House of Commons
Tuesday 3 February 2015
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
Legal Aid Funding
1. Whether he plans to make further changes in the level of funding for legal aid; and if he will make a statement. (907362)
Legal aid is a fundamental part of our justice system, but resources are not limitless. When reform began, we had one of the most expensive legal aid systems in the world, at about £2 billion a year. Even after our reforms are complete, our legal aid system will still be one of the most generous, at about £1.5 billion a year. The Transforming Legal Aid programme that is currently being implemented is designed to save an extra £215 million per year. There are no current plans for further changes to funding levels beyond this programme, but the financial pressure to balance the books remains.
Research by Rights of Women has revealed that six out of 10 women who suffered domestic violence and were then refused legal aid took no further action through the courts, and many, as a result, ended up staying in violent and abusive relationships. Will the Lord Chancellor look again at the barriers to access to justice that his legislation has created?
There are two issues involved. Clearly, domestic violence is a criminal offence and it should be dealt with properly by the police. Although we made a number of difficult changes in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, one of the groups we protected was women who needed to go to court after an incident of domestic violence, and that is the way it should be.
Not surprisingly, the Bar Council has argued very strongly for the status quo on legal aid. We have worked with it closely over the past 12 months, particularly in the work done by Sir Bill Jeffrey and, most recently, Lord Justice Leveson on how we can improve the process to reduce work load, at a time when we face big financial pressures, and create a system that is more efficient.
As a Government, we have had to take some difficult decisions about legal aid. It is certainly the case that there is less legal aid money available for family law cases than there was. I am afraid that is a natural consequence of the financial challenges that we have faced. It is interesting that no party in this House has pledged to reverse these changes.
So far, there has been an increase in the number of litigants in person. Of course, we have always had litigants in person in our courts. We continue to monitor the situation closely. The Minister of State, my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), is working hard to look at additional ways of smoothing the processes that people have available to represent themselves. None the less, progress in our courts has so far continued pretty well.
The Secretary of State’s third attempt to introduce a new contract for criminal legal aid is now stalled in the High Court and looks dead. Will he join the shadow Lord Chancellor, my right hon. Friend the Member for Tooting (Sadiq Khan), in burying it? Will he work with the legal profession to devise a model that does not put hundreds of high street solicitors’ firms out of business and lead to more miscarriages of justice? Or is this just like prisons, probation and the Courts Service—another of the policy car crashes he is leaving to an incoming Labour Government to sort out?
The one thing we can always guarantee at these sessions is to hear a load of nonsense from the hon. Gentleman. I have listened carefully to Labour Members’ arguments over the past few months. They oppose when it is politically convenient to do so, but they have absolutely no idea what they would do in our place—and that is why the electorate are not going to give them the chance.
Rebalancing the Outer Estates Project (Nottingham North)
2. What assessment he has made of the potential effect of the Rebalancing the Outer Estates Foundation in Nottingham North constituency on reoffending rates among young people not in education, employment or training. (907363)
I very much welcome the hon. Gentleman’s commitment to improving education, skills, training and employment for his constituents. He has a long record of working in early intervention projects—an area that I am personally very committed to.
I refer Members to my entry in the Register of Members’ Financial Interests.
Does the Minister agree with the old cliché that the best crime prevention measure is a job for young people? Will he commend the work of the rebalancing foundation in Nottingham North and visit it in order to see a number of the schemes that we have undertaken, including building—or hoping to build—a special college for 14 to 17-year-olds who are not in education, employment or training?
The evidence backs up what the hon. Gentleman says: only 32% of adults said they were in paid employment in the four weeks prior to custody, so the hon. Gentleman’s question is along the right lines. The evidence also tells us that more than a third of young people who go to prison in Nottingham reoffend. That is why we are putting education and skills at the heart of our transforming youth custody programme. The Government have also given £100,000 from the local enterprise partnership to the project in the hon. Gentleman’s constituency.
I am lucky enough to be the police Minister in the Home Office as well as a Justice Minister, and this question falls under both portfolios. We do not hold those data centrally, but we are now gathering them because of the review of pre-charge bail announced by the Home Secretary.
Some of the answers I am getting from the Department do not include National Crime Agency figures. That is an omission. Does the Minister agree that for someone to be arrested and bailed without charge for months and months, such that their careers and lives are destroyed, goes against all the principles of British justice? Will he look at what Operation Pallial and the National Crime Agency are up to and at whether they are leaking private information to the media?
If there is any evidence of leaking to the media, I am sure the hon. Gentleman will pass it to me in due course. I agree that we need to make sure that bail is used correctly, and that is exactly why the Home Secretary announced a consultation, which is ongoing. I am sure the hon. Gentleman will give evidence to it so that we can get it right. People should not be on bail for any longer than they need to be.
My hon. Friend is absolutely right, but someone who is arrested and offered bail when an investigation is ongoing faces a really difficult decision. We have indicated that the period should be no more than 28 days, and the consultation is looking at whether that is viable. The period may need to be longer in exceptional circumstances, particularly when the police are looking at encrypted hard drives, but at the end of the day it is for the individual and the police to decide.
Nuisance Phone Calls
Tackling nuisance calls is a priority for the coalition and I welcome my hon. Friend’s interest in the subject. We are working closely with colleagues in the Department for Culture, Media and Sport to reduce the irritation and distress they cause. Our Department’s claims management regulator has worked with industry and consumer groups as part of the nuisance calls taskforce. It published some recommendations on 8 December, which we believe will help reduce unwanted calls and texts, and we are actively considering which we can soonest implement.
One of those recommendations is that the Government should introduce new legislation to hold to account directors of companies that blatantly flout the law on making nuisance telephone calls. What progress has the Minister made on implementing that particular recommendation?
There are three specific issues on the table. The first is what we did in December, which allows for new, tough financial penalties on companies—by which I mean companies as a whole—that break the rules. The second is the proposal that we have consulted on and are about to respond to, which would lower the threshold at which enforcement action can be taken and produce a fine of up to £500,000, which should be a deterrent. The issue of holding individual company members to account is more complex and will not be the first of the two things we do.
The claims management regulator is often held up as the model for how to limit the number of nuisance calls due to the way in which the number of payment protection insurance call numbers has been reduced. However, recent discussions I have had with the Association of British Insurers indicate that it may not be working quite as planned. Will the Minister commit to a meeting as soon as possible to review whether the process is working as well as possible?
I recognise my hon. Friend’s assiduous work on this issue and I am very happy to pick up on the issue that the claims management regulation unit may not be as effective in practice as we believe it is in theory. We are determined to protect the public. Nuisance phone calls and nuisance texts, particularly to the vulnerable, are unacceptable. They must be dealt with and we will do that with my hon. Friend’s help.
The National Offender Management Service is working very closely with the contractor in a number of areas to address those extremely important issues.
I visited the jail myself recently and there have been some welcome improvements since the action plan, but, given the damning report by Her Majesty’s inspectorate of prisons, can the Minister assure my constituents that the prison is not only safe, but fit for purpose?
The Government take this issue extremely seriously, and the Secretary of State was at that prison on Friday. We are taking five actions. First, a new director has been appointed. He was formerly director of Her Majesty’s Prison Rye Hill, and he took up his position on 8 December. There is a new head of security and a new security intelligence manager, and new search and security systems are in place. Two full lock-down searches of the prison were conducted in November and December, and improvements have been made in the operation of the basic regime, which will help with the issues that the hon. Gentleman quite properly raises.
25. As well as taking prisoners from Merseyside, HMP Altcourse takes prisoners from Cheshire and north Wales. What will be the impact of the new super-prison at Wrexham on prisoner capacity in Cheshire, north Wales and Merseyside? [Official Report, 25 February 2015, Vol. 593, c. 3-4MC.] (907386)
We need more adult male capacity so we are taking the right course of action by building the new prison in north Wales. There are currently no prisons in north Wales, and the new prison will enable us to house all Welsh prisoners within Wales, which we have not been able to do before. We will keep prisoners as close to their home areas as far as possible.
Youth Justice System
6. What plans he has for the future of the youth justice system. (907367)
The Government are committed to preventing offending by young people. We are working to place education at the heart of youth custody, and will open the first secure college pathfinder in 2017. We have announced the commencement of our stocktake of youth offending teams, to give us a better understanding of how local youth justice services are delivered and to help ensure that we provide the best support possible to young offenders and their communities.
Will the Minister acknowledge the serious concerns that have been raised about the Government’s secure college proposals, and act on the advice of the chair of the Youth Justice Board and find alternative provision for girls and the youngest offenders?
As the hon. Lady knows, we will not be placing girls and young people under the age of 15 in the secure college when it starts, and those issues will be subject to a vote of both Houses of Parliament. At the moment we spend an average of £100,000 a year to keep a young person in custody, and we have a reoffending rate of 68%. We need to try something better, and putting education and skills at the heart of youth justice so that we turn young people into productive members of their community is the right way to go.
What plans does the Ministry of Justice have for alternative custody in the form of a secure residential drug treatment centre for young persons and adults? That could be piloted as an alternative for the future so that we can have better treatment in the longer term.
My hon. Friend is right to mention drugs in prisons as that issue is of great concern to the Ministry of Justice, not least because of new psychoactive substances that are getting into prisons. Our existing prisons have drug treatment programmes, and we are considering how we can continually improve and make that work more effective.
The Minister will know that many young people who become involved in offending have themselves been victims of crime—perhaps crimes that they have not disclosed such as sexual abuse. When did he last meet the children’s Minister, the Under-Secretary of State for Education (Mr Timpson), to discuss that issue and consider how we can ensure that those young people, as victims, get the help that they deserve?
Not a single independent expert thinks that the future of our youth justice system should involve wasting £85 million on a flawed plan for a secure college, and Labour Members will not go ahead with that proposal. Will the Minister guarantee that the secure college contract will not be signed before the general election, so that we avoid saddling the taxpayer with a huge bill for an expensive, unnecessary prison?
The hon. Gentleman is not totally correct because the Youth Justice Board is a strong proponent of the secure college. Let me say what I said to the hon. Member for Houghton and Sunderland South (Bridget Phillipson) a moment ago: it is not as if what we are doing at the moment is a roaring success. We spend enormous amounts of public money to get very poor results, and it is right to look at education and skills. The matter has been considered in Parliament, as he knows, and we are on plan to sign contracts later this month.
I am pleased to inform the House that we have now completed our work and opened up the market for breaking the cycle of reoffending to a diverse range of new rehabilitation providers to get the best out of the public, private and voluntary sectors, and that we have commenced the provisions of the Offender Rehabilitation Act 2014.
Mentoring is a crucial part of the future of our work to break the cycle of reoffending. I have absolutely no doubt that the ability of those who have been through the system themselves and turned their lives around, and who currently work within the voluntary sector, to play a role in changing the lives of those who are still in the criminal justice system is enormous. One thing that excites me is that, with the presence in the rehabilitation arena of a number of our leading charities working hand in hand with the Government and the private sector to deliver better rehabilitation, I am convinced we will see those mentoring skills brought to bear on the problem.
We have heard a lot about conflict of interest this week. Will the Secretary of State confirm whether he believes it is a conflict of interest that a private sector company can be paid £35,000 per place to keep somebody in prison in one region, and that the same private sector contractor can be paid £1,500 to keep someone out of prison? Is that not a conflict of interest?
We get a lot of nonsense from Opposition Members. I want a joined-up process, in which we work with people in prison, help them to prepare for release, and work with them when they have left prison. No organisation that works for the public sector in this arena chooses who it gets in its prisons or rehabilitation arena. It is right and proper that that responsibility lies with the public sector. I think a joined-up approach is the right way forward.
Does the Secretary of State agree that work in prison should lead to prisoners gaining skills that improve their employability, leading to reduced reoffending rates on release? Will he indicate to the House the number of prisoners partaking in work activity this year compared with 2010-11?
The number of hours worked in prisons has increased dramatically in the past four years—the latest figures show 14 million hours—and we are seeking to increase that number all the time. Last week, I was at HMP Coldingley for the launch of a new partnership between the Ministry of Defence and the Prison Service, whereby prisoners will produce items such as sandbags for use by our armed forces. I hope that that work will continue, grow and develop. The more we can get prisoners in our prisons working, the more likely they are to get a job when they leave.
As we heard earlier from the hon. Member for Hexham (Guy Opperman), drug addiction in the criminal justice system is a huge problem. There were 4,500 seizures of drugs in prisons last year. What further steps will be taken to deal with mandatory help in prisons and help for prisoners when they leave?
There are two parts to that equation. Although there has been considerable success over the years in tackling the problem of conventional drugs in prisons, the problem now is the arrival of new psychoactive substances that are not detected through the normal means. That has posed an additional challenge to our prison system, and is a significant reason behind the increase in the amount of violence—serious violence—in prisons in the past 12 months. We are taking additional measures to try to tackle that, including tougher security measures and tougher penalties within prisons, and the training of dogs to sniff out that new generation of substances.
Of course, alongside that, proper work must be done to try to tackle addiction. With the through-the-gate system we have created and are creating, it is important that we see a flow-through from work done in our prisons to work done after prison. I remember being told by prison staff how frustrated they were that they had no guarantee that the rehab being done in prisons would continue when prisoners left. That will now change.
The cycle of reoffending is not helped by the number of people who are released on bail rather than remanded in custody. As the Daily Mail reports today, two rapes a week and one unlawful killing are committed by people on bail. [Interruption.] The hon. Member for Slough (Fiona Mactaggart) does not seem to care about the number of rapes committed by people on bail and is laughing about it. A previous parliamentary question I asked revealed that 20% of all burglaries are committed by people out on bail. What is the Secretary of State doing to ensure that more persistent offenders are remanded in custody and fewer persistent offenders are out on bail to commit more crimes?
Decisions on individual bail cases lie with the courts, which are independent of Government, but I never want the courts to be in a position where they do not have a place to send those whom they wish to put behind bars. I hope our courts will exercise extreme care in deciding whether to put somebody behind bars or to let them out on bail. As we go into the election in May, there are 3,000 more adult male prison places than there were in 2010.
We continue to work to expand education in our prisons, and I am pleased that this year we expect a significant increase in the number of prisoner qualifications. Great work is done by our education professionals in our prisons. We will look to expand and develop that as far as logistically possible.
The Justice Secretary was warned about the risks of the appointment of Paul McDowell as chief inspector of probation, but he arrogantly ignored them. Despite the clear conflict of interest, he defended his decision at the Dispatch Box when I raised the matter. He has shown a clear error of judgment. At a time when an independent inspector is needed the most, we do not have one. Will he confirm that the taxpayer will now be left with a further bill of £70,000 for his error of judgment, with the former chief inspector free to join one of the private companies that are now running probation?
I have to say that the right hon. Gentleman’s comments are an insult to a fine public servant, who has taken a brave decision this week. I am not of the view that someone should be denied the opportunity to apply for a job because of the possibility that in the future their wife’s company might win contracts and she might be promoted. I regard Paul McDowell as a fine public servant who has done a good job for this country. I hope he will return to a new post somewhere else supporting our public sector in the future, because he deserves it. He has done a very good job.
Local Access to Justice
We keep the courts estate under review to ensure it meets operational needs and our aim to improve effective delivery of the justice system across our country.
As the Police Minister, I am sure some of my colleagues in the police force will be doing exactly that. I do not think there has been a better advocate for a constituency magistrates court than my hon. Friend. Every time he opens his mouth in conversation with me or my colleagues in the Tea Room, he talks about Skipton magistrates court. I would do exactly the same if I was in his position.
Will my right hon. Friend take a critical look at the proposal on its way to his desk that there should be a single local justice area stretching from Berwick to Sunderland, which could lead to cases being transferred for administrative convenience to courts 70 miles away at great cost to witnesses and families?
Incentives and Earned Privileges Scheme (Women Prisoners)
We have some excellent women’s prisons led by excellent governors. The impact of coalition policies on women is always considered carefully by Ministers. I am committed to ensuring that that is done for women in prison, for which I have a particular responsibility. There was an equality impact assessment for the incentives and earned privileges policy, which came into effect in November 2013. Since then, we have subsequently continued to listen to prison staff, women in prison and organisations, and we make changes to the framework whenever appropriate.
I thank the Minister for his response, but clothes, books and stationery are the very necessities of life. He will know about the independent monitoring board’s report on New Hall prison and the effect on the female estate. Will he at least review the effect on female prisoners of the one-parcel-of-clothing rule?
The incentives and earned privileges policy framework is an important reform to ensure that privileges in prison are no longer automatic. It is a reform that we brought in—it was not the case under the last Labour Government—and I hope Labour now supports the principle that people should earn privileges. On women’s clothing, however, female prisoners are not required to wear prison clothing; unlike male prisoners, they do not have to earn the right to wear their own clothing. There has always been a restriction on the number of items of clothing they can have in their cells, but I have insisted that there be no restriction on the amount of underwear they are permitted at all times when in custody.
Assaults on Prison Officers
There were 3,470 assaults on staff in the year to 30 September 2014, and I can assure the hon. Lady that I get angry and upset at every single one. There is growing evidence that the increased smuggling of new synthetic drugs into prisons is a major factor in levels of prison violence, and we have already announced a series of measures to crack down on it. We will ensure that governors have the powers and support they need to tackle the problem.
Is the Minister as shocked as I am at the number of serious assaults in male prisons? The number has nearly doubled from 241 in September 2009 to 418 last September. Will he look at the record when the Conservatives were last in charge of our prisons, when they cut prison officer numbers and then had to undertake an emergency recruitment programme in 1996?
The hon. Lady is right that these are extremely serious issues, but there is a growing body of evidence that the increase in the number of serious assaults is linked to the increase in new psychoactive substances in prisons. I hear that from governors and prison officers in every prison I visit. We have taken a series of measures, announced only a couple of days ago by the Secretary of State, to give governors more powers to crack down on the problem. We are trying to educate families and friends of prisoners not to smuggle these substances into prisons. If we can reduce the amount of those drugs in prisons, we will reduce levels of violence. All those things, along with the protocol with the police and Crown Prosecution Service and the increased use of body-worn cameras, will help to tackle this serious issue.
Can we just remind ourselves what we mean by “a serious assault” on a prison officer? It can mean serious cuts, fractures, concussion, loss of consciousness and damage to internal organs. If these were any other public servants—nurses, for instances—there would rightly be a public outcry. These are public servants going to work every day too often now in fear of their lives. The Minister has a duty of care towards them. What will he do now—it is not just about drugs—to protect staff in our prisons?
The hon. Lady is absolutely right that prison officers are front-line public servants who keep us safe, and I have told her how seriously I take this issue. I read the reports on a daily basis, and I can assure her that they affect me as much as they do her and everyone else in the House. We are taking action in three areas: a wider range of punishments to crack down on the use of new psychoactive substances; the new protocol—it has never happened before—between the CPS and police forces to ensure that prisoners who attack staff or other prisoners spend longer behind bars; and an increased use of body-worn cameras. All that will help.
Victims of Crime
We published “Our Commitment to Victims” in September 2014. In addition, I chair the victims panel, and we will bring forward a victims law. On Thursday, I launched TrackMyCrime, which, for the first time, will enable victims to track their crime as it passes through the criminal justice system. Across the House, we should congratulate Avon and Somerset constabulary on piloting and bringing forward this initiative.
In November, the Minister wrote to me to say that this Government had decided to be “silent” on the rights of murder victims abroad, so that they did not have to do anything to help the families secure justice. The Minister will try to talk about the new directives for victims, but why have the Government been silent about the rights of the British taxpayer Tyrell Matthews-Burton, and yet have spoken up for others?
I have met the hon. Lady, and I know that she is passionate—and quite rightly so—in speaking up for her constituents and victims. As she knows, it is about the definition within the law as it was, and it is no good attacking this Government, because it was exactly the same for the 13 years under the previous Government. We are making the changes.
I congratulate my right hon. Friend on the campaigning work she has done on this subject. The type of crime she describes is just as illegal if it is done online as it would be if it was done face to face. We are trying to support everybody, but there are difficulties, not least in getting people to come forward. TrackMyCrime will help. If a crime has been perpetrated in a domestic situation, for instance, people can get the e-mails at work; it is their choice where they get the information from.
21. Further to that point, what discussion has the Minister had with colleagues in the Home Office about how victims of cybercrime and other fraud are being treated by Action Fraud, when they are not even told whether their case is being investigated, let alone prosecuted? (907382)
I am a Minister in the Home Office, as I am sure you are aware, Mr Speaker, as well as the Ministry of Justice, so I am very close to this issue. Through TrackMyCrime people will know exactly where in the criminal justice system their case lies. Across the House, we should congratulate Avon and Somerset on bringing forward the initiative, which is now in 43 police authorities around the country.
We have already legislated to increase the duty on sentencers to consider compensation from offenders to their victims. We have taken powers to increase the amount that can be attached against benefits in future, so that the sums are actually paid to victims. We are increasing work in prisons so that prisoners can earn resources that can be paid to victims. Will the Minister tell us what progress is being made on delivering compensation from offenders to victims of crime in reality?
I am proud to say that we have just announced that there will be £40 million extra each year on top of the £50 million compensation already paid. A lot of that money comes from the perpetrators of crimes. We hope to get more money from offenders, and we are working to ensure that that happens.
Boundary Dispute Cases
The coalition is committed to reducing the number of property boundary disputes that come before the courts, as we are to reducing pressure on the court system more widely. I pay tribute to the work my hon. Friend has done, particularly his Property Boundaries (Resolution of Disputes) Bill. We published a scoping study on 15 January, and I hope that will provide a basis for agreeing a way forward that will lead to greater use of mediation and expert determination.
I thank the Minister for that answer. Does he agree that when neighbour property boundary disputes reach the courts, the legal costs often rack up, making it harder to settle the case? That is why I have been making the case for compulsory fast-track mediation, as in the party wall legislation, to make it easier to proceed and to avoid this problem.
I am absolutely persuaded that costs mount as people go to court, and I want to see the pressures and costs on our court system, as well as on individuals, reduced. We have taken steps over the past year to increase the use of mediation in the family courts, which has been successful. That should be applied to other disputes, including over property boundaries, and experts should also be used, but whether it is right to go down a mandatory route is the difficult question. I will work with my hon. Friend to see if we can reach agreement on how to move forward.
I will just “boing” again, Mr Speaker. The role of a magistrate is already a sought-after role in our communities and competition for vacancies is very strong.
I declare an interest as a life member of the Magistrates’ Association, which has expressed concern to me about the new provisions of the Offender Rehabilitation Act 2014, which came into force this week in relation to the new activity requirements. The association says that it has been inundated with queries from magistrates about these new provisions. Will the Minister tell us what detailed training has been given to magistrates?
14. How many people have been convicted of human trafficking offences in the last four years. (907375)
That question does not sit within the responsibilities of the Ministry of Justice; it is a question for the Home Office. However, I can inform the hon. Gentleman that between 2010 and 2013—the latest year for which figures are available in relation to human trafficking offences on an all-offences basis—the number of convictions increased by nearly 66%. The Government are committed to stamping out this abhorrent crime, building on the United Kingdom’s strong track record of supporting victims and fighting the perpetrators.
I am sorry to learn that the Secretary of State for Justice thinks that convictions for trafficking are not really his responsibility. I should have thought that those at the Ministry of Justice were the very people to deal with them. In Scotland, the Minister for Justice takes responsibility for trafficking convictions there. My criticism of the new Modern Slavery Bill is that all the laws for which it provides are exactly the same as those that have operated up to this moment.
I do not know what “66%” means: 66% of nothing is nothing. We want to know why the Ministry of Justice did not argue for the new laws that Lord Judge and Peter Carter recommended to the Joint Committee that was set up to look into the issue.
In response to the hon. Gentleman’s first point, I can tell him that it is a simple matter of fact in Government that this issue is looked after by the Home Office. As for his second point, I do not believe that any past Government have done more than the present Government to tackle human trafficking. Work is being done across Government and across the public sector to deal with a crime that we all believe is abhorrent, and that we all want to see stamped out.
The Secretary of State says that the issue of human trafficking is not his responsibility, but the issue of convictions is, and one of the key challenges is gathering evidence. In my constituency, I often meet victims many years after the trafficking offences have been committed. The Home Office may be responsible for some of these matters, but what is the right hon. Gentleman’s Department doing to improve the evidential chain and ensure that the evidence is there in court to secure convictions?
The securing of evidence to bring prosecutions to court is a matter for the police and the Crown Prosecution Service, but our Department will always do all that it can to facilitate their work. I expect our reforms of the court system to improve the process in both those organisations, but we depend on the very good work done by our police service and the Crown Prosecution Service to ensure that people are prosecuted.
In April 2010, 2,149 people under 18 were in custody. The latest published figures available for the youth custody population relate to November 2014, when 1,055 people under 18 were in custody. That is a decrease of 51%.
That is a substantial decrease and it is very welcome, particularly at a time when crime is falling. Much of it has been due to the excellent work of the Youth Justice Board, which should be congratulated. Does the Minister agree that we should take similar steps to try to reduce the number of women in prison, which is what has been argued for by the Minister of State, Ministry of Justice, my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes)?
I thank the hon. Gentleman for his words of praise for the Youth Justice Board. That organisation, along with colleagues in the youth offending teams, has done excellent work in reducing the number of entrants to youth custody. However, decisions about which people should be sent to prison are decisions for the courts, and women’s prisons are the responsibility of my right hon. Friend the Minister of State.
Suicides (Remand Prisoners)
Every death in prison custody is a tragedy. The Ministry of Justice records the number of self-inflicted deaths and does not make any attribution of intent; that is determined at inquests. In the last five years, there have been 108 self-inflicted deaths in prison custody of prisoners on remand. Safer cells are designed to have fewer obvious ligature points than conventional cells, but no cell can be entirely safe and free of ligature points. Three of those deaths were recorded as having taken place in safer cells.
I am grateful for that answer, but if the Prison Service had taken any notice of my Adjournment debate in 2000 on safer cells in prison, it would know that the quick arithmetic is that several hundred lives would have been saved. Will the Minister give an assurance that the Prison Service will get its act together and take the positive measures necessary for safe cells, which would minimise deaths in prison?
When I get back to my office I shall make it my business to read the hon. Gentleman’s Adjournment debate from 2000, as I recognise that he has a serious interest in this subject. Let me tell him the action that we are taking to deal with this issue. First, we accept, and act on, the many recommendations of the prisons and probation ombudsman. I also point out to the hon. Gentleman that the increase in deaths has occurred in a range of prisons in different circumstances, so there is no obvious pattern. We are putting additional resources and support into safer custody work and in particular into improving the consistency of the application of the case management system for prisoners identified as at risk of self-harm or suicide, and there is also additional support at regional level to share good practice.
This morning the Minister very kindly provided to the Justice Committee for publication the latest figures on suicides in prisons for 2011, 2012 and 2013 and nine months of last year. They show a total of 256 suicides in our prisons during that period. At the same time the Minister provided us with the figures on the ratio of the number of prisoners to staff. It has gone up from 3.8 to 4.9 in the same period. Does he not see a correlation between fewer staff dealing with more prisoners and less safe prisons?
I recognise that the hon. Gentleman, who is a distinguished member of the Justice Committee, takes a serious and ongoing interest in this. As I said to the hon. Member for Colchester (Sir Bob Russell), the rise in self-inflicted deaths has taken place in contracted prisons, which have not been subject to reductions, as well as in public sector prisons and prisons that have completed the benchmarking process, so there is no obvious connection between the two. I would just repeat what I have said: we look at every single death; we learn the lessons from the coroner’s report and the prison and probation ombudsman; we have put in extra resource both at prison level and at regional level to try to reduce the number of deaths; and we are absolutely as concerned about this as the hon. Gentleman rightly is.
Family Law Mediation Services
17. What recent assessment he has made of the effectiveness of mediation services provided for family law cases. (907378)
Mediation between separating couples helps reduce the stress on children and families and the pressure on the courts system, and saves money for taxpayers. Last year nearly two-thirds of couples attending a single mediation session involving children reached full agreement at that session, and seven out of every 10 couples choosing mediation ultimately reached an agreement. That is why the coalition Government have funded a free mediation information meeting and a free first session provided that one party is legally aided.
My constituent David Burke has described the mediation process for family law cases as shambolic, and his experience is not unique. This is working against enabling parental responsibility, as the legislation originally intended. What are the Government doing to address these failings?
I have to tell the hon. Lady that the message here is not one of failure but one of increasing success. The number of people attending mediation assessment meetings has gone up in the last three quarters, and there is no report of these being shambolic. I will willingly meet the hon. Lady and her constituent on the subject, but I am clear that her party is committing no extra money for legal aid, so it will not be any different or greatly reformed under Labour.
Mobile Phone Use (Prisons)
We take this problem very seriously, stopping many mobile phones getting into prisons and finding those that do get in. We search prisoners, staff and visitors, we use X-ray and body scanners, CCTV and closed visits, and we deploy mobile phone blockers. We have also amended the Serious Crime Bill to enable the National Offender Management Service to instruct mobile phone companies to disconnect any phone that is found to be used within a prison. This Government have also increased the punishment for possessing an unauthorised mobile phone in prison.
I thank the Minister for that answer. Ministry of Justice figures reveal that there have been 7,451 seizures of mobile phones and SIM cards in 2013 across the UK. Is there a difference in detection rates between establishments run by Her Majesty’s Prison Service and those run by private contractors, and if so, what can that be put down to?
I am not aware of any difference in the rates of detection between different prisons, but my hon. Friend is right to draw attention to this issue. We want to protect victims from being terrorised by prisoners from within prisons, and we also want to stop prisoners carrying on organising crimes from within prisons. That is why we take this issue so seriously. We are using blockers and we are now disconnecting. We will continue to focus on the matter.
I am pleased to inform the House that we have this week taken further significant steps in implementing our transforming rehabilitation reforms. This will reduce reoffending, which has been much too high for much too long. On 1 February, we brought into force the remaining uncommenced provisions of the Offender Rehabilitation Act 2014. This means that, for the first time, virtually all offenders will be given a proper chance of rehabilitation. The Act extends statutory supervision and support to the 45,000 offenders a year who are released from prison sentences of less than 12 months, the majority of whom currently receive no support at all after their custodial sentence ends. They simply walk the streets with a few pounds in their pockets. This group of offenders has the highest reoffending rate of almost any group; almost 60% of those released from short prison sentences went on to reoffend within 12 months. The changes mean that any offender whose offence was committed on or after 1 February and who has been sentenced to a custodial term of more than one day will now receive at least 12 months’ supervision after release. That is a big step forward.
To paraphrase Oscar Wilde: to lose one chief inspector could be considered a misfortune, but to lose two looks somewhat careless. Will the Secretary of State tell the House precisely when he became aware of Mr McDowell’s links to Sodexo and whether that was before Mr McDowell was appointed to the role? Will he also tell us why he chose not to share that information with the Justice Select Committee when it was going through the pre-appointment scrutiny hearings?
Let us be clear that the recruitment of Mr McDowell followed Cabinet Office guidelines exactly, as I have said to the House and to the Select Committee before. I do not believe that someone should be denied the chance to apply for a job based on hypotheticals of what may happen. I would commend Mr McDowell for recognising the issue when it arose, when his wife was promoted in November, and for taking what I think was a sensible decision. I think he is an honourable and upstanding public servant, and I wish him all the very best.
T3. I should like to take this opportunity to extend my deepest sympathy to the family of Shaquan Sammy-Plummer, who was tragically and senselessly stabbed to death on Friday night in the borough of Enfield. The Secretary of State knows that there are many complex reasons surrounding the causes of knife crime, but he will also know that the House has approved a change in the law proposed by my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) and me which would mean that the possession of a knife for a second time would carry a guaranteed jail sentence. Will he update me on the progress of that legislation? To kill someone with a knife, you first have to possess a knife. (907356)
I am sure that the whole House will want to send its commiserations to the family of my hon. Friend’s constituent who has lost his life. Naturally, the police investigation is ongoing so I cannot comment on that individual case, but we are awaiting Royal Assent to the Bill to which he alluded, and as soon as that comes through we will be able to take things forward.
We already know how little the Justice Secretary thinks of our international human rights obligations, given that he wants to repeal the British Human Rights Act and walk away from the European convention on human rights. What is the Ministry of Justice’s motivation for signing a £5.9 million contract with a country whose justice system is widely condemned for the use of torture—which is what a sentence of 1,000 lashes amounts to—and of execution by beheading?
We have not signed a contract. Under this Government and under the last one, our Departments have worked with other Governments around the world to try to encourage improvements and best practice in their justice systems. I believe that that is the right thing to do. We should try to influence countries to move their justice systems in the right direction, and we will continue to do that.
I look forward to hearing about the best practice for beheading.
We have a prisons crisis here, with the chief inspector of prisons being sacked. The chief inspector of the probation service has resigned. We have judges criticising Ministry of Justice policies on a daily basis, we have had disks containing sensitive information lost by the MOJ, and the legal profession is boycotting the summit to mark the 800th anniversary of Magna Carta, at which the Secretary of State is the keynote speaker. Why does he think that those who work in and use the justice system think so little of him?
The right hon. Gentleman cannot even gets his facts right; I am not the keynote speaker at the global law summit. It is being run independently with a number of key people from around the world, including the wife of a former Labour Prime Minister. The reality is that a leading figure in the justice world said to me last week, “Do you know, I may not agree with your policies, but at least you’ve got some; the other party hasn’t got any.”
T4. Last week, a much loved young man of 19, Zac Evans, was killed in a horrific attack by a man with a machete while trying to separate two women in a scuffle. The trial of the killer is due to be held in Bristol, but it would be better, especially for Zac’s family and, I believe, for all of Gloucester, for this local outrage to have justice delivered at the Crown court in Gloucester. Will my right hon. Friend support the letter I shall be writing to the Lord Chief Justice seeking precisely that solution? (907357)
We all condemn such a horrendous act and extend our best wishes and condolences to the victim’s family. The allocation of cases is and will always be a matter for the judiciary, and there are sometimes good reasons for their picking the locations that they do, as it is in the interests of justice to do so. I know the Lord Chief Justice well. He is deeply sensitive to the issues that victims face, and I am sure he will look thoughtfully at the letter that my hon. Friend sends him.
T2. Lord Lexden, the official historian of the Conservative party, has attacked the Lord Chancellor, saying: “Britain must have a Lord Chancellor who puts his duty to the law above party politics.”Why did he say that? (907353)
I believe it is the job of the Lord Chancellor not only to uphold the law but to change it where it is necessary to do so. The reforms of judicial review are necessary, measured and proportionate. They are reforms that were argued for by Ministers in the previous Government, but of course they never did anything about it.
T5. Last week, I was privileged to attend a ceremony at the Crawley Band of Brothers, where men mentor former young offenders to help them turn their lives around. What further steps can the Department take to encourage such voluntary groups to help the rehabilitation of offenders? (907358)
I share my hon. Friend’s enthusiasm for what voluntary groups such as a Band of Brothers can do, alongside the work of our public sector probation professionals, to reduce reoffending further, which is what our reforms are all about. No doubt he will be pleased to know that 19 of the 21 areas have a voluntary group such as the one he mentioned in their tier 1 providers, and a Band of Brothers is part of MTCnovo’s supply chain, delivering rehabilitation services in London.
I do not think the Justice Secretary answered the question from my hon. Friend the Member for Scunthorpe (Nic Dakin), so I will give him another go. Did the Justice Secretary know before the appointment of the chief inspector of probation that his wife was the managing director of Sodexo Justice Services? Why did the Justice Committee not have that information for its pre-appointment hearing?
I will say it once again. The hon. Gentleman asked about the Justice Committee. Of course my Department has been aware of the situation, but the reality is that we have followed, to the letter, the Cabinet Office guidelines. I do not believe we should disqualify somebody from applying for a job because of something that may, hypothetically, happen.
T6. My constituents are concerned about the claims culture that we saw in past times, which has been putting people off volunteering, and the risk of erroneous prosecutions. What progress have the Government made on dealing with those issues? (907359)
I am very pleased that we have now passed the Social Action, Responsibility and Heroism Bill through both Houses of Parliament. Interestingly, the Labour party has been saying all along that the Bill is meaningless, but in the House of Lords Labour tried to remove a chunk of it because of worries about the impact on employees. The Opposition cannot have it both ways: either the Bill does something, in which case they should ignore it, or it does not do something, in which case they might have a point. The reality is that the Bill makes a real difference: it will protect volunteers and small employers against spurious claims in the workplace. Once again, the Opposition say one thing in this place and do something completely different.
I recently wrote to the Minister of State, Ministry of Justice, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), regarding the daughter of a constituent of mine who was murdered by her former partner in the 1990s. My constituent subsequently sought care of her daughter’s child, but, disgracefully, the law enabled her killer to obstruct the adoption proceedings. The Minister was unable to explain how this injustice was allowed to happen, and it appears that the legal situation has simply not changed in this regard. I urge him to take a proper look at this case, take whatever steps necessary to ensure it cannot ever happen again, and give my constituents some answers.
I am very sympathetic to the issue that the hon. Lady raises. The Secretary of State and I met people arguing that the law should be changed so that there is a read-across from criminal convictions to the application in family law of rights in relation to children. The matter is actively on our agenda, and I am happy to accept representations and to meet the hon. Lady and her constituent.
I am sure the whole House wants to see people who perpetrate those sorts of crimes go through the criminal justice system and spend the right amount of time in prison. That is why we have toughened up this area and why the indeterminate sentences are there, and the European Court upheld the decision on that this morning.
I think I have answered that question already. I said yes, we knew that Mr McDowell had that relationship, and yes, we followed the Cabinet Office guidelines to the letter. At the time, his wife did not hold a position in the rehabilitation arena. She has now moved to a position where she will be the head of that part of the business. Mr McDowell has decided to step to one side, which is a creditable decision to take. As I said earlier, I do not believe that somebody should be disqualified from applying for a job because of a hypothetical. I know that the Opposition do not agree, and they seem to be out to get Mr McDowell. I can only reiterate that he is a fine public servant. I regret the fact that he has had to leave and I hope that he has a good career in the future.
T8. Kirkham prison in my constituency has developed a solid reputation for retraining inmates to prepare them for life on the outside. Will the Minister update me on what programmes are available to assist them to re-enter the world of work and end the days of offending? (907361)
I pay tribute to the staff at Kirkham prison for the good work they do in getting inmates into work. My hon. Friend is right that this is a really important area; we do take it seriously. I am pleased to tell him that we have increased the number of hours worked in prison from 10.6 million to 14.2 million and that our transforming rehabilitation reforms will ensure that prisoners are prepared for the world of work as they leave. I am pleased to say that increasing numbers of employers are doing really well at taking on ex-offenders.
I think the hon. Gentleman should tread carefully, given that the number of foreign national offenders in our prisons doubled while his party was in power and has come down while we have been in power. On a serious note, I share his frustration. I want to see removals speeded up. I can tell him that we now have the first prisoners taken back on the prisoner transfer agreement with both Nigeria and Albania, but he is right that there is further progress to be made.
I think we still have work to do in that respect. In particular, we have a problem with the new generation of psychoactive substances that do not show up in tests. I remember a conversation with a group of staff in one of our prisons working with offenders with an addiction. They said that the problem was that when those offenders leave prison nothing happens. There is no requirement on them to carry on treatment. They disappear off into the community and get back on drugs. Under our rehabilitation reforms, there is now a power to require those people to take part in rehabilitation for a 12-month period after they have left.
Does the Secretary of State share my grave concerns at the recently published report by the chief inspector of prisons on HMP Northumberland? Does he agree that if the Government do not do something, one of these serious incidents will turn into a tragedy that we all regret?
I have visited HMP Northumberland. It has been going through a period of transition, but the model of a working prison that will substantially extend the amount of work done by prisoners in that jail must be the way forward. I look forward to seeing improved inspection reports in future and a dramatic increase in the amount of work done and in prisoners’ employability when they leave.
In the Select Committee on Home Affairs last week, we heard the anti-female genital mutilation campaigner Leyla Hussein describe the death threats and intimidation she and her family, including her 12-year-old daughter, have to endure as the price for her brave stand against this appalling form of child abuse. It is essential that the thousands of hidden victims and witnesses to FGM see how seriously the Government take it and know that if they come forward they will be protected. What steps are the Government taking to ensure that victims and witnesses to FGM are fully protected under the law?
I am very proud that this Government have changed the law to protect not only the people who have had FGM done to them but those who might have it perpetrated on them. They should be protected in every way possible so that they have the confidence to come forward. That is what we are working on at the moment, and it is an important piece of work. A lot of this nasty abuse is online, and that is just as illegal as if those threats were made face to face.
On a point of order, Mr Speaker.
Points of Order
On a point of order, Mr Speaker. My point of order relates to question 16 on today’s Order Paper and implies no criticism at all of the hon. Member for Colchester (Sir Bob Russell). The question refers to prisoners who have “committed” suicide. Prisoners no longer commit suicide; nor does anyone else since the Suicide Act 1961. The word “commit” suggests a criminal offence and is a pejorative term that offends many of those who have lost family and friends to suicide. The Table Office could be instructed to be vigilant about the use of such terms. Perhaps the appropriate term could have been “died by their own hand” or “took their own life”, but the question certainly should not have used the word “commit”, which relates to a criminal offence.
I am extremely grateful to the hon. Lady for her point of order and for kindly giving me advance notice of it. She makes a good point on which I confess I had not previously reflected. The phrase used in the question, and I appreciate what she said about the hon. Member for Colchester (Sir Bob Russell), is not disorderly, but I will ask the Table Office to consider whether its practice should be changed for precisely the good reason she has just given to the House. I hope that that is helpful.
On a point of order, Mr Speaker. Earlier in this question session, the hon. Member for Shipley (Philip Davies) heard me scoff as he spoke. I scoffed when he referred to the Daily Mail as the source of his research, not because I do not care about the issue of rape, which is an issue I raised on the BBC in a “Newsnight” programme when the hon. Gentleman was eight years old.
On a point of order, Mr Speaker. I seek your guidance in uncharted territory. We have not had a fixed-term Parliament before and visits to constituencies by Ministers become much more sensitive in this clear run-up to an election. I heard at 5.38 pm last Thursday that the Secretary of State for Work and Pensions would visit Kirklees college in the heart of my constituency at 11 am the next day. If that was an official visit, it would have been a courtesy to tell me that he was coming so that I could perhaps have been there to welcome him. I understand that Colne Valley and Dewsbury are highly sensitive marginal seats nearby, but this was an official visit, presumably paid for by the taxpayer, in the run-up to an election that we know will be on 7 May. What is the status of such visits and should there not be the usual courtesy of telling a Member when a Minister is visiting their patch?
I am grateful to the hon. Gentleman for his point of order. He asks what is the status of such an arrangement. The short answer is that it is a convention; it is not a requirement of parliamentary procedure or of our Standing Orders. That said, I think it is very much to be preferred that the convention should be observed, as it is for the most part by Members on both sides of the House. Notification, by definition, must take place before the visit, but in order to comply with the spirit of the convention, it seems to me reasonable that Members should have adequate notice of, in particular, official visits, so that if they wish to be present, they have the chance to be so. I do not in any way diminish the significance of the hon. Gentleman’s point or of what I just said when I note that the honouring of that arrangement has frequently been as much in the breach as in the observance, and that, I think, is regrettable. It is not a point applied to one side rather than the other.
I know that in the past, long before I was elected to the Chair, visits were made to institutions within my own constituency of which I did not have what I regarded as anything like adequate notice in order to be able to decide whether I wished to be present. I appeal to colleagues to be considerate and solicitous in these matters, because a colleague who does not observe the convention is not only doing the wrong thing, but wholly disabling himself or herself from subsequently complaining if the convention is not honoured when his or her own constituency is affected. I think that deals with the matter.
On a point of order, Mr Speaker. When the Justice Committee, as was mentioned earlier, held an appointment hearing for the chief inspector of probation, some information was not given to it, although the Cabinet Office guidelines did not require that to be done. Subsequently, the position changed quite significantly when the wife of Paul McDowell was promoted to a much more senior post in an organisation which had in the meantime obtained contracts for probation. I think it right to say by way of a point of order not only that in my view has Mr McDowell correctly resigned, but that I endorse what the Lord Chancellor has said about his integrity, I repeat what the Committee said about his suitability for the job and his abilities, and I dissociate myself from any attack on his integrity from any part of the House today.
On a point of order, Mr Speaker. When, earlier, I raised the horrific killing of my constituent, Zac Evans, the entire Opposition Front-Bench team, with one honourable exception, were chuntering and laughing—indeed, one of them continues to chunter now. May I ask if it would be in order for one of their representatives to confirm that there was no intended disrespect in relation to an horrific act, widely decried in my constituency?
I am grateful to the hon. Gentleman for what he says and understand the extreme seriousness with which he treats that extremely serious occurrence. I hope he will understand if I say that I do not think we want to get into choreographed responses on matters of this kind. I think it should be taken as read that such a matter is extremely serious, and I do not myself imagine for one moment that any member of the Opposition Front Bench intended any discourtesy. The hon. Gentleman has underlined one important point: Members should be sensitive to the mood of the House and the nature of the matter being raised. It was and is a very serious matter and I thank the hon. Gentleman both for his question and for raising it in the seemly fashion he has just done. [Interruption.] The hon. Member for Kingston upon Hull East (Karl Turner) is chuntering from a sedentary position, although I note that on this occasion he has not said what he ordinarily says, which is, “It’s a disgrace!” and that itself is a notable change—
Living Wage (Reporting)
Motion for leave to bring in a Bill (Standing Order No. 23)
I beg to move,
That leave be given to bring in a Bill to require listed companies to report annually on the percentage of their staff paid below a Living Wage; and for connected purposes.
I am introducing the Bill because we need to be more open about the problem of low pay in our economy. Many of the UK’s largest, most well known companies pay wages which people cannot afford to live on. Millions of shop workers, care assistants, cleaners and catering staff are paid so little that the only way they can make ends meet is with the help of tax credits and the payment of in-work benefits. Put simply, the state is supplementing the incomes of the low-paid while subsidising the wage bill of their employers. I believe that companies that can afford to pay the living wage have a responsibility to do so, and we should have a right to know when they do not pay it. Greater transparency is needed to raise public awareness of the problem and to encourage big companies to do the right thing.
We are approaching the end of the first Parliament since the 1920s in which people will be worse off at the end than they were at the beginning. This is a country where 4.9 million workers earn less than the living wage—the income necessary to achieve a minimum acceptable standard of living. That is one in five British workers who do not earn a fair day’s pay for a fair day’s work. The living wage is not just about having enough money to eat and pay the rent and the bills; it gives workers the means to live a dignified and decent life. For many of my constituents, the living wage means everything from being able to afford a family holiday now and again to peace of mind at the end of the month. It means being able to get home in time to see their children because they are not struggling to hold down two jobs. These are not unreasonable expectations, but they are being denied to far too many people by poverty-level pay.
In May 2010, the Prime Minister declared that the living wage was
“an idea whose time has come”.
Sadly, under his Government, we are still waiting. In the past five years, the number of people earning less than the living wage has soared by an additional 1.4 million. The majority of working-age households living below the poverty line now have at least one adult in work. In my constituency, there are over 10,000 people whose hard work is rewarded with a pay packet which does not give them enough to live a decent life. The recovery may have reached some in the City of London, but for those struggling on low pay in Lewisham, it has yet to materialise.
Every fortnight at my advice surgery I meet people who simply cannot afford to live off their earnings. They are often employed by some of our country’s biggest companies—the large supermarkets, for example. These are people who are doing the right thing—working hard and contributing—but they are not earning enough to pay the bills. I have been shown payslips where take-home wages are less than £1,000 a month, and I am asked what people are meant to live off when they have to pay £700 a month in rent. At the same time, their employers may make hundreds of millions of pounds a year in profit, much of which will go straight into the pockets of their shareholders.
The irony is that this is not just bad for our country’s living standards; it is bad for the Treasury too. This Government’s failure to meet their own deficit reduction targets has proved that low pay is a drain on our public finances. The wages of under-paid staff routinely have to be topped up by Government through the payment of tax credits and in-work benefits. In the circumstances, this support for the low paid is the correct approach, but it means that at the end of the day it is the taxpayer who is subsidising the wages bill of large private companies. Low pay is driving up the benefits bill and making it harder to get the deficit down.
The truth is that low pay stifles our economy, stunts taxes coming into the Treasury and ends up in more Government borrowing, which we can ill afford. That may be an economic plan of sorts, but it does not sound to me like one that is working. So something needs to change. In the UK, the living wage stands at £7.85 an hour, and the London figure is £9.15. I see no reason why big companies making significant profits should not pay it. If they choose not to do so, why should they not have to be up-front about that decision, and tell us?
This Bill would not compel anyone to pay a living wage. What it would do is give the public and workers a mechanism by which they can find out who pays it and who does not. Listed companies are already required to produce annual remuneration reports, but these focus on directors’ pay. The Bill would provide some balance—a focus on the bottom as well as the top. The data required to comply with the Bill could be generated relatively simply by the companies in question, but their impact would be significant: they would end the silence on poverty pay that allows many of our biggest companies to inflate their profit margins at the expense of their staff and of every taxpayer.
I have heard it said that low pay can in some ways be good for business. I guess the argument goes that increased profits should mean more money ploughed back into enterprise, meaning more economic growth. There are many assumptions in such an argument, and I am not so sure that it always stacks up. Low pay may sometimes mean higher short-term profits, but it can also mean demoralised staff who are preoccupied with their daily struggle to try to make work pay.
Paying workers a wage that supports a decent standard of living is not just the responsible thing to do; the research shows that there are also clear business benefits. Low pay has high costs, in reduced productivity, higher absenteeism and lower staff retention. It is for those reasons that over 1,000 companies have now signed up to be accredited living wage employers, from the energy company SSE to Chelsea football club.
Many public sector bodies are also leading the way. I was proud to be a member of Lewisham council when we became the first local authority to become a living wage employer, and I commend the determination of Lewisham’s mayor, Sir Steve Bullock, to roll out the living wage to even more contracted staff, despite a very tough financial outlook. I also commend you, Mr Speaker, for your efforts to make this House an accredited living wage employer.
Big and small employers alike now pay a living wage. The south London-based Jane Jefferson Cleaning, whose tagline is “The Only Way is Ethics”, is the only domestic cleaning company to be recognised by the Living Wage Foundation. If a small cleaning company can pay the living wage, why can firms that have multi-million pound salaries at the top not pay it at the bottom? A director in a FTSE 100 company now earns, on average, 130 times more than their average employee, and 300 times more than the living wage, yet only 18 of those 100 companies pay the living wage. The Government’s policy of “wait and see” on low pay has clearly failed. Legislating for greater transparency would celebrate the best employers and expose injustice to public pressure.
Britain cannot continue on its current path. The Government have failed to create the decent jobs and decent wages that we need for the next generation. Instead, they have preferred a silent race to the bottom, masked by loud trumpeting of falls in unemployment without a care for the nature and pay conditions of the jobs created. The next Labour Government will make the problem of low pay a national priority. We will increase the minimum wage to £8 an hour and give a tax break to companies that sign up to become living wage employers in the first year of the next Parliament.
Decent pay requires the British economy to generate better jobs, with improvements in skills and support for investment in cutting-edge industries, but it also needs more honesty about the sources of low pay, putting pressure on large companies to meet their responsibilities to their workers and the taxpayer as well as to their shareholders.
In conclusion, it might be entirely legal for large companies not to pay their staff a living wage, but that does not make it right. The Bill is not about forcing our largest employers to pay a wage above the statutory minimum; it is about encouraging them to make the right choices about the pay of the people they rely on. This simple Bill would introduce a simple reporting requirement. It would allow the public to recognise those companies that go above and beyond their legal obligations, enabling the consumer to identify those businesses that want to build a fairer economy as well as a stronger one. I commend it to the House.
Question put and agreed to.
That Heidi Alexander, Paul Blomfield, Lisa Nandy, Sarah Champion, Mr Steve Reed, Jenny Chapman, Natascha Engel, Teresa Pearce, Bridget Phillipson, Mr David Lammy, Nick Smith and Karl Turner present the Bill.
Heidi Alexander accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 27 February, and to be printed (Bill 165).
Insurance Bill [Lords]
Considered in Committee
[Mr Christopher Chope in the Chair]
Insurance contracts: main definitions
Question proposed, That the clause stand part of the Bill.
Part 1 sets out some definitions for the Bill and is purely technical but, with your indulgence, Mr Chope, may I say again that this is a non-controversial Law Commission Bill, on which we had a constructive debate last week in the Second Reading Committee, and which has been scrutinised by a special Public Bill Committee in the other House? I hope that we can agree that clause 1 should stand part and move on to discuss the substantive clauses, taking each part in turn.
As the Minister has outlined, this is a non-controversial Bill overall, and we did indeed debate and discuss it last week. I have no issue with clause 1 and think that it is important to get on to the other areas of the Bill on which the Minister might wish to answer some questions.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Application and interpretation
Question proposed, That the clause stand part of the Bill.
As I explained to the Second Reading Committee, part 2 concerns the duty on prospective policyholders to disclose information to the insurer, which allows the insurer to assess and price the risk accurately. However, the existing law can be difficult to understand and even more difficult to comply with fully. A failure to provide all material information allows the insurer to refuse all claims under the contract.
Under the Bill, policyholders still have a duty to disclose information, and they should make an active search for relevant information, but insurers might need to ask the policyholder questions if they require further clarification. If a policyholder fails to make a fair presentation of the risk, there is a new system of proportionate remedies for the insurer, under schedule 1 to the Bill, based on what the insurer would have done had the failure not occurred.
There is nothing particularly controversial in clause 2, or indeed in clauses 3 to 8 and schedule 1. As the Minister said, the clause provides that the duty of fair presentation, which is set out in the remainder of the part, applies in the event of a variation to a non-consumer insurance contract as well as upon the initial agreement or the contract.
Clause 3 introduces a requirement on the insured to
“make to the insurer a fair presentation of the risk”
before the contract is entered into. That replaces existing duties in relation to disclosure and representations contained in the Marine Insurance Act 1906, but retains essential elements of those provisions in ensuring that the insured provides insurers with the information they require to decide whether to insure a risk and on what terms.
Clause 4 relates to an issue that we debated last week in Committee. The clause defines what the insured knows, and ought to know, for the purposes of the duty of disclosure in clause 3, based on the insured’s duty in section 18 of the 1906 Act to disclose every material circumstance known to them, including everything which,
“in the ordinary course of business”,
ought to be known to them. There was some difference of opinion about the scope and applicability of the Bill’s phraseology, particularly the definition of “senior management” as
“those…who play significant roles in the making of decisions”.
We debated whether that definition was perhaps too narrow. Helpfully, the Minister told us that the Government had
“amended the explanatory notes to make it clear that the senior management is likely to include the board, but can also go beyond it, depending on the corporate structure of the relevant policyholder.”—[Official Report, Second Reading Committee, 26 January 2015; c. 8.]
She also gave us information about stakeholders who have commented on this and agree that the Bill’s drafting is appropriate. I welcome the move by the Government to tighten up the explanatory notes to deal with that question.
Clause 5 deals with the knowledge of the insurer. Clause 6 provides that what an individual knows includes not only what they actually know but “blind-eye” knowledge—that is, knowledge that they ought to have but have deliberately neglected to acquire. Clause 7 serves to ensure that a company or other principal is not fixed with knowledge of a fraud practised against it by its agent or office. Clause 8 provides the insurer with remedies if there is a breach of the duty of fair representation. Schedule 1 sets out the insurer’s remedies for “qualifying breaches” under this clause.
Given the assurances that we received and the changes that were made when we raised these points in Committee, I have no difficulty with these clauses.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clauses 3 to 8 ordered to stand part of the Bill.
Warranties and representations
Question proposed, That the clause stand part of the Bill.
Part 3 deals with insurance warranties and similar terms. An insurance warranty is typically a promise by the policyholder to do something that mitigates the risk. Under the current law, any breach of warranty completely discharges the insurer from liability from the point of breach. That is so even if the breach is remedied before any loss is suffered and if the breached term had nothing to do with the loss. The insurer’s remedy therefore often seems unsuitable and too punitive. The Bill provides that an insurer will be liable for insured losses arising after a breach of warranty has been remedied. It also prevents an insurer from refusing payment on the basis of a breached term that could have had no bearing on the risk of the loss that actually occurred, such as where a warranty concerning a fire alarm is breached and the insured then suffers a flood in the insured property. The Bill also abolishes “basis of the contract” clauses. These clauses convert every statement made by a policyholder on a proposal form into a warranty.
Again, it has been helpful to hear the Minister’s comments. We have no difficulty with these clauses.
On clause 9, under the current law, an insurer may add a declaration to a non- consumer insurance proposal form or policy, stating that the insured warrants the accuracy of all the answers given or that such answers form the “basis of the contract”. That has the legal effect of converting representations into warranties. The insurer is discharged from liability for claims if the insured made any misrepresentation, even if it was immaterial and did not induce the insurer to enter into the contract. The Law Commission gave the example of a claim for flooding being refused, as the Minister suggested, because the insured had failed to install the right model of burglar alarm. The clause seeks to put an end to this practice by abolishing “basis of the contract” clauses in non-consumer insurance. Clause 10 replaces the existing remedy for breach of a warranty in an insurance contract.
Clause 11 was initially not included in the Bill. That gave rise to the introduction in the other place of a new clause that replicated a similar clause originally included by the Law Commission pertaining to situations in which an insured had breached a term of contract but could show that
“its breach of the term could not have increased the risk of the loss which actually occurred in the circumstances in which it occurred.”
In the Lords Committee, some expressed the view that this omission was an error. The Minister, Lord Newby, explained that the clause as originally drafted was
“too controversial to go through the special procedure for uncontroversial Law Commission Bills.”
He did, however, admit that it was
“difficult to argue against the policy and to say that insurers should be entitled to refuse liability for a loss that is of a completely different nature from that contemplated by the breached term.”
At the Government’s prompting, the Law Commission submitted a new draft, which became the current clause 11 and which was
“intended to minimise the uncertainty inherent in the first formulation”.
The clause acts to rectify the situation prior to the Bill when the actual nature of a breach of term was irrelevant. This has been a helpful process to ensure that that piece of tidying up was done. On that basis, we have no problem with these clauses.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clauses 10 and 11 ordered to stand part of the Bill.
Remedies for fraudulent claims
Question proposed, That the clause stand part of the Bill.
Fraud is a serious and expensive problem for insurers and innocent policyholders alike. According to industry statistics, policyholders currently pay an additional £50 on every insurance policy because of the cost of fraud to insurers. The Bill therefore strengthens and clarifies the civil law aspect of the Government’s drive to combat fraudulent claims by policyholders. The Bill sets out clear statutory remedies for the insurer where the policyholder has made a fraudulent claim. It affirms the common law position that the policyholder forfeits the fraudulent claim. The insurer has no liability to pay any element of it and can reclaim anything it paid before it knew about the fraud.
The Bill also clarifies an area of uncertainty, in that the insurer may choose to refuse any claim arising after the fraudulent act. However, previous valid claims should be paid in full. Finally, the Bill gives the insurer the equivalent remedies against a fraudulent member of a group insurance policy.
The Minister has again clearly outlined what the clauses do. As she said, clause 12 sets out the insurer’s remedies where the insured makes a fraudulent claim. It puts the common law rule of forfeiture on a statutory footing. Where the insured commits a fraud against the insurer, the insurer is not liable to pay the insurance claim to which the fraud relates. Where the insurer has already paid out insurance moneys on the claim and later discovers the fraud, the insurer may recover those moneys from the insured. As we have heard, that provides the insurer with a further remedy giving it an option to treat the contract as if it had been terminated at the time of the “fraudulent act”. That does not apply where a third party commits a fraud against the insurer or the insured, such as where a fraudulent claim is made against an insured party who seeks recovery from its insurer under a liability policy.
Clause 13 gives the insurer the remedies where there is fraud by one member of a group scheme. Again, we have no difficulty with these clauses standing part of the Bill.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Clause 13 ordered to stand part of the Bill.
Question proposed, That the clause stand part of the Bill.
Part 5 deals with two separate matters: the principle of good faith and the ability of parties to contract out of the provisions of the Bill.
Clause 14 retains the statutory and common law principle that a contract of insurance is one predicated on good faith. However, the clause abolishes avoidance of the contract as the remedy for breach, recognising that avoidance is capable of operating very harshly against policyholders.
The provisions are a default regime for business insurance contracts. They are expected to be appropriate for the majority of insurance contracts, but there may be circumstances when parties prefer to set out their own bespoke arrangements. However, if an insurer wishes to rely on a term that will operate more harshly against the policyholder than the Bill otherwise provides, clauses 16 and 17 require it to act transparently when the contract is made, by ensuring that the meaning of the alternative provision is clear, and by drawing the attention of the policyholder to it. In so far as the Bill applies to consumers rather than businesses, it is a mandatory regime. Insurers are not entitled to contract out of its provisions to the detriment of consumers.
Under the Marine Insurance Act 1906, insurance contracts are ones of “utmost good faith”. Clause 14 removes avoidance of the contract as a remedy for breach of that duty of good faith, both from the 1906 Act and at common law. The intention of clause 14 is that good faith will remain an interpretative principle, with section 17 of the 1906 Act and the common law continuing to provide that insurance contracts are contracts of good faith.
Clauses 15 and 16 prohibit insurers from inserting in an insurance contract terms that would leave the insured—be they a consumer or a non-consumer—in a worse position than that required by the Bill.
Clause 16 defines transparency in respect of what an insurer must do to draw the insured’s attention to the disadvantageous terms of the contract. Clause 17 sets out the transparency requirements. For example, the insurer should take sufficient steps to draw disadvantageous terms to the insured’s attention within a reasonable time frame prior to their entering into the contract, but when an insured has knowledge of the term, they may not claim that the insurer has not brought it to their attention. Clause 18 deals with the insurer’s remedies where a member of a group insurance contract makes a fraudulent claim. Again, we do not think that these clauses are controversial and we are content for them to stand part of the Bill.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clauses 15 to 18 ordered to stand part of the Bill.
Power to change meaning of “relevant person” for purposes of 2010 Act
Question proposed, That the clause stand part of the Bill.
Part 6 covers a topic that is distinct from insurance contract law. It amends the Third Parties (Rights against Insurers) Act 2010 and will assist injured parties who have claims against parties that are now defunct where insurance was in place to cover such claims. As I said in the Second Reading Committee, part 6 will make it easier for mesothelioma sufferers to obtain compensation due from insolvent employers.
The Bill allows the Secretary of State, by regulations, to add or remove circumstances in which a person will fall within the provisions of the 2010 Act. The intention in the first instance is to use this power to add insolvency and other similar events to the 2010 Act. Draft regulations are being prepared by the Ministry of Justice. Once the first set of regulations are made, the 2010 Act can be commenced. The Government are committed to bringing the 2010 Act into force as soon as practicable.
In the Second Reading Committee, I welcomed the fact that part 6 gives mesothelioma sufferers the opportunity to be dealt with in a timely fashion and to receive the justice they deserve. It is a terrible condition that many people have suffered as a work-related illness. We should do everything possible to support them.
Clause 19 inserts a new section into the 2010 Act. It enables the Secretary of State to make regulations adding or removing circumstances in which a person is a “relevant person” for the purposes of the Act, provided that the Secretary of State considers that the proposed circumstances involve dissolution, insolvency or financial difficulty, or are similar to those for the time being prescribed in sections 4 to 7 of the 2010 Act. That seems sensible and we have no problem with the clauses or the schedule standing part of the Bill.
I refer the Committee to my entry in the Register of Members’ Financial Interests.
Will the provision affect third-party cover under the Road Traffic Act 1988 and the level of insurance premiums taken out for motor insurance? May I also ask the Minister, en passant, to pay tribute to the Law Commission, on whose work this Bill is based?
My right hon. Friend will appreciate that this part of the Bill is designed to assist those who have insurance claims against parties that are now defunct, where insurance was originally in place to cover such claims. In theory, that could cover a motor insurance claim, but it is certainly not designed specifically to that end. Likewise, the cost of motor insurance will be determined by claims by the insurance companies themselves, so it is not envisaged that this will affect the cost of motor insurance.
I entirely agree with my right hon. Friend that the Law Commission has done an excellent job. Essentially, the Bill makes the insurance market more effective and fairer.
Question put and agreed to.
Clause 19 accordingly ordered to stand part of the Bill.
Clause 20 ordered to stand part of the Bill.
Provision consequential on Part 2
Question proposed, That the clause stand part of the Bill.
Part 7 deals with technical matters such as commencement, territorial extent and consequential amendments to existing legislation. The Bill repeals or amends various sections of the Marine Insurance Act 1906, which are superseded by provisions in parts 2 and 3. Clause 23 provides that the Bill extends to the whole of the United Kingdom, and that the provisions on insurance contract law will come into force 18 months after Royal Assent.
From a practical perspective, the new provisions will not apply to existing insurance contracts, but rather to new contracts and variations agreed after the Bill comes into effect. The regulation-making power on the Third Parties (Rights against Insurers) Act 2010 will come into force two months after Royal Assent.
As the Minister has said, clause 21 makes provisions consequential on part 2 and amends or repeals various sections of the Marine Insurance Act 1906, the Road Traffic Act 1988 and the Road Traffic (Northern Ireland) Order 1981, as well as the Consumer Insurance (Disclosure and Representations) Act 2012. She has also confirmed that clause 22 ensures that those provisions relating to fair presentation and good faith apply only to insurance contracts entered into after the end of the period of 18 months from the Bill’s entry into force. Clause 23 ensures that the Bill extends to the whole of the UK, apart from consequential provisions in clause 21 relating to Northern Ireland. Again, we are happy for these clauses to stand part of the Bill.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Clauses 22 and 23 ordered to stand part of the Bill.
Schedules 1 and 2 agreed to.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
I beg to move, That the Bill be now read the Third time.
I am grateful to hon. Members for the useful debates on the Bill, and glad to have taken it forward based on proposals by the Law Commission and the Scottish Law Commission, to whom I reiterate my thanks. The Bill was rigorously scrutinised in the other place, and demonstrates the usefulness of the special parliamentary procedure for Law Commission Bills.
Together with the Consumer Insurance (Disclosure and Representations) Act 2012 that preceded it, the Bill marks the biggest reform to insurance contract law in more than a century. It is the product of careful consultation and consideration, and as a result it is well supported. It demonstrates the Government’s commitment to maintaining and growing the UK’s insurance industry both at home and abroad. I am grateful to all insurers, businesses and others who have supported the Bill, and to those who have participated in the Law Commission’s project and the legislative process. I am also grateful for the contribution made by the Opposition in both Houses towards the smooth passage of the Bill.
I, too, thank everyone who has worked on this important Bill, including the Law Commission and the Scottish Law Commission. It has been interesting to follow the special procedure. There is no doubt that the Bill was rigorously scrutinised in the other place, and a number of amendments were tabled. That perhaps makes our task in Committee and on Third Reading somewhat easier, and will help to ensure that the Bill safely completes its passage through the House.
I raised one issue that was originally suggested in the Law Commission reports but did not make it into the Bill: late payment. I want to give the Minister the opportunity to reply, but to recap briefly, the Law Commission report states:
“We consider that a policyholder should have a remedy where an insurer has acted unreasonably in delaying or refusing payment.”
“an implied term in every insurance contract that the insurer will pay sums due within a reasonable time”,
with appropriate caveats. Those points were deemed too controversial to be included in a Law Commission Bill, and as I have said before, although the recommendations have merit, I recognise that a Law Commission Bill may not be the appropriate vehicle for putting such provisions into statute because of the way that “controversial” is interpreted.
I asked the Minister whether she would consider legislating for late payment by some other means. She offered encouragement on that and also said that
“evidence presented to the Law Commission, the Treasury and the Special Public Bill Committee demonstrated that the problems in the existing law are worse in theory than in practice.”––[Official Report, Insurance Bill Second Reading Committee, 26 January 2015; c. 9.]
Although the Minister provided some encouragement, she perhaps also suggested that such measures would not be a priority for the immediate future. It would be helpful if she clarified that point and said whether the Government have plans to take the issue forward and to what time scale. In general terms, the Bill has taken us forward and is largely technical in how it updates insurance law in statute. We have given it a good airing and should see it successfully enacted.
I am grateful to the hon. Lady for giving me the chance to put on the record the fact that the Government support the principle that insurers should make payment of valid claims within a reasonable time, and that they should be liable for compensation where appropriate should they fail to do so. The Government are always looking at ways to support and improve the position of the UK insurance industry, and it is hoped that legislative opportunities will arise to include that measure with other insurance-related provisions.
As the hon. Lady will know, the Government undertook a targeted consultation of insurance industry stakeholders in summer 2014 to assess support for the Bill and for a provision on late payment. The results of the consultation suggested that the late payment provision was not suitable for a Bill going through Parliament under the special procedure reserved for uncontroversial Law Commission Bills. The main arguments against such a provision were that it could lead to speculative litigation, or have the unwelcome effect of being used to exert undue pressure to expedite claim settlement, and those costs have not yet been quantified. Furthermore, adequate customer protections already exist, so the problems of late payment are worse in theory than in practice. The Financial Conduct Authority is currently undertaking a thematic review of the handling of commercial claims, and the issue is being considered from a regulatory angle.
As the hon. Lady recognised, not all recommendations made by the Law Commission are suitable for the special procedure for non-controversial Bills, and that provision was omitted from the Bill specifically to ensure that the special procedure was not abused. I repeat, however, that the Government support the principle that insurers should make payment of valid claims within a reasonable time.
Question put and agreed to.
Bill accordingly read the Third time and passed.
National Insurance cOntributions Bill (Money)
Queen’s recommendation signified.
That, for the purposes of any Act resulting from the National Insurance Contributions Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Mark Lancaster)
National Insurance Contributions bill (programme) (No.2)
That the following provisions shall apply to the National Insurance Contributions Bill for the purpose of supplementing the Order of 8 September 2014 (National Insurance Contributions Bill (Programme)):
Consideration of Lords Amendments
(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion two hours after their commencement at today’s sitting.
(2) Any further Message from the Lords may be considered forthwith without any Question being put.
(3) The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Mark Lancaster).
National Insurance Contributions Bill
Consideration of Lords amendments
I must draw the House’s attention to the fact that financial privilege is involved in Lords Amendment 1. If the House agrees to it, I shall ensure that the appropriate entry is made in the Journal.
Before Clause 1
Secondary Class 1 contributions: apprentices under 25
I beg to move, That this House agrees with Lords amendment 1.
Some right hon. and hon. Members may recall the important initiative on apprentices announced by my right hon. Friend the Chancellor of the Exchequer in his autumn statement on 3 December. The Chancellor announced that the Government will abolish employer class 1 national insurance contributions for apprentices under the age of 25 from April 2016, building on the removal of employer class 1 national insurance contributions for all under 21-year-olds from April 2015.
Amendments to section 9 and new section 9B of the Social Security Contributions and Benefits Act 1992 and the Social Security Contributions and Benefits (Northern Ireland) Act 1992 give effect to the Government’s intention to abolish employer class 1 NICs for apprentices under the age of 25. From April 2016, employers of apprentices under the age of 25 will pay a zero rate of secondary class 1 NICs on the earnings of those employees, and that zero rate will apply to earnings below the upper earnings limit.
As my right hon. Friend the Chancellor made clear, apprenticeships are at the heart of the Government’s drive to equip people of all ages with the skills valued by employers. This measure is intended to support employers who provide apprenticeships to young people by removing the requirement that they pay secondary class 1 NICs on earnings up to the upper earnings limit for those employees. The measure is also intended to support youth employment. Under this Government, employment is at its highest ever level while unemployment is now lower than when the Government came to power. However, there is more to do to tackle youth unemployment and ensure that no one is left behind.
The amendment provides a zero rate of employer class 1 national insurance contributions on the earnings of apprentices under the age of 25 from 6 April 2016. The measure will apply to both new and existing apprentices aged under 25 and is not time limited.
The main features of the clause are, first, that there is a regulation-making power to define “apprentice”. There are existing statutory definitions relating to apprenticeships. For example, in England and Wales, the Apprenticeships, Skills, Children and Learning Act 2009 introduced the concept of an apprenticeship agreement, which is defined in part with reference to “an apprentice”. Because education and training is a devolved matter, and because not all apprentices are employed under apprenticeship agreements, we will need to look at the approaches taken towards apprenticeships in the different devolved Administrations. The power will allow time to discuss the definition with interested parties such as the Skills Funding Agency and their devolved equivalents. The power will also enable us to respond simply to changing statutory definitions and requirements in future.
Secondly, there are regulation-making powers to vary the age group to which the zero rate of secondary class 1 NICs for apprentices applies. For example, the Government could in future allow for an increase in the age bracket of apprentices falling into the zero rate earnings band of secondary class 1 NICs.
Thirdly, there is a regulation-making power to ensure that the benefit of the zero rate of secondary class 1 NICs for apprentices can be enjoyed only in respect of earnings below a certain level. In other words, the power will provide a means to introduce an upper secondary threshold for apprentices in the same way as we are doing for under 21s. That threshold will be set at the level of the upper earnings limit in the 2016-17 tax year.
The Government’s objective is to make all apprenticeships world class. Around £1.5 billion is spent annually to support apprenticeship training, and the Government are committed to driving up the quality of apprenticeships. We are currently taking forward a number of reforms that will have a positive impact. The Government believe that the measure will, alongside other initiatives on apprenticeships and the abolition of employer’s NICs for under 21s from April 2015, help to address the problem of youth unemployment in the UK.
I hope that, with that explanation, the House will accept the amendment made in the other place.
I am grateful to the Minister for introducing Lords amendment 1, which was the main amendment made in the other place. As he said, it enacts the announcement made in the autumn statement that employer national insurance contributions for apprentices aged under 25 will be abolished from April 2016. The Opposition support the measure. There is agreement on both sides of the House and across party political boundaries that we need more apprenticeships; and that youth unemployment, and long-term youth unemployment, remain a problem not only for the individuals involved, but for the economy as a whole. We hope the measure helps to alleviate that somewhat.
The Minister said that there is a regulation-making power within the measure for the definition of “apprentice” and referenced the 2009 Act definition, which relates to an apprenticeship contract. That concern was raised in the other place when the measure was debated. Will he give the House more information about progress in discussions with the devolved legislatures about the definition to be applied? How confident is he that the provision will not be manipulated in a way that enables a reduction by companies of their tax liabilities? The lack of a definition of “apprentice” causes concern that that might arise.
The current quality of apprenticeships has come under scrutiny in this Parliament. A recent report from the Department for Business, Innovation and Skills showed that 15% of apprentices are paid below the national minimum wage, and that 28% of level 2 and level 3 apprentices who do not have a written contract are paid below the national minimum wage. We also know that one in five apprentices receive no formal training. Will the Minister consider a stipulation on quality when he looks at the definition of apprentice? That would go some way to alleviating some of the concerns raised about potential gaps in the measure that could lead to abuse, or to a proliferation of apprenticeships that are not of a high quality and that do not add too much to the future prospects of the young people engaged in them. It would be helpful to hear the Minister’s further comments on those points.
I welcome the hon. Lady’s support for the measures. It is worth noting the considerable progress made on apprenticeships under this Government. We have created 2 million apprenticeships during this Parliament; they are giving young people the skills they need to succeed in the global race and get on in life. That is significant progress—progress on the number of apprenticeships has been considerably faster than was previously expected. For example, the previous Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), said in 2008 that he intended to have 90,000 more young people taking part in apprenticeships by 2013. He said that, together with opportunities for those in their 20s and older, that would mean 220,000 people starting an apprenticeship each year overall. In 2011-12, 520,000 people started an apprenticeship, so we can see that there has been dramatic progress. The measure helps us to pursue that policy yet further.
I am intrigued as to how the Minister will define an apprenticeship these days. I was an apprentice in the construction industry. I served a four-year apprenticeship from the age of 16 to the age of 20. My father had to sign my indentures to say that I was indentured to that company, and possibly sold into slavery in a way. What is an apprenticeship these days? The Minister talks about half a million new apprenticeships, but are they apprenticeships as I understand them?
The hon. Gentleman goes to the heart of the question asked by the hon. Member for Birmingham, Ladywood (Shabana Mahmood) about who will qualify for the relief. As I have remarked, we are taking a power to define apprenticeships. Given that this is a devolved matter, it is important that we discuss it with the devolved Administrations. We want to support apprenticeships and will seek to achieve a broad definition for the purposes of the relief. However, the apprenticeship system across the UK is complex and evolving. Education and training is a devolved matter. Apprenticeships operate slightly differently in England, Scotland, Wales and Northern Ireland, and there are differences between Government-funded apprenticeships and independent employer schemes. The Government will discuss the definition of “an apprentice” with the Skills Funding Agency and its devolved equivalents before committing ourselves to a final definition. It is important that the definition is robust, satisfying minimum compliance standards while achieving the objective of supporting the provision of apprenticeships to the under-25s.
In terms of overall support for apprenticeships, the Government have done a great deal. We spend about £1.5 billion annually to support apprenticeship training. In Budget 2014, £170 million of additional funding was made available for apprenticeship grants for employers in 2014-16, providing a grant of up to £1,500 per apprentice for small businesses. The new budget will fund more than 100,000 additional incentive payments for employers to take on young apprentices.
It is also worth pointing out that in 2012 the National Audit Office recognised the strengths of the Government’s apprenticeship programme, highlighting how it continued to be valued by learners and businesses. It concluded that public spending on apprenticeships offered a good return, estimated at £18 for each £1 of Government investment. Evidence from the Department for Business, Innovation and Skills suggests that returns may be higher, at £28 for every £1 of Government investment. I hope Members will resist the temptation to criticise the substantial progress that has been made on apprenticeships over the course of this Parliament. It has been significant.
On the definition of apprentices, which I touched on earlier, there will need to be discussion with the devolved Administrations and the Skills Funding Agency. We want a robust definition, but we have to bear in mind the complexities in this area.
On eligibility, for a business to be eligible to work with training providers to create an apprenticeship programme, the employer offering an apprenticeship needs to employ an apprentice for a minimum of 30 hours per week, pay at least the national minimum wage for apprentices, support on-the-job learning and be involved in reviewing their progress. On the question raised by the hon. Member for Birmingham, Ladywood regarding manipulation, I would make the point that those safeguards are in the system.
One further point I believe is important is that, as the Government are doing with employment allowance and under-21s from April this year and as we did when we came to office and increased the threshold before employer national insurance contributions is paid, we have done a great deal to reduce the burden on businesses of employer national insurance contributions. That has helped in creating the substantial progress in employment we have seen in recent years. Had we pursued the policy we inherited—an increase in the jobs tax—we would not have seen that progress.