House of Commons
Wednesday 24 February 2016
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
Cardiff City Deal
The Cardiff city deal represents a once-in-a-generation opportunity to raise growth levels right across the region, securing Cardiff’s position as one of the best capital cities in Europe and a fantastic place in which to do business. Yesterday, my right hon. Friend the Secretary of State for Communities and Local Government and I met leaders from the Cardiff capital region to discuss the city deal and to ensure that progress and momentum are being maintained.
My hon. Friend the Member for Cardiff North (Craig Williams) has long championed the city deal to help deliver even greater success for Cardiff and Wales, but for it to succeed everyone must be as committed to delivering for Cardiff as he and the Secretary of State so clearly are. What assessment has the Secretary of State made of the Welsh Assembly Government’s commitment to this city deal and particularly their commitment to funding it?
I thank my hon. Friend for his question. I discussed the Cardiff city deal proposal on Monday with the First Minister, and I am pleased and reassured that all parties are now strongly committed to it. I think that there are still some questions to be asked about the nature of the financial commitment coming from the Welsh Government, but there is now momentum behind the deal and we look forward to getting it secured as soon as possible.
On financial commitment, last month, I asked the Secretary of State whether his Government would match the £580 million that the Welsh Government are putting towards the Cardiff city deal. Has he got a cheque from the Chancellor yet?
I am slightly surprised by the hon. Lady’s tone. We have already put £125 million on the table to help with rail electrification. The Welsh Government may want to put that into the pot. We have already put £50 million towards the compound semiconductor catapult centre in Cardiff. There is no question mark over our commitment to securing an ambitious city deal for Cardiff. As I have said, there are some questions about the nature of the Welsh Government’s financial support for such a deal, but I am sure that, with the correct attitude, we can work through those issues and land a deal.
I am sure the Secretary of State will join me in welcoming the massive announcement that Aston Martin will be building its new vehicle in south Wales. Does that not emphasise the important nature of the private sector involvement in the city deal, and what is he doing to ensure that the Welsh Government and local authorities engage with the private sector so that they lever in more money?
My hon. Friend is absolutely right. First, though, let me put on record our congratulations to him and his wife, Clare, as it is a few days after the birth of their second child. It is wonderful to see him taking a break from paternity leave to stand here today championing the interests of his constituents in Cardiff. He is absolutely right on two counts. The first is on the success of bringing the Aston Martin deal to Wales, which is a great example of the Welsh and the UK Governments working together in a true team Wales approach. The second is on the importance of business and the fact that it is right at the heart not just of helping to create the city deal vision, but of delivering it as well.
Let me pass on my congratulations to the hon. Member for Cardiff North (Craig Williams). I also congratulate the workforce in the St Athan area—in the seat of the Under-Secretary of State for Wales, the hon. Member for Vale of Glamorgan (Alun Cairns)—and the Welsh Labour Government on their support for that project, the Cardiff city deal and the Swansea city deal. Will the Secretary of State confirm that the support will be there for Cardiff and for the proposal by Terry Matthews for an “internet coast” that links Swansea and west Wales as well, as that is where we will drive the jobs into Wales?
The hon. Gentleman has raised a number of different initiatives all together in one question. The common thread running through them was the nature of partnership working, and we need to see more of that. I am talking about the Welsh Government, the UK Government and local partners all working together. The Aston Martin deal shows the fruit that can be borne when we have the right kind of attitude and commitment from the Prime Minister, the First Minister, the Ministry of Defence and excellent local MPs such as the Under-Secretary of State for Wales. I have discussed the Swansea city deal with Sir Terry Matthews. We are really interested in understanding it in a bit more detail, and we want to work with the Swansea city deal partners as well as our partners in Cardiff.
Is it not the case that Aston Martin moved to St Athan in the Greater Cardiff region partly because of the success of organisations such as Superfast Cymru, which is delivering fast broadband, and particularly because of the skills that now exist in south Wales?
My hon. Friend, who has a great love for and knowledge of Wales, is right. The most important thing for securing big inward investment projects such as Aston Martin, or the continued inward investment of companies such as Airbus, is the excellence of the skills and the workforce that we have now in Wales. We are not complacent about that. There is more progress that could be achieved, but the reason that such companies choose Wales over locations all round the world is the quality of the skills of the workforce, the quality of the infrastructure and the UK Government’s commitment to creating the best environment for economic growth.
Employment in Wales is now at a record high, with more people than ever before having the security of a pay packet to provide for themselves and their family. Aston Martin has been mentioned. That is testimony to the significant investment that Wales is attracting.
As a former student of Aberystwyth University, the oldest and the best law school in Wales, I have been pleased to see that more than 80% of employees in mid-Wales are now employed by small and medium-sized enterprises. Will the Minister join me in acknowledging the significance of that thriving community to the economy in Wales?
My hon. Friend is right and he is a true champion of Aberystwyth and of mid-Wales. He will be pleased to hear that there are 3,500 additional small businesses in that area, with an extra 5,500 people going out to work every day since 2010 as a result of the economic stability we have brought about.
Does the Minister agree that the key to further enhancing employment in Wales is diversification and innovation in the rural economy, just as is happening in East Anglia? What specific measures does he have in mind to increase enterprise in Wales’s more remote areas?
My hon. Friend is a great expert on rural issues in relation to the success in his constituency in North West Norfolk, and I pay tribute to that. Employment growth in rural Wales has outperformed employment increases across the whole of Wales, which demonstrates the dynamism and the broad base on which those policies are being implemented. There is a range of initiatives such as the British Business Bank, the start-up loan scheme and the new enterprise allowance scheme on a UK Government basis, and we are keen to work with the Welsh Government to try to diversify further.
Now that it is official Government policy to support membership of the European Union in the referendum, will the Minister and the Secretary of State produce a report that shows the benefit of the European Union to jobs and investment in Wales?
Our position is clear. The Government support the deal that my right hon. Friend the Prime Minister has negotiated. Of course, Europe is important to our exporters and businesses, but it is also important because of the money repatriated from Europe to Wales and the United Kingdom through cohesion funding.
As Aberystwyth’s MP, I reiterate the comments of the hon. Member for Gillingham and Rainham (Rehman Chishti). If we are serious about creating more jobs, and we are, that means real investment in real infrastructure. Why, then, has the Government’s mobile infrastructure project been such a failure and delivered so little for rural Wales?
The hon. Gentleman raises this issue persistently. As a result of representations from him and others, I met Openreach earlier this week, as well as Broadband Delivery UK. I have plans to meet the mobile operators shortly to discuss what more can be done to improve the mobile infrastructure. With the 4G auction, at least 95% coverage will be gained in Wales. That contrasts significantly with the 3G auction and the low percentage that Wales was left with last time.
Will my hon. Friend join me in congratulating my constituent, Mr Sean Taylor, on the further expansion of his company, Zip World? In four years this company has gone from no staff to 220 staff, revitalising the economy of rural north-west Wales, to the benefit of employment and diversification of the local economy.
Many Members will appreciate the difficulties that zip wires can present, but I pay tribute to my hon. Friend, who is a true champion of zip wires and the success and diversification that they bring not only to his own constituency, but to Arfon. We are keen to see the further support and diversification of that business in his area.
Following the excellent news about Aston Martin, I pay tribute to that company, to our dynamic pro-business Welsh Labour Government and to everyone who was involved in securing the deal. As we are discussing trends in employment, and with around 200,000 jobs in Wales dependent on our EU membership, what does the Minister think would happen to trends in employment if we were daft enough to leave the EU?
I am grateful to the hon. Lady for recognising the efforts that the UK Government have made to attract investment, particularly with the major Aston Martin investment in my constituency. I think those comments should be underlined. Of course, the Government do not plan to leave the European Union; the Prime Minister has made the case, having negotiated a strong deal, and we are confident that the British people will support that when the referendum comes.
This Government know that supporting our manufacturing industry is vital for rebalancing the economy. Despite challenging global conditions, we have seen 12,000 new manufacturing jobs created by businesses in Wales since 2010, reversing the decline we saw under the previous Labour Government.
My hon. Friend is absolutely right about the strength of the economic recovery in north Wales. When I travel around Wales, I see that much of what is innovative and exciting is happening in north Wales. We are clear that the economy of north Wales is integrated in a single entity with the economy of north-west England, so there are lots of opportunities for small and medium-sized businesses on both sides of the border to benefit from the emerging northern powerhouse vision. I met the North Wales Business Council earlier this month and, like businesses across north Wales, it is calling out to be part of the northern powerhouse.
Does the Secretary of State agree that the success of the manufacturing industry in Wales, and across the rest of the UK, reflects a growing global demand for our products and is further evidence of the success of the Government’s ambitious Exporting is GREAT campaign?
My hon. Friend is absolutely right; there is enormous and growing global demand for high-quality products manufactured in Wales. The Government have set ourselves really ambitious targets for increasing the level of UK exports, and I am clear that I want to see Welsh business sharing in that export surge. That is why UK Trade & Investment’s Exporting is GREAT roadshow truck will be in Deeside in north Wales tomorrow, explaining to small businesses there what export opportunities there are around the world.
One way to rebalance the economy is to decentralise enterprise and services. Therefore, why are the Government closing tax offices and courts in peripheral areas of Wales, given the impact that has on the economy? They talk about decentralisation, but they centralise services when they have the opportunity.
The hon. Gentleman should understand that the Government have a sacred duty to take care of how taxpayers’ money is spent. Despite all the problems we were left with in 2010, the truth is that we maintain a very strong UK Government footprint in Wales, and the growth in private sector jobs in Wales over the past five years far outstrips any reductions we have seen in public sector employment.
Partial income tax powers are of course a welcome step in helping the UK rebalance geographically, but it is vital that those powers are accompanied by a fiscal framework that genuinely preserves non-detriment to Wales. Given the Scottish Government’s successful struggle to achieve a no-detriment agreement, what specific representations has the Secretary of State received from the Welsh Government on their chosen deduction method, and what is his chosen deduction method? Is it not the case that partial income tax powers make it more difficult to achieve genuine non-detriment?
The hon. Gentleman is right about the need to get the details right—we have just seen a very prolonged negotiation on the Scottish fiscal framework—but that is further down the line. We still have an ongoing discussion with the Welsh Government. They want to avoid taking on any income tax powers whatsoever. They want to avoid the additional fiscal responsibility that that would entail. They are running from having that fuller financial accountability that we believe is really important for Welsh democracy.
14. Will the Secretary of State confirm that the Severn bridge is key to the economy of south Wales, that the debt will be paid back before the April 2018 prediction and that it offers a golden opportunity to reduce tolls for businesses and hard-pressed motorists in Wales? (903633)
My hon. Friend, who chairs the Welsh Affairs Committee, has been persistent and effective in raising concerns about the burden imposed on businesses and motorists in Wales by the very high tolls on the Severn bridge. We have not made any final decisions about what will happen when the private sector concession ends at the end of 2017, but we and the Treasury will be very keen to hear any specific ideas that he and members of his Committee might have.
Last year, the Secretary of State said his ambition was to secure more balanced growth in the Welsh economy, but on his watch we are seeing the loss of hundreds of jobs in our strategically important steel industry. The Government are being painfully slow to heed our warnings on cutting energy costs, and weak and disingenuous when it comes to standing up to Chinese dumping. With EU backing given in December, how much longer will the Government delay the energy compensation package the steel industry in Wales so desperately needs?
I am really disappointed by the slightly tribal and partisan tone the shadow Secretary of State adopts on this issue. If she wants to talk about what has happened to steel jobs under Conservative and Labour Governments, I am happy to do that, and we can talk about the decline in steel jobs on the watch of previous Labour Governments. I am much more interested in getting answers now to the global storm facing the steel industry. This Government have taken a lead in Europe in changing procurement rules and arguing for protection measures against Chinese dumping. We are making sure that the steel industry in Wales has the best possible chance of a sustainable and profitable future.
The Government also have a key role in commissioning large infrastructure projects, which can boost manufacturing and rebalance the economy. Manufacturers across Wales, who are gearing up in earnest to supply the Swansea bay tidal lagoon, share my deep concern that the Government are now planning a lengthy review, which could scupper the project altogether. Will the Secretary of State now give us an unequivocal guarantee that this vital project will not be sunk by his Government?
I notice that the shadow Secretary of State did not stand up and welcome what we saw yesterday—Her Majesty the Queen naming and opening the new Elizabeth Crossrail line, which, by the way, uses 50,000 tonnes of steel made in Wales by Celsa Steel. The hon. Lady should be absolutely welcoming that as a good example of how UK infrastructure investment can drive growth in the steel industry. On the tidal lagoon review, the chief executive of the Swansea tidal lagoon has welcomed it himself. He welcomes the fact that we are looking into this and exploring all options to see whether the project can be financially viable.
13. Does the Minister share my view that a prime mover behind rebalancing the economy is the sense of fairness? Does he agree that the action taken by the Government in freeing generations of people in constituencies throughout Wales is about making the best use of their talents? [Interruption.] (903632)
I did not hear the full question, but what I did hear was a really important point about fairness when it comes to rebalancing the economy. Unlike previous Labour Governments, who stood by while the economy of the United Kingdom became hopelessly imbalanced towards London and the south-east, we do not think that is good enough. We think that there are talents and resources in the north of England, Wales, Scotland, Northern Ireland and the west of England that need to be captured and enhanced to drive growth in the UK.
Air Passenger Duty
This Government have a proud record on devolution in Wales: establishing the Silk commission, devolving landmark new fiscal powers and taking forward the St David’s day agreement through the new Wales Bill. In that agreement, we committed to consider the case for devolving APD to Wales and this work is currently being undertaken and assessed by the Treasury.
Devolving air passenger duty will create a market distortion favouring a state-owned airport against a private one. It will damage the economic viability of Bristol airport and have consequential detrimental effects in the south-west. When my right hon. Friend discusses this with the Chancellor, will he gently reflect on the fact that, had our colleagues not made such great gains in the south-west, there would not be a majority Conservative Government?
I am sure that my right hon. Friend, like me, welcomes the fact that the Government are cutting APD in all parts of the UK. However, let us be clear: I want Cardiff airport to be a success story, but I also recognise that there are serious concerns about the effect APD devolution might have on competition issues in relation to Bristol airport.
I am very aware of the issues that the hon. Gentleman raises. I recently met the north Wales business council precisely to talk about the importance of a rail link from north Wales into Manchester airport. He makes an important point that we are very mindful of.
Wales is getting back to work. There are 58,000 fewer workless households in Wales since 2010. Our welfare reforms are benefiting the people of Wales, helping them into jobs that will provide a regular wage for themselves and their families.
The Institute for Fiscal Studies warned this month that universal credit will tend to weaken the incentive for single parents to be in work. What assessment have the Government made of the effect that rolling out universal credit will have on the number of workless households in Wales?
Welfare reform needs to be taken in its totality. It is about incentivising work but also about increasing wages and lowering taxes. I would hope that the hon. Lady would reflect on the positive nature of welfare reform in turning around communities, families and society.
Large Infrastructure Projects
The Secretary of State and I regularly meet stakeholders to discuss the Government’s plans to deliver improvements in infrastructure across the whole of Wales. For instance, next week the Secretary of State will meet Hitachi to discuss its proposals for a new nuclear power station at Wylfa in more detail.
Can my hon. Friend confirm that bringing HS2 to Crewe six years early, as part of the Government’s northern powerhouse, will directly benefit the people of north Wales and spur more economic development programmes in Wales, as well as in north-west England and Cheshire more generally?
I am grateful to my hon. Friend for raising this issue. He highlights the fact that the HS2 project is truly a national scheme. The Crewe hub offers significant potential to north Wales and to the northern powerhouse. I recently met the North Wales-Mersey Dee alliance rail taskforce, which also recognises the potential of north Wales for the northern powerhouse and the northern powerhouse for north Wales.
Much is rightly made of trends in employment in Wales, but average full-time workers’ pay in my constituency has dropped by 12% in the past two years. What is the Secretary of State doing to bring infrastructure projects, along with science and technology salaries, to Llanbedr and Trawsfynydd in Dwyfor Meirionnydd?
The hon. Lady is naturally a true champion not only of her own constituency but the whole of north Wales. She will welcome the significant investment in the prison in Wrexham and the £20 billion investment that Wylfa Newydd will bring. She has also shown interest in the modular nuclear projects at Trawsfynydd. I recently met the leader of Gwynedd Council to discuss the prospects that could result from my right hon. Friend the Chancellor’s announcement in the Budget making £250 million available for this scheme.
Eight young boys in my constituency were abused in the 1980s. They have waited all this time for some conclusions. It is ridiculous that in the past two months Government Departments have been sitting on Lady Macur’s report. What is going on? I understand that redactions are taking place. What confidence can we have that when the report is eventually published it is a true report without interference from Government?
I thank the right hon. Lady for her question. We are discussing something incredibly serious and sensitive. Let me put on record my thanks to her for the tireless work that she has put in over the years to fight for justice for those who have suffered horrendous abuse. We are talking about some of the most shameful episodes in the history of the nation of Wales.
We have the report, and it is being looked at by the Crown Prosecution Service, the Director of Public Prosecutions and the police. Lady Justice Macur recommended to the Government that certain redactions might need to be made. The commitment that I give to the right hon. Lady and the House today is that we will make redactions only where they are absolutely necessary, and we will provide a full explanation of why we are making those redactions. We owe that to the victims.
12. Does the Secretary of State agree that there is concern about attention in the report to the language issue? The only attention that was given to the language issue in the Waterhouse report was to say that the children swore a great deal, as well they might have. (903631)
The Wales Council for Voluntary Action criminal records unit, which provides free disclosure and barring checks for the third sector, will close on 31 May. The last paper application will be accepted this Friday. The WCVA has provided a bilingual service, which will cease on Friday. Does the Secretary of State share my concern about that cut?
The Prime Minister was asked—
The House will be aware of the dreadful accident that occurred at Didcot power station yesterday afternoon, in which one person died and three are missing. I know that the whole House will join me in sending our condolences to the family and friends of the victim and our best wishes to those who are still missing or injured. I pay tribute to the quick and incredibly brave actions of our emergency services, who dealt with the incident with typical professionalism. The Health and Safety Executive will carry out a full investigation to find out what led to the tragedy.
This morning I had meetings with ministerial colleagues and others and in addition to my duties in the House, I shall have further such meetings later today.
I would like to associate myself and the people of Wiltshire with the Prime Minister’s sentiments about the occurrence in Didcot.
Wiltshire has successfully integrated a number of Syrian refugees, including babies and children, who might otherwise have frozen or starved to death in the camps. However, there has been a serious delay by the Home Office, despite Wiltshire Council’s claims to have tried to introduce more refugees into the area. Will the Prime Minister tell us what more he can do on the matter? Will he look into it? Will he also outline what we can do to fulfil our moral duty to those desperate people?
Let me pay tribute to Wiltshire Council and to the many councils up and down our country that have done a magnificent job of integrating and taking in Syrian refugees and their families, finding them homes, finding them schools and, I hope, in time, finding them jobs, too. If we look at what has happened across Europe with the relocation and resettlement programme, we see that Britain has done far better than any other country. We said 1,000 by Christmas, and we have delivered 1,000 by Christmas.
My hon. Friend asked what more we can do. First of all, I will make sure that she can meet the Home Office to talk about how we can make sure the system works well. We will continue to invest in the Syrian refugee camps, not least with the $11 billion that we raised at the landmark London conference. We will continue to do what we can to deliver the 20,000 Syrian refugees we said we would take into our country.
I want to echo the Prime Minister’s tribute to all the emergency services in dealing with the major incident in Didcot. Our thoughts are with the families of the person who died and those who are missing or injured. We rely on our emergency services and we should make sure they are always there for all of us.
The NHS staff survey published yesterday shows that nine out of 10 junior doctors already work extra hours beyond their normal contract. The survey also showed falling morale among that vital group of staff. What does the Prime Minister think the Health Secretary’s veto of a deal and the imposition of a contract will do to their morale?
First, the Health Secretary did not veto a deal. For four years we have had discussions about how important it is to have an NHS that works on a more seven-day basis. Let me pay tribute to the fact that so many in the NHS work so hard already at the weekends, but what matters is making sure we can have a genuine seven-day NHS.
What I would say to junior doctors is that no junior doctor working legal hours will receive a pay cut. This contract will not impose longer hours. In fact, it has tougher safeguards to make sure it reduces the hours that are worked. We are not seeking to save money from the new contract. Nights, Saturday evenings and Sundays continue to attract unsocial hours payments. This is a good deal from a Government putting £10 billion more into our NHS.
This dispute with the junior doctors has been on the basis of misrepresented research about weekend mortality. I will read the Prime Minister what the researchers themselves say:
“It is not possible to ascertain the extent to which these excess deaths may be preventable; to assume that they are avoidable would be rash and misleading.”
Are the Prime Minister and his Health Secretary being “rash and misleading” with these figures?
Let me agree with the right hon. Gentleman about something, which is that this dispute has been plagued by scaremongering and inaccurate statistics. The British Medical Association, in its first intervention, said that this was a 30% pay cut. That was completely untrue. In fact, it was so untrue that it had to take its pay calculator off its website, and it never put it back up again.
Let me answer very directly the question about excess deaths. The 6,000 figure for excess deaths was based on a question asked by the Health Secretary of Sir Bruce Keogh, the medical director of the NHS. Now that we have had time to go into these figures in more detail, I can tell the House this: the Health Secretary was indeed guilty—he was guilty of an understatement. The true figure for excess deaths at the weekend are 11,000, not 6,000. Perhaps the right hon. Gentleman will now withdraw his totally unjustified attack on the Health Secretary. Will he withdraw it, now he knows the figures?
It is just worth reflecting for one moment that there is no dispute with the junior doctors in Scotland or in Wales, because their Governments have had the sense to reach an agreement with the junior doctors. The Prime Minister must also be aware that the vast majority of the public in England are on the side of the junior doctors, not the Secretary of State.
The situation actually gets worse. A freedom of information request by the BBC today reveals that, when asked for the source of the Health Secretary’s statistics, civil servants in the Department of Health decided to
“offer up the most bland statement possible, that would neither confirm not contradict”
the Health Secretary’s
Is it not time that the Prime Minister and the Health Secretary actually apologise for what they have done and correct these statements, and indeed, while they are about it, reach an honourable settlement with the junior doctors?
I think the best that can be said is that the right hon. Gentleman wrote that question before he heard my answer. I have given the fullest possible description of how the figure of 6,000 excess deaths was arrived at—the true figure being 11,000—but I note that there is absolutely no withdrawal of his accusation against the Health Secretary, even after he gets those figures.
The right hon. Gentleman says there is no dispute in Scotland and Wales with the junior doctors. The reason for that is that Scotland and Wales are not trying to create more of a seven-day NHS. That seven-day NHS was not only in our manifesto—I want to make sure that hard-working people can access health services at an equal rate right through the week, because they do not just get ill on weekdays; but if he reads his own party’s report on its election defeat, he will see that it admits that the concept of a seven-day NHS was a very popular concept, and it is.
The right hon. Gentleman can see that in England, we are putting £10 billion more into the NHS, we have got 10,000 more doctors and 10,000 more nurses, we are treating more patients, we have a settlement of the GP contract and we now have a settlement of the junior doctors contract. We are building a strong NHS for patients—that is what this is about.
We all want a strong and successful NHS, but that will not be achieved by provoking industrial action, misrepresenting research or failing to get a grip on the cost of agency staff in the NHS, which now amounts to £4 billion. Indeed, the Prime Minister’s own local NHS trust has overspent on staffing costs by £11 million this year, yet has managed to spend £30 million on agency staff. Will the chair of the Oxford anti-austerity campaign be writing another letter to himself on behalf of his constituents, asking for the Health Secretary to intervene to support his local NHS?
If we are talking of motherly advice, my late mother would have said, “Stand up for the principle of a health service free at the point of use for everybody.” That is what she dedicated her life to, as did many of her generation.
We are more than three quarters of the way into this financial year. The NHS deficit is already £2.26 billion, and 53% of NHS trust finance directors say that the quality of care in their local area has worsened this year. What will the deficit be by the end of next month?
We will get deficits down because we are clamping down on the staffing agencies and expensive management consultants, and introducing better public procurement.
The right hon. Gentleman has to recognise that we said we would back the Simon Stevens plan, which meant at least £8 billion more going into the NHS, but we have put £10 billion more into the NHS. At the last election and subsequently, Labour has refused to back that extra money. My mother is as proud of the NHS as I am, and she would be pleased to know that in the NHS today, there are 1.9 million more people going to A&E, 1.6 million more operations, 10,700 more doctors and 11,800 more nurses. I think that if Nye Bevan were here today, he would want a seven-day NHS, because he knew that the NHS was for patients up and down our country.
Nye Bevan would be turning in his grave if he could hear the Prime Minister’s attitude towards the NHS. He was a man with vision who wanted a health service for the good of all. I tell you, Mr Speaker, our health service is run by brilliant people—brilliant doctors, brilliant nurses and brilliant staff. I have a question for the Prime Minister from one of those brilliant doctors, whose name is Ashraf:
“As a doctor I know full well the stresses on the NHS and the shortcomings. We already have a 7 day emergency service. How does increasing elective work improve safety at the weekend? If a truly 7 day NHS is wanted, we need more nurses, admin staff, porters, radiographers, physios”—
all the other vital workers. Will the Prime Minister today commit to publishing the Department of Health’s analysis of the real cost of introducing a seven-day NHS? Is he prepared to pay for it, rather than picking a fight with the junior doctors who want to deliver it?
What I think is not clear is whether or not Labour supports a seven-day NHS. We support a seven-day NHS and that is why we are putting in £10 billion, 10,000 more doctors, and 11,000 more nurses. Crucially, yes, that is why we are looking at the contracts in the NHS to ensure that it can work on more of a seven-day basis. The truth is that there are hospitals today in our country, such as the Salford Royal in the north-west of England, that already operate on a seven-day basis within existing budgets. That is good, because they are using all the equipment on a seven-day basis, they are carrying out consultations seven days a week and they carry out some operations seven days a week. That is good for the hospital, good for the staff working in it and, above all, good for patients. We do not just get ill Monday to Friday. I want a world-class NHS. We are funding a world-class NHS. We have world-class people working in our NHS and together we will build that seven-day NHS.
Q3. With such a large number of schools in Brecon and Radnorshire facing the prospect of closure, what can my right hon. Friend do to encourage the Welsh Assembly to convert state schools into free schools and academies so that my constituents can benefit from the improvements to education that English pupils are seeing and so that we hopefully save these excellent schools from closure? (903646)
Obviously, education is devolved in Wales and the responsibility of the Welsh Assembly Government. I urge them to focus on how a good education depends not only on the finance, which is there because of the way that the Barnett formula works and because of the decisions we have taken about funding the NHS in England, but on high standards and the publication of league tables, so that people can see how their children are doing. Crucially, it requires structural reforms—free schools, academies—introducing some diversity and competition in getting organisations that are passionate about education to provide state education. We want all the best organisations in there providing the best education for our children.
May I begin by associating the Scottish National party with the comments made by the Prime Minister and the leader of the Labour party about the tragedy in Didcot? Our thoughts are with all those who have been affected.
Will the Prime Minister congratulate the Scottish Government and his own colleagues who secured a deal on financial arrangements for the next phase of Scottish devolution? The Treasury position initially endangered £7 billion of public funding in Scotland. At the beginning of this week, that was reduced to £3 billion and yesterday morning it was £2.5 billion. What changed the mind of the Treasury and helped it agree to a deal that will make Scotland no worse off?
Let me agree with the right hon. Gentleman that this is an excellent deal. It is an excellent deal for Scotland, but it is also an excellent deal for the United Kingdom. For those of us who want to keep the United Kingdom together, we have just demonstrated that we can have full-on devolution with a powerhouse Parliament and a fair fiscal settlement inside the United Kingdom, and that is something to be celebrated. Now we will move to a situation in which the Scottish Government and the Scottish Parliament will have to start talking about policies and decisions rather than processes. I am happy that the negotiations went as they did, I am happy that we have a good outcome, and I am happy that Lord Smith, who is responsible for so much of this work, put out a statement saying that this delivers Smith and the principles “in full”. No more grievance, no more fussing about process, no more arguments about the arrangements: now is the time to get on and govern.
We are indebted to Scotland’s Finance Secretary, John Swinney, and to First Minister Nicola Sturgeon for securing a no-detriment deal for Scotland. The Prime Minister is right that all parties will have to lay out their plans in advance of the May election, so will he answer this question? Is it true that in this time of austerity his party, the Conservative party, is planning tax cuts for higher earners in Scotland?
It will be Ruth Davidson, who is the only proper Opposition figure in Scotland, who will be sending out the plans. If someone in Scotland is worried about having a bit of a one-party state and a lack of accountability, and if they think that the Labour party in Scotland has lost its way, there is only one choice, and that is Ruth. I think there are opportunities to cut taxes, sharpen incentives and attract businesses and people into Scotland, and I am sure that Ruth will be making those arguments. As she does, and whatever she decides, she will have my full and unequivocal support.
Q5. A recent survey undertaken by Blaby District Council showed that 96% of the 1,100 residents surveyed were satisfied with my council’s services. Will my right hon. Friend join me in paying tribute to the Conservative leader of the council, Terry Richardson, his councillor colleagues, and all the officers in Blaby District Council who, while making savings that are necessary, are continuing to deliver a first-class service to the residents of South Leicestershire? (903648)
I am happy to join my hon. Friend in doing that, and he makes an important point. Yes, we had to make difficult spending decisions, not least over the past five years, but satisfaction with local government services actually went up. I think that proves a larger point, which is that we can reduce spending levels, find efficiencies, and provide better services at the same time.
Q2. My constituent Frank Wason is on long-term sick leave due to severe depression, but he is no longer entitled to sick pay. He was turned down for employment and support allowance, and he cannot claim jobseeker’s allowance due to his job being kept open for him. Mr Wason cannot leave his highly skilled job as a chef due to the threat of punitive sanctions, leaving him with no income. Will the Prime Minister consider Mr Wason’s case specifically, as well as the wider issue of expecting people with mental health issues who are unable to work to live on fresh air? (903645)
I am happy to look at the individual case, because the way that our benefit system should work is clear: if someone is unable to work, but with help could work, they should go on to employment and support allowance and the work-related activity group and get that help. If they are unable to work, they go on to the support group and get a higher amount of money that is not means tested or time limited. For people who have mental health issues and difficulties there is the new personal independence payment system, which can address some of those issues. Quite rightly for a generous and compassionate country, we have a benefit system that supports those who cannot work, while ensuring that those who can work are encouraged to do so.
Q6. It is fantastic news that unemployment in my constituency has fallen by 62% since 2010, but I am committed to helping even more residents back into work as we work towards our target of full employment. That is why on 18 March I will be holding a community and jobs fair, bringing together employers and the voluntary sector, for residents to find out the many ways that they can get suitable employment and support from charities. I invite the Prime Minister to come along to that event and see for himself the resources that the residents of Erewash have. (903649)
I thank my hon. Friend. I am sure I will be touring the country quite a lot in the weeks to come, and perhaps a visit to Erewash would be very worth while. I have visited her constituency before. We now have a much lower unemployment rate, and looking across Europe, our rate of just above 5% is one of the lowest in Europe. Even at that rate, there is still a lot more to do to match the jobs that are being created to the people who want to work, and jobs fairs, apprenticeships and training programmes are absolutely essential so that we deliver on what we promised, which is full employment.
Q4. The Prime Minister likes to go on about the importance of returning sovereignty to this House. May I remind him that on 7 January we debated the women’s state pension and the fact that women are being discriminated against by the pace of the state pension increase. The House divided that day with 158 votes to zero, and it asked the Government to mitigate the effects of that measure. Why have the Government not respected the sovereignty of the vote of this Parliament? (903647)
First, I would argue very strongly that we are not discriminating against women. We are ensuring that there is an equal age of retirement, which is right. Women have been discriminated against in the pension system in the past, and the single-tier pension means that many more women will be retiring with a full pension. As they do so, they have the triple lock of knowing that pensions will always go up by wages, prices or 2.5%, whichever is the highest. That is why pensioner poverty is at a record low, and why pensioners know that they can live in security and dignity in our country.
Q7. South Thanet lags behind much of the south-east across very many indices. I have launched a new body locally, the Ramsgate regeneration alliance, which brings together businesses and community groups. May I invite my right hon. Friend and the Minister responsibility for coastal communities to this gem on our doorstep to see for themselves what it could and indeed should be? (903650)
I am very happy to put Ramsgate on my tour list for the coming months. We all remember the historic battle my hon. Friend fought in that constituency. We have set up the coastal communities fund and have a dedicated Minister in the Government to try to help coastal communities. I will make sure that officials from his Department meet the new alliance and the Ramsgate coastal community team to see what they can do to help.
Q8. For two years, my constituents and I campaigned against the development of a luxury skyscraper. The local councillors listened and rejected the plans, but then the Conservative Secretary of State for Communities and Local Government called in the decision and overturned the wishes of the community, showing utter disrespect for local democracy. The Prime Minister preaches localism, but will he finally admit that his Government believe only in the devolution of blame for cuts, not the devolution of actual power to local communities? (903651)
We have a long-standing system not only for local planning but for being able to call in decisions. That system operated the whole time under the previous Labour Government. If anything, our local planning system is actually putting more power in the hands of local people, because once they have completed their local plan it is then much easier to say yes to developments that are within that plan and no to developments that are outside it.
Q9. Last Friday, I made separate visits to three families, all of whom have a child suffering from acute mental health difficulties that the families felt had not been adequately assessed at the early stages by child and adolescent mental health services. Colleagues from across the Chamber will be all too familiar with such visits. I welcome the Prime Minister’s recent commitment to reform mental health provision for young people. Will he consider reviewing the provision of initial stage treatment and continue to be the champion for these vulnerable and brave children? (903652)
Let me thank my hon. Friend for his question. He is right that children and young people’s mental health is a priority for the Government. I think we can all agree across this House that for many years this area has not had adequate attention or adequate investment. I would highlight in particular the problems of psychosis, sometimes caused by drug use. I would also raise the huge problem of eating disorders; we are seeing a rapid increase in the number of people suffering. We have gone a long way in increasing the number of talking therapies. Something like 740,000 more people are accessing those therapies than when the Government came into office. We recognise that there is more to be done and that is why we are investing £1.4 billion in system-wide transformation across child and adolescent mental health services.
Q10. Last week, Scottish Power refused to attend an evidence session with the all-party parliamentary group on Scottish Power cashback mis-selling, where crucial new evidence was uncovered. As a former consumer litigator, I am utterly convinced that more than 2,000 of my constituents and more than 500,000 people in the UK are owed cashback from Scottish Power. Given that this is potentially a scandal of huge proportions, will the Prime Minister agree to meet me and the cross-party group to discuss how we can ensure that these ordinary hard-working people receive the cashback they were promised from Scottish Power? (903653)
I am glad the hon. Gentleman has raised this. It has been raised on previous occasions by my hon. Friend the Member for Aberconwy (Guto Bebb) and I know the cross-party group has done some very useful work. My understanding is that any alleged wrongdoing should be fully investigated. Ofgem can impose fines if it finds companies have breached their licence. I am very happy to arrange for a meeting between him and other members of the all-party group with the relevant Ministers in the Department of Energy and Climate Change, so that we can try to get this fixed.
Q11. Does my right hon. Friend agree that with the NATO summit in Warsaw pending, the threat of expansionism from Putin’s Russia and the national security threat from Daesh, the Government are right to support putting 2% of our GDP towards defence? Is he not shocked at the failure of the Labour party to do likewise? (903654)
My hon. Friend makes an important point—we face an insecure and unstable world, particularly given what Putin has done in the Ukraine and particularly in view of what we see in Syria. That is why I think 2% spending on defence and making sure we renew our nuclear deterrent is the right answer.
To be fair to the Labour party, it has an answer. It is not going to spend 2% and it is not going to renew our Trident submarines, but it has come up with a really brilliant answer. They are bringing back as their spokesman and spin doctor Damian McBride. Six months ago, the Leader of the Opposition said:
“We can win in 2020, but only if we spend the next five years building this movement and putting forward a vision for the new kind of politics: honest, kinder and more caring.”
Six months on, Damian McBride is back. That says it all. [Interruption.]
Q12. Last week, together with several of my hon. Friends, I visited Palestine, where we went to the home of Nora and her family, who have lived in the old city of East Jerusalem since 1953. Israeli settlers, however, are now trying to force Nora from her home of over 60 years. There are many other cases like that. Does the Prime Minister agree with me that illegal settlements and constructions are a major roadblock that hinder peaceful negotiations? What are this Government doing to help prevent these infringements into Palestinian lives and land? (903655)
The hon. Gentleman’s question is incredibly important. I am well known as a strong friend of Israel, but I have to say that the first time I visited Jerusalem, had a proper tour around that wonderful city and saw what has happened with the effective encirclement of East Jerusalem—occupied East Jerusalem— I found it genuinely shocking. What this Government have consistently done and go on doing is to say that we are supporters of Israel, but we do not support illegal settlements and we do not support what is happening in East Jerusalem. It is very important for this capital city to be maintained in the way it was in the past.
Q14. One of my constituents, Alex Bagnall, is fighting to have his son brought back to the UK after he was taken to Poland by the mother illegally, as per The Hague convention. Will the Prime Minister outline what interventions the Government can make on the EU and Polish authorities with regard to The Hague convention in order to help British families with the safe return of their abducted children, offering hope to devastated families such as my constituents, the Bagnalls? (903657)
My hon. Friend is absolutely right to raise a case like this. Sadly, there are far too many of them in our country. The straight answer is that the return decision is, of course, for the Polish court, and Governments cannot interfere in the decisions or processes of another country’s justice system. However, we have the International Child Abduction and Contact Unit at the Ministry of Justice, and it has been in constant touch with Mr Bagnall. It is processing his paperwork and chasing its counterparts in Poland for information. I will make sure that the Foreign Secretary is made aware of this case and does everything he can to help my hon. Friend and her constituent.
Q13. Oil and gas has contributed over £300 billion to Treasury coffers. The Scottish Government, trade unions and Oil and Gas UK are calling for reductions to the headline rate of tax to support the industry in its hour of need. Yet instead of the so-called “broad shoulders” of the UK, what we see are the slopey shoulders of the Prime Minister, repeatedly dodging his responsibilities. Will he commit to reduce the tax level on oil and gas, and support this vital industry? (903656)
In the Budget last year, we reduced the burden of tax on oil and gas—something that we were able to do because of the broad shoulders of the UK. Now let us just examine what has happened since that time. Oil and gas revenues are down by 94%. If it were not for the broad shoulders of the UK Government and if instead this was a genuinely fiscally independent Scotland, there would be a massive black hole in its budget, and it would be cutting welfare, cutting spending, putting up taxes and facing a financial catastrophe.
Q15. Every week two women are killed in England and Wales by a current or former partner. The perpetrator is the problem: the question is not “Why doesn’t she leave?” but “Why doesn’t he stop?” The Sussex police and crime commissioner is piloting a programme called Drive, which aims to change the behaviour of offenders. In advance of his new strategy to tackle violence against women and girls, will the Prime Minister join me in congratulating Katy Bourne on tackling domestic violence throughout Sussex? (903658)
My hon. Friend is absolutely right to raise that issue. We have got better at tackling the crime of domestic violence, but there is still so much more to do. Katy Bourne, whom I know, does an excellent job as the police and crime commissioner. I think that police and crime commissioners, who have a higher profile than police authorities ever had, can give a real lead on this sort of thing, and I urge others around the country to do exactly that. We also need to make sure that we are policing these incidents properly, and we need to change the culture, but I think that police and crime commissioners such as Katy Bourne can help to lead the way.
As the Prime Minister knows, resources were ring-fenced following the fresh start agreement in November to help Northern Ireland to deal with legacy cases. Will the Prime Minister consider releasing some of that money—this has been hinted at by the Secretary of State—to help the Police Service of Northern Ireland as it faces increasing pressures on front-line policing? Will he also take this opportunity to reaffirm that there will be no rewriting of the past in Northern Ireland to legitimatise terrorism, or to promote a pernicious narrative that tries to make the security forces equivalent to terrorists?
The fresh start agreement was a good agreement, and an important part of it was dealing with legacy cases and ensuring that they were dealt with more quickly. To me, it has always been about trying to heal the hurt of the legacy cases rather than trying to write new narratives.
I shall consider carefully what the right hon. Gentleman has said about resources. We need to make sure that the policing of Northern Ireland continues to be properly resourced, not least because we still face a terrorist threat today.
The United Kingdom endorses the Code of Good Practice on Referendums, published by the European Commission for Democracy through Law, which states:
“Equality of opportunity must be guaranteed for the supporters and opponents of the proposal being voted on.”
It also states:
“Equality must be ensured in terms of public subsidies and other forms of backing.”
Yesterday, Sir Jeremy Heywood sent a letter to Departments preventing Ministers from having access to civil service briefings. Has the Prime Minister checked whether that letter was compatible with the guidelines on neutrality?
I am very happy with the letter that was sent out, for this reason. The Government have a position on this issue: the Government’s position is that we would be better off in a reformed European Union. Ministers are able to depart from that position, and campaign in a personal capacity. That is, I think, a very important statement. It is right in terms of how we go about it, but it does not mean that the Government are neutral. It does not mean that the civil service is neutral. The Government have a policy from which people can depart.
As for the funding of the referendum campaign, we now have very clear laws and rules in place—and the Electoral Commission—to make sure that both campaigns are funded properly, and I think that that is good for our democracy.
Scotland’s Fiscal Framework
With permission, Mr Speaker, I would like to make a statement about the new fiscal framework for Scotland, which was agreed yesterday by the United Kingdom and Scottish Governments.
I begin by paying tribute to everyone who has worked so hard to arrive at this point: my right hon. Friend the Chief Secretary to the Treasury and the Deputy First Minister of Scotland, John Swinney, who have led these negotiations with skill; my colleague the Under-Secretary of State for Scotland, Lord Dunlop, whose contribution has been invaluable; and the dedicated teams of officials from Her Majesty’s Treasury and the Scottish Government who have worked tirelessly on behalf of their respective Governments. They can be proud of what has been achieved and the service they have given.
This is a truly historic deal that will pave the way for the Scottish Parliament to become one of the most powerful and accountable devolved Parliaments in the world. We have respected all the principles set out in the cross-party Smith agreement and delivered a deal that is fair for Scotland and fair for the whole United Kingdom. As Lord Smith said himself yesterday evening:
“When the Smith Agreement was passed to the Prime Minister and First Minister both gave their word that they would deliver it into law—they have met that promise in full”.
Scotland’s two Governments will give more details in the coming days, but I would like to set out a few key elements of the deal.
The Scottish Government will retain all the revenue from the taxes that are being devolved or assigned, including around £12 billion of income tax and around £5 billion of VAT. The Scottish Government block grant will be adjusted to reflect the devolution and assignment of further taxes and the devolution of further spending responsibilities. We have kept our commitment to retain the Barnett formula, extending it to cover areas of devolved welfare. For tax, we will use the UK Government’s preferred funding model. Under that model the Scottish Government hold all Scotland-specific risks in relation to devolved and assigned taxes, just like they do for devolved spending under the Barnett formula. That is fair to Scotland and fair to the rest of the UK.
However, for a transitional period covering the next Scottish Parliament, the Governments have agreed to share those Scotland-specific risks as these powers are implemented. Specifically, the Scottish Government will hold the economic risks while the UK Government will hold the population risks, so the Scottish Government will not receive a penny less than Barnett funding over the course of the spending review simply due to different population growth. By the end of 2021, a review of the framework will be informed by an independent report so we can ensure that we are continuing to deliver Smith in full, with the Scottish Government being responsible for the full range of opportunities and risks associated with their new responsibilities.
We have also agreed that the Scottish Government will have additional new borrowing powers. That will ensure that the Scottish Government can manage their budget effectively and invest up to £3 billion in vital infrastructure. In line with the recommendation of the Smith agreement, we will provide the Scottish Government with £200 million to set up the new powers they will control.
The Government have delivered more powers to the Scottish people, ensuring that they have one of the most powerful devolved Parliaments in the world and the economic and national security that comes from being part of our United Kingdom. That is what we have agreed and that is what we have delivered in full. Now that we have agreed this historic devolution deal, the conversation must move on to how these new powers are to be used.
The Scottish Government will have extensive powers on tax, welfare and spending. They will have control over income tax and be able to change the rates and thresholds. They will be able to create new benefits, and of course the permanence of the Scottish Parliament is put beyond any doubt.
The people of Scotland voted for these new powers, and they deserve to hear from the parties in Scotland how they will use them. They are new powers that, if used well, can grow Scotland’s economy, and indeed population, and bring greater opportunity and prosperity. Now that we have agreed this fiscal framework, I hope and trust that this House and the other place will welcome it, while of course subjecting it to full scrutiny. I commend this statement to the House.
I thank the Secretary of State for advance notice of his statement, and indeed for coming to the House yesterday to indicate he would be making it today. I begin by welcoming unequivocally the news that an agreement has been reached on the fiscal framework, and I would also like to echo the thanks to both Governments, the Deputy First Minister, the Chief Secretary to the Treasury, who is in his place, and of course the Secretary of State himself for working so hard to secure this historic deal. Our heartfelt thanks also go out to the officials of both Governments, who we all know are the people who do the real work in these negotiations.
Yesterday’s agreement marks the removal of the final obstacle to the transfer of significant and substantial powers to Scotland, and, as Lord Smith himself has said, the agreement
“sees the recommendations of the Smith commission delivered in full.”
Importantly, the vow stipulated clearly that the Barnett formula should remain the key mechanism for calculating Scotland’s budget. That has now been agreed and Barnett has been secured.
I note the Secretary of State’s commitment to publishing details of the agreement by the end of this week, and I welcome that commitment, but can he indicate whether this House will have time to scrutinise the agreement in detail? I have been saying for some time that greater transparency is required in the way these deals are negotiated. This process has highlighted the fact that future intergovernmental relationships must be improved to make these powers work for Scotland. Lord Smith’s recommendations that both Governments need
“to work together to create a more productive, robust, visible and transparent relationship”
and that the Joint Ministerial Committee
“must be reformed as a matter of urgency”
echo in this process. Can the Secretary of State confirm that this will be done?
We all know that the major stumbling block was the indexation method used for the block grant adjustment. Under the compromise reached, there will be a five-year transitional period, which will cover the full term of the next Scottish Parliament. Towards the end of that period, an independent review and recommendation will be published that will form the basis of a more permanent solution. When he gave evidence to the Scottish Parliament’s devolution Committee last night, the Secretary of State suggested that the period between the review being published and the transitional period ending at the end of March 2022 could be as little as 12 weeks. If no agreement is reached, what happens then?
On the transitional period itself, it is my understanding that the Scottish Fiscal Commission will carry out the necessary forecasts of Scottish GDP and tax revenues. Can the Secretary of State confirm that, under the terms of the fiscal framework negotiations, those forecasts will be fully independent of the Scottish Government? Last week, the Scottish Finance Committee voted against allowing for that independence.
There also seems to be some confusion over the block grant adjustment during the transitional period to 2022. The First Minister said it would be done according to the Treasury’s favoured method but with the Scottish Government’s favoured outcome. Can the Secretary of State confirm what method will be used? Will it be the catchily named tax capacity adjusted levels deduction, which I understand was the Chief Secretary to the Treasury’s latest offer?
Further clarity is also needed on the timeframe for the devolution of powers. The Secretary of State has said that the new income tax powers will be available by April 2017. However, the Deputy First Minister has said he does not agree that that timeframe is realistic. Is the Secretary of State able to confirm that the new tax powers will be transferred by April 2017?
Today the Scottish Government are passing the Scottish budget. Twelve months from now, at the time of the next Scottish budget, we want them to have full control of income tax and air passenger duty and the deployment of 50% of Scotland’s VAT revenues. We also want them to have the considerable powers over welfare, which will allow us to design a new social security system for Scotland.
I welcome the review and the fact that it will be fully independent. I have stated several times that impartial oversight and, if necessary, arbitration should be an established part of intergovernmental relations. Will the Secretary of State tell us how the review body will be chosen, and can he confirm that it will be done in a spirit of consensus with the full agreement of both Governments? Will he also tell us to what extent the recommendations of the review will influence the decision taken on the long-term solution for block grant adjustment?
I close by welcoming once again the agreement that has been reached. Today marks an historic date in Scotland’s devolution journey: the creation of one of the most powerful devolved Parliaments in the world. The promises made to Scotland in 2014 have been met—the Smith agreement implemented, Barnett protected, powers transferred, the vow delivered. Scottish politics will never be the same again thanks to these new powers. We have entered a new and exciting era of devolution. What an opportunity to transform Scotland for everyone—an opportunity that my party will grasp with both hands.
I agree with most of what the hon. Gentleman said about the opportunity this presents to change Scottish politics. I think the people of Scotland want us to move on from discussing process to discussing policies and the difference that we can make for them with these extensive new powers. It is my full expectation that the agreement and associated details should be available tomorrow, and I very much hope that that will afford the maximum amount of scrutiny. It will of course be open to Committees of this House to scrutinise the arrangements as they see fit.
For understandable reasons, the hon. Gentleman makes reference to intergovernmental relations, but it is important to look at what Lord Smith said about how this agreement was arrived at. He said:
“It is difficult to imagine a bigger test of inter-governmental relationships and while it was obviously a very tough negotiation, what matters is that an agreement was reached.
“This provides an excellent basis for constructive engagement between the governments long into the future.”
I accept that fully. I believe that when the transition period is over and the independent reports have been published, it will be possible for the Governments to reach agreement.
The hon. Gentleman has asked many times why it has taken so long, but many important agreements are reached at the eleventh hour, just by the very nature of doing a deal. I am sure that we will be able, on the basis we have set out, to ensure that that is the case at the end of the transitional period. The independent review, to which he referred, will indeed be a matter for agreement between the two Governments, but as he is well aware, many people in Scotland hold themselves out as being independent but are perhaps not as independent as they superficially seem. It is therefore important that there is agreement between the two Governments as to how that independent review should go forward.
On the Fiscal Commission, the agreement with the Scottish Government is that its forecasts will be fully independent. Finally, this Government will place no impediment on the transfer of powers. Obviously we cannot impose the income tax powers on the Scottish Government, and we would not seek to do so, but I would have thought and hoped that they would want to take them on as soon as possible, and that is the end to which we will be working.
First, I congratulate my right hon. Friend on his apparent success in achieving a settlement of this difficult issue—we look forward to the details tomorrow. Can he assure the House that when the settlement is implemented, it will not only give a strong Scottish Government the powers they need to conduct their devolved affairs properly, but do nothing whatever to impair the ability of United Kingdom Governments to maintain financial discipline and healthy public finances for the British economy? That, surely, is an essential condition for the future growth and prosperity of the English, British, Welsh, Irish—United Kingdom—economy.
May I begin by thanking the Secretary of State for advance sight of his statement and indeed for the conversations he had yesterday, given the constraints of parliamentary time and being able to make a statement only today? We appreciate his having done so.
I speak on behalf of all Scottish National party Members in welcoming the agreement on the fiscal framework, and we all look forward to the draft heads of agreement being published for parliamentary scrutiny in this place and in the Scottish Parliament later this week. My SNP colleagues in the Scottish Government were clear throughout these protracted negotiations that they would not sign a deal that included a threat to the Scottish budget. Members on the SNP Benches here, too, pursued the UK Government’s commitment to the principle of “no detriment”, a promise made during the Smith commission negotiations and a promise that the SNP has ensured has been delivered.
When negotiations began, Scotland’s budget faced a threat from the Treasury of a cut of £7 billion. This week, it was £3 billion, and yesterday morning it was £2.5 billion, but last night my colleagues in the Scottish Government secured a deal that will ensure that Scotland will not be a pound or even a penny worse off, and that the new powers that were promised will be delivered. I pay tribute to the First Minister, Nicola Sturgeon, and the Deputy First Minister, John Swinney, for their efforts to stand up for Scotland and for being stronger for Scotland.
I welcome the fact that the UK Government will guarantee that the outcome of the Scottish Government’s preferred funding model—the per capita indexed deduction—is delivered in each of the next six years. I understand that a transitional funding arrangement will be reviewed following the UK and Scottish parliamentary elections in 2020 and 2021 respectively. The review will be informed by an independent report, with recommendations presented to both Governments by the end of 2021. In that context, let me say this: the Smith report was crystal clear that the fiscal framework had to be agreed by both the UK and Scottish Governments. The Treasury tried to engineer an agreement that would have allowed it to impose a model of indexation in five years’ time—those are the facts of the matter. That would have seen billions cut from Scotland’s budget. Let me therefore ask the Secretary of State the following questions: will he confirm that the Treasury no longer has the power to impose a method of indexation? Will he confirm that the review will go ahead without prejudice to the outcome? And will he confirm that there is no default indexation option and that the Scottish Government’s agreement is required before any new indexation model can be adopted?
I thank the right hon. Gentleman for welcoming the parts of the agreement that he did. This has been a negotiation, and this is the point arrived at in the agreement; it is not possible for the Treasury or the UK Government to have engineered an agreement, as what was needed was the agreement of the Scottish Government, and that is what has been achieved. The two parties have been able to reach an agreement on a fiscal framework that is both fair to Scotland and fair to the people of Scotland.
I can reassure the right hon. Gentleman that the review will go ahead on an independent basis, without prejudice or a predetermined outcome, and it will be concluded by the end of 2021. There will be no imposition of any formula at the end of that period, and what happens will be by way of agreement. As I said in my previous comments, when I quoted what Lord Smith said, I believe that this process, through some of the most difficult types of negotiation, gives us confidence that in a maturing relationship the UK Government and the Scottish Government will be able to reach such an agreement.
There will be no additional cost to England, Wales and Northern Ireland from the powers being transferred compared with if we were not proceeding with this devolution settlement, because the sum being delivered to the Scottish Government is exactly the same as would have been delivered under the Barnett formula.
The Scottish Government have committed to halving air passenger duty in 2018, if still in government. That leaves Newcastle airport, in my constituency, most at risk from cross-border tax competition. Following today’s statement, when can we expect a decision from the Government on support for regional airports, as promised by the Prime Minister? Ongoing uncertainty is very damaging to regional economies, and an approach of “wait and see” is not acceptable.
I note what the hon. Lady says. Of course people in Scotland will know that the SNP position used to be to abolish air passenger duty completely, so there is somewhat of a change there. None the less, she makes an important point. There is a review, and I am sure that those issues will be considered as the Budget process goes ahead in this Parliament.
Is not the measure of statesmanship the imagination to give to others what one demands for oneself? For centuries, the English have demanded full control over our spending and taxation. Why should the Scottish people feel any different? Does the Secretary of State not realise that there must be some merit in the argument that as long as we maintain the outmoded, outdated and unfair Barnett formula, which thoroughly disadvantages the English, we will simply stoke up resentment on both sides of the border, and that will ultimately lead to more calls for independence?
My hon. Friend, as we well know, is the staunchest advocate of full fiscal freedom in this Chamber—more staunchly so than those on the SNP Benches when he moved his amendment for complete fiscal freedom. My response is that the people of Scotland would not respond well to having a £10 billion annual black hole in their finances, and that full fiscal freedom is not the answer. Further devolution as set out in the Scotland Bill to create a powerhouse Parliament is what the people of Scotland want and it is what this Government are delivering.
Let me congratulate all the parties involved on managing to agree on a position that got us here, which is that principle of no detriment. I also thank the Chief Secretary to the Treasury and the Deputy First Minister for attending the Scottish Affairs Committee. I hope that the Chief Secretary will agree to attend the Committee again to explain a little bit more about the details of this fiscal framework. At the beginning of the process, we heard that the Treasury intended to cut £7 billion from the Scottish budget. Why did the Treasury intend to cut billions of pounds from the Scottish budget, and what did he, as the Secretary of State for Scotland, attempt to do about it?
I know the hon. Gentleman does not understand the concept of negotiation, in which two sides work together to get an agreement. Assertion and soundbites sound good, but they do not deliver for the people of Scotland. What delivers for the people of Scotland is the two Governments working together to produce a sustainable agreement. That is what we have done; we have an agreement that underpins the Scotland Bill, which means that Scotland can get these extensive new powers over tax and welfare. People will now want to move on from the process debate to hear the policy ideas.
During the inquiry of the Scottish Affairs Committee into the fiscal framework, we asked searching questions of our witnesses about the new welfare powers that have been devolved to Scotland. Has my right hon. Friend heard any details from the Scottish Government about how they plan to use the new welfare powers?
I very much welcome the fact that the First Minister and the Deputy First Minister have indicated that they plan to set out how they intend to use the powers. It was interesting to hear some of the media reports in Scotland that suggest that the SNP plans to increase significantly the tax burden on middle income earners in Scotland. Obviously, we will have to await the detail in the manifesto, but there will be no excuses now. SNP Members can come here and complain about certain welfare changes, but they will have the ability within Scotland to set their own welfare arrangements.
The Scottish Government have been able to achieve their chosen deduction method through their vigorous and skilled negotiation strategy. What advice will the Secretary of State give to the Welsh Government when it comes to negotiating the fiscal framework for Wales? Does he think that the Labour Government’s usual passive compliance with the Treasury will work?
I absolutely agree with my hon. Friend. I am sure that he will have read my speech of 21 December delivered in Glasgow City chambers making exactly the case for devolution within Scotland. Unfortunately, in recent times, Scotland has become one of the most centralised countries in terms of government. The new Scottish Government that will be elected in May should devolve further powers. The best way to achieve that is to elect more Conservative MSPs under Ruth Davidson’s leadership.
How great it is to follow that remark from the Secretary of State!
How does the amount agreed by the UK Government for the implementation costs compare with the Government’s current calculations for implementing the deal agreed at last week’s EU summit on benefits for foreign workers in the UK?
I welcome the hon. Lady’s question, because of course she and I were both Scottish Conservative candidates for the Scottish Parliament in the dim and distant past—[Interruption.] I am sure that the detail of this agreement and the issues that she raises will stand up to scrutiny.
Thank you, Mr Speaker. I thank the Secretary of State for his statement. Does he agree that the conclusion of this new agreement shows that Scotland’s two Governments can work together? Will he undertake to keep pressing the Scottish Government to reveal details of how they will use these new powers?
I certainly do agree with my hon. Friend, and I have, on a number of occasions in this Chamber, paid particular and sincere tribute to the Deputy First Minister of Scotland, John Swinney. He and I have had numerous conversations throughout this process and, although at times we have been in disagreement, they have always been cordial and civil. That is the basis of the relationship that I want to see with the Scottish Government. My hon. Friend is right: what this agreement means is that the Scotland Bill can pass through this House and, hopefully, receive the legislative consent motion at Holyrood. There will then be no hiding place on these issues for the Scottish Government. If they want to spend more, they will have the tax powers to do so, and if they want higher welfare, they will have the ability to achieve that.
My constituents will welcome this agreement. In particular, they will welcome the fact that the Scottish Government were able to persuade the Treasury to abandon its initial position, which would have meant £7 billion of cuts to Scottish finances, and to come to the Smith position that there should be no detriment. They will observe though that had that been the original position for the Treasury, we might have been able to get this agreement before Christmas rather than spend all this time on it. Will the Secretary of State confirm that it is now the case, beyond doubt, that the principle of no detriment to the Scottish budget is enshrined in his Government’s thinking both now and in the future?
The vow was very clear that Barnett would be retained. That has been done, and rightly so. The starting point for public spending in Scotland now is 115% of the UK average. Can the Secretary of State tell the House, in terms of his modelling, what that percentage per capita will be at the end of this Parliament?
As my hon. Friend asks for complex calculations, I will certainly be happy to write to him in that regard. Although I respect his strongly held views in relation to the Barnett formula, I have to say that the Government’s clear position is that the Barnett formula is being retained.
Following yesterday’s devastating votes on the Lords amendments to the Welfare Reform and Work Bill, can the Secretary of State say a little more about when welfare powers will be transferred to Scotland, so that at least in Scotland we can do something to prevent the appalling effects of poverty on children and disabled people?
Obviously, I do not agree with the hon. Lady’s perspective on specific policies, but she is right that the Scottish Parliament will now have specific and detailed responsibilities in relation to welfare. We have a joint ministerial group on welfare, which includes myself and Scottish Ministers Alex Neil and Roseanna Cunningham, and we look to work though that group on the transfer of the specific powers. We do not want a transfer of power without new arrangements being in place, because the people in receipt of the benefits must be our prime concern. We will work closely together. An enormous amount of work has been done by officials to date and I am confident that once we know what the Scottish Government’s proposals are—we do not know fully—we will be able to make an effective transition.
In his reply to my hon. Friend the Member for Perth and North Perthshire (Pete Wishart), the Secretary of State seemed to confirm that the Treasury’s opening bid in these negotiations—the so-called level deductions approach, which would have led to a £7 billion cumulative cut in Scottish spending—was merely a negotiating ploy. If that is the case, will the Secretary of State confirm that it was disrespectful of the negotiations to start with a position so far from the vow, and will he confirm that that will never happen again?
What complete and utter nonsense. A deal is done that is good for Scotland and good for the United Kingdom, and hon. Members on the Scottish National party Benches have to trawl through newspaper reports to find something that they can complain about. This is a good deal for Scotland which gives Scotland new powers. Let us talk about how we use those powers for the benefit of Scotland, and let us put the grievance agenda to bed once and for all.
I have no desire to sour the tone of consensus on an historic day for Scotland, but many of my constituents believe that the funding arrangements for Scotland, and specifically the operation of the Barnett formula, are unfair to northern England. Does the Secretary of State acknowledge that grievance and how does the new fiscal framework change that?
I acknowledge that people have those feelings. A number of people on both sides of the House have raised issues about the Barnett formula. That is their job as representatives of different parts of the United Kingdom. My position is clear: the Barnett formula is good for Scotland, and this Government are keeping the Barnett formula.
I can produce a list and send it to the hon. Gentleman. I am not focused on other assemblies around the world. I am focused on the Scottish Parliament and making it a powerhouse Parliament with the powers that make a difference in Scotland. That is the state of the debate. The hon. Gentleman’s constituents will not want to hear about Parliaments in South America and other parts of the world: they will want to hear about what his party intends to do on income tax and welfare.
We have had a particularly mild November, December and January because the Secretary of State for Scotland promised the Scottish Affairs Committee an agreement by the autumn. Can he let us know when he expects the Bill to complete its passage through the House of Lords; when he expects it to come back to the House of Commons; and when he expects it to get Royal Assent?
I thank the Secretary of State for advance sight of his statement. I note that he mentions the UK Government holding population risks. Will he concede that the limited powers available to the Scottish Government do not allow for population growth? Will he now listen to calls for a Scottish post-study work scheme?
On the latter subject, I have had the pleasure of appearing before the Scottish Affairs Committee and being grilled by the hon. Lady on the issue of student work visas. I made it clear that I would look closely at the report produced by the Committee, and I repeat that undertaking. However, I do not accept the premise of her question. I believe that, properly used, the tax and other powers that the Scottish Government have will allow them to grow the Scottish economy, create jobs and grow the population of Scotland.
The Secretary of State talks about negotiations. This is an important point. When the Treasury first considered making £7 billion worth of cuts to the Scottish budget, can the Secretary of State—Scotland’s man in the Cabinet—tell us what personal interventions he made to the Treasury to protect Scotland?
I have been closely involved in these discussions throughout, but they are negotiations—they are not about the Treasury imposing. As Lord Smith recognises, they are about the two Governments coming together in difficult circumstances to negotiate about money, which is often the most contentious thing that is ever the subject of negotiations. We have demonstrated that both Governments had the maturity to reach a deal which is good for Scotland and good for the rest of the United Kingdom.
The Secretary of State for Scotland has just confirmed that the initial proposal put forward by the Treasury of a £7 billion cut to Scotland’s budget was not an opening negotiation position, but a serious proposal. In the light of that, does he consider himself Scotland’s man in the Cabinet, or the Cabinet’s man in Scotland?
What complete and utter nonsense. This was a negotiation. Of course, it was conducted not by SNP MPs, but by John Swinney, who adopted a completely different tone—a civil and cordial tone—throughout. I respect his objective of getting the best deal for Scotland. That is my objective too, but we had to get an agreement, and we got one. It is a good agreement. It is an opportunity to move away from the grievance agenda, but this afternoon’s proceedings leave me in doubt that, even with these extensive new powers, the SNP will be able to leave that grievance agenda behind.
The Secretary of State has repeatedly criticised the SNP for allegedly failing to set out how it will use the new powers contained in the legislation, yet barely an hour ago the Prime Minister floundered badly when asked whether the Scottish Conservatives would reduce the tax rate on high earners. I am sure the Secretary of State will want to avoid suggestions of hypocrisy and extend his criticism to his boss.
I have nothing but admiration for Ruth Davidson. She is the one person in the Scottish Parliament who can stand up to the SNP and hold it to account. If people do not want a one-party state in Scotland, the way to achieve that is by voting Scottish Conservative. The Prime Minister did not flounder; he told us exactly what the position was. Ruth will set out the tax proposals and they certainly will not be the same as the SNP’s proposals, revealed in the Scottish press today to hit middle earners hard.
Points of Order
On a point of order, Mr Speaker. With your forbearance, I would like to raise a matter that was addressed in the Adjournment debate on Monday evening. During the debate, I asked the Minister about negotiations that might have taken place ahead of a proposal to allow ship-to-ship transfers in the Cromarty firth. Specifically, I asked whether Marine Scotland, representing the Scottish Government, had been consulted. The Minister replied:
“The hon. Member for Ross, Skye and Lochaber mentioned the Cromarty firth oil transfer licence. Marine Scotland was directly consulted on 10 December, and on 8 February, when the consultation ended, it had not responded. When it was asked whether it intended to respond, the answer was no. I hope that that clarifies that point.”—[Official Report, 22 February 2016; Vol. 606, c. 123.]
That was a very clear statement, and I was very surprised to hear the Minister make it, because I would have expected that Marine Scotland, on behalf of the Scottish Government, had responded to the consultation. I therefore checked the situation with the Scottish Government and received the following response:
“The Scottish Government is not aware of being directly approached by the UK Government during the consultation on the Cromarty Firth Oil Transfers. Marine Scotland was made aware of the proposal through informal contact by the Port of Cromarty Firth.”
It is safe to say that Marine Scotland was not contacted by the Maritime and Coastguard Agency or by the UK Government.
That is a very worrying statement, because it leaves open the suggestion that the Government have perhaps been economical with the truth at the very least in what has been said in the House. That is a very serious matter, not least because of the potential threat to people in my community of ship-to-ship transfers taking place, and of the Scottish Government not being adequately consulted on their responsibilities for environmental protection. I therefore seek your advice, Mr Speaker, on how I may deal with this matter and whether it would be appropriate for the Minister to correct the record.
It is open to any Member who believes that he or she has made a mistake to correct the record voluntarily. It is not the responsibility of the Chair to arbitrate between competing claims about a sequence of events, and nor is it my responsibility to interpret what the Minister might have meant in responding to the hon. Gentleman at the time. The hon. Gentleman has made his point with force and alacrity—we would expect no less of him. If the Secretary of State wishes to respond, he is perfectly at liberty to do so, but he is under no obligation.
Further to that point of order, Mr Speaker. I have noted what the hon. Gentleman has said and will have the matter investigated.
The Secretary of State has kindly said that he will have the matter investigated. I ought to emphasise, for the avoidance of doubt, that he was not the Minister who answered in the debate. I hope that the hon. Member for Ross, Skye and Lochaber (Ian Blackford) is satisfied with his prodigious efforts for the day and that we might now move on to other fare. I know that he will be absolutely delighted that we can now move on to the ten-minute rule motion, to be put forward by his hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). I am sure that he is sitting expectantly with that in mind.
Consumer Protection (Distance Selling Delivery Charges)
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 distance sellers to provide purchasers with a lowest available delivery cost option; to introduce a scheme for a fair delivery quality mark for responsible retailers; to establish penalties where vendors advertise free delivery but subsequently impose charges or conditions; and for connected purposes.
I am grateful for the opportunity to bring in the Bill, for this is indeed an issue that my constituents deal with on a daily basis and tell me about regularly. I know that the Minister for Skills is aware of our concerns, and I am grateful to him for his engagement so far. There is consumer appetite for improved online shopping throughout our communities, but there are areas that are being badly served by some retailers and carriers. Online shopping is a growing market, and it is particularly important to rural communities, and paying more in rural areas—the highlands and islands, for example—is unfair.
We know that the costs of delivery will always vary, but that is not what this is about; this is about people feeling excluded because of a disproportionately narrow and costly range of delivery options. Even people living in cities such as Inverness are being charged punitive surcharges for the delivery of goods. One of my constituents was asked to pay £90 for the delivery of a mobile phone. Current legislation is not working.
I am grateful for the support of hon. Members from all the nations of the UK who have experienced similar issues. For example, 43% of consumers in Northern Ireland have encountered a delivery surcharge, and it is estimated that shoppers there can pay, on average, an additional £7.93 on top of standard UK delivery costs. For goods delivered to the highlands and islands, 53% of retailers apply a delivery surcharge and consumers have to pay, on average, an additional £14.71.
Unfairness is not only wrong; it is bad for business. Resentful customers are created when seven in 10 consumers reluctantly pay a surcharge for delivery of their item, and they will look elsewhere next time. There are those who will tell us that these are just market forces at work, but in this connected world it has already been accepted that there is a need for universal services in broadband provision, to allow everyone to participate. Why does that not extend to the product at the end of the process?
If all this seems like small beer to some people, it should be remembered that this type of injustice lives longest in the memory and the higher the price in loss of trust through disconnect. Because of their postcodes, people are considered to be in the minority, to be unimportant and to be left behind. Why should we allow that prejudice? Many are already asked to pay more for fuel and heating, and among them are often the more vulnerable consumers. That is why it needs to be our collective responsibility, when talking about the delivery of goods, to first deliver the principle of fairness.
Let us now shine a light on good retailers and carriers. The Bill calls for the introduction of a kitemark or quality mark. Many companies work hard to ensure that they provide a good service across our nations, and they should be celebrated and recognised. Highlighting their good practices will allow them to access and help those currently being discriminated against, and they in turn will benefit from increased business. The really good news for companies is that those consumers are proven to be exceptionally loyal, and they will buy again.
There is a reason why operators such as eBay have introduced a “premium seller” badge for their vendors: it makes good business sense. Indeed, the principles that eBay seeks to apply to its traders are very similar to those that I am proposing today for the wider market. A key part of eBay’s rating is based on delivery and shipping costs, and sellers lose their “premium seller” rating when they have poor feedback. In this example there is a consequence for poor behaviour.
However, the wider distance selling market has no such rewards, and there are no clearly understood consequences for bad practice, or indeed for mis-selling of delivery. The introduction of an industry-wide kitemark or quality mark will allow consumers easily to identify those traders and carriers that can be trusted. That can be industry-led. Of course it will need careful thought, but there are no barriers that cannot be overcome.
The Consumer Rights Act 2015 aimed to make consumer law clearer, but recent research has shown that a number of retailers are still unsure of their responsibilities. Greater awareness is needed to better support retailers. This is not an isolated problem. In preparing the Bill, I spoke with consumer groups, trading standards, retailers and couriers, and they all agree that there is a lack of clarity. Current legislation sets out that consumers should have
“upfront disclosure of pertinent delivery information at an early stage in the transaction process”.
But that is not happening. Seven in 10 consumers do try to seek out that information prior to checkout, but recent research by Citizens Advice Scotland and the Consumer Council for Northern Ireland has shown that some retailers are still not complying fully with new consumer legislation.
When vendors or delivery companies unfairly discriminate based on location, there needs to be a clear understanding of the rights of the consumers and the redress that they would have in relation to such unfairness and false adverting. Existing laws are often unenforced and are too cumbersome, so opportunities for administrative penalties need to be considered.
Of course, online retailers have the right to choose where they supply their goods or services, but consumers should also have the right to know before they get to the last page of their transaction what they will be charged. Up-front information should include prominent and transparent key contract terms, including the total price of the goods and services and all delivery charges, not misleading terms. For example, people are told that they can take advantage of free delivery within the UK when that is not true.
In the highlands and in my constituency there are many mysteries, such as the location of the Loch Ness monster, but the biggest mystery has to be why Inverness, one of the fastest growing cities in Europe, and towns such as Nairn are apparently not on the mainland, at least according to some couriers. People are not buying boxes to be sent to Brigadoon; they are asking for things to be sent to a modern city.
The discrimination test has been failed, sometimes unintentionally, but couriers can make the situation worse for retailers by using out-of-date postcode software. There is an inconsistent and variable approach by some retailers to the disclosure of delivery information, which can lead to confusion, shopping fatigue, cart abandonment and, ultimately, lost revenue for the retailers themselves.
There must be a greater understanding among consumers, retailers and couriers of their rights and of the consequences of bad practice. It is not just me saying that: organisations such as Citizens Advice Scotland are calling for greater intervention and education.
The Bill also sets out the need for greater consumer choice over delivery options. People often do not have choices. Again, why are people in the highlands and islands paying nearly £15 more for delivery when we have a universal Royal Mail service? They should have that as a clear option. Alternatively, they should be able to have goods sent to recognised collection points or to arrange pick-up directly from the vendor. The answer is simple: give the consumer the right to choose.
As a former retailer, I know that that will mean a change in working practices, but barriers can always be overcome, and that will result in better business. Companies make adjustments all the time to improve, and I am sure that exciting new business opportunities could be explored, including the use of delivery brokers or working with other companies to maximise potential.
In introducing the Bill, we offer to work with the Government, business and others to establish change and to provide not just yet another set of promises, but a set of solutions. Let us recognise the good work of fair retailers and delivery companies through a kitemark. Let us make sure that there is clarity about the expectations in current legislation, and let us consider the option of administrative penalties for continued abuse. We should give consumers the choice over delivery and let them decide whether they want the universal service.
There are challenges, but let us decide to support those who find themselves in the position I have described. They are not asking for the unattainable. They do not expect to be treated with undue favour. They should not continue to be ignored. They deserve to be listened to. This is the time to extend inclusion and end exclusion. We have the opportunity here, with this Bill, to take action.
Question put and agreed to.
That Drew Hendry, Brendan O’Hara, Gavin Robinson, Caroline Lucas, Dr Paul Monaghan, Mark Durkan, Mr Angus Brendan MacNeil, Patricia Gibson, Ian Blackford, Mike Weir, Hywel Williams and Chris Law present the Bill.
Drew Hendry accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 11 March, and to be printed (Bill 140).
[19th Allotted Day]
Transitional State Pension Arrangements for Women
I beg to move,
That this House notes that the e-petition 110776, Make fair transitional state pension arrangements for 1950s women, has attracted more than 150,000 signatures; and calls on the Government to bring forward proposals for transitional arrangements for women adversely affected by the acceleration of the increase in the state pension age.
I want to start today’s important debate by saying how lucky I am to come from a family in which there have always been such strong and hard-working women—my mother and grandmothers, and now my wife and daughter. If there is one thing I have learned from all of them, it is that no one should ever try to pull the wool over their eyes—to take them for fools—because I guarantee they will always be found out.
That is a lesson the Tories really should have learned back in 1991—when they first started planning to equalise the pension age for women with that for men—because that is precisely what has happened: they have been found out. They have been found to have failed in their duty to inform women properly about the changes that were planned. They have been found to have left hundreds of thousands of women ill-prepared for a decision that would see the worst affected lose up to £36,000 in pension payments. They were found to have compounded their error in 2011, when a further delay to the pension age—to 66—was rammed through with barely two years’ notice. In the words of their current Pensions Minister, they have been found to have “pulled the rug” from under 2.6 million British women. Today, Labour will speak for those 2.6 million women and demand that the Government tell us what they plan to do to make amends.
Before we get too party political about this, it can indeed be said that an individual notice should have been given back in 1995. However, shortly after that, Labour came in, and there were perhaps a dozen Labour Pensions Ministers during all of Labour’s time in office. We are 20 years on. Can the hon. Gentleman not accept that we all have lessons to learn? An individual notice should have been sent out by at least one of those Governments—by the Conservative Government or the Labour Government. The hon. Gentleman had an opportunity to do that over all those years.
With respect, I did not have an opportunity because I was not here at the time. The hon. Gentleman is right that successive Governments have lessons to learn from this sorry affair, but the truth, as I intend to spell out, is that a change was first mooted in 1991, and the then Tory Government made no substantive efforts between 1991 and 1997, when they left office, to offer people a proper notice. Thereafter, the Labour Government did attempt to do that, and I will enumerate exactly the ways we tried to make amends. However, the problem was compounded by the coalition Government’s actions in 2011. If anybody has lessons to learn, it is the Conservative party, which has the greatest responsibility for these changes, and which now has a duty to make amends.
I will make some progress if I may, and then I will give way.
These things started back in 1991. That was when the Tory Government first consulted on their intention to shift the state pension age for women to 65 from 60, where it had been since the 1940s. Then, in the 1993 Budget, the Chancellor formally stated his intention to make this move, and he legislated for it through 1994 and 1995. The Pensions Act 1995 stipulated that the pension age would rise by five years during the decade from 2010 to 2020. That meant that women born between April 1950 and December 1959 would have to wait between one month and five years more before they could draw their pensions.
One would have thought that such a massive change—the biggest change to women’s pensions in half a century—would have been communicated with great care and, in truth, fanfare, but it was not. Some of the women concerned were as young as 39 at the time, so it is unlikely that they were looking carefully at the financial papers or paying much attention to the Government’s scant efforts to tell them about the changes.
Does the hon. Gentleman accept that, in 2004, the Work and Pensions Committee found that three quarters of women between the ages of 45 and 54 at the time were aware of the changes in the 1995 Act? I accept that there were mistakes by parties on both sides of the House in terms of communication, but three quarters of women knew 12 years ago about the changes.
I am pleased to swap stories about what people knew at the time, because the truth is that the question asked in that 2004 survey by the then Labour Government, who were concerned that the previous Tory Government had not made proper provision for women, was, unfortunately, not as straightforward as it should have been. Other surveys—five or six—from academics and others in the pensions world found that about 70% to 80% of the women involved did not know that the changes were taking place. It is no surprise they did not know, because the Conservative Government at the time spent very little money advertising the change. There were a few adverts in the newspapers, and letters were available to individuals if they requested them, but many did not.
That is an extremely common experience for MPs, because the letters sent out in 1995 by the then Tory Government were neither use nor ornament. I have got one here that was sent to a woman on 13 June 1995. This letter has five pages, and not one of them mentions that the pension age is going to rise to 65. In fact, every single page refers to the fact that the state pension age for women is 60. The final page offers the extraordinary suggestion that
“a form inviting you to claim your State Retirement Pension will be sent to you”
“months before you reach 60.”
This happened in the very month that the Bill that became the 1995 Act was going through this House under that Government. That is a measure of what a desperately poor job they did of informing people.
I have lost count of the number of constituents who have contacted me to say that they had absolutely no idea about these pension changes and heard about them on the radio or the TV. Fortunately, we are raising the profile of this issue on the Government’s behalf. Is it not insulting of Government Members to suggest that these women are wrong, or lying, or that there is something wrong with them, when ultimately it is the Government’s responsibility to communicate these changes?
It is wrong, it is insulting, and it compounds the more fundamental insult that women who, by and large, have smaller pensions because they had lower earnings throughout their entire lifetime while bearing a burden for the rest of us, have been told that they cannot access their pension. That is the real insult that we should be worried about.
My hon. Friend is right that it is completely insulting to suggest that proper notice was given, because the truth is that it was a botched job from start to finish. We know that because the current Conservative Pensions Minister in the House of Lords says so. She says quite clearly that
“until recently, many of these women were expecting to receive their state pension at age 60, since they were unaware of the changes made in 1995”.
The Government are damned out of their own mouths.
Does my hon. Friend recognise that there are a lot of women like Jayne Manners in my constituency, who assumed she was going to retire at 60, is now disabled, and has no ability whatsoever to make up the difference for the six years she has lost because of these changes?
My hon. Friend is making a very good speech. Increasing numbers of women in my constituency have been coming to my surgery and writing to me about this, many of whom I have known for many years because I was born and bred in the constituency. I am absolutely convinced of their sincerity and that they knew nothing about this because of the lack of notification. We saw earlier at Prime Minister’s Question Time the Prime Minister’s complete lack of understanding, or even care, for these women.
My hon. Friend is of course entirely right. He will know, because he was part of the previous Labour Government, that we tried to improve this set of circumstances. We conducted the survey that showed that there was a worryingly low level of understanding. Between 2004 and 2009, the then Labour Government instituted several million-pound advertising campaigns and sent out 800,000 personalised letters to the affected women, such as the one I have here, which, in stark contrast to the Tory letter I cited, says on the first page that the addressee will be affected by the change in age from 60 to 65.
The reality is testified to by many of my hon. Friends and by the brilliant women of the WASPI—Women Against State Pension Inequality—campaign, whose tenacity and truth-telling we should pay tribute to right across this House, because they speak for hundreds of thousands of women who did not know that they were in the firing line.
Of course it has, because historical inequalities existed then and persist now. The gender pay gap affects women. Women often do not have the full stamp because of their caring duties, and that is why it is doubly unjust that they should now be asked to pay a price in their retirement.
Does my hon. Friend agree that this generation of women are doubly disadvantaged, because many were at work before the Equal Pay Act 1970 came into force and had to take low-paid part-time jobs because of lack of childcare, and the Government are now heaping insult upon injury in disadvantaging them again in retirement?
My hon. Friend spoke with great eloquence in the recent Westminster Hall debate after a petition of 155,000 signatures was brought to this place, with more signatures from the constituency of my right hon. Friend the Member for Leigh (Andy Burnham) than anywhere else in the country—a magnificent job by the women of Leigh.
I will quote once more the current Pensions Minister, who said:
“Across the country I’m hearing from women who are enduring that sudden sickening realisation that their destiny in retirement is not in their own hands—this is not about fairytale luxury retirement villas, this is about affording the basics.”
That is the view of the current Pensions Minister, and the Government cannot run from it.
I would like to challenge the figure that was quoted by a Member on the Government Benches. The Opposition spokesman might have the correct figure, but the figure reported from the Department for Work and Pensions investigation in 2004 was just above 40%, not 75%. Surely, given such a cataclysmic change, every single one of these women should have had a simple letter on the doormat in 1995.
The hon. Lady is entirely right. Even if 40% of women were unaware, that is 40% too many. As I said, five or six other surveys were done by academics and those in other institutions that suggested that 80% of women were unaware that they were going to be affected, so the reality is that the number was far greater.
The scale of this problem only truly started to dawn on people when the Government decided to double down on their calamity with the Pensions Act 2011.
My hon. Friend is about to come on to the injustice of the 2011 Act. Is not the real issue not only that these ladies have been hit not once but twice by an increase in their state pension age, but that no transitional arrangement was put in place? Is that not why it is absolutely right that we support the Labour motion to get the Government off the fence and provide these ladies with the transitional arrangement they deserve?
This House and Government Members would do well to heed the words of my hon. Friend, because, along with my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), he has been the doughtiest campaigner in this House on behalf of these women. He speaks the truth when he says that Members from across the House should back our motion to provide transitional protections for them.
The 2011 Act not only broke the Government’s promise that the pension age for women was not going to rise until 2020, but broke the promise that no rises would occur without at least 10 years’ notice, because the women who suffered the double blow were given just two years’ notice. The former Pensions Minister, Steve Webb, has described that decision as an ill-informed “mistake”. He tried to make up for it in office, and secured some mitigation for 300,000 of the women who were due to see their state pension age go up by more than 18 months. The Minister on the Front Bench will no doubt mention this shortly, telling us that it cost £1.1 billion, but I bet he will not remind us that his predecessor was looking for £3 billion in order to offer these transitional protections. I suspect he may only say sotto voce that half of that £1 billion went not to women but to men.
I support the motion, because I support the WASPI women and I support transitional arrangements, but I have to say that the hon. Gentleman is making it more difficult for me and for colleagues to vote for the motion by making the matter so partisan. Thirteen years of Labour government did not help the situation. May I therefore suggest that in the spirit of the motion, which I support, he could give more details of what those transitional arrangements should be, so that we can at last start the dialogue that the Government should have started some time ago to see whether there is a middle way and a compromise to help the women who desperately need it?
I am sorry if I am bruising the hon. Gentleman’s feelings with my remarks. I am pleased that he has supported the campaign, and I know that he has been brave enough to speak in favour of it on several occasions. I am positive that a man of his resolve will not be put off by a few words across the Dispatch Box and will vote for the motion, irrespective of what I say; at least, I trust that he will. I will come on to talk about precisely the sorts of transitional arrangements that the Government should put in place.