joanne Bryce has not raised the matter with me, I happen to know that she has spent the past 15 years seeking expensive legal advice—on one occasion, she sought the advice of a private investigator—and travelling around the country pursuing these issues. She has had to remortgage her house and seek other assistance in order to continue seeking justice. She has not asked for compensation, but I must say on her behalf that I think she deserves some.
The issues raised by the case are extreme and serious. Although I know that I have raised some of them before, I have raised them again because I do not think that we can move on. I certainly know that Joanne Bryce and her family cannot move on. They fear that the lessons have not been learned. Such injustice in the imbalance of rights between alleged perpetrators and victims needs to be re-examined and put right.
It is a pleasure to serve under your chairmanship, Mr Rosindell. I pay heartfelt tribute to the hon. Member for St Ives (Andrew George) for the diligence with which he has brought this distressing history to the House.
The death of Claire Oldfield-Hampson occurred in 1996. As the hon. Gentleman said, he instigated debates on the issue 12 years ago and in the past couple of years, and he has sought this debate to raise it again. That shows that he has the interests of his constituents at heart and wants to resolve some of the injustices that have occurred, so that other families do not have to experience what Joanne Bryce has experienced on behalf of her sister. That is a positive development for him. I hope that the Minister can give the family some comfort about the circumstances that they have faced.
The justice system self-evidently exists for witnesses and victims. Ultimately, victims are what the justice system is trying to prevent, and we are delivering justice to victims through the whole police, Crown Prosecution Service and courts process. For justice to be effective, it needs to have the confidence of those who use or are brought into the system. I was particularly struck by the hon. Gentleman’s comment that many of the people who enter the system do so for the first time in their lives; they are not law-breakers, but have suffered an injustice. Their experience of the justice system, how their case is treated—how the police, the CPS and the courts deal with them—and the outcome of the process are extremely important as to whether they feel that they have received justice.
I am not familiar with the case of Claire Oldfield-Hampson or the details of the difficulties mentioned by the hon. Gentleman, but from what he said about the investigation, the Cambridgeshire constabulary appears to be guilty of serious failings of process. Such issues can be corrected by good governance on the part of all police forces and of the Home Office. The policy we make in the House of Commons and in government could at least provide some standards, to which we hope everyone would aspire. When victims are treated with such indifference, justice and their confidence in justice are damaged; as the hon. Gentleman rightly said, it also leads to a long period without a feeling of closure, given the concerns expressed. He has done justice by bringing such matters forward, and we need to look at them.
The hon. Gentleman mentioned the standards of service we can expect from police forces, and I look forward to the Minister’s response. We should also, however, expect police standards for the service given to victims in the case of serious incidents. Those standards should be codified, presented, monitored and observed. If there are complaints, the Independent Police Complaints Commission, while examining serious incidents, should be able to monitor and give guidance on such matters. I hope that the new College of Policing, which the Minister and I are discussing in detail in the Anti-social Behaviour, Crime and Policing Bill, will give some opportunity for proper guidance to police forces on serious crimes, be they manslaughter or murder, and on the types of service provided as part of the CPS, charging and courts process.
The Minister will probably mention the Victims’ Commissioner, which was established by the previous Government. Louise Casey was the post holder until she moved on, when Baroness Newlove was appointed to the position. I hope that we will be able to use that post to set some of the standards on the rights of victims to which the hon. Gentleman referred, in proceedings in court and in other aspects of the justice system.
My hon. Friends who deal with Justice matters—I am the shadow police Minister—are looking hard at how to strengthen the rights of victims and witnesses in the courts and the criminal justice system. We want to place in statute a victims’ code that would cover the service that victims might expect to receive from the moment that they become a victim through to the closure of the court case, whenever that might be.
In particular, we are looking at how to give legally enforceable duties, enshrined in an Act of Parliament, to criminal justice agencies in a number of key areas. In some cases, that will help and support the objectives mentioned by the hon. Gentleman. One example might be a right to be kept informed by the police as an investigation proceeds, and as the prosecution develops and then proceeds. He made a point about a last-minute change of charge, and that would have been resolved in part by the involvement of the victims in any discussion. The family should have been consulted or at least informed about the CPS involvement, rather than finding out about the charge at a late stage, in a distressing way. Another example for our victims’ code might be the right to have the body of a loved one released within 28 days, except in exceptional circumstances. In particular, there should be a post-conviction right to be informed 28 days in advance of any perpetrator of serious crimes being released from custody, so that victims are aware.
We are also looking at how to give legal entitlements to victims, including the production of a victim impact statement and the right to be treated decently in court, including an explanation of court proceedings in advance. The first time that a victim, witness or supporting family member appears in the proceedings could be their first time in a court, because the situation is the first one serious enough to drive them to court. Ultimately, they are victims and witnesses, not perpetrators. There should also be a right to have sentencing remarks put in writing and to have access to the Victims’ Commissioner who can look at what happens when things go wrong. The commissioner should be a full-time, resourced post able to deal with such matters.
My party are also considering nominating a Minister in the Ministry of Justice or the Home Office to have responsibility for overseeing victims’ issues and to develop victims’ policy. I had such a role in Northern Ireland, when there were many victims. As a Minister, I dealt with cases on all sides of the community, looking at victims’ services and their development. The fact that a Minister had ultimate oversight of such matters meant that they arrived at my door and reached the Victims’ Commissioner.
The next-of-kin issues to which the hon. Gentleman has drawn the attention of the House today are particularly important. The Opposition cannot give him any comfort on them, but they are nevertheless worthy of investigation and discussion. The need to have the killer’s permission as next of kin to release the body, or the permission of the killer’s family to look at the property and its contents, and who should have care of a child, are important issues. I look forward to hearing what the Minister has to say, but I assure the hon. Member for St Ives that the Opposition will examine such matters, and I will draw them to the attention of my colleagues in the shadow Justice team.
The hon. Gentleman mentioned the family of Stephen Lawrence. That case, too, is not typical. There will always be failures in every aspect of our public life—in a small proportion—no matter what happens, but that case holds real lessons, which I hope that we have learned and that will help the chief constable of Derbyshire, Mick Creedon, in examining the Metropolitan police and its historical cases of spying on victims. Doreen Lawrence most certainly was a victim.
My experience, as a constituency Member of Parliament and as a former holder of the Minister’s office, is that police are trying to do a good job in all circumstances. They want to bring people to justice, to ensure that victims are fully involved in the process and to secure justice for victims across the board. There will, sadly, always be areas where those standards are not met, which is why we need a close examination of what the standards should be. We need strong guidance from the Home Office to forces about how we deal with such incidents, and we need to ensure that there is a method of redress if families or even hon. Members feel that they cannot deal with the issues, which is why I strongly support the Victims’ Commissioner and the strong Independent Police Complaints Commission that the Committee on the Anti-social Behaviour, Crime and Policing Bill is currently considering.
I appreciate the hon. Member for St Ives bringing these issues before the House today. I hope that the family—Joanne Bryce and others who miss Claire to this day—will get some satisfaction from the fact that a Member of Parliament is still arguing for us to improve services for those who follow, and I wish him well in that. We will reflect on what he has said, and I look forward to hearing the Minister’s contribution.
It is a pleasure, as always, to serve under you, Mr Rosindell. I congratulate my hon. Friend the Member for St Ives (Andrew George) not only on securing the debate, but on the fact that, as the right hon. Member for Delyn (Mr Hanson) said, he has mounted a campaign of such length and depth on behalf of his constituents. The case he has outlined is tragic and shocking, and we can only have sympathy for the family in those circumstances. My hon. Friend is right to continue to raise the case and to ask questions about the criminal justice system. He said many of his complaints were about the police, while others were about other parts of the criminal justice system. I am not just the Policing Minister at the Home Office, but the Criminal Justice Minister at the Ministry of Justice, so I hope I can deal with a large number of the important issues he raised across the board.
I think it is fair to say that the support for victims and their families has improved dramatically since this terrible case, but there is, absolutely, always more that can and should be done, and more will be done in the coming years. As my hon. Friend mentioned, my hon. Friend the Member for Reigate (Mr Blunt)—the previous prisons Minister—apologised for the way in which the case was handled in the first place, and Cambridgeshire police have also apologised. I apologise now on behalf of all the public agencies involved. Clearly, mistakes were made, and it is the Government’s job to ensure that such mistakes, which cause so much heartache and misery, cannot happen again.
My hon. Friend the Member for St Ives talked about the proceedings of the IPCC, which deals with serious and sensitive complaints against the police. One problem my hon. Friend and the family have had is that Ms Bryce made a complaint in 2004 to the Police Complaints Authority—the IPCC’s predecessor body—so the IPCC was unable, under the Police Reform Act 2002, to reopen the case. There are now instances where matters brought to the PCA’s attention can be reconsidered by the IPCC. We now allow for some cases that were previously investigated to be the subject of further investigation. The circumstances have to be exceptional, and the IPCC must be satisfied that the matters that have been complained about are unusually grave and that there is an overwhelming public interest in the matters being reinvestigated.
I was interested to hear the Home Secretary’s statement to the House a couple of weeks ago, when she acknowledged that she had spoken to Dame Anne Owers about the Stephen Lawrence case. Dame Anne had indicated that if issues arose from the investigation of the allegations in that case, she saw a role for the IPCC, even though the police had investigated these matters 20 years ago.
The legal block put in place in the 2002 Act referred specifically to complaints that had been referred to the PCA. I can see why it was introduced: to prevent every case the PCA had looked at from being investigated by the new body. However, there are, as I say, very large caveats, and there needs to be exceptional public interest. The matters that have been complained about must be unusually grave, and there must be overwhelming public interest in their being reinvestigated. That is the hurdle, but that possibility is there.
My hon. Friend mentioned the fact that the Criminal Cases Review Commission reviews cases for perpetrators of crime, but not for victims or their families. The CCRC reviews the safety of convictions and sentences on application by, or on behalf of, defendants. Generally, it may do so only when all available avenues of appeal have been exhausted, but, in carrying out its functions, it takes care to ensure that it complies with the spirit of the code of practice for victims, as well as with its obligations under it.
A number of points have been made about how appeal proceedings can, in circumstances such as those we are discussing, appear to favour the perpetrator rather than the families or the victims. Although victims and their families cannot appeal, they can make a personal statement to explain the impact of the crime on them. Any personal statement from a victim or their family that was produced for Crown Court proceedings should have been sent to the Court of Appeal with the other trial papers when the appeal was started. However, a victim or a member of their family can lodge or update a personal statement with the Criminal Appeal Office at any time during appeal proceedings. Obviously, it is better to do such things in good time before the hearing so that judges have time to read the statement, but it is possible to send in the statement at any time up to the day before the hearing. In addition, we intend to include information about victims’ entitlements at the appeal stage of the process in the revised victims’ code.
That is extremely helpful; in fact, in the original debate in January 2001, a request was made for victims to have a statement and to have a role in the proceedings—even in the kind of lower-order hearing that was used in this instance to advance the case in mitigation. In Claire Oldfield-Hampson’s case, no one answered the case in mitigation, which resulted in the castigation of her and the appalling way in which her memory was recorded. Is there, therefore, an opportunity to find a means by which the family can, even at this stage, put on the historic record something to counteract the slanderous comments that are now there as a result of the hearing?
If I may, I will take that thought away and think about it, because no criminal justice proceedings are continuing, and it is difficult to legislate for something that has already happened. As I say, one thing I hope will come out of these tragic circumstances is that we learn to improve conditions for future victims and their families. I hope I am going some way towards assuring my hon. Friend that lessons have already been learned and continue to be learned. However, I will take his point on board and give it some thought.
My hon. Friend made a powerful point about what can happen to family effects. I can perfectly well appreciate how those are so valuable in such circumstances. It is already the case that the person convicted of murder forfeits his or her right to inherit from the victim. However, as my hon. Friend mentioned, it should remain a fundamental principle of law that a person is innocent until proven guilty, so there are no plans to amend the law to restrict a person’s right to apply for probate before trial or to prevent relatives of a person convicted of murder from inheriting from the victim’s estate.
The current law provides some flexibility, however, so that on application the court can amend or revoke a grant without the consent of the appointed personal representative, in exceptional circumstances; for example, if the personal representative has been convicted of the deceased’s murder. In addition, it is now open to anyone to enter a caveat on the probate register to prevent probate from being granted. For example, a relative of a murder victim could enter a caveat to prevent probate from being granted until the circumstances of the death had been clarified. I hope that is helpful.
I am grateful for that advice. Clearly, if it had been available to Joanne Bryce and her family at the time of the events in question, circumstances would be entirely different now. I am sure that had my constituents been aware of such powers they would have sought a caveat on the probate immediately—had they not been grieving and distraught, and unable to act in such a way for themselves.
Can anything be done retrospectively in such cases, and, secondly, can it be made clear that in the twilight world, so to speak, between arrest and conviction, the blood relatives of the victim should be given the best legal advice, to ensure proper protection of their interests and the memory of the person who was killed?
The key to the point is the victims’ code. We are about to publish a new version of it, and have been consulting on it for the past few months. It is very important that victims’ rights should be better understood, not least by victims themselves and their families. Members of the public, as well as those who are habitually involved in criminal justice proceedings, need to be more knowledgeable about the code. Victims of crime are entitled to receive information, support and services under the victims’ code. That includes, for example, information about the criminal injuries compensation scheme and the appointment of a family liaison officer. As I have said, awareness of the code is not high enough—not only among victims but among criminal justice practitioners. That is why, as well as revising the code to make it more accessible, we shall use a range of methods, including short leaflet guides, to communicate it more effectively. Awareness will be raised through work with organisations such as Victim Support, whose extensive networks operate locally in every part of the country.
Structural changes made since the late 1990s and early 2000s will serve generally to raise awareness of means of redress, particularly among victims and their families. The most obvious and dramatic have been mentioned: each area will have a police and crime commissioner, whose basic task is to hold the chief constable to account. When there are serious complaints, such as there clearly were in the case that my hon. Friend has raised, the PCC will be the first point to go to; that is where there would be someone whose local responsibility was, in the case in question, to hold to account the Cambridgeshire force. That will be a significant step forward.
I thank my right hon. Friend for giving way once more. One hopes that people will not need to reach the point of making complaints. As I think I have shown, it is often too late when the point of contacting the police and crime commissioner is reached. Given that the case I have raised highlights an appalling contortion of justice, in which permission must be given by a killer for the blood relatives to get access to the death certificate, so a funeral can proceed, can my right hon. Friend at least tell me that we have learned that lesson? Can anything be done to avoid that absurdity in future? Surely families of the victim of a killing should not have to ask the killer for permission to proceed with a funeral.
I quite understand the point. I hope that, partly through the victims’ code, and by other means, we will be able to consider some of the specific serious issues that arise in the terrible case in question. Two more reforms are being brought in to help to prevent repetitions of some of the problems that arose, one of which was mentioned by the right hon. Member for Delyn (Mr Hanson).
Firstly, to take up my hon. Friend’s point, we want to prevent recurrences: redress is important, but prevention is always the priority. The College of Policing has the precise task of raising professional standards throughout the many vital activities of the police. I hope that in relation to the case that my hon. Friend has raised the college could provide extremely useful guidance on sensitivity in interface with families, in addition to working on spreading best practice, making it easier and quicker for that to be spread between forces.
Secondly, we have also embarked on a wider reform of the criminal justice system. Much of the reform is about improving efficiency, but some of it is about making things more transparent. For everyone who becomes involved with the criminal justice system—and I take the point that often it will happen to a person once in their lifetime, perhaps because they are a victim or a victim’s relative, and so they do not want the involvement—things should happen in a clear, timely and efficient way, and be clearly explained. People should not be left waiting around for months or years waiting for a decision. That is another significant reform.
I have already mentioned police and crime commissioners, and they are perfectly placed to represent victims’ voices locally. We are legislating in the Anti-social Behaviour, Crime and Policing Bill, which is in Committee at the moment, so that from October next year PCCs will have clear powers to provide or commission the widest possible range of services for victims of crime. As has been mentioned, we have appointed a new Victims’ Commissioner, Baroness Helen Newlove, who began work in March. She is already meeting many victims and their families, to hear their views on the criminal justice system. Indeed, she sits on the criminal justice board that I have set up, which brings together the judiciary, the police, PCCs and various bodies that represent different parts of the system, precisely to drive through such reforms.
To address a particular point that my hon. Friend raised, in April 2011 we introduced domestic homicide reviews on a statutory basis, so that local areas and agencies will identify lessons learned, to help to prevent future homicides and violence, and make improvements. The reviews specifically encourage agencies to work more closely with friends and family members of victims, to see how they can share information at an earlier stage. I assure my hon. Friend and the family of Claire Oldfield-Hampson that we are considering how to improve means of redress for victims—we have discussed that briefly already—so they can hold the criminal justice agencies to account.
We have made a commitment to look at the case for an independent complaints ombudsman for the criminal justice system in the strategy and action plan I referred to. We have consulted on an improved complaints procedure in the new victims’ code, and we are keen to explore whether police and crime commissioners can play a role in ensuring that the high standards of service that we want and expect to see are maintained in every locality.
I am happy to assure my hon. Friend and the right hon. Member for Delyn that the Government are already taking forward many of the improvements that need to happen, and the victims’ code is already statutory. It is in secondary legislation, but any non-compliance may result in judicial review. The Parliamentary and Health Service Ombudsman is responsible for investigating complaints under the code, and there is a high level of compliance. The victim’s personal statement is key. We have consulted on putting victim personal statements in the code for the first time, which would give it a statutory footing. The Under-Secretary of State for Justice, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), already has specific responsibility for victims and this area of policy. I am glad that that change has been welcomed on both sides of the House.
Nothing anyone can say can undo the past, but I hope that it is at least clear that our reforms put the Government and the law on the side of the victim and their family. We want to ensure that throughout the criminal justice process there is support for victims of crime and their families, that consideration of their needs and welfare is embedded in the way in which police and criminal justice agencies work, and that those needs are an absolute priority in their work and everything they do.
Capping Welfare Spending
I am delighted to have secured the debate. The level of welfare spending and whether it should be capped have been the subject of great public interest but have not been discussed much in Parliament, so this is a good opportunity to give the issue a short airing.
Even before the crash, the cost of welfare spending rose by 50% under the previous Government. All sides agree that when the good times rolled, too little action was taken, in the famous words of the Chancellor, to fix the roof while the sun was shining. The current Government have had little choice but to take necessary but tough decisions. We must live within our means, and welfare reform and capping welfare are key parts of that. It is a question of fairness. In my constituency and up and down the land, people go out, work hard and try to do the right thing for their families, spouses, children and loved ones, to make ends meet in difficult times. They look around and they tell me, “It’s simply not fair that there are people living on benefits who are better off than we are. Why do we go out to work? Why do we bother? Why not just live a life on benefits and be better off?” It is wrong that people who do not work enjoy a higher standard of living than people who go out to work and do the best they can.
Does my hon. Friend agree that the vast majority of those who are on benefit do not choose to live that lifestyle, but the previous Government designed a system that traps them, because they receive more in benefits than they are ever likely to get through work? The system traps people in that condition.
I completely agree with the powerful point that my hon. Friend makes. The number of households in which no member has ever worked doubled under the previous Government. As he says, we cannot stand by and allow social failure on such a grand scale to continue for a moment longer. That is why no family who are out of work should be better off on benefits; why a benefit cap is right; and why it is set at £26,000 a year.
Does my hon. Friend agree that, from the perspective of a Yorkshire MP or an MP from another part of the country, the benefit cap could be much lower in certain areas, which would be much fairer to working people in those areas?
My hon. Friend makes an interesting point, which is certainly a topic for debate, so I hope that the Minister will address it when he responds. The Government have sent a positive social signal that work is a force for social good. Capping the amount of benefit that any one family can receive is right and has been met with great approval in my constituency. My constituents raised the issue time and again.
I thank the hon. Gentleman for securing the debate and for giving way. At the beginning of his speech, he mentioned that the current Government had inherited debt from the previous Government. I remind him that after 18 years of the Conservative party being in power, that previous Labour Government found in ’97 that, for every pound levied in tax, 50p went to pay off debt. They eliminated a lot of inherited debt, but that is not my main point. When I was a Member under previous Conservative Governments, people were trapped in housing estates. The hon. Gentleman wants to call it the system that we inherited or whatever, but whatever system we bring in, there are going to be people trapped in certain estates—they used to be called Thatcher’s children.
I thank the hon. Gentleman for that interesting intervention, but I cannot agree with him. When the current Government came to office, the interest bill was the same as the entire education budget—I think that I am right in saying that. It was a very substantial amount. That is not a great showcase for fine administration of the public finances. It is well understood that the country’s debt was entirely out of control. I take his important point about social mobility and helping people to get out of the traps of poverty. Universal credit will make work pay, incentivise work and encourage people to do well, and that lies at the heart of much what the Government are doing. I approve of that approach. We need to build in incentives, by on the one hand limiting the amount of benefit and on the other hand encouraging work and making it pay.
For too long, people in my constituency who were out of work for considerable periods, because they had challenges that needed to be overcome, did not get the proper, expensive advice and support that they needed to get back into the workplace or into it for the first time. Does my hon. Friend agree that in these difficult times, with a limited pot of money, we are better off spending money on top-quality advice, rather than increasing the welfare budget?
Absolutely, and a lot of Government policy has been about that. The Work programme is a key part of giving people the tools, education and support to get back into the world of work and understand the rhythm of a working day.
I thank my hon. Friend for taking my intervention. The Government are trying to ensure that the whole welfare system is perceived as fair. In a very low-pay constituency such as mine, the vast majority of people believe that the welfare cap is crucial if the system is to be fair and seen to be fair.
Absolutely. The system needs to be fair, and I hope that in his response Minister will address the important issue my hon. Friend raises.
The average pay packet has not increased much in recent years. The recession was serious and the recovery has been long, hard and extremely choppy, so it is right that welfare benefits should not increase faster than pay packets. It is unfair that benefits have risen twice as fast as average earnings since the financial crisis, which is why the Government are right to introduce a 1% uprating limit. My constituents have told me that that is an important signal about fairness and the fact that work is good. The Government are also right to make work pay, with universal credit and by increasing the income tax personal allowance. At the same time, the Government have sought to be fair and protect the most vulnerable—the disabled, the elderly and the incapacitated.
Benefit capping is about not only fairness, but money. We should remember the country’s debt crisis. Savings of £4.4 billion by 2017 are not trivial, so it is small wonder that more than 60% of people have told pollsters that they support the Government’s measures to restore fairness on benefit uprating. The Government have been prepared to make the most difficult decisions—I will not shirk that issue. Capping housing benefit, so that it is most aligned to housing need, has not been easy. It was a difficult decision. People do want to be told that they will have to pay more for their spare room, but that cap is also about fairness, which is why a clear majority of people tell pollsters that they support the difficult decisions that the Government have taken. There are 1.8 million households on the housing waiting list and 249,000 households live in overcrowded social housing, yet 386,000 households in the social sector are under-occupied. It is important that we take measures to restore the balance, so capping housing benefit is right and fair.
I would like to press the Minister slightly. Will he consider extending the principle of tackling the spare room subsidy, so that the social housing provider takes the burden? I am concerned that too many social housing providers think that they can simply pass the buck when it comes to managing their housing stock fairly and appropriately and making fair allocations. The spare room does not affect them, so why should they care? Too often, they are content to do little or nothing about fair housing allocation. The best incentive to get them to clean up their acts would be for social housing providers to take some or all of the burden for their incompetence in the management of housing allocations over such a long time. I hope that the Minister will consider that proposal, because it is right to send a strong message to social housing providers that indolence in housing management is not an excuse.
I congratulate my hon. Friend on securing this important debate. Would he particularly welcome the fact that, as of today, 2,500 out-of-work households in London can no longer claim more than the average working family earns? In London, where I was a senior councillor for several years, we have seen some particularly egregious cases of people in houses with equivalent rents of more than £100,000. I agree that that involved a few isolated cases, but it was a real slap in the face for hardworking people in London trying to get by on £10,000, £15,000 or even £20,000. A bit like with Abu Qatada and the human rights law, it crystallised for so many people the inequity and unfairness of things.
I completely agree with my hon. Friend. He made that same good point earlier today, in questions to the Prime Minister if I recall rightly. It is a serious point. We need to get a balance of fairness.
If we want to know whether people are affected, we need just to look at the local authority discretionary payments budget. Members can correct me if I am wrong—I am sure that the Minister will—but I believe that the budget has been under-spent, which indicates that the impact has perhaps been understated by some for political purposes, rather than their dealing with the practical effects of restoring fairness. Most of my constituents say, “It’s just not acceptable that anyone should have something for nothing, given the difficult times we live in.”
The Government have raised the issue of the overall cap, which is something I welcome strongly. It needs to be a serious cap, not the sort of nonsense that we have been hearing from the shadow Secretary of State for Work and Pensions. He does not seem able to say what his cap would be or how he would set it. Labour cannot say what would happen if the cap was breached; all the party seems able to say is that it wants to include the state pension and pensioners in it. We need to limit welfare spending, but it is not right to do it at the expenses of pensioners who have worked hard for so many years and have contributed to the system. It would not be right for any Government to start beating pensioners up and taking their pensions away, considering how much they have put into the system, so Labour is wrong on that. The party is in a total muddle and confusion. It has opposed each of our welfare reforms, which have saved some £83 billion.
When might the Minister be able to set out further details of the Government’s plan for how the welfare cap will work? Labour’s proposals are muddled and confused, and it is right that the Government should take time to get the fine detail of the plan right, rather than shooting from the hip like Labour. Does the Minister agree that it is important to limit the cost of welfare and to build on the measures that the Government are taking to do more to make work pay? I ask him to confirm that this Government will not punish pensioners for having done the right thing in years past by contributing to the system and will not take away or limit the state pension, as the Opposition seem to plan to do.
With your leave, Mr Rosindell, I will end there and allow my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) to take up the cudgels.
It is a pleasure to serve under your chairmanship, Mr Rosindell, in this very important debate. I congratulate my hon. Friend the Member for Dover (Charlie Elphicke) on securing the debate. I am sure that we are both disappointed that no one from the Opposition is here to state their point of view, since they have opposed every benefit change we have put through.
I do not propose to speak for long because we want to leave plenty of time for the Minister to respond to the important points that my hon. Friend raised, but I want to share with hon. Members my recent experience of the benefit cap. As part of my duties in my constituency, I visited my local jobcentre to hear about the impact the benefit changes were having and to understand what actions were being taken there to help people to deal with the changes, and I was surprised to hear some positive news. One of the most positive things was that the jobcentre had appointed a social justice adviser, whose role is to work inside the centre with the people affected, helping them to understand where they might be able to make savings and what benefits they are entitled to. Their role is also to work with those who have been affected by the benefit cap.
The newly appointed social justice adviser talked to me with great pride about a case he had recently dealt with. He had invited in a person who was getting £700 a week in benefits for her and her family, and they had sat down and reviewed all the benefits she was receiving and all the money she was spending. What came out of all that was that she was paying £1,200 a month in rent. When they looked a little closer, they discovered that the property was substandard and was massively over the market value for a property on that estate. With a little bit of work and some involvement from the council, instead of her paying approximately £300 a week in rent, she now pays £85, which brings her below the benefit cap. She and her family are now in better accommodation and on the right track. The other advantage is that because she now falls below the cap she can afford to look for work.
The one thing that the cap has done is to make us all look again at who is in receipt of benefits, and rather than just abandoning them into the benefits trap we are bringing them out, to the jobcentres, and helping them to get their lives back on track. That woman’s life has been turned around purely and simply because the benefit cap was introduced. She is now looking for work because she can afford to, and she has escaped the trap.
I said I would be brief, so I shall draw to a close. We should not allow the Opposition to tell us that the things we are doing are terrible and have a dreadful impact on everyone. While we have to accept that there will be an impact, we must work with those who have been affected to help them see the benefits, and to see that work will pay and that we will make it pay for them. The changes that the Government have introduced are a genuine opportunity for people, and I was delighted to be able to see and hear about that at first hand on that recent visit.
The Government should be congratulated and, as I said right at the beginning, I am just disappointed that someone from the Opposition is not here to listen to this important debate and to congratulate the Minister before he sums up. I am thankful for having been given the opportunity to say a few words, and I again thank my hon. Friend for introducing this very important debate.
I congratulate my hon. Friend the Member for Dover (Charlie Elphicke) on securing the debate. It has clearly created a great deal of interest among Conservative colleagues and it is a pity, as my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) said, that no Opposition Members are here, because they have a lot of questions to answer when it comes to welfare reform, the benefit cap and the welfare cap. I shall now deal with those three areas.
It is absolutely right that we reform the welfare state and ensure that we have a fair and affordable system that provides incentives for work. Both my hon. Friends referred in their speeches to the benefit cap, which is a good example of our ensuring that there is fairness in the benefit system. It is absurd to have people on benefits taking home more than the average wage, and it is absolutely right that we tackle that through the work we are doing. Earlier this year, we rolled out the benefit cap in four areas across London, and this month we are moving to a wider national roll-out. The example cited by my hon. Friend the Member for South Basildon and East Thurrock is a powerful testament to the transformational effect that the cap can have on people’s lives.
I visited the London Bridge jobcentre in the run-up to the roll-out of the London pilots, and I am sure that my hon. Friend the Member for Croydon Central (Gavin Barwell) is aware of the work being carried out in his borough in the pilot stage. What struck me during that visit was the amount of support that was going in to help people, either to move accommodation or to find work as a way of avoiding the impact of the benefit cap. The link between fairness and incentivising work is embedded in the benefit cap, because if someone gets 16 hours’ work a week the cap does not apply to them, so there is a real incentive there for someone who has perhaps been out of work for some time and has depended on benefits to move into employment.
I pay tribute to Jobcentre Plus advisers who have worked with people to get them closer to the labour market to tackle the problem, and to the co-operation between Jobcentre Plus and local authorities in relation to the implementation of the benefit cap.
My hon. Friend the Member for Dover made a powerful point about the relationship between landlords and their tenants. There are many good examples of housing associations and local councils that work holistically with their tenants. They are concerned not only about whether they get the rent on time, but about their tenants’ health and employment prospects, as well as a range of issues, such as antisocial behaviour. The benefit cap and the roll-out of universal credit will drive that further forward. The move away from direct payment in universal credit requires landlords to take a much greater supportive interest in their tenants—to get them into work so that they can pay their rent. Our reforms are therefore working.
May I tempt the Minister to comment on the idea of a regional benefit cap?
My hon. Friend may tempt me, although I do not want to be distracted from moving on to the welfare cap. Particularly given regional wage rates, what is set at a fair level in London appears to be higher in other parts of other country, but that is a debate for another day.
Since coming into office, we have sought to put the public finances on a more stable footing across the board. It is notable that this Government, unlike previous ones, have sought to find savings in the benefit bill. We must ensure that we do not repeat past mistakes—for example, the fact that the amount of money spent on tax credits and on housing benefit almost doubled under the previous Government. We need to have a system that is affordable in the long term and enables us to manage the welfare bill in a way that is sensible, reflects economic conditions and provides much greater discipline about how we spend our money.
That is why my right hon. Friend the Chancellor announced a welfare cap in his spending review. The cap covers more than £100 billion of welfare expenditure that has not been managed until now: because it is classified as annually managed expenditure, it was considered to be largely outside Government control, but that is not sustainable and it is not right. We are in a global race in which we must ensure that our tax rates are competitive and that we can control our benefit spending.
The Government can and should take action to control expenditure. The introduction of a cap will improve spending control, support fiscal consolidation and ensure that the welfare system remains affordable. Housing benefit, tax credits, disability benefits and pensioner benefits will all be included, but some benefits will be excluded, including the basic state pension and the additional state pension.
There are better ways to control expenditure on pensions, such as increasing the state pension age, and we have already announced plans to bring forward a state pension age of 67 by 2028. We are committed to introducing a regular and structured method for considering future changes in the state pension age, with the first five-year review taking place in the next Parliament.
We have received representations, such as those from the shadow Chancellor, the right hon. Member for Morley and Outwood (Ed Balls), about including the state pension in the Opposition’s version of the welfare cap, meaning that a future Government could offset a rise in working-age benefits by cutting the pensions of older people. I understand that some in the Labour party oppose the increase in the state pension age, but that would mean a reduction in state pensions under its version of the cap. I thought that the shadow Chancellor’s intervention showed that he had not properly thought that through and indicated that the Opposition’s target is really to cut the pensions of older people who have contributed to society and worked hard all their lives. Cutting pensions to pay for working-age benefits or to reduce the state retirement age are choices that this Government are certainly not prepared to make.
We will exclude also expenditure on automatic stabilisers, which are those areas of welfare expenditure that rise and fall with the economic cycle and dampen the effects of fluctuations in the country’s economic output. That will mean excluding from the cap a small number of the most cyclical benefits, such as jobseeker’s allowance and spending that is passported from jobseeker’s allowance.
My hon. Friends asked for more details about the cap. A nominal cap will be set from 2015-16 that will support the delivery of fiscal consolidation during the spending round period and beyond. It will be set over a five-year forecast period, starting in the second fiscal year from the date of the forecast, to allow policy changes to be developed and to take effect, if necessary. As the cap’s purpose is to manage structural increases in welfare spending, a margin above the cap will ensure that policy action is not triggered by small fluctuations in the forecast.
The Government will set the cap for 2015 in the Budget, alongside the Office for Budget Responsibility’s fiscal forecast, and we will publish further technical details in advance. To ensure that there is real challenge, the independent OBR will judge the Government’s performance against the cap. In future, when a Government look likely to breach the cap because they are failing to control welfare spending, the OBR will issue a public warning and the Government will be forced to take action to cut welfare costs or publicly to explain why they are breaching the cap.
The measures announced by my right hon. Friend in the spending review make a major contribution towards the control of long-term welfare spending, and they rightly recognise the contribution that older people have made to their pensions through saving. The Labour party did not recognise that contribution in its alternative proposals. To go back to my hon. Friends’ comments, we need to take difficult decisions on welfare and on how we spend taxpayers’ money, and we need to make sure that we have a system that is fair and affordable, so there is a real challenge.
People who criticise the reforms, as Labour Members do, need to tell us what they would do: would they reverse the cuts or accept them? Too often, we have heard mealy-mouthed statements from Labour Members, who say that they are against the cuts, but cannot say whether they will reverse them or stick to them. We know that our reforms are the right ones.
My hon. Friend the Member for Croydon Central made a helpful statement, in that the system too often stops people from working, as does the uncertainty that comes from people not knowing whether they are better off in or out of work and whether or not they earn more money. The major reforms that we are introducing—universal credit, the benefit cap and considering how to get more people out of welfare into work—are aimed at ensuring that our welfare state is fair, affordable and incentivises work. Today’s debate is an important contribution to making that argument. My hon. Friends’ interventions have made clear the scale of the change we are making.
I hope that this is not the last time that we debate this subject, and that next time someone from the Opposition might stand up and tell us what they believe in and are going to do, so that they can be pushed on that. I will not tempt any hon. Members to take part in the debate, but one, the hon. Member for Barrow and Furness (John Woodcock), has just entered the Chamber—not quite the 8th Cavalry come to rescue the situation. We should now hold the Opposition to account by finding out what they would do to tackle the long-term challenges to our spending and to ensure that we have a fair and affordable welfare system that encourages and incentivises people into work.
UK Submarine Supply Chain
It is a pleasure, Mr Rosindell, to see you in the Chair this afternoon. I am pleased to have secured this important debate on the supply chain for Britain’s submarines. It is particularly timely given the expected publication, perhaps within the next few days, of the Trident alternatives review—the taxpayer-funded vehicle that one half of the coalition Government set in motion to prove that they were right all along about their idea to scrap Trident in favour of some sort of mini-deterrent. How the Government respond to the review will have a direct bearing not only on thousands of jobs across the country but on Britain’s standing as a cutting-edge manufacturing nation.
The submarines that are built by the skilled workers in my constituency are truly extraordinary. The Astute-class boat currently under construction and the Vanguards, which carry Britain’s nuclear deterrent, are among the most technologically sophisticated vessels on the planet. It is no exaggeration to describe them as more complex than the space shuttle.
Barrow is rightly proud of the role that its boats play in ensuring Britain’s security. As an aside, may I say how much I am looking forward to welcoming the Minister to Barrow shipyard next week for the laying of the keel of the six Astute-class submarines? It would be a serious mistake to think that submarine building happens only in Barrow-in-Furness. In fact, this is an enterprise that brings together at least 1,200 firms from every corner and nation of the United Kingdom. The high-tech components and parts, the cutting-edge design skills and the essential services are ultimately brought together in Barrow for the Royal Navy.
It was great to welcome the representatives of some of those firms to Westminster last week when I hosted, along with BAE Systems and the Keep our Future Afloat campaign, a well-attended reception to mark the importance of the supply chain. We were grateful to the Minister for attending and speaking so warmly about the importance of those jobs. The workplaces represented included Rolls-Royce in Derby, which produces the nuclear reactors that power the submarines; Sheffield Forgemasters, which rolls and cuts the high-quality steel for the boats; Babcock, which has employees across the country including Clydeside, Chesterfield and Ludlow; Thales from Glasgow, which makes the periscopes and other communication systems; Truflo Marine, a valve maker from Birmingham; Ultra Electronics from west London; Meltog, a tube-making firm from Leeds and MacTaggart Scott, a naval component engineers from Midlothian.
I congratulate the hon. Gentleman on bringing this important matter to the Chamber. He is talking about the manufacturing skills across England, Scotland and other parts of the United Kingdom. Does he feel that the retention of manufacturing skills is vital for our future and that the Government need to give a commitment to retaining the number of submarines, so that we can have a continuity of skills and supply?
The hon. Gentleman is absolutely right. This is a finely balanced exercise. We are talking about enterprise stretching across the United Kingdom. Any gap, delay or reconfiguration of the programme could endanger the nation’s whole capacity to build submarines.
The firms that I have just mentioned account for at least 13,000 high-skilled manufacturing jobs—the exact sorts of jobs that everyone in this place agrees are essential if we are to rebalance the economy away from an over-dependence on the City of London and financial services. At Westminster last week, those firms made it clear just how vital the submarine programme is to them. Indeed, the chief executive of Forgemasters said that his iconic firm simply would not be able to continue trading if it lost its steel orders for naval submarines. Firms such as those, which are in almost every constituency, will be watching closely when the Trident alternatives review is published and as the debate continues on deterrent renewal in the run-up to the vote on main gate approval in 2016.
Of course the final decision on renewing Britain’s nuclear deterrent, and on what form it should take, cannot be made solely on the basis of jobs in the manufacturing sector. Quite rightly, it will primarily be an assessment of what is needed to guarantee the security of the nation against a nuclear threat in future decades. None the less, we must guard against superficially attractive half measures in the name of economising that will in fact save little or no money, seriously damage Britain’s high-tech manufacturing sector and jeopardise the country’s defences for many decades to come.
We know that the Liberal Democrats, the party of half-measures, are very half-hearted and mealy-mouthed about this issue, and it is no surprise to me that they are not represented here today. I think the direction of travel of my Conservative party, ably led and assisted by my hon. Friend the Member for New Forest East (Dr Lewis) here, is absolutely clear; we wish to have a Trident replacement. Will the hon. Gentleman give me some assurances that the Labour party, another potential party of Government, has the same view on this matter?
Indeed I can, and I thank the hon. Gentleman for his contribution. As he knows, it was the previous Labour Government who took the difficult but right decision to press ahead with Vanguard renewal. We set in place that programme, and we were disappointed that, following the coalition agreement, a delay was put on main gate and the in-service date. That has stretched the programme to its limit, but the Labour party remains committed to a minimum credible deterrent as long as other countries have it. Once one makes that call and genuinely believes it, as we do, the argument that I am setting out today is that there is only one logical conclusion, which is to renew Vanguard on the programme that is under way at the moment, or indeed even to speed it up.
My apologies for being slightly held up; the Defence Committee over-ran by a couple of minutes. I had the great privilege of visiting the yard with my hon. Friend a few weeks ago. Given the experience of the Astute programme, will he share with the Chamber the consequences of introducing another delay?
My hon. Friend touches on a key issue. I will come on to that in a moment if I may, because I have some important questions on which the Minister can give us some reassurance.
I thank the hon. Gentleman for his generosity in giving way. I should like to revert to the point raised by my hon. Friend the Member for Woking (Jonathan Lord), whom I thank for his kind remarks, which I did not deserve. Will the hon. Gentleman cast his mind back to the last Defence questions, when the hon. Member for North Durham (Mr Jones) made the excellent point from the Dispatch Box that if the alternatives study says that the choice is between a full-time deterrent and a part-time deterrent of, say, only two submarines, then at least we should get round to signing the contract straight away for the two submarines? I was encouraged by that and I shall be pressing the Secretary of State for a meeting to discuss that proposal so that Trident cannot again become a political football between the Liberal Democrats and the two major parties that support it.
I thank the hon. Gentleman for his wise words on this issue, which we hear so often from him. There could well be a number of reasons why it makes sense to bring forward the main gate decision. Indeed, if that requires a new coalition for that one issue in this Parliament, then I know that many of us, from across the House and in this Chamber today, will be prepared to be a part of it.
I will make a little more progress. Although it seems that the Trident alternatives review is set to dismiss such options as a land-based, air-based or surface ship delivery system, and indeed to give up finally on the Liberal Democrats’ mini-deterrent fantasy of adapting Astute-class submarines to carry nuclear-tipped cruise missiles, recent media coverage has suggested that the review may set out proposals to abandon the UK’s posture of continuous at-sea deterrence, which for decades has ensured that at least one British deterrent submarine is operational at all times.
We read that that could take place either when the Vanguard submarines reach the end of their life or perhaps even within the next few years, if the extensive leaks to the national newspapers can be believed. Colossal savings could be realised, says the unnamed brain-box who briefed the Financial Times in May. We are also told that we could build half the boats and save half the capital costs. As the submarines are predicted to cost, on average, about £2.5 billion each, that must mean a £5 billion saving to the Exchequer. Also, we are told that £1 billion a year could be saved by downgrading Britain’s nuclear capability to a part-time deterrent. Perhaps we could even keep Britain’s nuclear warheads in a cupboard, as the hon. Member for North Devon (Sir Nick Harvey) has curiously put it in the press. Alternatively, perhaps the main gate decision could not be brought forward but further delayed, and the proposed in-service date for the new submarines could be put back yet again.
Unfortunately, I am afraid that like so much that the Minister’s coalition partners transmit on defence issues, all of that is complete bunkum. For starters, does the Minister agree that it is nursery school logic to believe that we can save half the capital by building half the boats? The outlay on the submarine fleet is not simply a matter of purchasing these submarines; it is also about investing in the ability to design and build them. Those costs are fixed, whether we order two, four or more submarines—I am not necessarily suggesting that we order more than four submarines. Therefore, can the Minister confirm that he anticipates that the first of class would cost effectively double the average across the fleet, and that the fourth boat would be the cheapest of the batch? Can he also confirm that there would be significant savings from placing a four-boat order from the outset, rather than ordering two with the option to order two more? Also, can he confirm that if the Government were inclined to press ahead with the main gate decision in this Parliament, as was originally planned, there could be further substantial savings for the British taxpayer?
Similarly, with running costs the savings would not be anything like the amount that the antis boast it would be. Will the Minister confirm that at least 70% of those costs are fixed, covering the fuelling and basing facilities, and that they will be the same whether Britain operates patrols around the clock or takes the submarines on the occasional fishing expedition once or twice a year? What is his estimate—if he can share it with the House—of the annual savings that would accrue from stepping down from a class D posture?
Also, given the high fixed costs, does the Minister agree that abandoning class D would mean a disproportionate downgrading of the deterrent’s capacity to deter the grotesque horror of a nuclear war, by removing the guarantee that currently exists, namely that any nation that launched a nuclear attack on the UK could be hit by a counter-strike no matter what damage our country sustained? Furthermore, does he agree that it would be highly perverse if those who pursue disarmament—admittedly for absolutely laudable motives—were actually to increase the risk of nuclear conflict in future decades through their unilateral gestures, rather than making the world safer? Also, if I can tempt him to speculate, does he think that it was that woolly thinking from the Liberal Democrats that has left the party in the extraordinary position of having no representation at all in the defence ministerial team at this vital moment?
Thank goodness for that. [Laughter.]
Well, let us see.
On the timing of main gate, will the Minister confirm that a further delay to the build process is effectively ruled out by his Department’s assessment, which was communicated to me by the Secretary of State at the last oral questions, that the Vanguard hulls would be rendered unsafe if their life was extended beyond the current 35-year plan, which of course is the longest period that any British submarine has ever been in service?
Finally, building two boats rather than four means that work across the UK supply chain could grind to a halt as early as 2031, six years earlier than is currently expected. Without more submarines to build, Barrow’s unique specialised work force will break up, as they did the last time there was a gap in the submarine drumbeat. However, as we have just discussed, the consequences would be felt in every part of the United Kingdom. That would leave us with two expensive choices. Either the Government, and taxpayers, would have to pick up the tab for the sustained unemployment of that work force, and consign to history the nation’s capacity to build submarines, with the loss of valuable skills and export spin-offs that would occur as a result, or alternatively—this is surely more likely—the Government of the day would bring forward the next submarine programme. That programme would involve the successors to the Astute class submarines, which of course have not been built yet, sooner than those vessels are actually needed from a military naval capability assessment, to keep the industrial drumbeat going. Can the Minister confirm that because that would mean that the bulk of capital spending on that next generation of boats would be required as early as the Parliament after the next one, bringing that spending forward—by bringing forward the successor to the Astute class—would completely wipe out the savings from ending continuous at-sea deterrence?
Bluntly, that is the choice that we would face if the decision was made to abandon class D. We would have to be prepared either to put at grave risk a significant part of Britain’s cutting-edge industrial base or to bring forward a significant amount of spending well before it would actually be needed.
Everyone in this House has a responsibility to guard against siren voices peddling false economies. The submarine supply chain is one of Britain’s great unsung assets, providing high-skilled manufacturing jobs that will rebalance the economy. We must not sacrifice those 13,000 jobs on the altar of cuts that would end up saving nothing significant at all but would leave the country vulnerable in future decades.
It is a great pleasure to serve under your chairmanship today, Mr Rosindell.
I congratulate the hon. Member for Barrow and Furness (John Woodcock) on securing this important debate. He is a doughty champion of the skills and activities that take place around the submarine programme in his constituency, and I am delighted to have this opportunity to respond to this debate and to put on record the Government’s appreciation of all the work that he has done in his constituency to support that programme.
The recent return of HMS Trenchant from a record-breaking 11-month patrol reminds us of the unwavering dedication of our submariners. For 267 days, she was east of Suez, where our submarines have had a presence since 2001 and where she took part in NATO’s counter-terrorism and counter-narcotics operations. Therefore I would like to start my contribution to this debate by thanking all of those who serve in our submarines and their families, who support their loved ones while they are away, often for months on end. Their commitment is sustained because they know the importance of the role they undertake in protecting our nation. Whether they serve on a fleet submarine contributing to current operations—as HMS Triumph did, by launching cruise missile strikes during the NATO-led operation in Libya—or they deliver our continuous at-sea deterrent by patrolling the oceans every minute of every day—in April, of course, the Prime Minister welcomed HMS Victorious back from the 100th patrol of the current deterrent fleet, which was a notable milestone—our submarines have served this country steadfastly for more than 100 years. But their role is only made possible thanks to thousands of people around the UK, who build, support and maintain the submarines. Although Barrow, as the centre of excellence for submarine production, has the most visible part to play in this programme, we do not rely on that Cumbrian town alone.
Although it might be out of order, I would like to put on record the work done by the deep maintenance people in Babcock in Plymouth.
I am naturally grateful to the hon. Lady for reminding me. She pre-empts my own remarks. I am happy for her to endorse that, because it is not just Cumbria that contributes to this enormous effort.
From specialist diver support courtesy of Divex in Aberdeen, to marine valves courtesy of Hale Hamilton in Uxbridge, not so far away, few corners of the UK do not benefit either directly or indirectly from the £9.8 billion total cost of the Astute programme—not least the maintenance on the south coast that the hon. Lady mentioned.
The current submarine build programme alone sustains more than 10,000 jobs across the UK, as we have heard. There are some 5,000 high quality and skilled jobs at nine BAE Systems sites across the UK and thousands more are supported through 400 suppliers across the country. Thanks to our commitment to build seven Astute class submarines, as set out in the strategic defence and security review, these people are set to be busy for years to come.
These are the biggest and most advanced attack submarines ever ordered for the Royal Navy and the first two have bidden farewell to Barrow to join their cousins at their base port, Clyde naval base. But the pace does not slacken. I have seen for myself the hive of activity that is the Devonshire dock hall, as the third boat, Artful, is set to follow closely behind. Construction of boats four, five and six is also underway.
It is easy to focus only on BAES in Barrow, but we should not forget that the power plant at the heart of every nuclear submarine—in the past, now and in the future—has come from the Rolls-Royce facility at Raynesway in Derby. Rolls-Royce has been central to our nuclear-powered submarine fleet for more than 60 years, as the only company in the UK with design and production capability in nuclear submarine reactor systems. We recently announced an investment of more than £1 billion, to ensure we retain this unique national strategic capability for many years to come. This investment will regenerate the facility and sustain reactor core production at the site, securing some 300 of the most highly skilled manufacturing jobs in the process.
Likewise, the fleet could not continue to operate without the support provided at Devonport dockyard, as the hon. Lady highlighted. The refuelling, refits and overhauls that are essential to keeping our submarines at sea are all carried out here, as the centre of excellence for submarine maintenance.
It is not only England that plays its part in the submarine programme. Quite apart from the vital work done in support of our operational submarines by the 6,700 personnel supporting operations on the Clyde, firms across Scotland are winning contracts in the supply chain for build and maintenance of the fleet. For example, as hon. Members from Scotland present in the Chamber are no doubt aware, the sensor support optimisation contract I signed recently with Thales UK in May has secured 50 high tech jobs in Glasgow, along with a further 250 in Crawley, Manchester and Somerset.
The Minister knows that I am a huge supporter of the submarine programme. He has mentioned Scotland and is also aware of the seven now decommissioned submarines, lashed against the wall at Rosyth. If he has time, will he say a little bit about the plans for the end of their lives, and if not will he meet me, perhaps in the autumn, to discuss how that programme is progressing?
I am afraid that I do not have time to cover that point, but I am more than happy to meet the hon. Gentleman in the autumn to talk about the disposal programme. We made an announcement recently. The hon. Gentleman knows that this multi-year challenge is being carefully monitored and managed by the Ministry of Defence.
The sensor support programme contract that we signed with Thales will provide support to the eyes and ears of the fleet, which includes periscopes, sonar and electronic warfare systems for both the current and future submarine classes, as well as vessels in our surface fleet.
Although the ongoing build programme and the support to the current fleet are the most visible signs of our continued investment, defence is all about planning for the future and we must look ahead to building the next classes of submarine, the subject to which the hon. Member for Barrow and Furness devoted most of his speech. I will attempt to deal with some of the questions that he posed, but will not cover all of them, as he may not be surprised to learn.
We have learned much about the importance of sustaining this supply chain from the 10-year gap in submarine production in the UK after HMS Vengeance was launched in the 1990s, which the hon. Gentleman mentioned in respect of delays to the Astute class. Having to re-establish a submarine design, build, testing and commissioning capability that had lain dormant for a decade had a serious impact on the delivery of the Astute class and economic ramifications in Barrow. This has been well documented, but it is important that we do not lose sight of these hard lessons. For this reason, the Astute programme is crucial to sustaining the skills and the work force we need to meet our clear commitment to retain and renew a credible, continuous and effective minimum nuclear deterrent.
I thank the Minister for giving way. I know that his time is so limited. It is worth putting on the record that the Prime Minister has said that, as long as he remains leader of the Conservative party, we will have a continuous at-sea deterrent. But it would help—and it would be nice—if those of us who have requested a meeting with the Secretary of State to discuss how we can prevent being blackmailed in future by the Liberal Democrats in the event of a hung Parliament, as we were in the past, could be given a particular date to look forward to.
I am grateful to my hon. Friend for reinforcing the commitment of the Conservative party, from the highest levels, to continuous at-sea deterrence. I was not aware that he had requested a meeting with the Secretary of State. I am happy to take that up, and if the Secretary of State is unavailable I am happy to meet him as a fall-back, in the first instance.
The Astute programme is crucial to sustaining the skills and the work force that we need. Through that programme, we are undertaking the planning required to prepare for the successor submarines that will replace the Vanguard class from the late 2020s. Hon. Members will be aware that we are taking the steps necessary to be ready to start building the first submarine as we lead up to a main gate decision in 2016.
The hon. Member for Barrow and Furness asked whether this decision could be advanced, saying that this might help both cement the decision and, potentially, reduce the cost. Another lesson that we have learned from shipbuilding programmes is that unless the design is mature enough at the time that the investment decision is made—in other words, if a decision is rushed—additional frictional cost could be built in, through changes to the design programme after the contract has been priced, which can delay the programme and add significantly to the cost thereafter. We do not want to repeat the mistakes made at the time of the Astute contract being laid, by making a premature decision on the successor design.
That is a good point. Could we have main gate and then do the pricing at some point later?
As the hon. Gentleman will learn as he gets more used to the defence procurement rules and regulations that apply in the Ministry of Defence, the main gate investment decision is taken at such time as the design is available, to enable the contractor to price against it. It is on the basis of a price proposal—not necessarily a firm price, but normally it will be, under this Government—against a specific design. That is the main investment decision point and we do not believe, at this time, that it will be possible to advance it.
I will press on, if I may, rather than addressing too many of the hon. Gentleman’s other specific questions. He asked about our commitment to continuous at-sea deterrence. I think that I have addressed that from the Conservative point of view. He asked about the alternatives review and the position of the Liberal Democrats. I have to refer him to the Liberal Democrats, to await the publication of whatever they or the Deputy Prime Minister choose to publish in relation to that.
We are clear that stability and security for the UK are absolute priorities in the Ministry of Defence, albeit they must be managed within a financially restrained approach, in these difficult economic circumstances. We have led the way in the submarine domain, in seeking to extract efficiencies through the submarine enterprise performance programme, which will help to ensure we have an affordable programme that continues to stimulate growth and secure jobs and, most importantly, continues to deliver some of the world’s most advanced, powerful and formidable machines to the Royal Navy.
Question put and agreed to.