Wednesday 4 December 2013
[John Robertson in the Chair]
Energy Intensive Industries
Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Evennett.)
I thank Members and the Minister for attending this early-morning debate, which appears on the Order Paper with the catchiest of titles: “Cumulative electricity tax burden for energy intensive industries”—truly a headline writer’s dream. Their presence speaks volumes for the importance industry gives this issue. I have been approached in the corridors this morning and in the past two days by people who cannot be here, but who are closely following the issue because they have had representations from their local manufacturers, too.
I and other colleagues applied for the debate at the urging of the British Ceramic Confederation, which represents tableware firms and brick and tile makers in my area—north Staffordshire—and across the country. Indeed, on Friday, I am visiting one of them—Ibstock Brick, in Chesterton, in Newcastle-under-Lyme—to view first hand its £20 million investment in brand-new kilns, which use the Etruria marl in the company quarries just a couple of miles away in Knutton and Silverdale, in my constituency. The fact that we are having this debate is also due in no small part to the urging of my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), who has been cracking the whip for not only her local industry, but the sector.
The debate is very timely. It comes not only as energy prices for domestic customers have taken centre stage following the price-freeze initiative introduced by my right hon. Friend the Leader of the Opposition, but just a day before the autumn statement. The ceramics industry has lobbied the Chancellor of the Exchequer and the Minister hard for measures to tackle rising energy costs. It is not only the ceramics industry that has done that, but the glass, steel and chemicals industries—all sectors that describe themselves as highly energy intensive industries. In short, they are the cream of the UK’s manufacturing industry. We will no doubt learn tomorrow whether their pleas have fallen on deaf or, hopefully, receptive ears.
When it comes to my local ceramics industry and the potteries, I am more used to hearing cries of anguish over gas than electricity, because gas mostly fires the kilns. Only last week, 13 Members with ceramics interests, from across the parties and across the country, signed a joint letter to the Select Committee on Energy and Climate Change ahead of its session last Thursday on gas storage. A delegation of us also recently met the Minister to raise issues along the same lines on behalf of the industry. In our representations, we questioned the Government’s recent decision not to involve themselves in actively encouraging more storage to tackle gas price volatility and future security of supply. We were pleased that the Committee’s members took those concerns on board in their questioning of key representatives of the gas industry last week.
The debate is about the cost of that other staple and crucial energy source: electricity. On average, the ceramics industry uses more gas, but quite a number of our manufacturers employ some of the most electro-intensive processes in the UK and, indeed, Europe.
I congratulate my hon. Friend on securing the debate. Three of the five biggest users of energy are located in Scotland, so he will understand my interest in this subject and, in particular, in the effect of Government policy. These industries are not able to get the grants available to their competitors in mainland Europe, which is leading to the possibility of job losses. Does he accept that the Government need to do more in those circumstances?
Before my hon. Friend comes on to Scotland, may I congratulate him on securing the debate? He is very knowledgeable on this matter. Is he aware that the INEOS ChlorVinyls plant in Runcorn uses electrolysis to manufacture chlorine? As a consequence, about 70% of the production costs on the site are accounted for by electricity. Some 1,800 people are employed on the site, so it is important that this matter be resolved. Is it not important that the Government look at the carbon floor price?
I thank my hon. Friend for that intervention. I know the INEOS plant on Merseyside—it is an ex-ICI plant—very well, because two of my cousins from the extended Irish side of my family work there. Like all Members, I have had representations from INEOS, which is a major employer in my hon. Friend’s constituency. The company made exactly the same point—that 70% of its costs go on energy, so if we are substantially out of line with our competitors in Europe and the world beyond, it suffers a considerable disadvantage.
I thank the hon. Gentleman for securing the debate. Germany has methods of subsidising high energy use-based steel, because it has high green taxes. The trouble is that the unforeseen consequences of our green taxes—they were, in all fairness, started by the previous Government—are mounting for industry. If we are to carry on with green taxes on bills, we must find a way to help these highly energy intensive industries; otherwise, we will export our business abroad.
I thank the hon. Gentleman for what is the third intervention. I will come to the comparative prices in Germany, which has long had a strong green movement. In the past, it has also had the benefit of wide-ranging, simple schemes, not least in respect of coal, something that affected my constituency years ago. One of the things I want to come to later is the complexity under which our industry has to suffer.
I thank the hon. Gentleman for giving way—he is a very popular individual this morning. One of the issues I have received the most lobbying on in my constituency is green taxes. We have the second-largest manufacturing base outside Belfast. The Government have promised to make business easier and more competitive and to remove bureaucracy, but we need to do something about this issue, because our manufacturing industry is not competitive out there, and we need to keep our jobs in the UK.
I am grateful to be so popular for the first time in many a month. I do not want to make this party political, but one of the lessons the Government seem to have learned from the Labour party’s initiative on energy prices is that we need to have simplicity and to reduce prices for domestic customers. However, the same message needs to be learned in respect of industry across these islands.
As I was saying, the ceramics industry, along with other industries represented here by Members, uses some of the most electro-intensive processes in the UK and Europe. The advanced refractory and technical ceramics manufacturers, which make products that must withstand high temperatures, operate electric arc and indication furnaces at well over 2,000° C, which is getting on for half the surface temperature of the sun.
That brings me to one of the key points I want to make. Several of our major manufacturers in these highly competitive industries have already moved overseas, relocating inside and outside Europe, including in Germany and France—our major European competitors—and they have cited electricity costs as a key reason for doing so. That is happening in not just the ceramics, but other sectors, such as chemicals and steel. We have heard about INEOS, and Members will no doubt want to refer to the steel industry and the experience of Tata.
To take one further example, the German multinational chemical company BASF, which is a major employer near Manchester, just north of my constituency, wrote to me to underline that electricity and other energy costs have been responsible for rendering uncompetitive its 60-year-old Scottish pigments plant at Paisley—the group’s second most energy intensive plant. As a result, that plant will close in 2015, with the loss of another 150 jobs. That is the stark message from the industry about UK competitiveness. Manufacturers now typically pay between £80 and £100 per megawatt-hour in the UK. Some of their German competitors pay nearer to €40—not even £40—per megawatt-hour, which is less than half that price. In France, they pay €50. If nothing is done, and if UK electricity costs rise further, more businesses, investment and jobs here will be put at risk.
I congratulate my hon. Friend on obtaining the debate. Must not we make sure that we can maintain manufacturing jobs in the UK, including in the ceramics industry, and support energy intensive industries, while enabling them to decarbonise? A key difference between the UK and Germany is the fact that in Germany the power sector has been transformed with a move towards clean energy. We must not lose sight of the necessary innovation and the transformation of the energy sector.
That was one of my hon. Friend’s shorter interventions, Mr Robertson. Her constituency, Stoke-on-Trent North, includes Burslem, the mother town of the potteries. She is the Chair of the Environmental Audit Committee and will be sadly missed when, as she has recently decided, she retires at the end of this Parliament. I totally agree with her; what we need is a balance. What I want to show today, in the light of the pleas from industry, is that we have not got it quite right yet.
I shall be as quick as I can—and I, too, congratulate the hon. Gentleman on obtaining the debate. The topic of Germany has been raised, and we should all understand that its emissions are higher than the UK’s per capita and per unit of GDP—by about 30%. Germany has more renewables than we do, but burns far more coal and will not go along the route that we have taken so unilaterally and quickly.
The hon. Gentleman makes the point very simply; we must look at things in the round when we consider reform of the system. I want to explain that industry wants reform to be simple and far-reaching, to permit competition with big companies that enjoy great support in Germany.
We are all familiar with the concept of fuel poverty—elderly people or less well-off families spending significant parts of their income on keeping warm. That concept could, strange as it may seem, equally be applied to some of our major manufacturers. Energy can account for up to a third of all costs in the ceramics industry and up to 70% of costs for major chemicals manufacturers, as we have heard. Big international price discrepancies matter, and will matter more if prices continue their inexorable rise. Like the household bills that we have put under the microscope in recent weeks, the price that industry pays for electricity also breaks down into three main components. One is the wholesale cost, which is rising. Another is climate-related charges. Hon. Members will have to bear with me while I go through a short list of what they include: the carbon price floor, the EU emissions trading system charges, the climate change levy, the renewables obligation, small-scale feed-in tariffs and, to be added to that bevy of burdens in the future, contracts for difference under electricity market reform. The third component is transmission charges, which are also increasing ahead of inflation, and which also include climate-related costs in the form of subsidies for offshore wind and other intermittent renewables.
I do not want to torture hon. Members and the Minister into torpor and total submission, but I shall give a couple of examples, provided by the British Ceramic Confederation, of the present and future impacts on industrial electricity prices of some of the carbon taxes and climate levies. Today, without climate change policies, the baseline electricity price that is being paid is about £70 to £71 per megawatt-hour. The climate change policies add £4 to £14 to that, so the cost rises to between £75 and £85. It is reckoned that, in 2020, which is not so far off, on top of a forecast base of £79 per megawatt-hour, the policies in question will add £15 to £35 or so; and in 2030, with the same forecast base, the cumulative effect of carbon tax and levies will, it is estimated, add £25 to £55, taking the price of electricity beyond £100 per megawatt-hour, to a top-of-the-range £130.
My hon. Friend referred to the bevy of burdens on energy intensive industries. When I talk to the likes of INEOS and GrowHow, in my constituency, they say they want certainty and simplification, which is surely the way forward, and a long-term policy, so that they know what is coming in five and 10 years.
My hon. Friend anticipates the final paragraph of my speech—which is not too far off—with a plea for simplicity and predictability.
Industry’s message about comparative prices and prospective increases is simple. With non-baseload charges rising so rapidly, on top of wholesale price increases, the UK’s energy intensive industries will be at a growing disadvantage, not only compared with international competitors, but because of lower-cost countries internationally that are hungry for their investment. Of course, the fact that the playing field is so far from being level harms UK industry, but it will also do nothing to help with climate change or to reduce carbon emissions, if it means that manufacturing ends up in less energy efficient factories in countries with a laxer view of their environmental obligations. I know that my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) is concerned about such prospects for carbon leakage.
I refer my hon. Friend and the Minister to the report of the Environmental Audit Committee on the energy intensive industries compensation scheme and the issue of carbon leakage. There is a need for proper research on which to base future policy, to provide the necessary certainty.
I hope that everyone will put the report on their Christmas reading list and that the Government will take note of the evidence base and the recommendations.
What is to be done? Industry, although deeply concerned, is not totally ungrateful to have had the Government’s ear in recent years. There has been a welcome for the announcement in the Budget that ceramics and other industries would be exempted from the full cost of the climate change levy. I recall that in giving that news the Chancellor paid tribute to his Tea Room discussions with my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt), who chairs the all-party group on energy intensive industries. Of course Opposition Members thought that that compliment meant that his political career was done for, but changes since then have happily proved us wrong. The reality is that the tax exemption is hardly what the British Ceramic Confederation calls a game-changer. Welcome though that gesture was, it will save only an estimated 2% of energy costs for ceramics, mineral and metallurgical companies. Similar things can be said about the £250 million package to compensate energy intensive industries in the 2011 autumn statement—relief that was extended in the recent Budget—and about the sentiments behind the exemption, which the industry argues is too limited, from the UK’s new contract for difference charges.
What further things would those vital industries like from the Minister today and from the Chancellor, if not tomorrow, then in the future? One thing is further news on practical implementation, without state aid complications, of the climate change levy exemption. Looking further ahead, they would like the compensation package that has already been announced to be linked to the carbon price floor, so that it remains for the duration of the policy, and so that its value will reflect the trajectory of the price floor, if that continues. The industries would also like a widening of the contract for difference exemptions, so that there will be help for more companies than the estimated 10% of the ceramics industry that it is thought will be helped. They would certainly like a bigger helping hand in relation to Brussels. There was dismay, a fortnight ago, in the ceramics, glass and cement industries at the discovery that they would be excluded from compensation under the EU emissions trading system, even though highly electro-intensive processes are employed in the sector.
I am grateful again to my hon. Friend for giving way. I have had many representations from the glass industry about its being excluded. There is a highly successful glass factory in my constituency, but its concerns are so great that it is bound to lose jobs as a consequence of being excluded from compensation. Does he agree?
I certainly do. As I move to the final page of my remarks, I have some brief comments on the glass industry that reflect my hon. Friend’s concerns.
What the industry wants most of all, however, is a radical change of approach to stop our international competitiveness from being eroded further and even faster. The carbon price floor has inflicted pain on the industry for no discernible benefit, and its dream scenario would have the Chancellor abolish it entirely tomorrow. As with the measures affecting household bills, energy intensive industries would also like to see new climate-related charges, such as contracts for difference, paid from general taxation, because the nature of their businesses are such that they cannot protect themselves against such charges.
Other hon. Members will no doubt want to talk about industries other than ceramics, but before I let them, I will just say a few words about glass, which is another staple industry that is crying out for help. British Glass tells me that, since the UK climate change agreements took effect at the turn of the millennium, half of UK glass manufacturing sites have closed, with some 3,500 jobs lost. Despite the difficulties, it is still a £1.7 billion a year industry, employing 7,000 in the UK, but because it faces rising costs through rising green taxes and being ineligible for the EU help that my hon. Friend the Member for Central Ayrshire(Mr Donohoe) referred to, it fears that yet more jobs will go. We will then simply import more glass, which is bad for our balance of payments.
My hon. Friend makes an important point. Energy intensive industries form a large part of our manufacturing base. All parties have said that they want to protect and, naturally, improve manufacturing. Otherwise, we will end up importing many more goods. That is why it is vital that we take radical action to ensure that our manufacturing industry is promoted and protected.
I entirely agree. From my 12 years as a Member of Parliament, my experience is that—I hope the Minister can change this mindset—the UK’s generally laissez-faire approach to industry, as well as its studious approach to implementing directives, means that we, in effect, give less support to our manufacturers than France, Germany, Italy and other leading nations give theirs.
I want to end with a plea to the Minister, which I am sure will fall on receptive ears as I know him to be intensely practical. If the Government are not minded to be as radical as the industry wants, the industry would certainly like more simplicity, which is a particular plea from BASF and the chemicals industry. End the plethora of levies by merging them into a single carbon tax, with the existing rebate scheme under the climate change agreements, to cut costs and bureaucracy and to reduce the mind-boggling complexity around green taxes and levies that often reduces Members of Parliament to complete confusion.
Thank you for listening, Mr Robertson. I look forward to contributions from colleagues and to the Minister’s response.
It is privilege to serve under your chairmanship once again, Mr Robertson. I congratulate my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) on his lucid explanation of the case for more Government support for energy intensive industries.
My constituency plays host to Tata Speciality Steels, Naylor Industries plc, which is a ceramics manufacturer specialising in clay pipes, and Wavin, which also manufactures clay pipes and lies a bit further to the west of the constituency. We are home to a paper mill at Oughtibridge, which is unfortunately due to close in 2015, ending a 140-year history of paper making on that site. My constituency is also home to British Glass, and I am very proud about that.
Manufacturing represented 12% of national output in 2011 and 8% of employment. In my constituency, 14% of output was generated by manufacturing, which accounted for 11.8% of local employment. Manufacturing therefore still matters in my constituency and in south Yorkshire. The big manufacturing employers in my constituency, in steel and ceramics, are also high energy users, and it is estimated that about a third of their production costs relate to energy use. My work as an MP is about not only talking up manufacturing and everything that is needed to support it, but making the case to the Government on how they can help to secure cost-competitiveness in a global context. For many such industries, energy costs are a key factor.
What are the facts on energy costs for high-end users? Tata Steel stated on 2 December that wholesale electricity year-ahead prices are 70% and 45% higher than in Germany and France respectively. Policy-driven taxes and levies for the most intensive users were 2.5 and 6.5 times higher than in Germany and France respectively in 2011. The scale of difference is clearly large enough to turn profit to loss and to send out negative signals to potential investors.
On that point, there is a large company in my constituency whose parent company, which is overseas, is constantly reviewing its overheads and the bottom line, which, for many, is the cost structure. Where such companies see the opportunity for reduced costs overseas, there is the serious possibility of their relocating.
I completely agree with the hon. Gentleman. BASF pointed out only a couple of weeks ago that there is a real risk of losing at least 10% of European manufacturing capacity to the US, because of the much cheaper energy costs, but we will not go into that debate this morning.
On taxes and levies, the British Ceramics Confederation has pointed out that the Department of Energy and Climate Change’s analysis shows climate-related charges are already 19% of the base load price, and that will rise to 47% in 2020. The Engineering Employers Federation states that the Government’s estimates indicate that industrial electricity prices will have increased by 70% by 2030. Moreover, Tata Steel is clear that the green levy with the greatest impact today is the renewables obligation, which, along with small-scale feed-in tariffs, will cost £10.50 per megawatt-hour in the year from April 2014, which is an increase of more than 100% in three years. Tata also points out that many steel makers in Europe will either be completely exempt from the charge or have their charge capped at €0.50 per megawatt-hour. There is clearly a serious problem here for such industries in the UK; spiralling energy costs, compounded with myriad taxes and levies, are threatening our ability to compete, even within the EU.
The British Ceramic Confederation points out that, as my hon. Friend the Member for Newcastle-under-Lyme said, some of its manufacturers operate some of the most energy-intensive processes in the UK, and that several companies have already relocated to Germany and France, with electricity costs cited as a key reason. Even more worrying is the real risk that the current tax regime will do nothing to lower emissions globally if, as the confederation suggests, manufacturing focus is encouraged by costs to emerge in less regulated and less energy-efficient factories abroad. Carbon leakage is therefore a real threat. There is a great irony here, because energy intensive industries are making a huge effort to improve energy efficiency and thereby cut their costs. Tata uses 40% less energy today to produce the same amount of steel as it did in 1975. That is a 40% cut in energy costs as a result of its energy efficiency measures. Ceramics industries have been heavily involved in trying to improve their processes. Naylor Industries in my constituency continually strives to reduce costs by improving energy efficiency.
In summary, it is clear that we need reform of the current system of green taxes and levies, because of the risk of losing capacity, either to the EU or elsewhere, with the linked risk of carbon leakage. However, let me be absolutely clear: I have not, as yet, come across one industrialist who disagrees with the principle of green taxation. Everyone understands that a well-designed taxation system has a role to play in stimulating growth of the low-carbon economy, but that process has to be balanced with the critical need to avoid damaging the cost-effectiveness of the industrial base.
Our energy intensive manufacturers are important in their own right; I know that because I come from a family who have been involved in steel making for at least four generations. Such manufacturers are even more important given that the industries that we are talking about have a key role to play in providing components for the low-carbon economy—a point often overlooked by critics of the industries. Technical ceramics are used for nuclear, wind and solar generation. Clay pipes are 100% recyclable and have an incredibly long life. It takes 1,000 tonnes of steel of six different grades to produce each offshore wind turbine. The steel exterior for the Nissan Leaf electric vehicle was developed and produced in the UK by Tata Steel. Last but not least, the polyurethane foam insulation developed by BASF saves 233 tonnes of carbon over its lifetime for every tonne used in its production.
As my hon. Friend the Member for Newcastle-under-Lyme asked, how should the Government act to remedy the problem? It is worth listing the array of schemes in play, or due to come into play soon: the climate change levy; small-scale feed-in tariffs; the emissions trading scheme; the renewables obligation; the carbon floor price; the energy company obligation; the carbon reduction commitment; and contracts for difference. We also have the aggregates levy and the landfill tax, but both are well embedded, and nobody would touch them. I might not even have included all the schemes on that list, but the point is made.
For industry, the green tax landscape is burdensome in two key ways: there is the cost, and the bureaucratic tangle involved in ensuring compliance. For example, one business in my constituency employs a full-time, highly skilled individual simply to ensure that it meets all its obligations on green tax. The Government have committed to the red tape challenge; this is a clear red tape challenge that needs to be dealt with. That individual could be employed to improve energy efficiency in the plant instead.
I repeat: what is to be done? Industry has a few ideas and key demands. First, it wants a level playing field for European and non-European competitors on climate-related taxes and levies, to ensure that world-class companies in the UK can remain internationally competitive. EEF pointed out that an assessment of that could take place within the context of the fourth carbon budget review.
Secondly, industries need to see the detail of the promised exemption of ceramics and other industries from the full cost of the climate change levy from next year. The autumn statement would be a good opportunity to provide that detail, as well as detail about how the Government will negotiate a way through without falling foul of state aid rules. In addition, the expected change in guidelines means that the Government have an opportunity to exempt such industries from the renewables obligation and small-scale feed-in tariffs. EEF and the British Ceramic Confederation make reference to the impact of those two taxes on their members. Industries also want the £250 million package moulded around the ETS and the CFP to be in place for the duration of the latter policy, until 2030, and they want the value of that compensation linked to the upwards trajectory, as my hon. Friend pointed out. The contract for difference worries energy-intensive industries, too. They look for comprehensive exemption for industries, so that they can remain competitive.
Finally, both the steel and ceramic sectors point out that the Government could do a great deal for their members if capital allowances were increased for a wider range of energy-efficient technologies, so that a much higher proportion of the green taxes raised went back into such investments. I could also make the point about including a wider range of industries in the state aid guidelines. It is incumbent on the Government to ensure that they make that case to the EU.
The Government face a bewildering range of choices. They ought to consider two more radical proposals before making up their mind. Perhaps we need a consolidation of all the taxes and levies, or to simplify the system, to reduce the bureaucratic burden on our manufacturing companies and make it easier to work out what the cost burden should be and how best to compensate industries that are at risk of losing that competitive edge. Transparency and good environmental tax design could be achieved simply by revising and reforming the complexity of the current regime. I would like to hear the Minister’s comments on that.
Perhaps we could scrap the carbon floor price altogether—let us just get rid of it. It is a unilateral tax that is projected to pull in more than £2 billion for the Treasury by 2020, but it threatens to undermine the competitiveness of our key industries.
Of course; thank you, Mr Robertson. The Minister needs to be clear today about the choices that the Government are prepared to make in response to the demands that I have just outlined. Indeed, the Chancellor needs to be clear in his autumn statement tomorrow that the political will to protect our energy intensive industries is there. We need to hear that. Our manufacturing base demands that. Industries deserve that. More than anything else, our country desperately needs to hear the Chancellor give us that message tomorrow, and the concrete proposals that will deliver a level playing field for energy intensive industries in the UK.
Unfortunately, we lost a lot of time with the previous speaker. I now impose a limit of seven minutes. That may go down, depending on interventions. I ask Government Members not to look at the clock opposite them for guidance, as it is not working.
Thank you, Mr Robertson. I will look at the clock behind my shoulder, or perhaps you will tell me when I am getting close to my limit.
I congratulate the hon. Member for Newcastle-under-Lyme (Paul Farrelly) on securing the debate. I have been an MP for three years, and I have taken part in many debates on green jobs and how we were not moving fast enough on green subsidies. It is good to have a debate today on the 900,000 jobs in our economy in the chemicals, steel, cement and ceramics industries. I will mention one more industry, which is represented in my constituency: the aluminium industry. It, too, is affected by high energy prices. Furthermore, although intensive industry is affected most by high energy prices, all industry is affected. We are trying to rebalance the economy back towards manufacturing, and gross domestic product growth correlates to energy use, so it is nonsense to say that only intensive industry is affected.
We are not talking principally about industries moving abroad, although that does happen; we are talking about marginal decisions about investments that do not come to our country, but go somewhere else. That is much less obvious. When an investment goes to Wilmington in the United States, instead of Teesside, or to Germany, instead of this country, nothing necessarily closes, but we do not get the expansion that we might have.
Let us look at our competitive position vis-à-vis Asia, the United States and Europe. Historically, perhaps because of cheap labour costs, we have been used to some manufacturing moving to Asia, but we are now finding manufacturing moving to the United States and to Europe. That is far more worrying.
Turning to the US briefly, it is worth noting that US gas prices have fallen from $9 per million cubic feet to $3 per million cubic feet. That is utterly transformational. It is not the Government’s fault—it has nothing to do with taxes—but when something like that happens to an economy, there is a stark transformation. It affects feedstock prices for the chemicals industry and energy prices right across the piece. It has had a massive impact on the US’s competitiveness, relative to ours. Luckily, the US is a couple of thousand miles away, so the impact will not be felt quite so much as it would have been had it happened in Europe; but the shale gas revolution in the US is one of the most important events to have happened in global politics in the past decade. Members who are tardy or reluctant to endorse our taking action on shale gas need to reflect on that fact.
A bigger and more worrying issue is the EU. Our big competitors are France and Germany, and we have already heard about the differential that is arising. The issue is not so much the differential today—some may disagree with me—as the direction of travel for all of us. We have talked a great deal about carbon targets since the Climate Change Act 2008. We are the only country that has carbon targets—no other country in Europe has the same degree of statutory enshrinement of carbon targets. That fact drives behaviour. We have seen that in the dismantling of the emissions trading system in Europe. To all intents and purposes, the carbon price in Europe is now €2 or €3 per tonne, but in the UK, due to the carbon price floor introduced in April, it is about €20 per tonne. That will be absolutely devastating. At the margin, power stations will go to Holland, which is now building coal stations, and supply us through interconnectors. I do not see where that gets us.
This is an issue for all industry, not just intensive industries. The Government have assigned £250 million to help intensive industries, but that will not be enough if we are going to give ourselves differentially high energy prices into the medium term. All of us in this place need to reflect on that. I do not want to cause discord between the two sides of the House, but we have a vote this afternoon on energy prices. Some of the Members asking today that we keep prices down—something I desperately want to do, both because of fuel poverty and for the reasons we have heard about industrial competiveness—have the chance to vote on an amendment brought forward by the Labour party in the House of Lords that asks that we accelerate the closure of coal-fired power stations in this country. In my opinion, that will have the direct impact of raising energy prices by between 3% and 5%. I see the Opposition Front Benchers are whispering to each other, so I may well be about to be told that the Labour party has decided not to support that amendment.
On a point of fact, the amendment was from the Liberal Democrats. It will be interesting to see how they vote this afternoon.
I thank the hon. Gentleman for that information; whichever party brought the amendment forward, I am clean. I will not be supporting it, and I suspect that many of the people in the room are sympathetic to my petition. All I would say is that it is the official position of the Labour party that the remaining coal-fired stations in our country should be decommissioned on an accelerated basis, with all the costs that will incur for the industries we have been talking about. We should reflect on our debate this morning with regard to the debate this afternoon.
The decarbonisation target has a cost impact, as well. Nothing in the world is free. We have heard about PV tariffs; I went through the Division Lobby when the Government were reducing the subsidy for solar from six times grid parity to four times grid parity—a reasonable measure, but again, the Labour party divided on that. It is important to understand the impact of what we are voting for on fuel poverty and on the 900,000 jobs in these industries that we all care so much about.
We have been sleepwalking into this situation for several years now. We have been driving energy prices up and up, and not only industry but domestic customers are paying for that. It is time we got overall energy prices down, not just for high users, but for everyone.
I thank my hon. Friend for that intervention. To wrap up, in terms of our position on Europe, I believe we need to cut carbon. It is important, and I am not a sceptic on that stuff. My difficulty is with the idea that we have to cut carbon unilaterally. We are responsible for 1.5% of the world’s carbon emissions. We produce two thirds as much carbon as Germany per capita, and per unit of GDP. That is similar to Holland and lower than the average in the EU, yet we are pushing ahead with unilateral actions that come with a severe price. We need to think hard about that when we negotiate our way through this maze.
The points that have been made about complexity are absolutely spot on. Myriad complexities have built up in the attempt to keep a diverse set of technologies available, and those complexities are really mindboggling.
I have put points to Labour Members about solar, about their party’s position on the decarbonisation target and about the opportunity this afternoon to vote according to their feelings on an amendment that would increase electricity prices further in the UK. I will also make a few points to the Minister, which he may wish to address. We should look at our tendency to act unilaterally, hemmed in as we are by the Climate Change Act and the fourth carbon budget and all that goes with it. I ask that we get away from EU directives on renewables and the rest. Yes, Germany is big on renewables, but it has far higher carbon emission levels than we do because it burns so much coal, and because it is building 10 more unabated coal-fired stations.
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) on securing this timely and important debate. The contributions so far have shown that this issue is important outside this place, for the communities that we serve and the future of our nation.
There has been a kind of renaissance in the cross-party consensus on the importance of manufacturing over the past few years. The current Government should share some of the congratulations on that renaissance, as should all politicians. However, when we look at how our energy intensive industries are being treated, it is ironic, because their treatment undermines that consensus. The hon. Member for Warrington South (David Mowat) has drawn attention to many of the dichotomies that we need to act on in that regard.
Foundational industries such as steel, glass and chemicals are crucial to a modern, balanced economy, and very much dominate the industrial scene in the part of the world that I represent. In Scunthorpe, Tata Steel, the UK’s largest steel maker, has just announced 500 more job losses, after announcing 1,800 in May 2011, so the issue of jobs is a live one. What Tata has said is exactly what my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) reported earlier: a comparison shows that UK energy costs are 70% higher than in Germany, and 45% higher than in France.
For someone sat in Mumbai making decisions about where to place investments, those figures are going to have an impact. It is crucial to take urgent action to ensure that that impact is not negative for the UK. Furthermore, as Member after Member has said, if we displace industry from the UK to places that are less energy efficient and less carbon friendly, we will increase the global carbon impact. That would be negative not just for the UK, but for the globe.
The hon. Member for Warrington South (David Mowat) spoke about the explosion of fracking in America leading to an increase in manufacturing there. My great fear is that the traditional gas markets in the middle east, particularly Qatar, will start making overtures to industry to move to the middle east to produce there, rather than wait for the west to import their gas.
My hon. Friend makes an important point, which reminds us that we live in a global world with global decision makers and global impact. Tom Crotty, a director of INEOS, said:
“We are at a crisis point. We will not have an energy-intensive sector in this country in 20 years’ time”
if action is not taken. Karl Koehler, chief executive of Tata Steel’s European operations said:
“Our…manufacturing plants face electricity costs that are… 50 per cent higher than our key competitors in France and Germany…If the chancellor wants an industrial recovery and to rebalance the economy he must show real commitment to fair energy costs for foundation industries such as steel.”
The carbon floor tax is an interesting case study. It is a unilateral tax on manufacturing introduced by the coalition Government. They announced in 2010 that it would be introduced in 2013, and in 2011 gave a commitment to a package of support for energy intensive industries. In October 2012, the Department for Business, Innovation and Skills consulted on it, and it has now come into effect, but there is still no time scale for when compensation or mitigation will be in place because the carbon floor tax mitigation proposals are stuck in Europe. One would have thought that that would be checked out before we went down that route. Industry needs to be confident about when that mitigation will come into effect.
I have the highest regard for the Energy Secretary because he is on the side of manufacturing and wants the foundation industries to succeed, but in a written answer the Minister said that
“£16 million has been paid to 17 companies.”—[Official Report, 5 November 2013; Vol. 570, c. 142W.]
However, in a later written answer, he said that applications were still being considered, implying that nothing had been paid out. Last week, he said in answer to a question that 20 companies had had moneys paid out. There is still a bit of confusion about what exactly is happening. He is brandishing sheets of paper, which are probably complex but clarify the matter.
That demonstrates the fact that the landscape is confusing and complex. The carbon floor tax has been unilaterally imposed. There is no sign yet of any mitigation there. The mitigation of the European trading scheme seems to be trickling out. However, as my hon. Friend the Member for Penistone and Stocksbridge said, the issue of most concern to steel makers involves the renewables obligation and we need to ensure that that is addressed. The danger is that, if mitigation is not put in place, the current renewables obligation will be catastrophic to foundational industries in the UK.
What needs to happen next? We must maximise efforts to achieve state aid clearance on the carbon floor tax, to move to compensation or to implement quickly interim measures to give confidence to investors and our manufacturing base. We must extend the time horizon of the package, which is currently three years. Investment horizons in industries such as steel extend for decades. The principle of long-term certainty is accepted by the Government and Opposition for support schemes for low-carbon generation. We need the same sort of long-term certainty for these investments.
I pay tribute to my hon. Friend and parliamentary neighbour the Member for Newcastle-under-Lyme (Paul Farrelly) for securing this debate. In terms of the long-term vision, energy issues are important, but it was not that long ago that jobs, particularly in the ceramics industry in north Staffordshire, were being lost abroad not because of energy costs, but because of labour costs. Should we not look at the issue in the round and take all aspects into account?
Absolutely. I am aware, Mr Robertson, that other hon. Members want to contribute to the debate, so I will close by reinforcing the need for urgent action now. The autumn statement tomorrow provides a real opportunity for the Chancellor to deliver support for our foundational industries, so that they are here today, here tomorrow and can be a confident part of our future.
I congratulate my hon. Friend on his quick-witted response to your invitation to speak, Mr Robertson. May I add my congratulations to the hon. Member for Newcastle-under-Lyme (Paul Farrelly) on securing this important debate? He made a strong case in support of energy intensive ceramic industries in his constituency. I want to speak about an energy intensive industry in my constituency and to refer to the packaging industry.
My constituency has a company that has manufactured cement for more than 150 years. It was originally called Rugby Cement, but is now operated by CEMEX. It is one of the largest plants of its kind and the most recently erected in the UK, involving total investment of around £200 million. It is operated by one the world’s largest producers of cement.
Energy costs for cement manufacturers takes up to 40% of gross value added, of which electricity is a significant part, but not in this instance the primary source of heat. In contrast with steel, aluminium and ceramics, the primary heat source in cement manufacture has traditionally been coal, but it is now increasingly alternative fuel, often derived from waste, ensuring that waste is put to good use instead of going to landfill. In that way, it contributes a significant environmental benefit.
The electricity is used in the process of grinding the clinker to create cement powder, in the movement of various materials in the plant and the blending process to create different varieties of cement products, and finally in the bagging of the finished product for transportation and sale. Therefore, significant amounts of electricity are used.
Before coming to this place, I spent 30 years in the packaging industry and I find myself chair of the all-party group on the packaging and manufacturing industry. It represents companies involved in the manufacture of paper, board, aluminium, plastics and particularly glass packaging. We have heard from hon. Members about the impact of electricity prices on the manufacture of glass and I will refer particularly to that used for bottles and jars. Manufacturers of cement and packaging have seen significant increases in the cost of energy. The British Glass Manufacturing Confederation has referred to a 14% increase in the past 12 months.
That increase has arisen partly as a consequence of the Government’s objectives on climate change and carbon dioxide emissions. Hon. Members on both sides of the Chamber today have recognised that the present and previous Administrations have gone too far and imposed an excessive burden on those manufacturers. The present Government have recognised that in their action to exempt the most energy intensive industries from that burden. The announcement by the Energy Minister in July this year was welcomed by many energy intensive industries as a start and a move in the right direction. I am sure, across the Chamber, that we hope the Minister will tell us that the Government will be able to go further. However, there are significant concerns that some industries have not benefited—cement and packaging fall into this category—because they are not eligible for the compensation that has been announced.
Both sectors have made representations that electricity costs in the UK are significantly higher than in other countries, and increasingly, manufacturers are multinational, with plant across the world. CEMEX, for instance, is a multinational producer, and it knows exactly what it costs to produce a kilo of cement at any location in the world. It is able to calculate where the most cost-efficient location is and a concern, which has again been expressed across the Chamber, is that if we are not able to provide additional forms of support in terms of energy costs, manufacturing will migrate to overseas plants rather than taking place in the UK. It will be an absolute tragedy if, as our economy recovers and turns the corner, our manufacturers are not able to take advantage of the growth in the economy and of the additional effect that that will have on UK employment.
That is particularly important in respect of the cement industry, because construction has been in a difficult place over the past five years. I am told that the supply chain is starting to see a renaissance and increased activity, and I very much hope that our UK-based manufacturers will benefit from that resurgence. I hope that the Minister will be able to provide reassurance today to Members across the Chamber about the work that the Government will do to support our energy intensive industries.
I rise to speak as the secretary of the all-party parliamentary group for the steel and metal-related industry and because steel is an extremely important industry in my constituency, which has 19% of its employment in manufacturing—considerably higher than the UK average. Steel and a lot of related metal industries and the automotive industry are extremely important to me.
I congratulate my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) on securing the debate, and I would particularly like to congratulate my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) on her contribution. I shall try not to repeat her comments, given the shortage of time, but I would like to endorse everything she said.
Although huge efforts have been made over the years to improve energy efficiency, with steel production now being 40% more efficient than it was in 1975, it is becoming increasingly difficult to find additional savings. It becomes harder and harder, and one thing I have asked the Government before—and ask them again—is to take another look at such things as enhanced capital allowances and renewable heat incentives, to try to recognise and incentivise increased efficiency measures and better use of resources. In the long term, I think we also need to raise that issue as part of the EU emissions trading scheme, because when companies have really made a huge effort to make massive improvements, which is obviously helping us all globally to get emissions down, we need to try to recognise that.
Tata and many other steel manufacturers already recycle waste products in their factories and reuse a lot of the heat that they produce. Of course, metals are highly recyclable substances, and, again, those are the sorts of things that we should be supporting. However, it is a highly competitive world and we know that if we want to see UK-produced steel products and other products used in UK infrastructure, we have to get the price right.
On the use of UK products, I really would like the Government to move forward with the idea of targets for percentages of local content in big infrastructure projects and to look again at developing criteria on local economic benefits in assessing tenders for major projects. That has been done elsewhere in Europe, so it is not impossible to do it and still keep within European regulations. This is very important, and we could report how much local content was used, which would really flag up how much we think it matters that UK products are used in UK infrastructure. However, none of that can happen unless we get a competitive price. We must have a competitive price or we cannot even get out of the starting blocks on tendering for any UK infrastructure projects.
Energy is a major component cost, costing Tata Steel some £300 million last year. That is a huge bill. If we take a conservative estimate and say that energy costs are 60% more than in Germany—some colleagues have quoted 70%—the difference even then can amount to more than 10% of the product price. That is the difference between people being able to sell their product and not being able to. It makes a massive difference to competitiveness, and it is virtually impossible to offset that type of competitive disadvantage.
As we know, the carbon price floor is a unilateral tax. It was introduced in the UK and now we are in a muddle, trying to sort out the state aid rules in order to give help, whereas if it had not been imposed in the first place, we would not have to try and get the mitigation measure. The carbon price floor is a major disadvantage, putting us at a considerable competitive disadvantage as compared with places such as Germany and the Netherlands—we are not talking about cheap labour countries, but comparable countries in Europe.
Having said that, even if the state aid rules are sorted out, the rebate will only be 80%, so there is still an outstanding 20% that we will not be able to get. In addition, the renewables obligation is double what the Government’s mitigation measures will give back, so there is a real need to have a complete review of the whole green tax issue—of the complexity, as has been mentioned, and of the fact that the renewables obligation is what seems to be causing the most difficulty. I ask the Government to have a real look at the cost differential between the UK and elsewhere in Europe, which arises from the renewables obligation. As has been mentioned, the costs in other countries are something like 50 euro cents per megawatt-hour, whereas here we are looking at £10.50 per megawatt-hour. That sort of difference is creating a huge problem for our manufacturing industry.
I ask the Government to look at the whole issue—at the interplay of all these taxes. What we are saying today is that it is about the cumulative impact. It is about looking at the whole picture of all the different elements of the green taxes, not because the industries are against them but because the industries want a level playing field and for the system to work for everyone across Europe equally.
As ever, it is a pleasure to serve under your chairmanship, Mr Robertson. I add my congratulations to my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) on securing this very important debate.
The Minister has been asked a number of questions, and a number of comments have been made to him by Members on both sides. Many have been from those who represent constituencies where these issues are very important, so I shall limit my contribution to give the Minister enough time to reply. There is no point in repeating all the arguments that have been made very well. Many key concerns are coming through regarding the tax system for energy intensive industries. I want to highlight one of the comments made by my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith): she called for clarity and pointed out that energy intensive industries support a well designed system of taxation and understand the need to decarbonise. I do not think the two things are contradictory, but one issue that most speakers have mentioned is the complex nature of the tax system and related issues. I would be very pleased if the Minister commented on those things.
I want to make a very brief point—I am sure you would pull me up if I did otherwise, Mr Robertson. Are we not missing some of the wider implications? Germany has been mentioned time and again, but the way in which Germany is operating its system, getting rid of the monopolies and concentrating on local, not-for-profit providers, is completely different. That is the issue, really. It is about a fundamental root-and-branch review of how we do things, so that we do not have the six monopolies, but actually have a different way of doing things.
We can always learn from how other countries do things, although one of the things about Germany that is not publicised much is that it imports much of its nuclear energy from the Czech Republic, which is what sometimes leads to its cheaper prices.
I would like to comment on some of the things that have been said about the importance of our manufacturing industry, because manufacturing is a key part of our coming out of recession and moving into economic growth. It is not only something that this country should be very proud of historically as, moving forward, we are at the cutting edge of some of the best manufacturing in the world. I personally feel very strongly about that and I am pleased that a number of hon. Members have talked about its importance to our economy.
There are concerns that the carbon floor price, which was introduced by the Chancellor of the Exchequer, imposes an additional burden on energy intensive industries and hampers our competitiveness. It is also on an upward trajectory: it is going up year on year. It was increased again in last year’s Finance Bill. The hon. Member for Tiverton and Honiton (Neil Parish) is no longer present, but he talked about the carbon floor price being a green tax. It is important to state on the record that the carbon floor price tax is entirely a revenue-raising tax; it goes to the Chancellor.
We cannot afford to end up in a situation in which the carbon floor price damages energy intensive industries while at the same time achieves a weak carbon-abatement effect. It is important to take a sector-by-sector approach. The issues inherent in and the support required by the ceramics industry, for example, may not be quite the same as those in the steel industry.
I am particularly pleased that the Minister of State, Department of Energy and Climate Change, the right hon. Member for Sevenoaks (Michael Fallon), will provide the response on behalf of the Government, because I am sure that he will be able to provide some clarity on where he stands on the carbon floor price. Earlier this year, before he became an Energy Minister, he called the carbon floor price
“a fairly absurd waste of your money”,
before going on incidentally to announce that it had been introduced by Labour, although as I have said, it was introduced by the present Government in 2011. I would be interested to know where the Minister stands now on that statement. How can he square it with his support for the carbon floor price?
It is vital that we keep British industry competitive, while decarbonising its activity. Much more work is needed, in conjunction with energy intensive industries, to develop a plan for how to achieve that.
I want to raise an important point in relation to the need for a plan. Today we have heard that Lotte at Wilton has announced that it is to close a plant, with the loss of 70 jobs, in the area next to my constituency. I remember when that plant went into administration in 2009 and NEPIC, the North East of England Process Industry Cluster, under the regional development agency, got Lotte, a South Korean company, in to purchase the plant and it got going again in April 2010. What we want, as my hon. Friend the Member for Stoke-on-Trent South (Robert Flello) said, is a rounded—all-round—plan in relation to how regions function, what type of regional investment we have and what—
I thank my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) for his comments. He gives another example of how missed the regional development agency is in the north-east—in our region.
It is right that the Government are taking steps to help energy intensive industries that must adapt to the EU emissions trading system and the carbon floor price. We do not want to see the UK’s carbon emissions just shifted overseas. However, if we are to meet our emissions targets and avoid catastrophic climate change, we need to reduce those industries’ carbon emissions.
Energy intensive industries are an important part of our economy, accounting for 4% of gross value added, and 125,000 people are employed by them directly or in their supply chains. Many energy intensive industries are at the forefront of the low-carbon economy, producing the mechanisms that we need to develop our low-carbon industries. That was set out in great detail by my hon. Friend the Member for Penistone and Stocksbridge. However, like all sectors of our economy, this one must decarbonise if we are to meet our crucial emissions targets. The transition to low-carbon power generation will keep energy prices down in the long run. The alternative is to remain at the whim of unpredictable yet ever rising gas and electricity prices.
As the EEF, which was formerly the Engineering Employers Federation, has pointed out, if the Government were serious about the transition to a low-carbon economy, with innovation and green jobs at the centre of that transition, they would be supporting research and development. We question why research and development on energy as a percentage of Government R and D spending is comfortably less than the OECD average. However, the bigger problem is the Government’s counter-productive, counter-science and counter-business decision not to adopt a 2030 power sector decarbonisation target, which was supported by the EEF, which represents many companies in this area. That decision, or rather non-decision, is scaring away investment, costing green jobs and jeopardising our future energy security.
Actually, I did not say that; I said that the target was supported by the EEF, which represents many companies in this sector.
The Government need to be clearer on how they will provide support for energy intensive industries. In his autumn statement, in November 2011, the Chancellor announced that measures would be introduced to reduce the impact of the Government’s electricity market reform policies on energy intensive industries. My hon. Friend the Member for Scunthorpe (Nic Dakin) set out many of the issues in this area. That announcement was made almost two years ago, yet energy intensive industries still have very little detail on how that will work in practice. Perhaps the Minister can enlighten us on that today.
I understand that the Government concluded their consultation on the exemption eligibility for contracts for difference costs in August. What progress has been made since that time? Exemption costs for contracts for difference will be collected through the supplier obligation. Can the Minister provide some more detail on that obligation?
I would not dream of asking the Minister to pre-empt what might be revealed in the autumn statement, but if it is the Government’s intention to introduce further compensation, could he provide an update on the Government’s negotiations with the European Commission, when he or his officials last met representatives of the Commission to discuss this matter, when he expects to receive a final decision, and whether there is a plan B in the event that state aid is not granted?
To conclude, I hope that the Minister understands the difficulties that many energy intensive industries are facing with the current tax regime and that he will listen to the concerns raised by hon. Members. I am sure that he will be acting to make changes in the near future. I also hope that he would agree with me that the single best way to reduce energy costs for intensive users is to give further support to low-carbon technologies, which provide the best solution to keeping costs down in the long run.
I am very grateful to the hon. Member for Sunderland Central (Julie Elliott) for giving me a little extra time to enable me to try to respond to some of the very good points made in the debate. I hope that, if I do not respond to them all, hon. Members will allow me to write to them on the points that I have missed out.
This has been a good debate. It has not just been a good-natured debate. I think that it has been a reasonably constructive debate and it is certainly a very important one. I congratulate the hon. Member for Newcastle-under-Lyme (Paul Farrelly) on instigating it and attracting such a good attendance on both sides of the House. He raised a number of points. He asked about our engagement with the industry. He will know that last month I met Staffordshire Members with the British Ceramic Confederation. I have also met representatives of BASF, which he specifically mentioned, to hear their particular concerns. We are always ready in the Department to continue to meet representatives of those industries that are most affected.
The hon. Gentleman raised the issue of gas storage. I know that he disagrees with our decision not to subsidise large-scale storage reservoirs, but there are fast-cycle gas storage plants being completed. Two have been completed already. Two more are due to be completed next year. That will double our gas deliverability. I do not accept that the decision not to subsidise gas storage makes any major contribution to that debate.
The hon. Gentleman asked about the position of refractory ceramics. My officials have visited some of those electricity intensive sites, and we are considering the case for including them within the carbon price floor compensation. He tempted me to speculate, in advance of the autumn statement, on the carbon price floor. I simply cannot do that. The carbon price floor is a matter for the Treasury, as he knows. What I can say is that, obviously, the Department for Business, Innovation and Skills is very much aware of concerns across industry about the level and the trajectory of the carbon price floor, and we certainly ensure that our views are known in the Treasury.
The hon. Member for Penistone and Stocksbridge (Angela Smith) made several points. She compared prices with those in France, but I ask her to reflect on the fact that France enjoys a huge amount of base load nuclear power. I hope that she will welcome the decision to replace our nuclear fleet and to invest in such base load nuclear power, a decision that was too long delayed. She also made some important points about simplifying the schemes. I am completely with her on that, and I will refer in a moment to what we have done in that regard.
My hon. Friend the Member for Warrington South (David Mowat) reminded us of the need to be competitive, and he spoke of the success of shale in the United States. I reassure him that we are encouraging the search for shale in the United Kingdom. A dozen companies are prospecting, and more applications to drill are coming in. I expect the search for shale to accelerate over the next few months. He usefully reminded us that we all bear responsibility for the way in which we vote in this House, and several of us have voted in favour of climate change objectives. Indeed, we have the opportunity this afternoon to vote down an amendment that would increase energy prices for industry and business.
The hon. Member for Scunthorpe (Nic Dakin) asked me about the working of the ETS compensation scheme, which has paid out some £18 million to 29 companies, including Tata Steel, in respect of several plants in the constituencies of hon. Members who are present: the hon. Members for Middlesbrough South and East Cleveland (Tom Blenkinsop), for Scunthorpe, for Central Ayrshire (Mr Donohoe), for Rutherglen and Hamilton West (Tom Greatrex), for Llanelli (Nia Griffith) and for Penistone and Stocksbridge, and my hon. Friend the Member for Warrington South. Those payments are flowing. They are backdated to January, and they will be made quarterly from now on. I will say a little more about the working of the scheme in a moment.
My hon. Friend the Member for Rugby (Mark Pawsey) championed the cement industry in his constituency, as I would expect him to. We recognise the pressures that that industry faces, which is why we have announced the exemption for mineralogical and metallurgical processes from the climate change levy. We are examining the case for the inclusion of cement and some ceramics—those that have come forward with evidence—in carbon floor price compensation.
The hon. Member for Llanelli spoke about energy efficiency, which is extremely important, and she also made an important point about local content. It is our intention to require, under contracts for difference, supply chain plans in respect of major contracts. Not only will that make those involved examine how they can drive up local content, but it will enable us to see more clearly where the local content is. I hope that she will welcome that measure.
The hon. Member for Sunderland Central suggested that the failure to set a decarbonisation target was somehow delaying investment. The House voted down the setting of a decarbonisation target in June, since when we have seen a wave of investment: not only the signing of the first new nuclear station in a generation but the introduction of a series of projects under our intermediate final investment decision enabling regime. She asked me what we were doing in respect of the Commission. My right hon. Friend the Secretary of State has regular discussions with the Commissioner. My right hon. Friend and I regularly go to Brussels to pursue cases such as CPF compensation, and we try to build support among other member states.
The hon. Member for Penistone and Stocksbridge made one of the most important points of all, namely, that there is a balance to be struck between green taxes, which the House has generally supported under successive Governments and which some of us have voted for, and ensuring the competitiveness of our industries. That can be a difficult balance to strike, and we are tackling it in two principal ways. We are helping to incentivise energy efficiency in industry and households, which several hon. Members described as important, and we are helping to relieve some of the short-term pressures on industry.
I agree with that, and I will come on to climate change agreements later. The Government cannot control the volatility of global fossil fuel prices, but we can help industry to exploit energy efficiency potential, which will reduce the impact of rising prices. Some of our incentives are financial ones. The climate change levy is a tax on business energy use, and the EU emissions trading system is a cap-and-trade mechanism based on the emissions of energy intensive industries. The scheme is forecast to save the equivalent of 3,100 megatonnes of CO2 by 2020. To complement the EU ETS, we have a domestic scheme, the carbon reduction commitment energy efficiency scheme, which targets large non-energy intensive organisations. That is predicted to save the equivalent of 4,800 gigawatt-hours per year, which is greater than the annual energy use of all households in Manchester.
In addition to those financial incentives, we are working to incentivise industry through several other mechanisms. Climate change agreements, which the hon. Member for Stoke-on-Trent North (Joan Walley) referred to, are aimed specifically at energy intensive industries. They provide a discount on the climate change levy of 90% for electricity and 65% for gas, in exchange for commitments to achieve energy efficiency. She is right to remind us that they are a good example of an area in which Government and industry can work together to agree achievable objectives. More than 50 energy intensive sectors have negotiated agreements under the latest phase of the scheme, which are expected to result in an 11% energy efficiency improvement across participating sectors by 2020. Looking ahead, we have recently consulted on the new energy savings opportunity scheme, which will help larger businesses to identify energy efficiency measures that will result in average bill savings of £50,000 to £60,000 per year. Subject to legislation, the first audits under the scheme will be undertaken by December 2015.
The second leg of our reforms is the recognition of the competitiveness problems faced by some industries as a result of their energy costs, which lies at the heart of today’s debate. Rising electricity prices are a real concern for many businesses, which see them as a barrier to growth. The commitments to tackling climate change that the House has voted through have contributed to increases in those bills. That is why we have set aside up to £400 million to offset some of the costs of energy and climate change policies for the most energy intensive industries.
As we move to a low-carbon economy, it is vital to ensure that the more energy intensive industries are not placed at a competitive disadvantage in Europe or across the world, and they are not forced to consider relocating to other countries. Not only would that have a negative impact on our economy, but it might result in our exporting emissions to countries that are not strongly committed to cutting carbon emissions. Many energy intensive businesses are located in areas that have been hit hard by the economic downturn, so we have to ensure that we give them the best support available.
I have spoken about the energy contingency scheme. We continue to engage closely with the Commission on the carbon floor price, to obtain the necessary state clearance. Both packages are aimed specifically at the electro-intensive industries. It is important to highlight—
It is a pleasure to serve under your chairmanship, Mr Robertson. I am pleased to have secured the opportunity to speak about podiatry services. I hope the Minister will forgive me if I speak a little briskly, but there are a number of issues that I want to cover. I am delighted that other hon. Members also wish to contribute.
In my constituency, which covers Corby and east Northamptonshire, podiatry services are delivered through Northamptonshire Healthcare NHS Foundation Trust. In May this year, the Nene clinical commissioning group and the Corby CCG initiated a public consultation on their proposal to make changes to the delivery of podiatry services, based on categorising the needs of patients as high, medium or low risk. I received letters from constituents and had constituents attend my surgery. For MPs, multiple contacts from constituents is sometimes a warning sign that there might be a problem. My constituents were concerned about the consultation, first, because they regarded it as ineffective, as it failed to communicate or engage with the users of podiatry services to any reasonable degree, and secondly because they thought it token. We know that the public are at times sceptical about consultation exercises, and with reason. It does not help when they see them as being more about selling a solution—a predetermined decision—than about genuinely engaging people in finding the best way forward.
We all recognise that services need to change for all sorts of reasons, not least due to our ageing population and the financial challenges that our local health care providers face. We MPs want to engage in consultations in which the public are genuinely involved and in which we feel that there has been rounded discussion about how best to work together, across the public sector and the different parts of the health system, to find the best way forward.
Podiatry is important for everyone, and those who need treatment in particular. The optician will diagnose things that other people might not see; the podiatrist, too, can diagnose things that are wrong with someone’s body—for example, he can spot the onset of diabetes and other health issues, including in elderly people who do not know they have them. Does the hon. Gentleman agree that podiatry is vital in checking for ailments that someone does not know they have?
The hon. Gentleman is absolutely right, and I shall turn to that point in describing the consequences of some of the changes in my area. There is a pattern across the country. I am sure that he, too, will be concerned to ensure that services are available in his area.
On 30 July this year, the clinical commissioning groups announced that their governing bodies would approve the cessation of “low risk” podiatry. They have been unable to explain to me what the standard assessment process will be for categorising patients in that way. They qualified the announcement by stating that the decision would not apply to children or vulnerable groups, which was a response to the strong feedback that the public and I, and perhaps other hon. Members, gave. I challenged the Nene CCG on the definition of “vulnerable groups”, and it told me that the term refers to
“The frail elderly and people who are likely to neglect foot-care for financial reasons”.
That is good to hear, but it is not clear who will make that assessment, and on what basis. We must ensure that the most vulnerable can access care.
I congratulate the hon. Gentleman on securing the debate. He is serving his constituents extremely well on this issue. I had an e-mail from a constituent who says:
“I have an appointment this morning, where I am expecting to be told that I shall not be receiving any more services from”
“I have Psoriatic Arthritis in my hand and feet and other joints”,
“insoles made to help me walk. ‘I am unable to reach down to do my feet myself’ I told the podiatrist, to which he replied, It can’t be helped. He then said I would have to get my husband to do my feet.”
She goes on to say that her husband
“has issues himself, I cannot ask him to do yet another task for me.”
That is an example of a vulnerable person who clearly does not feel that she has been included in the exemptions that the hon. Gentleman describes.
I thank the hon. Gentleman for his intervention. I welcome his support for the debate. He is assiduous in working on local health matters; indeed, we have worked together on some issues. I welcome him raising his constituent’s concern. It illustrates the worry about the impact of the changes and the reality of people already being advised that services will be withdrawn—even those who the hon. Gentleman and I would hope would fall under the definition of “frail” or “vulnerable”, including those who may not be able to afford care.
Access is part of the problem. At the same time when the consultation exercise was carried out, the foundation trust reviewed its estates and facilities to make savings. It closed some podiatry clinics and relocated some services, making them more difficult to access. We are talking about people who may not have transport or who may have mobility issues, so difficulty in accessing services is a further problem.
In Northamptonshire, 107 private podiatrists are registered with the Society of Chiropodists and Podiatrists. I am grateful to the society for its helpful briefing for today’s debate. Those private podiatrists are expected to provide care to low-risk patients. Costs vary across the area, so will the Minister comment on how we can safeguard our constituents’ interests by ensuring that costs are affordable where people are told that they must meet costs themselves and that as many people as possible are not charged at all where there is a clear need, in accordance with the CCG’s stated wish to include the frail and vulnerable?
I have received letters from Northamptonshire Healthcare NHS Foundation Trust podiatry staff, who told me that their jobs were being put at risk. There have been 16 whole-time equivalent podiatry posts lost, including leadership posts and the posts of musculoskeletal and diabetes specialists. That is inconsistent with the Government’s stated aim of maintaining high-quality clinical services. The reductions will create a high level of clinical risk by putting patients at an increased risk of falls, ulceration and amputation. We all want to ensure that our local hospital services, for example, can meet growing needs. We do not want more people presenting at accident and emergency or needing hospital admissions because they were not effectively treated through podiatry services.
The staff in the local podiatry service down-banded to bands 5 and 6 will be expected to carry out the same role that they currently deliver at bands 6 and 7. The view of the Society of Chiropodists and Podiatrists is that that is a deskilling or de-professionalisation of the service. I am concerned about that. Podiatry is not the most glamorous or attractive part of medicine. Not everybody wants to deal with people’s feet, for reasons we can all understand, but such work is incredibly important. Those who do it are proud of their professional skills, and we do not want them diminished, or want people not to be paid at the right level for their qualifications, because in the end that will lead to a recruitment problem
I understand the importance of the quality, innovation, productivity and prevention challenge to the national NHS strategy. I met the chief executive of the Northamptonshire Healthcare NHS Foundation Trust on Friday to discuss the issues. She talked to me about the rationale behind the changes, but she also said that there had been “learnings”. What I am learning is that the term “learnings” in health care usually means, “We recognise that we didn’t go about this in the right way. We perhaps rushed too quickly.”
Does the Minister accept that if people cannot access services where they are needed, the changes in Northamptonshire, and perhaps other areas, could create long-term problems and prove to be a false economy? I hope she agrees with that. Will she look at the staffing changes in Northamptonshire? I was asked on BBC Radio Northampton this morning what an Adjournment debate achieves, and I said that one thing is that the Minister will take an interest in what is happening in my area. I hope that one outcome of today’s debate will be that she will look at the changes in Northamptonshire, if she has not had a chance to do so already.
I do not want the Minister to override the proper role of local decision makers in deciding on the best pattern of services in our area, but a sense check on the Government’s intentions around the shift to prevention and the best use of resources, and how short-term decisions are made locally to find savings, may be a counter to that.
There seems to be a contradiction between the Department of Health’s vulnerable older people’s plan and policies that put older people at higher risk through the downgrading of incredibly important and much valued services. Along with the demographic time bomb that the NHS is facing, there is also a diabetes challenge; 2.9 million people, or 4% of those in the UK, have been diagnosed with diabetes.
I congratulate my hon. Friend on securing this debate. I recently visited the foot clinic at the Aneurin Bevan hospital in Ebbw Vale in my constituency about a fortnight ago, and I spoke to the fantastic podiatrists there. They told me about the huge and growing demands on their services because of diabetes. Does he agree that raising awareness of diabetes and the effect that it can have, particularly on people’s feet, is really important?
I thank my hon. Friend for his supportive intervention. He is absolutely right that diabetes can cause problems for people’s feet. Also, by examining people’s feet, the podiatrist can diagnose cases of diabetes and ensure that people get the treatment, help and support that they need. I am concerned that some of the estimated 850,000 people who are undiagnosed might continue to go undiagnosed if podiatrists are not able to provide proper, professional attention to people’s feet when they come into contact with them.
The National Institute for Health and Care Excellence clinical guidance on the prevention and management of diabetic foot complications sets out a foot care management plan to reduce the risk of problems occurring in those with diabetes. It is the clear view of the Society of Chiropodists and Podiatrists that there are not enough podiatrists to comply with the NICE clinical guidelines. We might expect the society to make that argument, but it chimes with my concerns locally that we have lost 16 podiatrists in our area. At a time of increasing diabetes, a reduction in podiatrists gives me real cause for concern, because the society’s view might be right.
Some 500,000 hospital beds in England each year are occupied by people with diabetic foot ulceration—more than all other diabetes complications combined. Only breast and prostate cancer have a higher mortality rate than diabetic foot ulceration. The number of amputations in England has risen from 5,700 in 2009-10 to more than 6,000 in 2010-11. It is reported that, given the increasing incidence of diabetes, more than 7,000 amputations will be performed on people with diabetes in England alone by 2014-15, unless urgent action is taken. If we look at our acute hospital budgets and compare the costs of a bed and of performing an operation and amputation—not to mention the impact on the individual concerned—we see that an increase in amputations in our area could prove far more expensive than continuing to provide the podiatry services that people have come to expect.
Does the Minister accept that the prevention and management of foot disease in people with diabetes is an essential component of every commissioned diabetes pathway, and does she share my concern that 80% of amputations each week are preventable? That is a stark figure. Can she give me an undertaking that clinical outcomes for vulnerable older people, including those with diabetes, will not worsen in Northamptonshire?
I wish to mention briefly some other issues in the short time I have left. By standardising best practice in the work of podiatrists in the UK, there is the potential to make net savings and reduce the number of accident and emergency admissions and amputations. NICE clinical guideline 119 looks at best practice. I hope that the Minister will consider how we can make sure that that guideline is followed in Northamptonshire with the resources available.
Finally, there needs to be greater parliamentary and public attention to podiatry issues. I very much welcome hon. Members’ attendance at this brief debate, and their interest and support. The subject is not particularly glamorous. Toenails, amputations and ulcerations are not things we want to think about over our breakfast, but they are important issues, particularly for some of the most frail and vulnerable people.
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the hon. Member for Corby (Andy Sawford) on securing this important debate. He is right to say that podiatry might not be at the more glamorous end of the health service, but of course it is important. I had a very good meeting with Diabetes UK within the first few weeks of taking on my new job as the Public Health Minister. Many of the points that he has raised were stressed, particularly the link with diabetes and with unnecessary and avoidable amputations. Being unglamorous does not mean that it is not important. I think we can agree about that.
The Government know that receiving personal care that is responsive to people’s needs is absolutely essential, and the service that podiatrists provide to local communities is vital in helping people to maintain their mobility, independence and well-being. We know that many other good things flow from maintaining mobility and independence.
Healthy feet allow people to be active and to exercise, which, as we know, has numerous benefits: maintaining better weight, improving muscle and bone strength, and keeping people’s emotional and mental health in a good place. There has been a lot of discussion about the isolation and loneliness of some older people, and the more active they can be, the less likely it is that they will be isolated and lonely.
With the elderly being the fastest-growing age group in Britain, increasing pressure is being put on health care, which will be reflected in the demand for podiatry care. Ensuring people have got healthy feet, preventing falls in older people, and proper and regular foot care can alert us to the early signs of other, more serious health issues, which is obviously important in people with diabetes.
Diabetes, arthritis and blood circulation problems are of particular concern, and they are big priorities for all parts of the NHS. Sometimes people are concerned that individual services or conditions are not always specifically named, but NHS England has very clear direction, through the NHS mandate, about looking after long-term conditions and older people, and podiatry is a key component of that mandate.
Access is an important factor. The hon. Gentleman is right to highlight the fact that improving and maintaining access is important.
Sometimes education is about making sure that people understand when to seek help and what the warning signs are. Podiatry is an important component of early alert work, as well as an important provision for older people and for people with long-term conditions. In situations in which services need to be changed, the NHS commitment is to make sure decisions are made in a clear and transparent way, so that patients and the public can understand how services are planned and delivered.
Through the mandate, NHS England is responsible for services and for working with local clinical commissioning groups to ensure that their services are based on the needs of the local population within the resources available—the hon. Member for Corby acknowledged the constraints—and there has to be evidenced-based best practice.
An important part of the reforms was to establish CCGs at the level at which commissioning decisions are informed. They are closer to their local communities and can respond to local needs, but they have access to good advice through NHS England, clinical senates and local professional networks. That commissioning process also takes into account the local authority’s views, with regard to the joint strategic needs assessment and, of course, the local health and well-being strategy, so these decisions do not exist in a vacuum: they are taken within a framework, all of which is geared towards local services responding to the needs of local people.
Of course, a big part of that—it is something I am always keen to stress—is the engagement with local democratically elected representatives. I am really pleased that the hon. Gentleman is so engaged with this issue. Whenever I have the chance to talk to people from any part of the health service in the course of my work, I stress the need to keep local councillors and local MPs closely informed and to work with them in making these key decisions, because I know that we are often the early warning signal when people have concerns. Like the hon. Gentleman, I have had people come to my surgery about these issues and that has been an early alert about when people might have concerns. It also allows us to respond to concerns that perhaps arise sometimes when a misunderstanding of a decision is causing undue alarm.
On the point about misunderstandings, the Minister is right. I do not want to alarm people across my area about services that they may still be able to access, but will she look at this issue in relation to Northamptonshire? If she has any opportunity to talk to the local CCGs or Northamptonshire Healthcare NHS Foundation Trust, will she ask them to make clearer what guidance there is and what assessment process there will be to ensure that people who can still access these services know that they can do so and are assessed as being in the group that can still access them?
The CCGs and NHS England are obviously aware of the debates that we have here in Parliament; I always undertake to draw to the attention of the correct parts of the NHS the debates that we have here. It is obviously not for me to tell CCGs what to do or what to commission. However, this is the whole point such debates —to highlight Members’ concerns, to give Ministers a chance to respond to them, and to explore how more could be done to allay those concerns and respond to them—so I am very happy that we are getting this discussion on the record.
The hon. Gentleman raised the issue of the education and training of podiatrists. Health Education England is working to ensure that there is an appropriate balance between supply and demand. We have already talked about the likelihood—indeed, the certainty—that demand for podiatry services will grow, because of our ageing population. HEE looks at the number of training places being commissioned. In collaboration with HEE, employers are also obviously keen to ensure that there are sufficient podiatrists to deliver the services that are needed. HEE will publish the national work force plan for England in early December—so, any time now. This year, providers have forecast their future work force requirements, which are obviously based on local service demand and which local education and training boards have moderated, to make adjustments for their education and training commissions. That piece of work is being gauged sensitively to look at local demand and the need for service provision. The assessment will be available in the published plan, which will show the position right across England.
Obviously, that process looks to the future, but we already know that the number of podiatrists working in the NHS has increased during the last 10 years, from 2,916 full-time equivalents in 2002 to 3,067 full-time equivalents in 2012, which is an increase of about 5% during that time. We are also continuing to develop the profession. The hon. Gentleman rightly highlighted that this is an area in which we need growing expertise. We introduced legislation that came into force on 20 August 2013 that enables podiatrists and physiotherapists to prescribe independently, following recommendations from the Commission on Human Medicines. Therefore, podiatrists who successfully complete education programmes approved by the Health and Care Professions Council, including conversion courses to allow existing supplementary prescribers to become independent prescribers, can begin to prescribe independently in 2014. That is a helpful step forward. Extending prescribing in this way will also help to support the key role that podiatrists play in shifting care into the community and improving the patient experience. It will benefit patients by making it more convenient for them to get treatment, as well as hopefully freeing up some valuable GP time.
We recognise that some of the people accessing podiatry services will be vulnerable; we have talked about that issue and the hon. Gentleman expressed his concern about it in his speech. We are reviewing how primary care, urgent and emergency care, and social care services can all work together as part of the integrated out-of-hospital response, looking at the whole person and considering the essential point that the hon. Gentleman made about how we can keep people out of hospital when they do not need to be there, by doing the good early alert work and ensuring that things do not progress to a point where we have the unnecessary amputations that he described.
To support that vision, the Government are working with NHS England on an out-of-hospital care plan for vulnerable older people. In doing so, we are engaged with patients, carers, and health and social care staff—all those important groups—to test those proposals and implement them. The final plan will be published later. I think that the hon. Gentleman will realise from recent announcements that my right hon. Friend the Secretary of State for Health has put enormous emphasis on the need for joined-up thinking about supporting people, particularly the frail elderly, and that is a clear priority that we have talked about a lot. All the things that the hon. Gentleman mentioned in his speech this morning are part of that process, to ensure that people understand that they have a named GP who can support them and to ensure that we spot signs of problems early. That personalised, proactive primary care is essential.
I see the Minister looking at the clock and I sense that she has a little more to say, but can she just say whether GPs will be able to refer people to podiatrists, in such a way that the service is free? Can GPs be a helpful way of ensuring that people in Northamptonshire who really need this service can get it?
Right across the country I would absolutely expect GPs, when they see the warning signs of problems, to alert people to the need for further care. That is one of the advantages of having a named GP; hopefully, they will spot the signs of problems early and recommend whatever the appropriate services are. That is very much part of the system that we envisage.
However, we also need multi-disciplinary teamworking; we need people to be joined up in their thinking. Obviously podiatry services are part of that. The hon. Gentleman has eloquently raised the concerns of his constituents and his own concerns this morning. One of the things that he focused on was the question of who are low-risk patients and how is someone assessed as low-risk. I understand that the CCGs involved modified their recommendations for future service provision in response to feedback received during the consultation, so children and vulnerable patients will still be able to access community podiatry services. However, I sense that his concern is that further work might be needed to flesh that plan out, and I know that the CCGs will have heard him express that concern; he has put it on the record today, saying that he is still concerned that those recommendations might still not be fully understood and that he would like to see more work done in that regard. I believe that the analysis carried out by the CCGs showed that only 1% of low-risk patients move into the medium or high- risk categories, but I know that he will want to have ongoing discussions about the nature of that assessment and about that figure.
I also believe that the CCGs involved took into consideration the number of local independent podiatrists who are registered with their professional body, with regard to the low-level community-based care. They are also rightly exploring the potential of developing a broader range of low-level foot care and podiatry services via the third sector and social enterprises, as part of their emerging health and well-being strategy. That is the right thing to do. Some of these services do not need to be delivered by a clinician of any sort; sometimes they might be delivered more appropriately in another setting. I believe that one of the advantages of an increasing emphasis on local planning and integrated service planning at a local level is that people can think outside the box about where certain services—particularly these important early alert services and low-risk services that can prevent people from becoming a higher risk—can be delivered.
The hon. Gentleman has put his concerns on the record; it is right that MPs have the chance to do that. The local CCGs will have heard the concerns that he and other Members who have intervened in this debate have raised, and I am sure that they will be looking to respond to and allay them. However, some of those concerns were based on speculation about what might happen if this piece of work is not got right, and it is important that we find the balance between having due concern about what might happen if services are not got right and if the commissioning of them is not right, and at the same time sending a very clear signal to those people who have medical concerns, such as diabetes or the early onset of other problems, that they must seek help and that they will receive that help. They must not be put off seeking help because of concerns about the future commissioning of services.
It was useful to put all these issues on the record, and I am sure that the hon. Gentleman’s local CCGs and other CCGs will be looking to respond further to the concerns that he and other hon. Members have outlined today.
[Mr Andrew Turner in the Chair]
It is a pleasure to serve under your chairmanship, Mr Turner. I am grateful for this opportunity to debate issues relating to the provision of dermatology in the NHS. This area has received little parliamentary attention over the years, given the considerable morbidity and mortality for which skin disease is responsible. Indeed, I think I am right in saying that this is the first debate in the House of Commons in several years on dermatology and how it is treated in the NHS.
I should declare an interest, because we are always supposed to. I have a skin condition called rosacea. It is not that serious; I take antibiotics every day and it is controllable, but it has, of course, led me to take an interest in this subject.
In preparing for this debate, I consulted widely among the different interests in skin disease, and I am grateful for the insights that I was given. It is noteworthy that the same themes emerged from all quarters. Skin disease is extensive and has a great impact. It results in profound psychological consequences for many, especially for those with severe variants of conditions. It is under-treated in the NHS, and there are commissioning issues that relate partly to dermatology’s continuing to be something of a Cinderella disease. Talking to people, I heard the expression “Cinderella disease” time and again.
Most crucially, there is wholly inadequate training, notably among general practitioners, to enable doctors to handle the dermatology cases that will come their way in day-to-day practice. Why is this? There is a view that dermatology does not matter and that it does not kill. This is both complacent and wrong. Many skin diseases have horrendous effects, even when they are not fatal. Skin cancer is a major killer, and there would be benefits from renewed focus on this disease, both to help people avoid it in the first place and to identify and treat it quickly where it occurs.
The statistics on the burden of skin disease are eye-popping. Some 54% of the United Kingdom population experience a skin condition in any 12-month period. Of those, 14% seek medical advice, usually from a doctor or nurse in the community. Some skin conditions will be trivial, but many are not. Skin conditions are the most frequent reason for people to consult their GP with a new problem. Some 24% of the population visit their GP with a skin problem each year.
I congratulate my hon. Friend on obtaining a debate on a subject that has not been discussed for a long time. I have looked at facts and figures on dermatology services in my constituency. Would it surprise him to hear that, in the first six months of the year, the trust’s dermatology department had 501 day cases, 4,160 new out-patient appointments and 7,951 follow-up out-patient appointments, and undertook more than 3,292 out-patient procedures? Does not that show the demand in the system for dermatological services?
I am not surprised. I found similar figures in Lincolnshire. I should think that the same sort of problem will be found anywhere in the England.
The most common reasons for people visiting their GP are skin infections and eczema. Nearly a fifth of all GP consultations relate to a skin disease. Atopic eczema is the most common form of eczema. All my children have had it, and one of my boys suffered badly. Some children suffer grievously from it. It can affect people of all ages, but is primarily seen in children and affects up to 20% of children by the age of seven. Most people grow out of it, but a number of adults continue to show symptoms at a later age, some having the condition for life.
Eczema is typically characterised by red, sore and itchy patches of skin. For those who have it or those, such as parents, who have to care for a child with it, eczema can be highly debilitating. Sleep deprivation is common in children with eczema and, therefore, of course, in their parents. It causes major disruption to family life, not least because of the application of endless amounts of ointment. I know all about that.
Psoriasis, from which my brother and my mother suffered, has serious effects. It affects only 2% to 3% of the population, but often has devastating consequences for those who have it. Its onset is typically at 15 to 24 years, which is such a crucial stage in a person’s development. It is an immune condition that triggers excess replacement skin cells, which can lead to raised plaques on the skin that can be flaky, sore and itchy. It is a serious problem.
Then there is acne—I know all about that, too—a condition most commonly associated with adolescent teenagers. Although the condition is thought to be linked with hormonal changes during puberty, some 80% of young people above the age of 11 will have a degree of it at some point. It can affect people well into their adult lives, and it can be severe. Acne scarring is permanent. About 5% of women and 1% of men have acne over the age of 25. In a not inconsiderable number of cases, acne is widespread and ever-present, producing feelings of shame, despair and even, I am sorry to say, suicide in some cases. Acne is particularly tricky, psychologically, because it is often at its worst when the young emerging adult is feeling at their most self-conscious.
Other common conditions seen by specialists include vitiligo, urticaria, rosacea, herpes simplex, shingles, vascular lesions, benign skin tumours, benign moles, solar keratosis, viral warts, non-malignant skin cancers—I know all about that, too—and malignant melanomas. The list is almost endless, running as it does to a couple of thousand different conditions, each of which can have profound effects on the lives of those who have them. People who suffer from these diseases often do not want to speak about them. I am attempting, in this small debate, to give these people a voice.
It is worth saying that serious psychological effects are sparked by skin disease. We live in a society where we are subjected daily to images of perfection, selling everything from make-up, fashion and holidays to ice-cream. Skin conditions are sometimes very visible, and some people are highly prejudiced against those who have them, and make little attempt to hide that. That can lead to stress, depression, anxiety, and other related problems.
There is a beautiful picture in the Louvre of a child reaching out to an old man, probably their grandfather. The child is beautiful and the old man, who obviously suffers from rosacea, is deformed and hideous. The point of the painting is that beauty lies inside, not on the skin, but that is not often the view of modern society, so skin conditions lead to psychological stress.
Many of these facts—I could go on, but I will not—are set out in detail in the recent report on the psychological effects of skin disease published by the all-party group on skin. I pay tribute to my hon. Friend the Member for Mole Valley (Sir Paul Beresford) who chairs that group and does it well.
Despite the fact that skin disorders are both serious and the most likely reason for someone to go to their GP, training and knowledge of dermatology among primary care health professionals is generally very limited. Perhaps “very” is wrong, but it is certainly limited. Astonishingly, there is no compulsory requirement for dermatology training in undergraduate or postgraduate medical programmes of study. Dermatology is still not included in all undergraduate medical school curriculums; it is optional in some, and untested in others. In five to six years of medical training to become a doctor, the average medical school offers—I found this incredible— less than a fortnight of teaching in dermatology. This is often combined with another so-called minor field of medicine. I am told that many miss this teaching altogether, not regarding it as important, and joke about taking a “dermaholiday”. That is like the NHS employing an army of plumbers who are highly knowledgeable about boilers and blocked drains but who do not know how to trace a leak or mend a pipe. By failing to provide adequate education in dermatology, which is an important field of medicine, we are badly failing to meet the needs of patients.
I congratulate the hon. Gentleman on securing this important debate. He is setting out his stall extremely well. According to the consultant dermatologist at Scunthorpe general hospital who contacted me, 15% of patients presenting to GPs have a skin disorder of one kind or another, which underlines the hon. Gentleman’s point on the importance of including dermatology in GP training.
In a moment, I will address the fact that skin diseases can have fatal consequences. As GPs often do not have adequate training, they are not able to spot conditions that can be very dangerous.
Training is important. In a 2008 survey of final-year medical students, only 52% of 449 respondents said that they felt they had the necessary skills to manage skin conditions. A lack of education and training may lead to fatal errors, and I stress that point because skin disease is not only about psychological damage. Skin lesions mistakenly taken to be benign can lead to cancer. Conversely, inappropriate referrals to secondary care can be costly and are blocking up big parts of secondary care. As awareness of litigation increases in the NHS, GPs are, unsurprisingly, less and less willing to take risks, so they refer more and more patients to secondary care. I understand that the general hospital in Lincolnshire—this echoes the point raised by my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan)—has seen a 26% rise in dermatology referrals for secondary care in the past year, and it is not alone.
The exploding incidence of skin cancer, an ageing population and side effects from new potent drugs are all driving referral rates. It has been guesstimated that there are 100,000 cases of skin cancer a year in the UK, but the number is not known for sure because the NHS does not collect figures for cancers that are not melanomas. Work this year suggests that the number may be nearer to 700,000; that is what dermatologists tell me, because they are dealing with such a volume of cases, day by day.
Studies show that the skill of GPs in diagnosing skin lesions needs improvement, and other studies raise concerns about the standard of skin surgery offered in primary care. In 2012, the Royal College of General Practitioners updated its curriculum statement on the care of people with skin problems. The statement goes a long way towards recognising dermatology as a key component of a GP’s training. The statement sets out a number of expected key competences within the field, but crucially, dermatology remains an optional component. For undergraduates, the British Association of Dermatologists recommends a two-week full-time attachment to a dermatology unit, with a realistic assessment at the end of the course. The association thinks that dermatology should also be taught when undergraduates work with general practitioners in the community. When trainee GPs are undertaking their two-year hospital placement, a six-month post in dermatology alone, in a combined post such as dermatology and general medicine, or in a combined minor specialty rotation would go a long way towards helping trainee GPs to take a special interest in dermatology, which is what we need.
The GP training period is likely to be lengthened by 12 months. I urge all interested parties—Health Education England, the royal colleges, the General Medical Council and the ultimate employer, NHS England—to use half or all of that extra time on a proper dermatology rotation, which would ensure that the GPs of the future are properly equipped to address their future work load. If that is to happen, funding must be made available to ensure that there is adequate consultant time to train budding GPs and to pay their salary while they undergo the hospital training.
My hon. Friend is making a powerful argument. Does he agree that there is a worrying lack of provision for the psychosocial aspects of skin conditions? Is he familiar with Changing Faces, which, among other things, provides skin camouflage clinics? It sent me an e-mail when I was preparing for this debate saying that the King’s Fund has stated that there are only 3.7 posts across the country providing support for the psychosocial aspects of skin conditions, and the funding for those posts is under threat. Does he propose that funding should be found to try to support that vital work?
I entirely agree. I talked to a doctor recently who said that one of his patients had not dared to go out for 20 years without wearing enormous amounts of special make-up because she was so worried about her condition. We should take that very seriously, because it affects hundreds of thousands of our fellow citizens and their feeling of self-worth.
The lack of dermatology education applies not only to GPs but to nurses and pharmacists, who also play a key role in the management of patients with skin disease. High and ever increasing sales of over-the-counter skin products suggest that people buy many products from pharmacies, yet training of pharmacists in the management of skin problems is limited, and evidence that they are providing appropriate advice is lacking.
There is considerable potential for improving self-care through the provision of high-quality patient information and the development of the knowledge and skills of community pharmacists in skin diseases. That would save the NHS money, as well as improve patient care, and it is a nettle waiting to be grasped.
The General Medical Council, working with the Royal College of General Practitioners, the British Association of Dermatologists, the Royal College of Nursing and the Royal Pharmaceutical Society, plus Health Education England and NHS England, has a duty to ensure that urgent priority is given to the provision of proper dermatological training for all GPs, nurses and pharmacists. That training should surely emphasise that most inflammatory skin diseases are long-term conditions and are likely to need ongoing care, often throughout a patient’s life. Similarly, the psychological effects of skin disease should be considered an integral part of any dermatological training course; I echo my right hon. Friend’s important point on that issue. There is good evidence for the effectiveness of general practitioners with a special interest in dermatology working within appropriate accreditation frameworks. More needs to be done to expand that group of clinicians, which is still all too small.
In addition to poor training at primary care level, there is also an issue with the number of consultant dermatologists. I pay tribute to my consultant, Professor Chris Bunker, who is well known in the field and is president of the British Association of Dermatologists. Compared with mainland Europe, the ratio of consultant dermatologists to the general population remains low in the UK, at 1:130,000. It is estimated that there is a 20% shortfall in consultant numbers in the UK.
Furthermore, there are significant issues related to vacancies in dermatology consultant posts—there were some 180 consultant vacancies at the last count. That is due both to an inability to attract people to posts in remote areas and to the widespread problem of funding being available for a post but the relevant deanery refusing to provide a training number that allows the post to be filled by a trainee.
As well as being unpleasant and demoralising for patients, some skin conditions kill; that must be emphasised. Skin conditions are not just a psychological problem. There were nearly 4,000 deaths due to skin disease in 2005, of which 1,817 were due to malignant melanoma, which is now the UK’s most common cancer. That is against a background of 13,000 malignant melanomas each year, a level that has increased 50% in little more than a decade. Those figures continue to rise, driven by the wide availability of cheap holidays in the sun, the continued fashion for using sunbeds and the inadequate resourcing of awareness campaigns. We must do more about that; improved public funding for awareness campaigns, better training and stronger regulation of the use of sunbeds are some of the most obvious answers to the problem, yet very little, if anything, ever happens. Despite skin disease being very common, the direct cost to the NHS of providing skin care is relatively modest. The overall direct cost to the NHS in England and Wales was some £1.82 billion at the last estimate, in 2006.
As of October 2013, there is no policy lead for dermatology in the Department of Health or NHS England; I put that point directly to the Minister. The majority of dermatology services are commissioned by clinical commissioning groups, but national oversight is necessary to co-ordinate care across the country and to drive the agenda. Prior to the April 2013 switchover, primary care trusts were responsible for commissioning dermatology services, but the Department did at least have a policy lead on overseeing service provision. No similar post now exists in NHS England, so no one—I hope the Minister can reassure us on this—champions this area, spots good practice, or drives change.
Earl Howe recently stated in the other place that dermatology would be spread across the five domains of NHS England, and that it would not, as was previously thought, sit primarily under long-term conditions in domain 2. That surely only heightens the need for a director to co-ordinate policy across the five domains. Even if only a junior post were to be created, patients and health professionals would be given a clear line of accountability and a person to whom they could appeal who was above their local CCG lead for commissioning. Given the prevalence of skin disease, a national clinical director for dermatology, which is what I am calling for, would not look out of place among the long list of such posts at NHS England. I urge it to consider such an appointment.
There is a lack of sources of peer-group, independent advice for people with skin conditions. Patient support organisations are mainly charitable institutions that rely, for the most part, on donations from individuals and pharmaceutical companies. People with skin disease place great value on the information and help provided by dermatology patient support groups. Skin disease is not a well-resourced area, and such groups struggle to make ends meet. There is no group at all, for example, to provide support to people with acne, the previous group having run out of funds some years ago. Given that such charities are almost certainly a cost-effective way to provide what might be life-saving support to patients, perhaps the NHS should consider being a little more generous in its funding.
I thank all those who have helped me to prepare this speech, particularly the British Association of Dermatologists. It is clear that a small number of important steps would make the greatest difference in this area of disease, including the appointment of a national clinical director to co-ordinate learning around the NHS and to drive uptake of new ideas and change. More important, however, is persuading the relevant bodies that I have mentioned to ensure that undergraduates emerge from medical school with a reasonable grasp of dermatology and that newly appointed GPs can recognise a malignant melanoma, which is probably the most important point of all. Those changes alone would have far-reaching, positive consequences for dermatology and for those with skin disease, and I urge the Minister to consider what can be done to make them a reality. I hope that this debate will make some difference.
I congratulate my hon. Friend the Member for Gainsborough (Sir Edward Leigh) on obtaining this debate. I have tried quite often and failed, so he obviously gets on better with Mr Speaker than I do or has better luck in the ballot system. I also congratulate him on producing many of the statistics and conclusions that the all-party parliamentary group on skin has come up with, which has two advantages: the Minister has heard them, and I do not have to repeat many.
This is an important and reclusive area in the national health service, but I must start by making some declarations of interest, as we are supposed to do. First, as part of clinical practice, I have seen and referred patients with a number of skin conditions. The treatment of some has been urgent—my hon. Friend mentioned melanomas—and some semi-urgent, such as basal cell carcinomas. Such carcinomas are commonly called rodent ulcers and are just chopped out, but when I was in Palermo a few years ago I saw one that had been left on the side of a gentleman’s face and that looked something like a small, underdone McDonald’s hamburger. We do not see such things here, so whatever we say about the condition of dermatology in this country, that has gone—thank goodness. There are a number of common and disfiguring conditions. My hon. Friend touched on acne and a number of other chronic diseases, such as psoriasis, all of which some people do nothing about, but for which help is available if they look for it.
Secondly, I am chairman of the all-party parliamentary group on skin. I must admit that, shortly after the election, I was pressurised, bullied, pushed and dragged, kicking and screaming, to accept the post. One problem with many things that we do in this House is that, once close to something, it is hard not to get drawn in. It is a fascinating and complex area with a definite recognition problem. It is just not seen and accepted. My hon. Friend talked about funding but also touched on his family’s clinical problems; I shall resist doing so as my sons would never allow me. The area could do with more money, but more could be done more effectively with what we have. Much improvement can be made through education, which my hon. Friend touched on, a change in service approach and, most of all, a recognition of need.
One of the first really quite shocking points that was made to me as chairman of the APPG was that, while skin conditions account for the greatest proportion of patient visits to GPs, undergraduate education in such conditions for doctors, including those who will become GPs, is minuscule. I risk repeating my hon. Friend’s point, but it is worthy of repetition. Many student doctors spend a few weeks, possibly only one week, studying skin diseases and conditions. I am not sure whether it still applies, but I believe that education in skin conditions is optional in some medical schools. If someone wants to become a GP and opts not to learn about such conditions, they are in for one heck of a shock or run the risk of doing their patients a disservice. It is quite staggering considering that dermatologists are expected to manage over 2,000 different diseases of the skin, hair and nails.
Reputedly, as has been mentioned, 54% of the population are affected by skin disease each year, and, as my hon. Friend said, some 4,000 deaths are attributed to skin disease annually in the UK. Generally, the horrendous malignant melanoma is the main cause. The incidence of melanomas has increased by 50% over the past 13 years. The hot spots are many and varied and include Glasgow and areas of Surrey. I do not know why that is and I am not sure that anyone does. Skin cancer is the most common cancer and is the second most common cancer causing deaths in young adults. Prevalence of basal cell carcinoma equals that of all other cancers combined and increased by 133% between 1980 and 2000. Hand eczema is one of the most common reasons for disablement benefit in the United Kingdom, yet skin disease hardly ranks in the education that goes towards the basic medical degree.
As has been mentioned, we have 780 funded posts for consultant dermatologists in the United Kingdom, which is a positive. That would be impressive, but, as has also been mentioned, 180 to 200 vacancies need to be filled. To add to the difficulties, many of the posts are filled by locums who are not fully accredited dermatologists. Even more concerning is that there are few specialist facilities, which are not ordinary hospital facilities but those that provide specialist dermatological treatment, including dedicated dermatology psychology practitioners. It is little recognised that many skin diseases are always present or threatening to be present and can cause devastating effects on a person’s physical well-being and can lead to serious psychological problems.
The all-party parliamentary group on skin has produced evidence that highlights the extensive impact that skin disease can have on all aspects of patients’ lives, such as school, work or personal relationships and, as a result, self-esteem. Such conditions often affect career choices and even such basic things as where an individual can go on holiday. Who would want to sit on a beautiful beach or to go swimming from it when hit by eczema, psoriasis or any of the various pigment conditions? It just does not bear thinking about. Some conditions can obliterate what many of us would expect to be normal social, sexual or leisure activities. According to the British Skin Foundation, approximately 50% of people who suffer from skin conditions have been victims of verbal abuse—we can imagine a child with psoriasis in a school. One in six has self-harmed and 17% have contemplated or attempted suicide.
If I have one major ask of the Minister, it is that she go to one of the few—but top—skin clinics, particularly one that includes psychological treatment as a norm. She should talk to some of the patients with psoriasis or a number of other such disfiguring diseases. They are not necessarily death-causing, but they totally obliterate normal life. She can see how they are handling their conditions, as well as how modern medicine can improve their lives, in particular if they get psychiatric help. Most can be helped to keep their conditions at bay, but part of the package should require psychological help—we have an APPG paper on this. I ask the Minister to meet those patients, who range from the very young—babies—right through to the very old, and watch and listen to how they cope. That should encourage a national rethink on how the NHS treats this massive and often unrecognised area of medicine.
When the Minister visits new clinical commissioning groups, which she does, I hope that following our debate and in particular the point made by my hon. Friend the Member for Gainsborough, she will ask some pertinent questions about how commissioners draw up local service specifications for the bidding process for dermatological services. The parameters of dermatology bids need to be drawn up with expertise and experience, which many CCGs do not have. I hope that the Minister can encourage, bully, push and cajole those CCGs to buy in, pull in and seek expertise when drawing up the specifications. The British Association of Dermatologists recommends that, before carrying out a service tender, commissioners should undertake a health care needs assessment and a review of the current service provision and, most importantly, consult service users and local clinicians, especially those who know something about the conditions.
I pay tribute to my hon. Friend as chairman of the all-party group on skin—however reluctantly he took the post, he does a good job and I am pleased to be a member of the group. Is he familiar with the teledermatology service pilot in Buckinghamshire where a short history and photos of a patient are sent to consultants who can then provide advice to GPs? If he is not aware of it, would he like to know more? If he is aware of it, will he recommend that the Minister look at it while examining what we do in this area? It could be a valuable addition to the tools available to help people with dermatological conditions.
I thank my right hon. Friend. In answer to her first question, which was whether I was aware of the pilot, the answer is no. Would I be interested? The answer is yes. As for the Minister, I saw that she was writing the details down, so I do not think I need to repeat them.
The greatest change necessary is to encourage education. That has already been touched on at some length. The lack of knowledge among practitioners and clinicians is the problem. We need better education in the under- graduate curriculum and further improvement in post- graduate training, perhaps with a continuing professional development requirement. Training is also required to produce more consultants, more doctors and psychologists with a professional interest in dermatology and more specialist nurses. That is not a big ask, considering the size of the problem.
This is an area where investing more on education at every level, with better provision of specialist clinics should, in due course, ease some of the costs and pressures, in particular on primary care. There would therefore be a positive payback. I reiterate, however, the importance of the Minister seeing things first hand. I would be delighted to arrange an appropriate visit and join her if she is willing.
I apologise for ducking in and out of the Chamber. I am trying to make arrangements to meet a couple of people, so I apologise to the hon. Member for Gainsborough (Sir Edward Leigh) and to other Members for not being here for the entirety of his speech.
I congratulate the hon. Gentleman on bringing the matter to the House for consideration. He expounded the importance of this matter to him personally. For others in and outside the Chamber, it is something that perhaps members of their families have and that they can relate to.
As the hon. Gentleman outlined, there is a need for sufficient funding. When we look at what this involves, we can quickly appreciate the importance of the subject. He referred to the 75% increase in skin cancer in the past year. As an elected representative with a particular interest in health issues—I am my party’s health spokesperson in this place—I have a close relationship with my counterpart and colleague in Northern Ireland, the Health Minister, Edwin Poots. He furnished me with figures that indicate that the increase in Northern Ireland is equal to the figures given earlier, if not just above in many cases. I find that as worrying as the hon. Gentleman did.
I have read the report and it is helpful to read some of the background information. A team from East Anglia recorded data. Some people will say that there are lies, damned lies and statistics. Perhaps that is not entirely fair, as they can provide helpful information. The team referred to an 11-year study that showed that basal cell carcinoma increased by 81%. They extrapolated their figures across the whole of the United Kingdom to come up with figures. Whether they are entirely accurate, I do not know, but I think that they do give a feel for the subject and an indication of the number of people who may be affected. The report said that
“around 200,000 patients had 247,000 cases of BCC treated surgically.”
That is just one type of skin cancer, which gives an idea of the magnitude of the problem.
I want briefly to give some details of what we are doing in Northern Ireland. Again, I do that from a positive frame of mind, because I believe that, if we are doing something, that can be helpful. The hon. Member for Mole Valley (Sir Paul Beresford) may not have known about the programme that is taking place in the area of the right hon. Member for Chesham and Amersham (Mrs Gillan), but if something good is happening, we should exchange those ideas to help each other. That is something that we initiated in relation to dermatology overall as well as skin cancer. In the past year, the Health and Social Care Board invested some £1 million recurrently and another £3 million non-recurrently in dermatology services, including psoriasis drugs. That is for a population in Northern Ireland, as the Minister will know, of 1.8 million, which puts the amount invested into some perspective.
My second son, like the hon. Member for Gainsborough, was born with what I would refer to as scaly skin, or eczema. I have to say that I did not wash him very often, but my wife would always wash him morning and evening up to about the age of six or seven, as well as creaming him twice a day. What was interesting was that eventually the eczema left him, but, as that left him, something else took its place: asthma. That was an unusual reaction, but as the eczema left, the asthma increased, so there is obviously, as the doctor at the time made us aware, a medical connection between the two conditions. The interaction was close and clear.
The Northern Ireland Department of Health has an additional £240,000 of recurrent funding confirmed for dermatology services in the Northern Health and Social Care Trust. That is only one of four trusts in Northern Ireland. The board is working with the others to finalise their recurrent funding requirements, which are estimated to be about £500,000. I mention that strategy of working together with the trusts because trusts and councils on the mainland could come together to do something similar to spread the cost.
The debate is about the funding of dermatology in the NHS. We are in difficult times, and everybody acknowledges that finance is not always available in the way it was in the past. We have to make better use of the money we have, and we have to try to do that in a way that delivers services and address all the issues. We have tried to do that in Northern Ireland, and I know the House and the Minister are also trying to make better use of the money that is available.
The Health and Social Care Board has also been working with local GPs to redesign the traditional patient pathway for dermatology assessments. Again, early diagnosis is important, and the figures in the background information for the debate indicate that. Some of the survivors of skin cancer I have spoken to would say the same. Some of those cancers are usually completely curable. One cancer, if caught in the early stages, might need surgery, chemotherapy and/or radiotherapy, but there is hope when the dreaded “big C”, as many people call it, comes upon us.
Initiatives have also included the funding of a photo-triage pilot. It will, I hope, help the Minister to hear what we have been doing. The pilot scheme will deliver its results in March next year, and it would be helpful if they were made available so the Minister can see what has happened. As part of the pilot, GP practices can refer patients with suspected malignant melanoma or—forgive my Northern Ireland accent—squamous cell carcinoma to a dedicated photographic clinic, which is used to triage the patient, thus reducing unnecessary out-patient attendances. That pilot can shorten the process and focus resources on the issue in hand. If the pilot is successful, as I hope it will be, the figures it produces will be helpful.
I want quickly to comment on sunbeds. Some Members have spoken about them, and others will speak about them as well, including perhaps the hon. Member for Romsey and Southampton North (Caroline Nokes).
Maybe not—I thought that might be one of the issues she would touch on.
In my previous job as a Northern Ireland Assembly Member and a member of Ards borough council, in my constituency, I had some influence on this issue. The council was concerned about the effects of sunbeds, and it was aware of the importance of controlling, monitoring and regulating them. It took decisions to do that, and other councils took similar initiatives. Again, that shows we have done things in the way they should have been done.
Again, I congratulate the hon. Member for Gainsborough on bringing this important matter to Westminster Hall for consideration. I very much look forward to the Minister’s response. I hope that my comments about what we do in Northern Ireland have been helpful, and that is particularly true of my comments about the pilot scheme and the way in which triage can work with GPs, hospitals and, more importantly, the patient.
I assure you I will keep my comments brief, Mr Turner. I congratulate my hon. Friend the Member for Gainsborough (Sir Edward Leigh) on securing this important debate on the funding of dermatology in the NHS and on giving Members the ability to raise specific issues that may have been put to them by dermatologists, expert groups and patients.
I am a member of the all-party group on skin, although I am obviously not as exalted a member as my hon. Friend the Member for Mole Valley (Sir Paul Beresford), and I do not share the same expertise, but I have benefited over the years from personal experience of dermatological services. I am also the chair of the all-party group on body image, which has given me the privilege of working with organisations such as Changing Faces, which has brought to my attention some of the work that it does with patients with severe skin conditions. Changing Faces provides what it refers to as skin-camouflage clinics, and the word “camouflage” is interesting in this context. Many people who suffer from serious skin conditions will attempt to camouflage themselves—to hide away—because they are so self-conscious about their conditions.
I was present in this Chamber yesterday afternoon for a debate on the effects of the drug Roaccutane—a very effective, serious drug used to treat severe acne. I have a different Minister to address my comments to today, and I do not intend to rehearse the whole of yesterday’s debate, but there are some pertinent issues that I would like to draw to her attention.
Many sufferers of skin conditions will have depression and anxiety long before they ever get to see a dermatologist, and yesterday we heard in detail how important it is for dermatologists to have the time and the knowledge to be able to go through in detail the possible side effects of any medication that may be prescribed. Even dermatology drugs—drugs for the skin—can have severe side effects, including depression, and I am sure Members will agree that psychological illnesses need careful handling and treatment. Medical professionals need time to address concerns properly, but more than one consultant dermatologist contacted me before the debate to say that the specialism is under pressure and that time is at a premium.
Yesterday, the hon. Member for North Devon (Sir Nick Harvey) raised the issue of Roaccutane and the need for rigorous up-to-date research to ascertain why some groups of patients are more vulnerable to its severe side effects than others. When I say there are severe side effects, I should point out that there have been some incredibly tragic cases, in which young people who have been prescribed the drug have suffered terrible depression, and that has sometimes gone on for many months or even years after treatment has concluded. A number of young people have also committed suicide, and that is thought to be as a result of having taken this drug. Sadly, we lack up-to-date research and scientific evidence that proves a causal link between Roaccutane and suicide. The hon. Gentleman’s contention yesterday—I support him in this—was that only a public authority will be in a position to undertake the level of research required.
I would like to take the opportunity of today’s debate to highlight some points to the Minister. About 13 million people will present at their GP with a skin condition, and family doctors spend a significant proportion of their time treating patients with a skin problem, so dermatology is a significant part of the work of primary care. Dermatologists are concerned that the time they are spending on these conditions is not matched by the investment in research and that dermatology is something of a Cinderella service, as we have heard.
The overall burden of skin disease is large and growing, and to that mix we can add a lack of consultants and the drugs that can have a seriously negative impact on mental well-being, so it is not surprising that there are real concerns. With the specific case of Roaccutane in mind, I suggest that there needs to be better investigation of the causal link between the use of Isotretinoin and depression, self-harm and even suicide. That research is long overdue, and I have no doubt that it will fall to the Department of Health to make sure it is funded. I urge the Minister carefully to consider the case, which I wholeheartedly support, for better science, more evidence and independent study.
I know from work with organisations such as Changing Faces that those suffering serious skin conditions are far more likely than the general population also to suffer depression. Skin conditions can be extremely debilitating, especially for the young; they can cause a lack of confidence and an unwillingness to engage in social activities. At that particularly difficult and hormonal time, they can also have a disproportionate impact on mental well-being.
It is very careless to dismiss skin complaints as nothing more than a few spots or a bit of dryness or redness, especially if the face is affected. To the sufferer, such things can be a huge emotional and psychological burden. My hon. Friend the Member for Gainsborough spoke of the endless images in the media of physical perfection and perfect, flawless skin, and that all adds to the psychological stress.
I wish to focus briefly on training and the importance of making sure there are trained professionals to step into the 180 unfilled consultant posts the British Association of Dermatologists estimates currently exist. In some places, those posts are filled by long-term locums, who might be without the training and credentials required of a permanent appointee.
I would like to take the Minister back to the subject of Roaccutane. It is a highly toxic drug, intended for use in only the most severe cases and requiring very close supervision. It can be prescribed only by a dermatologist, the very specialism in which as I have explained there is a shortage; so patient waiting times increase, and the time the consultant has to spend with each patient reduces, along with the opportunity to discuss changes in their mood or mental well-being. The time for follow-up care is inevitably limited. That all comes together to give patients the impression of long waits and rushed appointments and results in a greater temptation to find a private consultant and pay for a private prescription. Among the families of people who suffered negative effects from Roaccutane, several have emphasised to me how many young people who had self-harmed were in receipt of private prescriptions because the families were too desperate to wait the six months for an NHS consultation.
My experience of consultant dermatologists working in the NHS has been nothing short of fantastic. The professionals with whom I have been in contact are dedicated and determined to get the best outcomes for their patients; and they have cut no corners. However, the growing dermatology case load puts them in an increasingly difficult position—perhaps particularly on the south coast. In places such as my constituency there are longer hours of sunshine and high life expectancy, and the incidence of cases of skin cancer is increasing. That all adds up to a stretched service. A local consultant dermatologist wrote to me outlining what he called a work force crisis, with a national shortage of consultants and considerable variation in the quality of dermatology provision across the country, as services are increasingly provided by those without appropriate training. That cannot go on. The service is demoralised and under pressure, and is struggling to identify where the next generation of skin experts will come from.
I urge the Minister to consider the situation closely. The specialism is crying out for the sort of TLC that the specialists are so good at giving their patients, which gives those patients the confidence to go out and face the world. I commend to the Minister the remarks of my hon. Friend the Member for Gainsborough about training, the threat of fatal mistakes in diagnosis and the need for a national clinical director in dermatology.
It is a pleasure to serve under your chairmanship for this afternoon’s debate, Mr Turner. I congratulate the hon. Member for Gainsborough (Sir Edward Leigh) on securing this important debate, which will be relevant to the 13 million people who present each year with skin problems, and their families.
I want to focus on psoriasis, on the often under-appreciated burdens that its sufferers bear, which go beyond the effect on their skin, and on the barriers to their getting the best care. On 1 November, I chaired a summit in west Lancashire, where seven of my constituents with psoriasis met the award-winning dermatology team at Ormskirk hospital, as well as some local GPs and the west Lancashire clinical commissioning group. I learned how psoriasis affects people, beyond the plaques on their skin, and the changes that we need to make to secure the high-quality care that my constituents and other psoriasis sufferers deserve.
Psoriasis is a terrible and lifelong condition. I have observed it through a personal connection, because after my mum died my father, who was 62, developed psoriasis. The Psoriasis Association tells me that the average member has been living with psoriasis for 32 years. The personal toll of living with the disease and its cumulative impact, which commits people to lifelong skin care, is enormous. The effects are felt beyond the individual and reach to people’s families, employment prospects and participation in society. The painful plaques are highly visible, which leads to rejection and stigma on top of everything else. Worse, 40% of people with severe psoriasis will develop psoriatic arthritis, which can lead to more pain as well as joint damage.
Psoriasis is also associated with mental health problems. It affects the skin and the joints, as well as people’s psychological well-being and life expectancy. Research has shown that the cumulative impact of psoriasis on people’s quality of life can be as significant as that of type 2 diabetes. One person in 10 with psoriasis considers suicide. I met such a person at the summit and it was heartbreaking to hear how the condition had affected her life. That is the most extreme end of the condition, but it shows the devastating impact that psoriasis can have on people’s lives.
Many positive things are happening for people with psoriasis, including the recent publication of the National Institute for Health and Care Excellence quality standard on psoriasis, which gives guidelines on treatment. The national standard constitutes progress, but the Psoriasis Association called it a
“minimum standard, not a gold standard”.
Psoriasis care is not always up to that standard. In some areas, even achieving the minimum standard is, sadly, an aspiration.
To an extent, the degree of understanding and appreciation of the full effects of psoriasis has a direct consequence on the funding of services. Despite the fact that 13 million people present with skin problems each year and that 15% of GPs’ time is spent managing patients with skin conditions, there is still a lack of understanding, even within the medical profession, about dermatology. I have been contacted by a consultant dermatologist who believes that dermatology has been neglected in medical schools and in GP training, so that GPs are often ill-equipped to deal with the variety, complexity and volume of cases. We need more specialist education for people such as GPs who look after patients when they are not in the care of the dermatology team.
Sitting suspended for a Division in the House.
Figures provided to me show that 180 dermatology consultant posts in the UK are unfilled, out of a total of 830. In Ormskirk, the dermatology service struggles to attract doctors to fill full-time roles. It has a work load roughly equivalent to that of nearby St Helens, but whereas St Helens has seven consultants, Ormskirk has two. We also need specialist nursing capacity and more space in the department. Nearby services have several light-therapy machines, but Ormskirk has only one, so my constituents have to wait six or eight weeks for treatment—once they have had their referral, and on average there is an eight to 12-week wait just to be seen by a specialist. Ormskirk is an award-winning service, yet the team there do not have the resources they need.
A 2008 audit showed wide variations in treatment. Access to specialist treatments such as biologic drugs, specialist nurse support and psychological services is sporadic throughout the country. Access to psychological support is a major theme of the new quality standard for people with psoriasis, yet 80% of the 170 dermatology departments that responded to the 2013 BAD audit of services reported having no access whatever to psychological support for patients.
We know from research that early intervention and appropriate treatment for psoriasis will contribute to a person’s psychological well-being and ability to continue in the working environment. It really is not enough simply to treat the skin. I have seen pioneering dermatology services where patients have access to a resident psychologist as a routine part of their treatment. I want and need that level of support for my constituents. I hope that the Minister will encourage commissioners and dermatology services across the country to look at the evidence base and adopt that model.
That does not mean that we need to find a magical pot of new money; it means using existing tools to incentivise what works best. That could even save money in some cases. Commissioning groups are held to account through the outcomes indicator set; will the Minister encourage the National Institute for Health and Care Excellence to develop indicators covering dermatology? As in other areas, in dermatology we need better co-ordination between primary and secondary care; will the Minister encourage NICE to create a quality and outcomes framework indicator on dermatology, to incentivise that? Eventually, it would be great to see a best practice tariff or a national CQUIN—commissioning for quality and innovation—payment framework for psoriasis. At the moment, dermatology is such a Cinderella service that that seems ambitious, but we must aim for it. We need central clinical leadership to push dermatology up the agenda, to promote quality improvement and to reduce local variation.
Perhaps the Minister will tell us why, when other specialists are getting going with their strategic clinical networks and have plenty of clinical leadership from the centre, dermatology does not even have a national clinical director. From a response to a written question back in May, I learned that NHS England does not have a single person responsible for dermatology. Will she tell us whether that is still the case? We must recognise the burden that psoriasis places on people’s lives and ensure that dermatology services are properly joined up and properly funded. I hope that the Minister will task NHS England with making that happen.
Finally, will the Minister join me in congratulating the Psoriasis Association on a very successful psoriasis awareness week last month? The members have created a booklet, “I wish someone had told me…”, which is full of practical advice, and I recommend it to anyone suffering from the condition. We must all work together to provide a quality service for all patients with skin conditions, particularly psoriasis.
As always, Mr Turner, it is a pleasure to speak under your chairmanship. I extend my sincere thanks to the hon. Member for Gainsborough (Sir Edward Leigh). I understand that dermatology is extremely close to his heart, and the personal testimony that he shared with the House today was a frank and honest account of what many of our constituents live with daily.
I can scarcely remember a health debate in this place when the hon. Member for Strangford (Jim Shannon) has not been present and made a tremendous contribution. He did so again today, as did my hon. Friend the Member for West Lancashire (Rosie Cooper) and all hon. Members. If only the House could speak with such unanimity of purpose on other issues. The chairman of the all-party group on skin, the hon. Member for Mole Valley (Sir Paul Beresford), also made a telling contribution.
This might be the first time I have debated with the hon. Member for Gainsborough. I was supposed to have debated religious freedom with him at the Oxford Union in 2005 when I was a young Back Bencher, but under pressure from the Whips, I was unable to attend, so we will never know whether that exchange would have been contentious. However, I am delighted to debate the issue before us today.
“Dermatology” is a wide-ranging umbrella word covering more than 2,000 conditions of varying severity, all of which have a detrimental impact on the quality of life of those who are affected. “Cancer” is also a wide-ranging word denoting many different types, including basal cell carcinoma, squamous cell carcinoma, malignant melanoma and others such as Kaposi’s sarcoma and cutaneous T-cell lymphoma. Dermatology also covers skin rashes, skin infections and acne. Acne and skin rashes may not seem to be serious medical issues and do not often cause such serious complications as other skin conditions may do, but they are far from trivial, as we have heard, and may have a huge impact on the psychological well-being of the individuals who suffer from them.
The wide-ranging nature of dermatological practice means that episodes of treatment for conditions are extremely common. Skin cancer is one of the most common cancers in the world, as we have heard, and the NHS estimates that there are around 100,000 new cases of non-melanoma skin cancer in the UK each and every year. Thankfully, through excellent research and brilliant work by professionals and charities alike, skin cancer is becoming more and more treatable, but it is not “job done” and we must continue to strive for even better patient outcomes. I am sure that all hon. Members agree.
Skin diseases represent more than one third of diseases in children. One in five children in the UK have eczema. The British Association of Dermatologists, in its recent evidence to the Select Committee on Health, stated that children with serious skin conditions have their quality of life impaired to the same extent as those with chronic illnesses such as epilepsy, renal disease and diabetes.
Acne is a very common skin disease and affects many people. It is often trivialised as a passing phase for teenagers, but that is not the case and it can continue throughout their 20s, 30s and even 40s. The scarring left by acne is permanent and may have lasting effects on the psychological well-being of those who are affected. The British Association of Dermatologists says that it may have a major impact not just on someone’s relationships, but on their employment prospects throughout their life.
In this very Chamber yesterday afternoon, hon. Members debated the side effects of a drug, Roaccutane, used to treat acne. It is very effective in clearing up acne and is often prescribed to those who suffer the condition. It can be prescribed only by a specialist dermatologist because of its associated side effects, which, it is said, can range from relatively minor issues such as dry lips and chapped skin to serious mental health problems linked to depression and suicidal thoughts, as well as physical conditions such as diabetes and kidney problems.
When a significant number of people rely on such treatment to improve their quality of life, Government of all colours must give a commitment properly to fund research and development for new treatments. Many thousands of people rely on drugs such as Roaccutane and face the many risks associated with them. We must commit to developing new and safer drugs. Will the Minister give that commitment today? Will the Government help to facilitate the development of new medicines and new treatments for these conditions?
In 2009, the previous Labour Government legislated to introduce a ban on under-18s using sunbeds. That ban was an important step in protecting people of all ages from what can be harmful tanning practices. Will the Minister, who is responsible for public health, tell us what steps she is taking to increase awareness of the risks of using sunbeds? I certainly hope that she will retain the previous Government’s focus on the issue.
Other skin complaints have an impact on many millions of people in the UK and continued work is essential for progress to be made. I again thank the hon. Member for Gainsborough for securing this debate because at a time when funding and commissioning in the NHS have been thrown into turmoil—some clinical commissioning groups will have their funding slashed in the next couple of days—it is crucial that treatments and research are properly funded.
The funding of dermatology services in the NHS has been made ever more complex by the Health and Social Care Act 2013 with some treatments now being commissioned by NHS England on a national scale and others being left to local clinical commissioning groups, resulting in a fragmentation of services and a poorer experience for patients. The British Association of Dermatologists said:
“Provision of the type of care affected people need is under resourced, fragmented and of variable quality in terms of manpower and facilities. This is exacerbated by poor teaching and training of dermatology in medical schools and general practice, and underfunding of relevant research.”
These very serious concerns have been raised by a well-respected charity with unparalleled expertise in this area. Will the Minister tell us whether they have been raised by anyone else with her Department, and what action the Government are taking to tackle them?
The resources available for dermatological purposes are majorly overstretched. It is estimated that skin conditions result in 13 million consultations each year in general practice—I think we heard that figure earlier. If we had the pro rata equivalent of dermatology consultants in Germany, France, the USA and elsewhere, we would need almost 10 times as many as we have currently. Will the Minister also tell us whether there are recruitment plans in place to ensure that this highly specialised discipline is adequately catered for throughout the national health service? Not only is access to dermatological expertise in the UK subject to a postcode lottery in terms of quality, but the resources and the necessary work force are simply not there to care for the patients who rely on those services.
We have heard many testimonies today, and not just those of hon. Members here. When hon. Members speak of their own circumstances and difficulties, we achieve a better quality of debate and tend to edge towards better policy outcomes. In the light of the testimonies we have heard today and of what our constituents, patient groups, charities and professionals tell us, it is clear that the evidence points to a specialism under severe strain. It is underfunded, understaffed, under-resourced and, as a result, under immense pressure. The profession’s staffing levels are clearly a major problem.
The biggest problem is education. It takes a very long time to give someone expertise, particularly in this area with around 2,000 diseases or variations of them. Will the hon. Gentleman think carefully and recognise that any unfilled consultant place goes right back to a lack of education under his Government?
I am grateful for that intervention. I make the point repeatedly every time hospital doctor statistics are mentioned by Ministers. I absolutely recognise the hon. Gentleman’s point and welcome his making it: he is absolutely right to say that education is surely at the core of the problem.
Staffing levels in the profession are clearly a major problem. Will the Minister give an assurance today that those who need the services of a specialist dermatologist will have access to them? If not imminently, when? Should the Government bring forward effective proposals, I give the Minister the assurance that they will have the Opposition’s support. Where the Minister cannot answer my concerns, I would appreciate a written reply.
It is a pleasure to speak under your chairmanship, Mr Turner. I pay tribute to the hon. Members who have spoken today and particularly to my hon. Friend the Member for Gainsborough (Sir Edward Leigh) for securing the debate. As has been illustrated throughout, this is an under-discussed area and it seems to be neglected in other ways, too. The debate has been valuable, and I have certainly learnt a lot during its course and in my preparation for it. Inevitably, there will be some points on which I cannot give a full answer today, but I shall endeavour to follow up with hon. Members if I cannot. I also pay tribute to the all-party parliamentary group on skin. I have looked at the recommendations in its recent report, and I pay tribute to the members of the group who have spoken today.
We have heard from several Members how many people are affected by skin disease and I shall not go over those numbers, which are very large indeed. There is a huge range of skin diseases; some are manageable and others are life-threatening, as we have heard. All have an impact on people’s lives and, in particular, can affect their personal appearance, as Members have highlighted in moving terms. In that way, skin problems perhaps represent more of a day-to-day challenge than many other conditions. They impact on all aspects of life, such as employment and personal relationships. It is, therefore, important to ensure that people with skin disease receive both the treatment and support that they need. As today’s debate has highlighted, considerable challenges remain, many of which we have not necessarily bottomed out during the debate, but we have begun to highlight some.
Let me first plug the national framework. Skin disease is a long-term condition, and through the NHS mandate we have made it clear to NHS England that we want to see the NHS among the best in Europe at supporting people with long-term conditions. We want them to live healthily and independently, with better control over the care that they receive. Those improvements are monitored through the NHS outcomes framework, for which ambitious expectations have been set out. In turn, the NHS will monitor the performance of clinical commissioning groups through the clinical commissioning group outcomes indicator set, on the quality of the services and health outcomes achieved through that commissioning.
As my hon. Friend the Member for Gainsborough highlighted, commissioning for most dermatology services is a matter for CCGs. They are better placed to use their clinical insight, local knowledge and local relationships to do excellent commissioning at a local level than Ministers in Whitehall, but I take on board the challenge about the more specialist areas. We are not leaving CCGs to commission without support. NHS England is working closely with them to ensure high-quality commissioning, and it has established commissioning support units and quality surveillance groups across the country. However, as my hon. Friend the Member for Mole Valley (Sir Paul Beresford) said, it is certainly something that I can raise on appropriate visits when the opportunity arises. As the Public Health Minister, given that so much of my portfolio is localised, I am very keen to draw attention to good practice where we see it.
There is an example in the area of my hon. Friend the Member for Gainsborough, where his local CCG has introduced a teledermatology pathway, which allows patients to be reviewed at their own practice. We also heard of an excellent example from Buckinghamshire, which I was speaking about with my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) during the break for the Division. The pathway in the area of my hon. Friend the Member for Gainsborough is being implemented across 10 practices from September. If it is successful, it will be rolled out across all the practices in the Lincolnshire West CCG. I am always interested to hear about good practice. A number of kind invitations for visits have been made during the debate and I look forward to following those up with Members so we can highlight people who are being innovative in a way that will help other commissioners.
As has been mentioned, with some highly specialist dermatology services for conditions that cannot be treated locally, it is appropriate for NHS England to commission them directly. NHS England has set out detailed service specifications for the services that it directly commissions. I realise that a number of Members have made points about the national clinical director, and that issue has been raised in other contexts, too. It is a matter for NHS England whether it appoints a national clinical director. I understand, from asking it the question, that there are no current plans to introduce an NCD for dermatology, but it is continuing to discuss with the British Association of Dermatologists the best ways to improve outcomes for patients.
As has been said, aspects of treatment of people with skin conditions can be considered under any of the five domains. That change in the new NHS focuses on people as individuals rather than on their conditions, which is why the patient pathway and not the organisations that treat them is given the closest attention. Many of the national clinical directors have cross-cutting roles—I have come across that in other areas of my portfolio—rather than roles that are related to individual medical conditions, so it is not the case that dermatology is being singled out. Clinical directors often cut across.
There is interest in the research—points have made about it—that is going on to get better results in dermatology and to come up with new treatment, so I shall touch on that. I reassure the Chamber that investment by the National Institute for Health Research in skin research increased from £4.7 million in 2010-11 to £8.7 million in 2012-13. That includes the NIHR investing £2.6 million over five years in the biomedical research centre at Guy’s and St Thomas’s and the King’s College London centre, which is leading the way in research on cutaneous medicine. The NIHR is dedicated to translating these scientific discoveries into improvements in treatment, which we hope will benefit patients at the earliest opportunity.
The NIHR has also awarded nearly £2 million to Salford Royal NHS Foundation Trust to undertake a programme of research on psoriasis. The studies will look at crucial issues, including individual patient experience, difficulties faced by service providers and identifying levels of risk in populations. I hope that the hon. Member for West Lancashire (Rosie Cooper) will take particular comfort from that, and I am sure that she will be interested in the outcome of that programme. The NIHR is also investing nearly £1 million in a trial of silk therapeutic clothing for the long-term management of eczema in children.
My hon. Friend the Member for Gainsborough will know that NICE has also published guidance on a range of dermatological conditions, including atopic eczema in children and psoriasis, and it has issued quality standards on those topics. NHS England is statutorily required to have regard to NICE quality standards, and we expect health and care professionals to take NICE guidance on the treatment of relevant conditions fully into account when deciding how to treat a patient.
NICE has also recommended a number of drugs for the treatment of dermatological conditions such as eczema and psoriasis. Patients have a right in the NHS constitution to access drugs and treatments recommended by NICE technology appraisal guidance that their clinicians want to prescribe.
As I acknowledged earlier, and as has been very much illustrated during the debate, skin disease can have adverse psychological effects on patients. The NICE quality standard on psoriasis recognises that and sets out that people with psoriasis should be offered an assessment of how their physical, psychological and social well-being is affected when they are diagnosed and when they undergo treatment. It is the responsibility of all commissioners, providers and clinicians to ensure that patients receive the psychological and emotional support that they need. Hon. Members may be aware of the IAPT—improving access to psychological therapies —programme, which is an NHS programme rolling out services across England offering interventions for people with depression and anxiety disorders. I understand that as part of that programme, NHS England is looking at how best to support people with psychological problems arising from their physical problems. That issue was raised a number of times during the debate.
I listened carefully to the comments of my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), who highlighted that the issue of Roaccutane was discussed only yesterday in the Chamber. It is associated with rare, serious side effects and can only be prescribed by or under the supervision of a consultant dermatologist. The BAD has published guidelines for its members about when to prescribe it and how best to monitor patients for adverse effects during treatment. I will certainly make a point of catching up with my hon. Friend the Minister of State, who responded to that debate. I will ensure that we touch base with regard to the important subject that my hon. Friend the Member for Romsey and Southampton North has raised today.
The issue of GPs’ and other health workers’ education and training has come up a lot. My hon. Friend the Member for Mole Valley made it the focus of his speech. It is important that health professionals have the right training. Training and education of health professionals is a matter for Health Education England and the royal colleges. NHS England is statutorily required to have regard to the NICE guidelines, and we expect health professionals to have regard to them, too. I am aware that the BAD has produced toolkits and guidance. They are valuable resources for health professionals and should be promoted widely. NHS England has responsibility to support CCGs, as I said, with commissioning guidance and tools and it can flag up the relevant dermatology guidance and standards.
I understand that NHS England’s domain director for long-term conditions regularly meets the president of the BAD, who is also an adviser to the all-party group on skin. I am sure that the issues about the education of GPs are raised at those meetings.
The current framework for accreditation and re-accreditation of GPs with a special interest remains under review, following the transition to the new arrangements for the NHS in England. NHS England is working with the Royal College of General Practitioners and with dermatologists to produce an improved and consistent accreditation system. It is expected that there will be a report early next year, and I am sure that there will be interest from hon. Members in that.
I am concerned about the point that has been made about the shortcuts being taken on some of the training courses. I thought that what was highlighted today was quite alarming. I have heard that before. It is certainly something that I will put on the agenda for my forthcoming meeting with the Royal College of General Practitioners. I will report back to my hon. Friend the Member for Gainsborough, who raised the matter and said that there was considerable interest in it in the House.
Since 2002, there has been a 40% increase in consultant dermatologists, but I accept that that is from a modest base. It is clear that, although there was an increase of 28% between 2002 and 2012 in the total number of staff, we still have more to do, but things are improving. Health Education England needs to ensure that we have the right dermatological work force. I will ensure that it is aware of the issues that have been raised today and highlight the concerns of hon. Members.
Many of the problems highlighted in the debate have not really been funding issues, which I suppose makes a change in an NHS debate. They have actually come out of a lack of engagement that hon. Members have highlighted. I think that some hon. Members have even alluded to there being a sense of complacency sometimes with regard to skin conditions and they asked whether such conditions are taken sufficiently seriously. I am not sure that in this debate we have quite got to the bottom of why clinicians perhaps do not choose to specialise in or pursue this line of work, but today’s debate is useful in highlighting that.
Will the Minister take away to her fellow Ministers the point that the psychology of all this is very important and, in particular, read the report from the group chaired by my hon. Friend the Member for Mole Valley (Sir Paul Beresford)? A lot of people, when they poke fun at others because of their appearance —their skin colour or something else—do not realise that they are causing them psychological damage. That is the particularly the case with children. It is an important point that we want to be taken away from the debate.
I am very happy to give a commitment to take that point away and I will certainly bear it in mind in other discussions that I have.
I am glad that some hon. Members have taken the opportunity offered by the debate to highlight the growing issue of malignant melanoma. It is absolutely right to say that we need to make more people aware of the dangers of skin cancer. I was struck by the point made by my hon. Friend the Member for Romsey and Southampton North about the regional variation and the fact that in her area it is a particular problem.
The Department has funded Cancer Research UK to continue to test approaches to encourage, in particular, men over the age of 50 to visit their GP if they have signs of skin cancer. I have to say that, if anyone can come up with a magic way of making men over 50 approach their GP about anything, that would be very welcome and they would be rewarded by all parts of the NHS.
That is perhaps a debate for another time, but I note the concern. There is a happy medium to be struck.
Hon. Members might be interested to know that in autumn 2013 Cancer Research ran a campaign in south Devon, utilising text message communications, phone consultations with specialist nurses and volunteer community outreach to try to address some of the barriers to getting harder-to-reach groups to seek advice about skin concerns. Between 2003 and 2011, Cancer Research also collected data via the Office for National Statistics monthly omnibus survey to measure awareness, attitudes and reported behaviour of adults in relation to sun protection. The Department is funding a repeat of that survey in 2013, so that Cancer Research can track changes over time. I think that the results will be very interesting.
Public Health England, in partnership with the Department, NHS England and other stakeholders, proposes to run a local “Be Clear on Cancer” pilot campaign in early 2014 to encourage the early detection of malignant melanoma. The South West Strategic Clinical Network will host that pilot. It will build on evidence from the work in this area that I have just described.
This is a sizeable challenge. We can only, as individual Members of Parliament, take every opportunity that we can to encourage people to seek help from their GP and not to put that off, because for some cancers, the only thing that explains different outcomes for men and women is the fact that men refer themselves later and therefore do not benefit from early diagnosis.
With regard to the point made by the shadow Minister, the hon. Member for Copeland (Mr Reed), on sunbeds, I can respond to him separately on some of the specific things that he asked. I will make the point that the figures that I have seen for the problems associated with sunbeds are highly regionalised and that is one reason why public health is now devolved to local government. Some local government areas are giving the issue real attention and making it a priority. It is perhaps better suited for that sort of local and regional priority than it is for a national campaign, but I take the point that he makes.
A range of support is in place to help GPs to identify malignant melanoma. There is NICE guidance, “Improving Outcomes for People with Skin Tumours including Melanoma”, and there are the “Referral guidelines for suspected cancer”. We cannot highlight them too often.
I would like to take this opportunity to recognise the hugely important role that patient support organisations play. As has been said, they sometimes operate on a shoestring. They make an enormous contribution in helping patients to understand and cope with their conditions. Sometimes, knowing someone who can stand alongside us and say, “I know how you feel and this is how we have learned to cope with it,” is very important as a supplement to clinical guidance.
I again congratulate my hon. Friend the Member for Gainsborough on securing the debate and raising the profile of what is an important issue. As I said at the outset of my speech, I have learned a lot in researching my response to the debate, and I will now have these important issues firmly in my mind in my meetings and visits, where I can raise them. I pay tribute to the work that my hon. Friend is doing and to the all-party group. I assure the House that I will make NHS England and all the relevant bodies that I have mentioned today aware of the issues raised in the debate and the depth of feeling expressed about them.
It is a privilege to be under your chairmanship, Mr Turner, for this debate on press freedom as I see it. A colleague of mine would like to speak for a short time, so when I conclude, he will ask to speak. I know that others wish to intervene, and I would be very happy to take interventions.
Having been a journalist for some 17 years, this subject is dear to my heart. The principles of free speech and a free press are cornerstones of our democracy. At its best, our press is indeed Churchill’s
“vigilant guardian of the rights of the ordinary citizen”,
rooting out wrongdoing and holding the powerful to account. At its worst, it is vicious and petty, wounding those it should protect, but for all its faults, I am proud and fortunate to live in a country with a free and often irreverent press. It is a beacon of hope across the globe, which is why I was genuinely surprised when, back in March, 530 hon. Members dared to cross a threshold not crossed for 300 years.
In response to the Leveson inquiry, the Government established a new system of punitive exemplary damages in an amendment to the Crime and Courts Bill. Only 15 Members voted against, myself included, and some of the glorious 15, as The Spectator magazine called us, are here today.
Since then, the press charter has received Royal Assent. The legislation amounts to the toughest regulation of the press in the free world, and it has been greeted with widespread condemnation. In the US, where freedom of the press is enshrined in law under the first amendment, such legislation would be illegal. The New York Times states that the regulations will
“chill free speech and threaten the survival of small publishers and Internet sites.”
Many other countries have joined the chorus of disapproval. A senior delegation of “concerned” publishers and editors from the World Association of Newspapers and News Publishers will visit Britain next month. They are coming here, to this island that has stood and fought for freedom for so long, to demand an end to
“continued attacks on press freedoms”.
We are in poor company. Other countries that the team have visited include such bastions of free speech as Ethiopia, Libya, Yemen, Tunisia, Mexico, Honduras, Ecuador, Colombia, Guatemala, Ukraine and Azerbaijan. One really could not make it up.
Free speech organisations around the world are asking us to rethink. They fear that the changes set a dangerous precedent for non-democratic regimes, and our Foreign Secretary agrees. Why, then, are we going down this road? True democracies erect a barrier between Government and the press for good reasons, and there is no excuse for dismantling it. It is claimed that the royal charter protects press freedom because it can be changed only by a two-thirds majority in Parliament, but that is illusory. Such a majority rule was enacted in the Enterprise and Regulatory Reform Act 2013, but a simple amendment would allow a future Government to sweep it away at any time with a single-vote majority. Even the two-thirds safeguard is misleading, especially when we consider how an emotive topic such as Syria nearly persuaded the House to take the country to war. Large majorities are not as rare as the charter would have us believe, especially if the cause is deemed to be right, whether it be going to war or cracking down on the press.
Wind the clock back a bit. When Lord Justice Leveson published his report in November 2012, he called for “voluntary, independent self-regulation.” The deal stitched up at 2 am over a pizza by a group of politicians and the celebrity lobby group Hacked Off was far from voluntary, independent or self-regulating. The newspapers and magazines that it covers include the 1,000-plus regional and local papers that were exonerated by the Leveson inquiry, none of which was told that the meeting was taking place. There was no parliamentary scrutiny or consultation with the industry or the public on the terms of the state-sponsored royal charter, even though there are compelling constitutional questions about the imposition of a royal charter on an industry that does not want one. My hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) has put those well.
I am grateful to my hon. Friend for his flattering comments. Can he recall any occasion since the late Stuart period, when the Stuart kings were trying to establish an absolute monarchy, on which a royal charter has been used for the purpose of extending the power of the state? I hope that the Minister will be able to answer that point as well.
My hon. Friend is extremely good on that subject, and I would not begin to question his knowledge. I am sure that what he says is the case, and we would both be grateful if the Minister answered that point in his wind-up.
The legislation also raises questions under human rights laws. The eminent human rights lawyer, Lord Lester, says that the new system may breach article 10 of the European convention on human rights. In a letter to The Times, he wrote:
“There is no need for further state intervention, as proposed by Hacked Off celebrity campaigners. We need a system of independent self-regulation that encourages professional standards and provides effective redress, avoiding unnecessary litigation.”
Instead, what we have is state licensing of the press. That was unthinkable only six years ago, when the Select Committee on Culture, Media and Sport concluded:
“statutory regulation of the press is a hallmark of authoritarianism and risks undermining democracy.”
I could not have put it better myself.
Unfortunately, much has changed in the past five years. The American satirist H. L. Mencken famously said that in a democracy,
“journalist is to politician as dog is to lamppost.”
Now, with the aid of organisations such as Hacked Off, which is totally unrepresentative, the lamp post has turned on the dog. The motivation of some of my colleagues is dubious, to say the least. The sharpening of axes has been heard for some time. Cash for questions, cash for honours, cash for lobbying, mortgage flipping, duck houses, moats—the list goes on. As for Hacked Off, it simply wants to curb what it calls the “excessive” power of newspapers. I appreciate, as I am sure everyone does in this room and in the country, that there have been examples of appalling behaviour, and victims are understandably angry, but let us not forget what spawned the Leveson inquiry: phone hacking, which is already a criminal offence. As Lord Lester has said, the country’s
“plentiful criminal and civil laws”
already regulate the press.
Far from nothing having happened as a result of Leveson—a complaint that I hear all too often—the repercussions have been profound. The biggest newspaper in the country closed down, and 61 journalists were arrested. Prosecutions are ongoing in a number of courts across the land. Those in favour of the royal charter say that it will not impinge on a free press, but I disagree, as does Fraser Nelson, the editor of The Spectator. He wrote that as soon as Lord Leveson’s recommendations were published, the number of calls he received from Members increased markedly, all suggesting that comments with which they were unhappy should be removed or clarified. That is precisely the chilling effect that I and many others feared and have warned against.
Today, we have reached an impasse. The press is unwilling to sign up to the royal charter. Instead, the newspapers have gathered all the recommendations of the Leveson inquiry into their own set of regulations for the Independent Press Standards Organisation, which I have here.
Does my hon. Friend agree that not a penny of taxpayers’ money should be spent on setting up a recognition panel, which the Secretary of State accepts might be entirely redundant? It would be useful if the Minister set out whether any public money has already been spent on setting that up. Does my hon. Friend agree that it would be much better instead to allow the establishment of the Independent Press Standards Organisation, which will be up and running in early 2014 and would enable statutory control of the press to be avoided?
I could not have put it better. My hon. Friend, with his free and independent mind, speaks wisely. We ask the Minister to comment on that point.
Most newspaper editors and publishers are willing to sign up to the IPSO regulations. They are tough, and they are independent of both politicians and the press. For example, no editor would be allowed on the arbitration panel, and potentially crippling financial penalties of up to £1 million could be placed on titles that step out of line. Far from being toothless, the regulations would bring swift and fair redress to those who have been badly treated.
Lord Leveson called for a system that all sides could agree to—I ask hon. Members to note the use of the word “all”—and evidently the royal charter fails in that regard. It seems as though the Government have seen that for themselves. The Secretary of State for Culture, Media and Sport was reported to have said last month that the press charter could be redundant if newspapers produced an effective system of self-regulation. They have done so, and I have it right here.
Perhaps one day we can create a British Bill of Rights that incorporates freedom of speech and freedom of the press, which would give us the same protection as the American first amendment. Despite the fact that all three parties are agreed on the royal charter, I hope that self-regulation will prevail. It is in all our interests.
My hon. Friend and almost neighbour makes a good point. I shall answer it with what might be a humorous point. After the 15 of us had voted against the Government on that day, I was called within minutes, not by the BBC or any organisation in this country, but by the news desk of the Russian equivalent of the BBC, to ask what I was doing. I find a certain irony in that.
I apologise for missing the very beginning of the hon. Gentleman’s contribution due to the retiming of the debate. I congratulate him on securing it. Does he understand the scepticism there will be among many members of the public due to the previous failures of self-regulation? The proof of the pudding will be in the eating, and we will know how effective this self-regulation is only when it is exercised. That is how the public might develop confidence in it.
The evidence—the cake—is in the IPSO documents, and the public can tuck in whenever they want. As I understand it, when the press signs up to the IPSO regulations, those regulations will be contractual, so the press will have to follow its own rules. What more evidence does the public need than the document that I am holding? If all the papers, and others who sign up, agree to the regulations, which they say they will, we will have gone a long way towards reassuring the public that something has at last been done.
With those comments, I shall close. I hope the Minister is able to comment on the Secretary of State’s remark that if the press gets on with setting up its own regulatory body, the Government will withdraw the royal charter and allow the press to regulate itself, and, most importantly, safeguard freedom of speech and the freedom of the press in this great country of ours—the United Kingdom.
I shall be brief. I congratulate my hon. Friend the Member for South Dorset (Richard Drax) on his speech. I, too, was impressed by what the Secretary of State said. I hope that we will hear the sound of back-pedalling from the Minister when he speaks. There should be no doubt that what the Government propose is state licensing; my hon. Friend made that clear. If the Minister is unwise enough to say anything to the contrary, no one should take too much notice. The legal underpinning by statute—it might be divided between various bits of architecture, but the effect is the same—would mean that those who do not sign up, and they alone and they uniquely, will be exposed to exemplary damages. I had a call from the Russians as well, by the way. I found it as disturbing as my hon. Friend did that they should want to interview me about press freedom.
Karl Popper wrote “The Open Society and its Enemies”, and Sir Edward Boyle, the former Conservative Minister of Education, wrote an essay on that book, in which he said that Popper had first made him realise that of all human rights, the most important was the right to criticise one’s rulers. The problem with what the Government had proposed—I hope that I can say “had”—is that the Government would set the parameters for what was and was not acceptable criticism, and opinions will differ on what is and is not acceptable criticism at any one time.
I have a document from the Nuclear Decommissioning Authority, commissioned by KPMG, which contains criticisms of Nuclear Management Partners Ltd, its contractor, for very poor leadership and for intervening to a very limited extent. It cost hundreds of thousands of pounds of public money. I know that Government do not want it in the public domain, because the copy that was first sent to me was redacted. I have now got hold of an unredacted copy. The conversation about what should and should not be in the public domain is obviously a permanent one. The idea that the Government should be the arbiter of that is wrong.
We have the expression “a free press” for a reason. The people who are prepared to toy with these new ideas bring to mind the expression of George Orwell, who spoke of
“playing with fire by people who don’t even know that fire is hot.”
It is a great pleasure to serve under your chairmanship, Mr Turner. I thank my hon. Friend the Member for South Dorset (Richard Drax) for securing this important debate. I have read his fine contributions to our various debates on press self-regulation, so I knew before the debate about his extensive experience as a journalist. He reminded us that he was a journalist for 17 years, so his remarks and his passion should be taken with the utmost seriousness.
I am not entirely certain—it is not in my brief—how many of my hon. Friends present today were winners of The Spectator parliamentarian of the year award, but I offer those who are present and who have won that award my heartfelt congratulations. Although I was at the beginning of the lunch, I was called away to a meeting, so was not present at see them receive their award. This is the first opportunity I have had to congratulate them. In passing, I also welcome the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles). Given that he is going to witness a fellow Minister being beaten up over the next 15 minutes, perhaps this is a respite from the ordeals he has faced at the hands of colleagues over the past 12 months or so.
I will finish my last joke before I get on to serious points. The Spectator has led a robust campaign against the royal charter. I am not one of those MPs who rang The Spectator; I have not rung to complain about its coverage of my activities. I recently took part in one of its discussions on the future of technology companies. I cannot quote exactly from memory, but the blog afterwards said something like, “The Minister said the Government was doing a lot in this area, but none of his examples were convincing.” I give way to my hon. Friend.
We have certainly noted the Under-Secretary of State’s comments. Unfortunately, I opened the door to that point by referring to his presence.
I shall take the opportunity provided by the debate to discuss the issues raised about the royal charter. It is more than a year since Lord Justice Leveson—Sir Brian Leveson—published his report, which ran to an astonishing 1,987 pages in length and, I think, 5 lb in weight. The report covered a vast territory. It examined the existing self-regulatory structure of the press, as one of its core themes. It set recommendations—to which the Government responded—for, I would say, a reformed system of independent press self-regulation. Let me take this opportunity to remind the House what those recommendations were.
The key elements of the recommendations in the report can be summarised as follows. The first was maintenance of a vigorous free press. The second was having the maintenance of press self-regulation at the heart of the new system that delivers the key principles set out in the report. The third was to have incentives that encouraged the press to use that self-regulation system and created benefits for those who signed up to and followed it. In addition, an independent recognition body should be able to recognise that a press self-regulator was adhering to the principles.
I am going to ask a horribly cruel question. Has the Minister read the IPSO document? I entirely endorse every word of the speech that he is making— it almost sounds like my speech—so I hope that he will conclude at the end that my colleagues and I are right.
I have not read every word, but I have examined the principles and been briefed on the matter. To pick up on what my hon. Friend says, we can recognise a huge amount of common ground between us.
The independent recognition body should be able to recognise when a press self-regulator is upholding the principles. By adhering to them, the press can take advantage of incentives. It is important to remember that the recognition body is there, first, to recognise the self-regulator, and then to carry out periodic checks every few years to ensure that the self-regulator adheres to the Leveson principles. It will not be, and was never intended to be, involved in the self-regulation of the press.
I would put it another way: the Government would incentivise those who join an independent self-regulator that adheres to the Leveson principles.
All three main parties have agreed that the royal charter is the best way to deliver the recognition body that Leveson recommended. I referred earlier to the fact that I have read all the speeches of my hon. Friend the Member for South Dorset. I was able to point out that he had been a journalist for 17 years, because he mentioned it again in this debate, but let me prove that I have read his speeches: I know that the fact that all three main parties have adhered to the idea of a royal charter will not persuade him, as he said in one of his speeches that when the three parties were agreed, it set alarm bells ringing for him.
We are making considerable progress. My hon. Friend has so far said that the speech I am giving could be his, and now he says I am as eloquent as he is.
There has been much concern expressed in the House and in some quarters of the press about the charter damaging press freedom. I recognise that those arguments have been put, but I have to state that the Government do not believe that to be the case. The Government are clear that free speech and freedom of the press are vital; they underpin our democracy. The Government would not seek to implement anything that endangered those fundamental principles. Indeed, the Prime Minister was clear from the outset that he had serious misgivings about taking any action that could infringe free speech and a free press.
My hon. Friend has taken the words out of my mouth. I was going to say that that is why statutory legislation was avoided and why a royal charter was chosen to establish the recognition function instead. It is important to get the point across that politicians will not be able to meddle with the charter on a whim. There are clear safeguards built into the charter to ensure that it cannot be amended unless a very high, strict bar has been surpassed. Any proposed change must be ratified by a resolution of both the House of Commons and the House of Lords, as well as with the unanimous agreement of the board of the recognition panel.
As I said in my speech, what happens if we have a change of Government? We cannot hold future Governments to legislation if they change it. It does not matter whether the fraction is two thirds or whatever it is now; the legislation will be wiped out by one vote, if indeed it was a close call, would it not?
The Government went to great lengths to ensure that the royal charter could not be meddled with at will. The statute states clearly that change would need the unanimous agreement of the recognition panel, and that both the House of Commons and the House of Lords must approve a change. Two thirds of Members must agree to the change, as well as the members of the body itself.
As I said earlier, the Prime Minister made it very clear that statutory regulation of the press was not a road he would ever go down. The recognition body is not a regulator of the press; that is a really important point to get across. The recognition body comes into being through a royal charter, not through legislation.
I do have plenty of time—that is right—and 1640 obviously refers to the time that the debate closes, rather than to the Stuart period of history referred to earlier by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg).
It is important to stress that the press royal charter cannot simply be changed by Ministers without recourse to Parliament. That is a very important point. All other charters can be changed or dismantled by the Government of the day without any recourse to Parliament at all. In the case of this charter, safeguards have purposefully been put in place to stop any such meddling.
Will the Minister address the question that I posed in my intervention on my hon. Friend the Member for South Dorset (Richard Drax)? Has public money been used in setting up a recognition panel? If not, will he make a commitment that it will not be, given that even the Secretary of State has admitted that the panel could turn out to be completely redundant?
It is on the record that a degree of public funding will be required to ensure that the recognition panel is established and able to take applications for recognition, but that is time-limited. I cannot confirm exactly whether any public money has been spent so far, so I will write to my hon. Friend. As far as I am aware, none has been spent so far, but I cannot, on the basis of the note I have been passed, absolutely confirm that.
The Minister is being extraordinarily generous in giving way. I would like to suggest a way forward by drawing, I hope, a not-too-tortured parallel. We had a vote, which was referred to in the opening speech of my hon. Friend the Member for South Dorset (Richard Drax), on Syria. If that vote had gone the other way, I doubt whether the chemical weapons would have gone, or whether we would have had the deal with Iran. The Government are now claiming credit for those things having happened, even though they were defeated in a vote. Can the Minister see where I am going with this?
Well, it will become clear. I doubt whether we would have had on offer anything like as tough a regime as that constituted by IPSO without what the Government have done up till now. Would it not be an idea to give it a trial and see whether it works? The Government could then legitimately claim credit for having brought it forth, when otherwise it would not have come forth.
My hon. Friend tempts me, perhaps uncharacteristically, to claim credit where it might not be due, but I recognise the force of the point that he makes. It is important to stress that the independent self-regulation body that is being set up by the press is welcome. It is also important to stress that it is entirely a matter for the press whether they choose to seek recognition for that body. As I have said, the benefits that come through being recognised by the recognition panel are entirely voluntary. I do not think it is any secret, and I am sure that my Secretary of State has put it on the record, that we are delighted with the progress that the press has made in this area.
I recognise the force of the argument that my hon. Friend the Member for South Dorset has made, but as I say, the charter itself will not play any direct role in regulating the press. It is there simply to recognise and periodically review any independent self-regulator, and when I say “review”, it will not even review the workings of that panel, but will look to see that it still adheres to the principles that are set up—
Mr Turner, it is a pleasure to see you presiding over this debate this afternoon. I am also very pleased to see the Minister here in Westminster Hall and the hon. Member for Worthing West (Sir Peter Bottomley), who has led on this issue in this House for a number of years now. I know that he wants to make a contribution to the debate before the Minister responds, so I am very happy to see that he is here.
This is a growing issue. I have had a number of cases in my constituency of Poplar and Limehouse in the past 16 years involving people in very expensive properties; professional and qualified individuals, residents who paid large sums of money for the homes that they inhabit. They are being ripped off and exploited by unscrupulous property management companies and individuals who have spawned these management companies.
That is my own local perspective. However, this is a national issue. As I understand it, about 5 million people are in leasehold tenure in the United Kingdom and only one other country has that degree of tenure. A note on the statutory instrument that we debated last week in Committee—the Redress Schemes for Lettings Agency Work and Property Management Work (Approval and Designation of Schemes) (England) Order 2013—said that 40% of all new properties are under leasehold tenure. East London, where we have massive regeneration and lots of new properties and conversions, is I think one of the areas with the biggest number of properties under leasehold tenure. This is not a situation that will go away. It has been growing for years and will continue to grow.
When we were in government, I know that we tried to address the issue to a certain extent. We had a number of stabs at it, but sadly we did not cover it. I am very hopeful that the Minister will be able to say that the coalition is still very interested in the subject and want to address it.
It is not just leasehold tenure that is an issue. I have to declare that I live on an estate that was previously managed by Peverel, which was previously owned by the Tchenguiz brothers, who were quite notorious. An Office of Fair Trading report is due out this Friday; I will mention that later. I am a freeholder, but because I am on an estate that is run by a property management company I have a covenant and therefore I am included and have a role to play. I want to put that on record, so that I am not accused of any conflict of interest.
Despite the reforms in the statutory instrument, there are still specific problems, including unfair charges for repairs, insurance and electricity supply, and complex procedures for residents to seek redress; those procedures are supposed to be informal. When residents get to land valuation tribunals—I know that the structure of those tribunals is itself being reformed—property management companies turn up with heavyweight legal teams, including barristers, and put people under massive pressure. One other difficulty is that, even where residents win their legal cases, the legal costs incurred by the property management companies, which were supposed to be capped at £5,000 but are not, suddenly appear on the bills of the residents for the following year as part of their service charges. That is grossly unfair and adds insult to injury.
I congratulate my hon. Friend on raising this very important issue. Does he agree that these problems are a particular nightmare for elderly residents who simply cannot cope with the pressure that they are put under and the extent of the rise in costs?
My right hon. Friend anticipates a point that I will make later, namely that these problems are not restricted by class, age or geography. They relate to properties ranging from pensioner and retirement flats that have a value of only £50,000 through to million-pound properties in my part of east London. However, when we are talking about pensioners in their retirement homes and other such communities, the trauma and the stress caused by these issues is even greater. Although there are some restrictions in the legislation about the fees that these property management companies can charge, and measures dealing with the ability of local authorities to prosecute these companies when they see that there is a transgression, local authorities appear to be unwilling or unable to respond legally.
I know of a number of cases. In my constituency, I have two high-profile cases running at the moment: one on the Canary Riverside development and one on the West India Quay development. Both involve companies owned by the Yianis Group and are operated by Octagon Assets. They are in major disputes with residents, who have real problems in getting their situations resolved. The right to manage estate ballots procedure is very complex, especially where there are absentee owners who are sub-letting, and it is also very expensive. At the Kingsmere development in Brighton, it cost residents £30,000 to take action and they failed to secure the right to manage their own properties. An individual in Battersea, Mr Dennis Jackson, entered a dispute with his property management company about £7,000. He incurred legal costs of £76,000 and nearly lost his £800,000 flat, which he now has to sell to pay for his legal fees. That example shows the level of professional individuals we are talking about. They have to relocate to deal with the problems they have had to face.
We have had predators such as the Tchenguiz brothers and Peverel, the largest property management company in England, with many complaints from pensioners and others about onerous and unnecessary maintenance work and about exacting fees; my right hon. Friend the Member for Oxford East (Mr Smith) mentioned the pressures on pensioners. There is no requirement on these property management companies to demonstrate value for money, or to ensure quality of service.
I would be grateful if the Minister, when he responds to the debate, brought us up to speed on the OFT investigation into Peverel and on the leasehold inquiry, which I believe has been announced. I know that he will not be able to say too much without compromising embargoes and so on, but I know that there have been announcements, so it would be good to put on the record today exactly what is happening.
I congratulate the Leasehold Knowledge Partnership both in respect of the full OFT investigation into residential leasehold and the securing of the OFT report into the Peverel-Cirrus price-fixing racket, which involved warden call and electronic door systems in retirement leases. Again, that relates to the point that my right hon. Friend made about pensioners. I believe that the report is due out this Friday, but I would be grateful if the Minister confirmed that.
I thank the LKP and Carlex for their briefings and the information that they have given me, particularly the information about repayments to residents: £1 million to residents at St George Wharf; £500,000 to residents at Charter Quay; and £400,000 to residents at Chelsea Bridge Wharf. Those are huge sums, and they demonstrate that something has gone badly wrong in this sector.
We have had the statutory instrument and the redress scheme. I asked the Minister’s colleague—the Under-Secretary of State for Communities and Local Government, the hon. Member for Keighley (Kris Hopkins), who presided over the statutory instrument—about the redress scheme. He was able to say that the scheme, which has now been extended, means that, if someone is not in the scheme they will not be able to operate. Perhaps the Minister could say a little more about how the scheme will make it simpler for residents and tenants to be treated fairly. Also, can he give any information about the OFT inquiry, its duration and the liaison between his Department and colleagues in the Department for Business, Innovation and Skills about that?
The fundamental question is whether the Government accept that this issue must be addressed, with solutions in due course—
Sitting suspended for a Division in the House.
Do the Government accept that this growing issue will not go away and that action is needed? Certainly, the OFT announcement suggests that the authorities recognise that, although whether that is because the Government have told them, I am not entirely sure. It would be good to hear the Minister’s view on that.
Returning to my right hon. Friend’s intervention, leasehold crosses class and age boundaries, and includes everything from expensive lofts and expensive apartments to retirement bungalows and flats, and it is not geographically limited, either. The issue affects the whole country.
On the Delegated Legislation Committee, the Minister’s colleague, the Housing Minister said that he is prepared and happy to meet me, the hon. Member for Worthing West and other colleagues with an interest. I would be grateful if the Minister confirmed that meeting. Obviously, the OFT inquiry means that things will be happening in parallel, but it would be good to put that directly to the Housing Minister and the Department at some time in the future.
I thank the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) for using the Delegated Legislation Committee to draw the Government’s attention to the matter, and I congratulate him on securing this debate.
I welcome the Minister, and I hope that he will pass on to his departmental colleagues and to Ministers in the Ministry of Justice the fact that something needs to happen to make things fair, to give people freedom and to avoid what I have called criminal behaviour in leasehold deals, price-fixing cartels, the cheating of freeholders and excessive exit fees and fiddles. Opportunist lawyers are playing the system, and at times the Property Chamber—or the Leasehold Valuation Tribunal, as it was—has not been led with the determination that secures justice for people sorting out ordinary disputes between a leaseholder, a managing agent or a freeholder.
I would like to invite the barrister Justin Bates, for example, to say out loud the ways in which opportunist managing agents and freeholders can frustrate an application to the Leasehold Valuation Tribunal or the first stage of the Property Chamber, where, as the hon. Gentleman said, the fee is fixed at £500, yet a lawyer can explain to the respondent, the managing agent or the freeholder, “You can make applications to delay the hearing, you can apply to go to the county court or you can bounce between the two. And, by the way, if you take the advice of some lawyers and apply for the right to manage, it can take up to 18 months for the courts to dispose of the fact that you do not have to have the letters RTM in the name of the proposed management company that would replace the managing agency appointed by the freeholder.” As my hon. Friend the Minister will know, the freeholder appoints and gives instructions to the managing agent, and the freeholder has every interest in the managing agent doing what the freeholder wants and not what is right by law or necessarily in the interest of the leaseholder.
I first became involved in the matter indirectly because of my Worthing home, which is leasehold. The other five owners and I took up an offer from the freeholder to buy the freehold. It took us two exchanges of letters to agree a price. The managing agent appointed by the freeholder was very good, and we continue to use that managing agent now. That is an example of how the system is supposed to work. If we had had a dispute over the price, we could have gone to the Leasehold Valuation Tribunal and solved it, but we did not need to do that.
Also in my constituency is a block of flats where a number of people—poor, old and some of whom were dying—found themselves applying to get back money that had been wrongly taken from them. It took well over a year to get the case to the Leasehold Valuation Tribunal. Partly because of my intervention, the freeholder recognised that what it had done was wrong and it offered £70,000 to the leaseholders, which was accepted. The sum was less than the leaseholders would have got in court, but at least it solved the problem.
The hon. Member for Poplar and Limehouse rightly mentioned Martin Boyd and Sebastian O’Kelly and their work with the campaign against retirement leasehold exploitation. LKP has saved millions of pounds for hundreds of people. The Government’s Leasehold Advisory Service does its best, but it does not have enough money or resources, and sadly it has to take advertisements from people who should not be advertising at all, let alone through a Government advisory service. I name Mr Benjamin Mier, who, when shown a report by the Judicial Conduct Investigations Office, resigned his position. If he had not, the report would have been made public. Because he resigned after reading the report, we do not know what is in it—actually, we do know what is in the report because we know what he had been doing, but we do not have that information formally. People only have to read the comments of the chairman of the Leasehold Valuation Tribunal to know what Mr Mier did.
Besides answering the debate today, for which I am grateful, will the Minister please ensure that the whole Government come together, follow the OFT investigation into what is going wrong commercially and consider what the Serious Fraud Office had, and the OFT has, on Peverel, which has been named? I would also like the Minister to consider Mr Israel Moskovitz, who, again, has played the system to avoid his leaseholders in Plymouth getting into dispute resolution, the Leasehold Valuation Tribunal, or the right to manage or the right to purchase.
The Association of Residential Managing Agents, with our former colleague Keith Hill as its arbitrator, has some of the right ways forward. It ought to be illegal for any managing agent or freeholder to take a commission from an insurance company without having an open book and without showing that what they are doing is in the best interest of leaseholders.
I am pleased that the right hon. Member for Kingston and Surbiton (Mr Davey), who is also the Secretary of State for Energy and Climate Change, and I had meetings with the OFT that have led to the decision this week to investigate. There is more to come. Bluntly, it is wrong that were I a convicted fraudster who came out of jail yesterday, I could set up as a managing agent today without having to meet necessary and obvious standards. Such standards are not just for those who live in big flats on the Thames—those with lawyers and expensive flats—but for small people who cannot get anything other than a leasehold property of their own in which to live, hopefully without undue cost.
We must make the system such that managing agents have a duty to paying leaseholders to get the best possible service at the right price and leaseholders do not have to pay for things that are not needed. The OFT will address the door-call systems whereby many hundreds of blocks of flats—there are probably six in my constituency, and I know there are such flats in the constituencies of both the Chancellor of the Exchequer and the Prime Minister, and there are probably some in most constituencies—are forced to have unnecessary renewals at prices fixed by almost a cartel. They are not actually cartels, because the two other so-called bidders do not do the work. If I were 99% of the market, I do not think I should get relief from the OFT rules by confessing my sins after the Serious Fraud Office had passed my case to the OFT.
I will not go on, because there will be other opportunities for the House to consider these matters. The hon. Member for Poplar and Limehouse has rightly spoken for millions of people, and it is time that Parliament and the judiciary took action to stop such scandals, costs, frustration and worry for ordinary individuals who are just trying to live quietly at home.
It is a pleasure to serve under your chairmanship, Mr Turner. I feel much safer with you watching over us.
I congratulate the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) on securing this debate and on speaking with both passion and persistence on an issue that I know is of great importance to his constituents. I also thank my hon. Friend the Member for Worthing West (Sir Peter Bottomley) for his contribution and his persistence in pursuing the matter, which some might view as arcane but is a very real source of worry and distress in many people’s lives.
I am responding to this debate in place of the Housing Minister, the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Keighley (Kris Hopkins), as he is required to respond to an Opposition day debate on business rates. I may not be able to address all the issues, and if I try to do so, I might not address them as intelligently as he would have done, but I know that he is happy to write to hon. Members to follow up on any issues. Of course, he is also happy to hold the meeting mentioned by the hon. Member for Poplar and Limehouse, to which he has already committed.
Residential leasehold is indeed an important and growing housing sector. Many leaseholders, like my hon. Friend the Member for Worthing West, are happy with their home, but we recognise that some leaseholders are not. The Housing Minister’s postbag makes that very clear.
The hon. Member for Poplar and Limehouse has raised a wide range of issues, and I will attempt to address as many as I can in the time available. I am glad to have been asked how the redress schemes will assist leaseholders and others. Since 2010, the Government have become increasingly aware of the issues in the residential leasehold sector, particularly to do with the quality of service. The Enterprise and Regulatory Reform Act 2013 gives the Secretary of State for Communities and Local Government the power to require all residential letting agents and property management agents in England to be members of a Government-approved redress scheme. We are making good progress on implementing those powers, and we expect to start approving such schemes early in the new year.
I have a brief technical point that I do not expect the Minister to answer today. In law, a leaseholder is a tenant, but leaseholders are not always counted as tenants, so will he try to check whether the schemes will cover leaseholders, as well as people normally referred to as tenants? Perhaps the Housing Minister can come back to us on that.
My understanding is that it will, but we will certainly write to my hon. Friend to reassure him. I skipped over a sentence that seems to imply that it will be the case, but we will confirm that to all right hon. and hon. Members present.
I want briefly to address the right-to-manage legislation. I must admit that this is the first time I have ever heard about it, so I may not make as much sense as hon. Members deserve. The leasehold right-to-manage legislation is designed to be available to as many private sector leaseholders living in blocks of flats as possible. The right was designed for use on a block-by-block basis. Applying the legislation to estates is complex and might result in the right becoming less, rather than more, accessible. Right-to-manage ballots can be complex and potentially expensive, and the legislation sets out in detail the procedures that all involved must obviously follow and comply with. The provisions aim to protect the interests of all parties, including those of the leaseholders. I am sure that my hon. Friend the Housing Minister will be happy to discuss that further if appropriate.
The hon. Member for Poplar and Limehouse mentioned high charges to leaseholders for repairs, insurance and utilities. The law provides leaseholders with a range of important rights to do with service charges, including the right to be consulted, the ability to challenge the reasonableness of charges at independent tribunal and the right to obtain information.
The right hon. Member for Oxford East (Mr Smith) mentioned older and vulnerable leaseholders, who may find it onerous or stressful to attend a tribunal or to exercise their rights. Free initial legal advice is available from the Leasehold Advisory Service—LEASE—which is funded by my Department.
I want to add a tribute to Anthony Essien, the chief executive of LEASE. He and the Master of the Rolls, as the head of the Court of Appeal, would agree that judgments by the Leasehold Valuation Tribunal and on appeal need to be trawled through, so that instances of when poor, ordinary people have been frustrated at great cost and worry can be collected. As the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) said, the costs pile up and then come back as service charges. More work is needed.
I hope that I will be able to address, at least in part, the question of the ability of property management companies to recover their legal costs from leaseholders, even in cases where the leaseholder is the successful party, by adding them on as service charges for the following year. Whether the landlord can recover his legal costs, and if so, in what way will depend on the terms of the individual lease. Even when a lease does allow the recovery of legal costs as a service charge, the courts and tribunals still have the power to prevent that from happening by issuing what is known as a section 20C—of the Landlord and Tenant Act 1985—order, if they judge it appropriate. Of course, to get such an order does require someone to go through the court or tribunal. Each case will be determined on its merits, and independent legal advice should be obtained, but where leaseholders believe that they have grounds to do so, they should consider applying to the court or tribunal for such an order.
I want to address questions about the Office of Fair Trading. There have been several reviews, and I want to ensure that I get the information correct. I am advised that the OFT is carrying out an investigation into property management groups that use associated companies to supply security systems and other services, and I believe that it expects to report on that shortly. The OFT is also undertaking a separate market study of property management, but that is only in the initial stages, so I am unable to say exactly how long it will last or when it will report. I do know, however, that the OFT is seeking views on the scope of the study, which should be provided by January. I am absolutely certain that the Housing Minister will be able to provide more detail when he meets hon. Members.
At the end of his speech, the hon. Member for Poplar and Limehouse asked what is perhaps the most important question, which is whether the Government are saying, “Nothing to see here, move along,” or whether they are recognising the problems and abuses and the fact that, while some steps have been taken, including those in the Enterprise and Regulatory Reform Act 2013, other subjects may need examining. I reassure the hon. Gentleman and others that we do understand that there is abuse and that there are vulnerable people who are not best placed to defend themselves. We are open to conversations about ways to improve matters without massively over-complicating systems or adding hugely to the burden on either the taxpayer or leaseholders.
Does the Minister agree that, in addition, the professional standards bodies for surveyors, bankers, barristers and others should review whether the actions of some of their members should lead to reviews of whether professional standards are being met? If someone does something illegal, that is clearly wrong, but someone doing something that is against the public interest should not happen in a profession.
It is certainly the case in other professions that people can be struck off, even if not found guilty of a criminal offence, for breaking the code of that profession. I am sure that every profession will want the public to have full confidence in its professional standards and in its maintenance and enforcement of them.
Question put and agreed to.