House of Commons
Thursday 12 May 2016
The House met at half-past Nine o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Energy and Climate Change
The Secretary of State was asked—
New Energy Technologies
Encouraging and supporting innovation is central to everything we do. The United Kingdom has a proud record of leadership in energy innovation, through, for instance, our success in driving down the costs of offshore wind technology. The Government took steps to build on that in last year’s spending review, more than doubling our energy innovation budget over the next five years to a total of £500 million. With that budget, we can continue to support the development of clean, cheap and reliable technologies.
I recently visited two farmers in my constituency. J.C. Channing and Sons is generating electricity through anaerobic digestion, while Dale Aston of Brinklow Biogas is using the same process to generate and supply biogas via a connection to the national grid. Will the Secretary of State join me in congratulating those entrepreneurs, who are demonstrating considerable innovation in the use of new technologies, and will she tell us a little more about how the Government are supporting the sector?
My hon. Friend is, of course, right. One of the biggest challenges that we face is how to decarbonise our heat and electricity supplies over the coming decade. Anaerobic digestion has played an important role in meeting the challenge to date, providing low-carbon heat and electricity for consumers in the United Kingdom. I congratulate employers such as those in my hon. Friend’s constituency who, by using food and farm waste, are helping to deliver the kind of renewable energy that we need.
May I ask the Minister to get out a bit more? I walk around my constituency talking to environmentalists and to the big companies that invest in new technology, and they say that the stops and starts and changes in Government policy, especially in the Treasury, have deeply harmed innovation and research in this area.
I am sorry to hear that from the hon. Gentleman, but the facts speak for themselves. Investment in renewable technology and energy is at a record high in the UK, and the Government are always careful to consult before making changes so that we take industry with us and deliver the stability that it needs.
My hon. Friend is, of course, absolutely right. Nuclear power is an important part of the energy mix that we continue to need, and the Government support advances that will enable us to replace our ageing nuclear fleet over the coming decades. Since we launched the SMR competition we have received 38 expressions of interest, and we will be working closely with those companies to ensure that the competition proceeds in the way that is most likely to generate investment.
Late last month the United States Senate passed an energy Bill, in a rare occurrence of bipartisan co-operation. The Bill could unleash billions of dollars for research and development in new energy technologies, including energy storage, hydrokinetic and marine R and D, and advance the electricity grid in the US. Can we expect the United Kingdom Government to act in a similar manner, investing in the future and addressing the myriad problems that affect our energy infrastructure?
The hon. Lady will know that the Climate Change Act 2008, which underpins the drive towards renewable energy in this country, was passed on a cross-party basis, and our work in developing a low-carbon future remains absolutely cross-partisan. This Conservative Government are committed to ensuring that we invest and plan for the long term, so that we can develop that renewable energy, while always ensuring that we do so at the least possible cost and put energy security first.
Does my right hon. Friend agree that supporting the innovative electric vehicles industry is an excellent way of protecting the environment while also backing UK businesses? If so, will the Government do all they can to support that new technology for the benefit of the environment and business?
My hon. Friend is absolutely right. The future for transport is indeed electric, and the Department for Transport has clear plans to develop and support the electric vehicles industry. I am proud to say that one in four of the electric cars that are currently being driven around Europe was made in the UK, and I hope that the UK will continue to be a leader in this developing industry.
I welcome the hon. Member’s support for smart meters, and I am sure she will agree that their roll-out is a vital step towards putting consumers firmly in control of their energy use. Consumers will need to have ready access to the data from their smart meters if we are to achieve that goal. That is why all households will be offered an in-home display that will allow them to see the energy they are using in near real time, as well as its cost. We are also allowing suppliers to trial innovative technologies alongside that.
Smart meters can transform domestic energy consumption and help to save the planet, but only if consumers are given secure control and ownership of their own data. The display options that the Secretary of State refers to will still allow smart meters to be a back door into our homes for hackers, so will she overcome her ridiculous complacency and announce measures to give consumers the digital rights that they deserve before it is too late?
The hon. Lady should know that privacy is absolutely protected and at the heart of the smart meter programme. She should be careful not to put fear into the hearts of people where none should exist. The data are protected, and they belong not to the Government—which some people might, not unreasonably, fear—but to the energy companies. We will always reassure consumers that privacy is at the core of delivering safe meters.
The Competition and Markets Authority has recommended a temporary safeguard for vulnerable users who have pre-payment meters, which could result in savings of up to £300 million a year for those consumers. Will the Secretary of State commit to implementing that measure as soon as possible to protect those vulnerable users?
My hon. Friend is absolutely right. The preliminary report from the Competition and Markets Authority addresses head-on the difficulties and higher costs often faced by people on pre-payment meters, and, yes, we will be implementing its recommendations. We look forward to seeing its final recommendations over the next few months.
According to the Government’s own calculations, they reckon that with smart meters installed. we as a nation could save some £17 billion on our collective energy bills over the next 15 years. Does the Secretary of State recognise that if consumers had access to their detailed data usage, it would put them in a good position to share those data with third parties, should they want to, and that that could improve competition, which the Government would obviously be glad to see?
Yes, the Government are glad that the Competition and Markets Authority has said that it will make available in a controlled way the details of people who have not switched. We will have to ensure that that is done in a way that does not result in consumers feeling overwhelmed by suggestions. The Competition and Markets Authority has yet to come up with its final solution on this point, but I am confident that it will do so in a measured way and that this will help to ensure that people who have not switched will have access to switching and to the opportunities that it provides.
Offshore Wind: Scotland
The Government have announced up to £730 million of contracts for difference support for offshore wind and other renewables. The first auction later this year will offer £290 million, and I expect Scottish projects to bid. This is a huge opportunity for the UK supply chain, and I am doing everything I can to persuade developers to buy British.
The Government have cancelled the contract for difference for the Neart na Goithe wind farm off the east coast of Scotland. Without that wind farm, there will be no such projects at all in Scottish waters. Will the Minister tell us why the contract has been cancelled? Will the Government commit to redeploying the funds to another Scottish project?
It is not the Government who decide whether a delivery milestone is met; it is the Low Carbon Contracts Company that manages those contracts for difference. That cancellation was the result of the milestone delivery date not being met, and there are ongoing discussions about that. I recognise that the termination of a CFD is disappointing for all partners, but I can reassure the hon. Gentleman that there is quite a big project pipeline for Scottish offshore wind and I expect to see other projects coming forward at the next auction.
There is a direct link, Mr Speaker. Clearly, developments in the industry in Scotland will have an impact on the success or otherwise of the development of the energy estuary, which is the Government’s ambition for the Humber. Will the Minister give us an update on how developments in Scotland might impact on the Humber?
I commend my hon. Friend for both his tenacity and his command of the English language. Whether from Scottish projects or from projects in the Humber region, this project pipeline will benefit the UK supply pipeline enormously. That is what we really want. He will be aware of the ongoing east coast review, and I am talking with individual developers to try to ensure that we buy British wherever possible and use UK fabricators, and that the UK has the opportunity to get more of this valuable business, which has been a real success story for the UK.
I am unsure whether saying, “What rubbish,” is unparliamentary, but, frankly, that was absolute rubbish. There is no sense in which the UK Government treat Scotland as if we were an absentee landlord. The hon. Gentleman will be aware that 60% of the renewables obligation has gone to projects in Scotland, which has about 8% of the population. How on earth can he think that Scotland is somehow losing out? That is absolute nonsense.
I do not know the answer, but I can write to the hon. Gentleman. My right hon. Friend the Secretary of State is absolutely committed, as am I, to the success of not only wind and the renewables sector in Scotland, but, importantly, the oil and gas sector. The hon. Gentleman will be aware of the hours that she and I have spent in this Chamber desperately trying to get the Oil and Gas Authority sorted out through the Energy Bill, which he and his colleagues have tried to delay and scupper at every turn.
Electricity Pylons: Sensitive Environments
It is quite right that network companies give proper consideration to the protection of communities and sensitive areas, and my hon. Friend is right to speak up for his local residents. I hope I can reassure him and his constituents that legislation already puts such a requirement on network companies. Local communities will always be properly consulted on how new transmission networks might affect their local environment.
I am grateful for that reply. The Minister will be aware that many miles of new electricity cabling will be required across the country for new energy projects, including in my area of north Wales. When there is controversy, does she agree that the cost of delays to such infrastructure projects could far outweigh the cost of undergrounding sections of cabling in sensitive areas to help overcome such controversy? Does she also agree that planning guidance may need firming up to enable clarity around the requirement?
I certainly agree with my hon. Friend that getting on with projects and avoiding delays is important, and I am sure he will appreciate that there is a balance to be struck. A recent independent study showed that the undergrounding of transmission lines can cost up to £24 million per kilometre compared with up to £4.4 million per kilometre for overhead lines, and such costs are ultimately paid through consumer bills. I reassure him that existing planning guidance will ensure that undergrounding is always fully considered.
I want to ask the Minister about vertical infrastructure more broadly. We have pylons going through Cumbria, and my constituency has an awful lot of wind farms and telephone masts. How do we bring all of that together when we consider new planning?
I hope I can reassure the hon. Lady that local authority planning processes do always take into account the cumulative impact of yet one more project getting under way. I suppose that this is a question for the Department for Communities and Local Government, but the existing planning arrangements not only allow for proper local consultation and proper consideration of all the alternatives, including undergrounding to take infrastructure right out of sight, but consider what one more project will do and whether things can be brought together. If an area is affected, different projects can be undertaken in the same place, rather than being spread out and ruining the landscape.
The best way to deliver on energy bills for businesses and households is to have a robust and competitive energy market. In 2010, the big six controlled 99% of the domestic retail market, but this year consumers can choose from more than 30 independent suppliers, who, between them, control more than 15% of the dual fuel market. Competition is improving, but we cannot be complacent, which is why I look forward to the final report of the Competition and Markets Authority and why I will continue to encourage consumers to switch.
I agree with the Secretary of State on that and thank her for that answer. The best way for consumers to get a good deal on their energy bills is to consider switching. Will she confirm that the Government remain committed to driving down the time it takes for consumers to switch?
My hon. Friend makes a good point. Consumers are sometimes put off from switching not only by the complications that they perceive, but by the length of time it can take. We are working with Ofgem and are confident that it will reach reliable next-day switching by 2018.
My hon. Friend the shadow Secretary of State for Energy and Climate Change recently visited the award-winning eco-house in my constituency, where heating and lighting bills are kept below £100 a year. What action is the Minister going to take to promote carbon-neutral homes?
I thank the hon. Lady for her question. She is right to point out that some fantastic innovations are taking place through private sector business investment to make sure that innovations are delivered in this sector that will help to drive down bills. On zero-carbon homes, I can reassure her that a European Union directive, due to come in by 2020, calls for near-zero carbon emissions, which I believe will help to reduce people’s bills.
I agree with my hon. Friend that we have to have as many choices as possible for people, and the CMA has made some proposals, but we also have to be careful to ensure that this is addressed fairly, that the cheapest tariff is available and that there is full disclosure. I tend to encourage people to go to the Ofgem website beanenergyshopper.com.
The Secretary of State is fond of telling us how keen she is to cut energy bills, but last Friday, when attention was diverted elsewhere, her Department revealed that families in this country will be asked to pay up to an extra £38 on their energy bills to fund her failure to get new power stations built. Can she confirm to this House that not only is she asking families to pay more to fund her policy of closing coal- fired power stations, but, at exactly the same time, she is going to ask them to pay more to keep them open?
The hon. Lady is referring to the changes to the capacity market, and I am concerned that she has not grasped the facts of the situation, which are that wholesale prices have fallen, with the consequence being that coal prices, and indeed some gas prices, become uneconomic. Because the Government will take no risks with energy security and because we are absolutely clear that it must be the No. 1 priority, we have brought forward a new capacity market that will stop there being the sort of price hikes which are most unwelcome. My Department estimates that this will actually save consumers up to £46 on their bills.
The absurdity of the situation appears to be completely lost on the Secretary of State, but as she has been on this panic spending spree recently perhaps I could ask her another question. She recently announced generous subsidies to EDF, the big energy company that operates Britain’s nuclear fleet. She has agreed to hand over £153 million in 2018 and a further £139 million the following year to subsidise nuclear power stations that would have been open in any case. Is she aware of the recent news that the cost of Hinkley Point C is set to rise to £21 billion, which is £3 billion more than was forecast? What is her estimate of the cost to bill payers and taxpayers in the UK of this new revised figure?
I am concerned that the hon. Lady did not hear my answer to her earlier question. The fact is that energy security has to be the priority of government. In bringing forward changes to the capacity market, we have made sure that, with low wholesale prices, we have sufficient energy during the next two years. She just reveals her total lack of understanding of getting the right balance on secure electricity—nuclear and, yes, in the short term, coal—which supports our renewable investment, keeps bills low and ensures that customers always have a good supply of electricity.
The most effective way for consumers to ensure that they are on the best value tariff is by engaging with the energy market and switching supplier. I encourage all Members to urge their constituents to engage with the market and make use of the readily available Ofgem-approved price comparison websites. Meanwhile, we will continue to make it easier for consumers to switch, and we are working with Ofgem and the industry to move to reliable next-day switching by 2018.
High Peak is probably one of the coldest constituencies in England in the winter, so our household energy costs are probably disproportionately high compared with those in many other areas of the country. Has the Secretary of State made any assessment already of the trends of people changing suppliers and whether they are actually changing suppliers to keep those costs down?
I can reassure my hon. Friend that switching was at a four-year high in 2015, with 6.1 million electricity and gas switches across Great Britain—roughly a 15% increase on 2014. I am aware that some people are unable or unwilling to switch, which is why we have the big energy saving network programme. This year, that programme gave £10,000 of funding to two champions in High Peak who reached more than 350 customers directly, and trained 111 front-line staff. Over the year, more than 1,900 vulnerable customers were supported. It is important to reach all consumers.
Only last week, the hon. Member for Lichfield (Michael Fabricant) owned up to having brought a hedgehog into the Chamber some years ago—I am pleased to say that it was not during my tenure of the Chair. With all the reference to price comparison websites, I am glad that no one has thought it necessary to bring a meerkat into the Chamber.
The Government agree with the Competition and Markets Authority that consumers on pre-pay meters are getting a poor deal. Supporting such consumers was at the heart of our decision to support the CMA investigation in the first place. The hon. Lady may have seen the estimate by Citizens Advice that 23% of households in her constituency have pre-payment meters, which is above the national average of 16%. That is why it is so important that we take on board the recommendations of the CMA following the publication of its final report.
In Wales, a staggering one fifth of households are on pre-payment meters, paying up to £330 a year more for gas and electricity than those on the cheapest tariff. It is particularly important for Wales, and for those 7,200 households in my constituency, that we know which recommendations the Government will be working on with the CMA and Ofgem and when constituents will start to see the benefit. Can the Minister be specific?
We do not yet have the specific recommendations, but the hon. Lady will, like me, be aware that what we have had proposed so far in the draft recommendations is a safeguard tariff for those people on pre-payment meters. It is not clear yet whether that will be temporary or long term, but we will look carefully at the recommendations of the CMA to get the best outcome for the most vulnerable customers, which, I know, she desires as well.
May I just push the Secretary of State once more on that, as the 4 million households who are still languishing on rip-off pre-payment meters would really like more detail from her? Given that the Government’s energy efficiency policies and fuel poverty strategy are in tatters, people would like more details on the timetable and when this will happen.
It is typical of the Opposition party that it is unable to understand the concept of the CMA, which is preparing this report. It is up to the CMA to come forward with the final recommendations, and it is its recommendations that we will be following. I must take issue too with the hon. Gentleman’s reference to “tatters”. This Government are absolutely committed to helping the most vulnerable. We are proud of the work that we are doing to reform our various schemes so that we can support the most vulnerable, and that is something that we will continue to do to ensure that we always support the people most in need.
May I press the Secretary of State a little further? My constituency of Heywood and Middleton is, sadly, in the top 50 for numbers of households with pre-payment meters, and my constituents are being ripped off. What can the Secretary of State tell me that I can tell my constituents about how long they will continue to be ripped off by pre-payment meters?
I am sure that the hon. Lady has looked at the CMA’s report. It has a proposal for a safeguard tariff, and we welcome that. It is one of the key reasons why we were keen to propose this review by the CMA. We are expecting it to come forward with the final report soon. When it does so, we will act on the recommendations and hope that it will deliver what we and she hope it will, which is support for people on pre-payment meters, who are often the most vulnerable.
State Aid Clearance: Scottish Islands
We have had extensive correspondence with the Commission during the pre-notification process. The Government will publish as soon as we can the decisions about the contract for difference allocation round for all less-established technologies in pot 2, including strike prices. We will take all the steps needed to deliver the allocation, including submitting any necessary notifications to the European Commission.
I am grateful to the Minister for that answer, but she will know that the application for state aid clearance for the island strike price has been ready and sitting in the Department since the new year. The continuing failure to submit it is causing enormous uncertainty and a massive loss of confidence among renewable energy generators in the Northern and Western Isles. Will she agree to meet me and the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), along with a delegation of local renewable energy developers, to discuss this so that she can hear from the horse’s mouth and understand just how serious it is for our industry and our islands?
The right hon. Gentleman and the Chair of the Select Committee on Energy and Climate Change met my officials only recently to discuss these issues. I assure the right hon. Gentleman that my officials have also met several representatives of the renewables industry specifically to discuss remote island wind. I will certainly be happy to meet the remote islands forum again to discuss our decisions once we have taken them.
Does the Minister not agree that the very fact that we have to go begging to the European Union before we can help our fellow citizens in this country amply demonstrates why we would be better off, and why those citizens would certainly be better off, if we left the European Union, took charge and were able to decide for ourselves how we spent taxpayers’ money in this country?
Coal-fired Power Stations
We are among the first developed countries to consult on phasing out coal. It is vital for our decarbonisation that we move away from the dirtiest fossil fuels, so holding a consultation is extremely important to make sure that we get views on how best to achieve our goal while ensuring energy security, which, as the hon. Lady will know, is non-negotiable. The consultation will begin in the near future.
I am grateful to the Minister for her response. There are still many people in the UK, in Wales and, indeed, in my constituency of Neath, who work in or are connected with the coal industry. What assurances will the Minister provide that the consultation will be properly thought through and will take time to explore the issues thoroughly so as not to leave people unduly concerned for their livelihoods?
The hon. Lady is exactly right to speak out for her community, which is precisely why we are undertaking the consultation. We want to take all the factors into account. I am sure that she and Opposition Members will agree that it is right that we move away from the dirtiest fossil fuels over time, but in a measured way, taking into account the impact on local communities and their livelihoods and what other opportunities there are for them in the energy space and in the workplace. I can totally assure her that we will consult carefully.
12. If Rugeley B, a coal-fired power station in my constituency, shuts this summer, will my hon. Friend commit to working across Departments to ensure that any application for a new gas power station can be dealt with in a timely manner that will help to create future job opportunities for the highly skilled workforce at the plant? (905000)
I congratulate my hon. Friend again on all the work she has done on that. I know it is an incredibly important constituency issue for her. I met her and a number of colleagues only recently to talk about the possibility of coal-fired power stations due to close becoming new combined cycle gas turbines. I welcome and encourage her efforts to support such an outcome. I have already told her that I will happily write to the Department for Communities and Local Government to ask what more, if anything, can be done to make it easier for planning permission to be granted for a new CCGT on the site of an old coal-fired power plant, and I will do that. She will be aware that DCLG is separately holding a consultation for those who are interested in making that transition, so that they can better understand the processes they would need to go through.
Renewable Heat Incentive
The renewable heat incentive is the world’s first long-term financial support programme for renewable heat, and is central to our efforts to deliver renewable energy to consumers and businesses across the UK. In March this year, my Department launched a consultation on measures for the RHI. As is the case for everything my Department is doing, a central aim of this reform is to ensure that the scheme offers value for money and allows us to make the transition to cleaner heating technologies in a manner that is affordable for the UK.
I can assure my hon. Friend that the Government are providing support for small and medium-sized biomass companies through a range of incentives, including the renewables obligation, the feed-in tariff and the renewable heat incentive. We expect biomass to play an important role in industrial processes and district heating, where there are fewer alternatives for low-carbon technologies, and we want to ensure that we bring forward deployment in these areas.
The consultation that the Secretary of State mentioned reveals an intention by the Government to provide 55TW hours of renewable heat by 2020. That is 9% of UK heating, but it is 3% less than the original 2020 renewable heat target. How does she intend to hit that target, given that there is now a shortfall in heat and in transport?
It is more about the number of houses or businesses that we support for the renewable heat incentive and not always about the pure cost. It is not necessarily about the league table of costs, but rather about the outcomes that we get. We are consulting on the renewable heat incentive to ensure that we deliver the best value for the taxpayer. I am committed to making sure that we use the money in the most cost-effective way.
The Secretary of State did not address the question of the relationship of the renewable heat incentive proposals and finances to the UK’s contribution to the EU renewables target of 12% by 2020. As my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) mentioned a moment ago, we are still short of that target. Is the Secretary of State confident that the measures and finances that she has suggested in the new RHI proposals will enable us to reach that target, or is she actively considering other measures to make sure that we do?
The hon. Gentleman will be aware that the renewables target for 2020 covers building, heat, transport and electricity. The renewable heat incentive is a key part of that. That is why we have had the consultation. We will now examine those responses in order to ensure that we direct the funds that we have in the most effective way. We recognise that although we have made good progress towards the renewables target for 2020, there is more work to do. We believe that we have sufficient policies to address the need, but we are going to look at what else can be done, particularly in respect of buildings and transport, to make more progress from the halfway mark that we have reached so far.
Solar Photovoltaic Systems
In the first quarter of our new, more sustainable cost control regime under FITs, six out of 11 deployment caps were reached, including the two largest of the four solar caps. Take-up of domestic solar photovoltaic systems is strong but still within the cap. We estimate that FITs will support over 178,000 new solar PV installations at domestic scale by 2018-19.
Domestic solar installers in my constituency report that demand for their services has plummeted over the past year, and domestic solar installations across the country are down 80% on this time last year. Will the Minister now acknowledge that the new tariff is too low and that the disastrous approach that this Government are taking to solar energy is effectively stopping individuals who want to make a contribution to combating climate change in their own homes by installing solar panels from doing so?
No, I do not recognise what the hon. Lady says. Solar deployment in this country has been amazing, and far in excess of all our expectations. Some 99% of solar installations have taken place since 2010—under this Government and the previous Government, not under the Labour Government. It has been a huge success story. As I have said, our subsidy regime takes into account the interest for the consumer who has to pay it and the developer who is continuing to build. Some of the caps have already been met and others are performing strongly.
Solar Thermal Support
We launched a consultation in March with proposals for reform of the renewable heat incentive. As the right hon. Gentleman will be aware, the consultation, which closed on 27 April, included a proposal to withdraw RHI support for solar thermal technologies. We are looking carefully at all the responses. I can assure him that in coming to our conclusions we will consider all relevant factors, including the impact on the UK supply chain.
Does the Minister accept that solar thermal has the lowest CO2 footprint of all heating generation technologies, has no significant ongoing fuel commitments, has relatively low space requirements and is ideal for homes for vulnerable people because there is no requirement for homes to be heavily insulated? Why are the Government proposing to cut support for solar thermal?
I absolutely agree that it certainly plays a part, but I can tell the right hon. Gentleman that, as part of the reform of the RHI, we are trying to ensure that the budget offers the best value for money. Solar thermal requires the highest subsidy from the Government of all RHI technologies, and the evidence suggests that nearly 50% of RHI respondents said they would have installed it anyway, even without Government subsidy. We always need to look at the balance between keeping the costs down for the bill payer and supporting these technologies.
Green Research and Development
With permission, Mr Speaker, I will take Questions 15 and 19 together.
The Government are taking steps to build on our proud history of energy innovation and are more than doubling our energy innovation budget over the next five years to a total of £500 million. With this budget we can continue to support the development of clean, cheap and reliable technologies and the growth of the green research and development sector across the UK.
I thank the Secretary of State for her reply. With the new Rampion offshore wind farm being based in the Newhaven enterprise zone in my constituency, and with the recent opening of the university technical college in Newhaven, does the Secretary of State agree that Newhaven town has the potential to be a hub for green research and development, and could she outline how the Government can support that?
I welcome the activity already under way in my hon. Friend’s constituency and will of course be considering opportunities to support research, development and demonstration across the UK as we develop our energy innovation programme. I encourage her to speak directly with low-carbon energy funding bodies, which stand ready to support innovation in the technologies that we will need in the future. I really welcome the development of the UTC, which is partnered with, among other companies, E.ON UK and EDF Energy. It has a specific focus on green engineering, so I think that there is a great opportunity there for Newhaven.
The Government’s emissions reduction plan has been promised by the end of this year, and the Secretary of State has said that it will address the current 10% shortfall for the fourth carbon budget, which was set back in June 2011. Section 14 of the Climate Change Act 2008 stipulates that the Government must lay before Parliament a report setting out how they will meet each carbon budget
“as soon as is reasonably practicable”
after setting it. Five years later, does the Secretary of State consider that she is now in breach of the Act, or does she have an unusually elastic definition of the phrase “as soon as is reasonably practicable”?
It is always a pleasure to receive such detailed questions from the hon. Gentleman. I can reassure him that I am fully aware of section 14 and the sections either side of it. I am clear that we will have an emissions reduction plan by the end of the year, as we have said, and that we have an obligation to come forward with our response to the fifth carbon budget. It is because we take these matters so seriously, and because this is a big, realistic and important challenge for the UK, that we are not rushing it.
Biomass Heating Industry: Renewable Heat Incentive
My Department is currently considering responses to our recent consultation on reform of the renewable heat incentive. As part of this consultation, we have engaged extensively with the relevant trade bodies and industry stakeholders to understand the impact of the proposed reforms, including, specifically, the impact on the biomass industry.
Currently, the biomass industry directly supports the jobs of 11,500 people, as well as 590 companies, across the UK. With that in mind, will the Minister explain the UK Government’s apparent lack of ambition with respect to the installation of biomass boilers, which will lead to job losses in this sector?
I am aware of the importance of the biomass industry to the hon. Gentleman, his constituency and, indeed, Scotland overall. That is why we are consulting on the issue to make sure that we are fair with the money we have and that we deliver best value for taxpayers. Small biomass has an important role to play. The RHI budget is in fact trebling by 2020-21. We remain committed to developing the RHI and biomass, and we will come back with responses in due course.
Oil and Gas: North Sea
This year the Government have pulled out all the stops to support the oil and gas sector. This includes a fiscal package worth £1.3 billion over five years, £20 million for new seismic surveys and, of course, our core policy of establishing the Oil and Gas Authority, whose job is to maximise economic recovery from the North sea. This is a vital UK industry, and we are totally committed to keeping the UK continental shelf as an attractive destination for investment, securing hundreds of thousands of jobs.
I thank the Minister for her answer, and I do appreciate the work that is being done. However, while the SNP welcomes the support announced in the Budget and what has been done, those who have lost their jobs in the north-east would not necessarily agree with her characterisation. It is essential that we listen to those in the industry who are calling for a strategic review of the fiscal and regulatory regime. What steps are being taken to review the tax rates and the investment allowance?
As I said, the Treasury has already taken enormous steps through fiscal policy towards the North sea to promote further oil and gas exploration. It is constantly looking at that; in fact, I am having a dinner next week to talk again to the maximising economic recovery group of operators and investors, the Oil and Gas Authority and so on to look at what more we can do, and the Treasury plays its full part in that.
However, we have to be clear that the Oil and Gas Authority is already transforming things such as production costs and the level of co-operation between different operators in the North sea. This is an incredibly important area. We have an inter-ministerial group, which I think is meeting again next week to discuss what more can be done. We are pulling out all the stops for the North sea.
Although I sympathise with the constituents of the hon. Member for Livingston (Hannah Bardell) who have lost their jobs in the North sea, would not the best thing for them be for us to create new jobs by allowing fracking in Scotland for those very people, with those skills, who have been denied the prospect of such jobs by the hypocrisy of the SNP Government in Scotland?
I absolutely agree. Obviously, it is a matter for the Scottish Government to decide, but one of the policy options I am looking at in my Department, together with the Department for Business, Innovation and Skills, is what more we can do in the energy space for those who have lost their jobs. For example, an experienced offshore engineer may well be able to retrain to work with offshore wind or even nuclear. There are therefore other opportunities in the energy space, and I know the Scottish Government are looking at that. I would certainly be delighted if they wanted to think again about the importance of shale gas.
T1. If she will make a statement on her departmental responsibilities. (904977)
Our Energy Bill receives Royal Assent today. It is a vital part of our plan to ensure that our families and businesses have access to secure, clean and affordable energy. We are delivering on our manifesto commitment to end subsidies for onshore wind. We are also using the opportunity to support the Oil and Gas Authority with powers to drive greater collaboration and productivity in the industry. I thank the Bill Committee and my hon. Friend the Minister for making this possible and going through the Bill in such painstaking detail to deliver it.
Evidence from the Universities of Leicester and York has shown that sick and disabled people are particularly at risk of fuel poverty, especially after the recent social security cuts by this Government and the previous coalition. Will the Secretary of State approach the Chancellor again to look at better targeting of warm home discount funding, especially after her rebuff from him just before the Budget?
The hon. Lady will be aware that this Government, and this Department specifically, are refocusing our support, as far as possible, on to those who are most vulnerable. We have just closed the consultation on the warm home discount and we are looking at the results. She can rest assured that we will, as far as possible, target it at those who are most in need, which is the right thing to do.
T3. I have been contacted by a number of constituents who are concerned about fracking in Dorset. What reassurance can the Minister give to me and to my constituents about environmental considerations, about issues of public consultation and letting local residents have their say, and, importantly, about fracking being considered only in appropriate locations? (904979)
I can absolutely assure my hon. Friend that the UK has more than 50 years of safely regulating onshore and offshore oil and gas. We have the best regulatory environment in the world. The Environment Agency looks very carefully at any proposals for hydraulic fracturing, the Health and Safety Executive monitors all activity in that area, and of course local authorities will consult widely with their local communities. I am desperate for local communities to be given the proper facts—that is a really important part of the job for us and for local authorities to do.
I think that people across the country will be really concerned by the lack of an answer in the response just given by the Minister. They will also be looking very closely at Ryedale, where North Yorkshire County Council is set imminently to make a decision about whether fracking should be given the green light there. If so, will she extend the same courtesy to that community as she has extended to communities affected by wind farms and promise the people of Ryedale that she will not override their wishes and impose fracking against their will?
With regard to safety is absolutely paramount the industry for hydraulic fracturing. If there was any likelihood, chance or risk of any of the issues in the scare stories that the hon. Lady likes to propagate being real, this Government would not be looking at promoting this vital industry. We provide 40% of our own natural gas; the rest is imported from overseas. It is vital for our energy security that we continue to use home-grown resources wherever we can. It is also a massive jobs and growth opportunity for very many communities where employment is desperately needed, and she should take some interest in that.
T5. What progress has my right hon. Friend’s Department made in working with the big energy suppliers such as EDF Energy, partly located in my constituency, with regard to the roll-out of smart meters for the benefit of consumers? (904982)
I can assure my hon. Friend that we are working closely with all energy suppliers on those aspects of the roll-out to ensure that the consumer benefits are fully realised. Good progress has been made so far, with over 3 million meters installed, and there is evidence that those consumers are already saving energy. Recent research by British Gas shows that consumers with smart meters have reduced their energy consumption by around 3%, on average, for both gas and electricity.
T2. I hope that this will be a case of third time lucky. I have asked the Housing Minister this question twice, and I have also notified the Secretary of State’s office of the question, so I hope I am going to get a reply. What is the difference in the annual energy bill that a family in a zero-carbon home would have to pay as opposed to a family in a home that has the insulation and energy efficiency standards that the Government propose? (904978)
The right hon. Gentleman’s question starts from an incorrect premise. [Interruption.] I am trying to answer his question; bear with me. I think that he is referring to the zero-carbon proposal that was rejected by the other place last night, although it was agreed that a review would be ongoing. The problem with zero-carbon homes, as conceived in the Bill, was that they would add costs to the house. If we add costs to the house, we add costs, ultimately, to the house owner, the consumer and the bill payer. The problem with the allowable solutions portion was that it would act as a tax on home builders and, ultimately, it would be of no benefit to the homeowner.
T8. The Committee on Climate Change recommended in its 2015 report to Parliament that the Government produce an effective policy framework on aviation carbon dioxide emissions. Part of that plan was that UK emissions in 2050 should not be higher than those in 2005. Will the Department work with the Department for Transport to publish such an important policy before a decision on a new runway is made? (904986)
My hon. Friend has incorporated quite a few questions into that one question. What I can say to her is that the most important element of addressing airport emissions is to have an international agreement. We do not want to have a situation where the UK is trying to do something independently; it is important to have such an agreement EU-wide and internationally. We tried to get the proposal that she mentioned incorporated into the Paris climate change agreement, but it was not, so we are working with international partners through the International Civil Aviation Organisation to try to achieve an international agreement this autumn. I will certainly keep my hon. Friend updated.
T4. I am going to push the Minister of State further on fracking, because a week tomorrow an important decision will be made. In Ryedale, one energy company wants to frack the beautiful landscape just south of the North York Moors national park. More than 4,000 well- informed local people want to protect their local community and environment. Who should have the greatest influence? (904981)
I say again: the shale industry is vital to the UK’s energy security future, and we absolutely support the idea of local consultation and local people having their say, but as in all planning matters—[Interruption.] If the hon. Member for Wigan (Lisa Nandy) could just stop chuntering for one minute—every time I try to answer a question, she chunters. There is a balance between the absolutely right case that local people should have their say, and the national interest. That is why there is a very clear local consultation process, and that is why the people of Ryedale will have their views taken into account and the local authority will balance up those interests.
My hon. Friend is absolutely right: new nuclear is an essential part of a secure, reliable energy system. We are supporting new nuclear, but we are also particularly enthusiastic about small modular reactors, which is why my right hon. Friend the Chancellor doubled the funds for our innovation budget and we have launched our competition. We hope that it will bring forward a great array of different proposals so that we can take forward a number of them.
T6. Citizens Advice estimates that 7,300 households in Wakefield are paying over £400 a year more for their gas and electricity than they should be paying because they are stuck on prepayment meters. Last month, the Competition and Markets Authority recommended a price cap to protect my constituents from this indefensible overcharging. This week, we hear that the chief executive of the CMA is to be the Department’s new permanent secretary. Does that mean we can look forward to him implementing his own recommendations in the very near future? (904983)
Forgive me for making no comment about the appointment. I certainly share the hon. Lady’s view that prepayment meters need reform, that we need the safeguard tariff that the CMA has proposed and that it is unacceptable for the most vulnerable customers—usually those on the lowest incomes—to be stuck on higher tariffs. We will support the CMA to ensure that it delivers on that.
Cornwall produces the world’s finest china clay, but the industry faces a significant increase in its costs due to the proposed implementation of the EU emissions trading scheme. Does my right hon. Friend agree that the Government should do all they can to make sure British industry is not put at a competitive disadvantage as a result of energy costs, and will she meet me specifically to discuss what we can do to support the china clay industry?
I would be delighted to meet my hon. Friend, who I know is a strong champion for the china clay industry in his constituency. The EU ETS provides an important role in levelling out competitiveness within the EU to make sure that our intensive industries are protected. I will meet him to ensure that his industry receives a fair settlement.
T7. The Minister will be aware of the devastating Super Puma helicopter crash in Norway less than a fortnight ago, which killed 14 people, including Iain Stuart from Laurencekirk. Super Pumas have ditched in the North sea three times since 2009, citing problems such as gear box and oil pump failure. We do not yet know the cause of the crash on 29 April, but 14 families, including Mr Stuart’s, will be desperate know what it was. Will she engage with her counterparts in Norway to ensure that any lessons learned from their investigations can be applied to offshore commercial helicopter flights in the UK? (904985)
We were all completely devastated to hear about that crash. Having been on one of those helicopter trips to an offshore rig, I have seen the amount of effort and the focus there is on health and safety, and that makes it doubly tragic. The hon. Gentleman will be aware that the UK Civil Aviation Authority has grounded the helicopter model involved. I assure him that we are working very closely with it and with colleagues in Norway to understand exactly what happened so that we can make sure that it cannot happen in the future.
Does the Minister agree that historic market towns built for the horse and cart, such as Bradford on Avon in my constituency, could not cope, because they do not have the infrastructure, with the extra traffic that fracking will bring?
I absolutely think that is one of the factors any local authority planning committee will take into account. That is precisely the point of having local authority involvement and a community say, because local people of course know best what is suitable for their area. Local planning is one aspect of this, but the whole safety regulatory environment—the Health and Safety Executive and the Environment Agency—is, nevertheless, absolutely vital. I assure my hon. Friend that there will be no compromise either on safety or on the view of the local community.
The Secretary of State will know that we now have scientific evidence that noxious fumes from diesel engines are poisoning our children and poisoning our air. Are those fumes also related to the deterioration in our climate?
I share the hon. Gentleman’s concerns about pollution and air quality. It is because of those concerns that this Government are so committed to delivering on the Climate Change Act 2008. It is absolutely clear that the problem also derives from the support for diesel. Basically, we have all been misled on diesel, and I hope we can look carefully at how to make sure—for example, by ensuring no defeat devices are installed—that that does not happen again. I will work closely with the Department for Transport to make sure we deliver on that.
The Secretary of State will be aware of the continuing speculation about the Hinkley Point C project. Will she reassure me that, in any assessment of it, the Government will bear it in mind that it could create 25,000 jobs in the south-west during the construction period? Those are the skilled jobs that this economy desperately needs.
I thank my hon. Friend for that question and for giving me the opportunity to say how much this Government support the Hinkley Point project. We are delighted to be able to say that we expect it to go ahead and to deliver much-needed clean, secure, affordable energy. This Government are focused on a new nuclear programme, not only with Hinkley Point but with other new nuclear, because we are doing what the Labour party so dismally failed to do for 13 years, namely deliver on investment in infrastructure to the benefit of all consumers.
EU Migrants: National Insurance Numbers
For years, UK migration figures have been measured independently according to agreed United Nations definitions. Today’s report by the independent Office for National Statistics is a clear endorsement of the validity of those figures. I welcome the clarity that the ONS has provided on this important issue, and am glad to have the opportunity to clear up some of the misconceptions about the figures for national insurance numbers and what those may mean for EU migration.
On 7 March this year, the Office for National Statistics published a note explaining why long-term international immigration figures could differ from the number of national insurance number registrations, concluding that the two series are likely to differ. At the same time, the ONS undertook to conduct further analysis of the issue. It has published its conclusions this morning; I stress that that is independent work carried out by an independent statistics authority. Its conclusions are clear. The ONS has now stated that the difference between the number of long-term EU migrants and the number of national insurance registrations by EU nationals can largely be accounted for by short-term EU migration to the UK, and that the independent international passenger survey remains
“the best source of information for measuring”
net migration. The ONS also says that national insurance figures are “not a good measure” of levels of migration, even if they are helpful for understanding patterns of migration.
A national insurance number can be obtained by anyone working in the UK for just a few weeks, and the ONS explains clearly that the number of national insurance registrations should not be compared with migration figures because they measure entirely different things. Short-term migrants have never been included in the long-term migration statistics, which are governed by UN definitions. There have always been short-term migrants who are not picked up in those statistics, but short-term migration will not have an impact on population growth and population pressures, as by definition short-term migrants leave the UK within 12 months of arriving.
The Government look forward to the ONS’s follow-up note later in the year, which will set out its analysis in greater detail. We must now be careful not to distort the figures following the ONS’s clear statement. I welcome its conclusions, which I hope provide reassurance to those concerned that national insurance data could suggest that the published migration statistics were inaccurate.
The Government take very seriously the need to reduce net migration to long-term sustainable levels, from the hundreds of thousands to the tens of thousands. We have taken a number of steps to achieve that, of which the Immigration Bill, which completed its parliamentary passage this week, is just the latest. Clear and accurate statistics are integral to what we are seeking to achieve. I am pleased that today the ONS has, with its normal impartiality, confirmed that the statistics based on the international passenger survey that we use have the necessary integrity and remain the best measure for understanding net migration.
I am grateful to the Minister for his statement, but does he not accept that the very popular programme of making a substantial reduction in net migration that he, I and other Conservative MPs stood on at the general election is quite impossible to honour as a promise given the Government’s own figures for migration, never mind the figures for national insurance? Migration has been running well above the maximum total that we suggested to the electorate. Does that not show that all the time we stay in the European Union we cannot control EU migration in the way we promised at the general election? Does the big difference between the national insurance numbers and the migration figures have implications that will worry Members across the House, given the impact on public services?
Over five years, 1.2 million additional people came to the UK, got a job and a national insurance number, and lived here for a considerable time, even if some of them have now departed. Those people needed doctors surgeries, school places for their children, and so on. In the past two years, an additional 1.1 million people have registered for GP services. That implies that national insurance numbers are closer to the truth, and that we need to consider those figures as well as the formal migration numbers when planning public provision.
Does the Minister share my concern that we are not offering a sufficiently good welcome in terms of GP places, health facilities and school places, and that that is putting a lot of pressure on settled communities and not offering something good to the newcomers? Does he share my wish to get a grip on that, so that we can properly plan our public services? The note that was slipped out—fortunately Mr Speaker allowed this urgent question—does not explain that discrepancy or deal with the fundamental point that if someone comes here, works and gets a national insurance number, we must provide public facilities for them.
I am grateful to my right hon. Friend for allowing me to clarify those points, and today’s statement from the ONS is clear. As Glen Watson, the deputy national statistician for population and public policy, said:
“We are confident the International Passenger Survey remains the best available way of measuring long-term migration to the UK.”
My right hon. Friend correctly highlighted the pressure on public services, and the Government remain committed to reducing net migration to the long-term sustainable levels that existed before the previous Labour Government. We remain focused on achieving that, which is why we have taken steps to reform the visa system and to confront illegal migration. Measures in the Immigration Bill, which the House approved earlier this week, are pivotal to that.
The ONS is clear that we should not be looking at national insurance numbers for an assessment of the pressures of migration. Some have suggested that leaving the EU will in some way deal with the migration issue, but we need only consider the examples of other countries that have decided to be outside the EU yet have free movement and pay into the EU budget. There is an idea that things would be better outside the EU, but I find it inconceivable that we would have access to the single market and not have those issues of free movement.
We must also stress the important achievements of the Prime Minister in his renegotiation, and in putting the welfare brake into effect and dealing with some of those pull factors, as well as important steps on deregulation. He secured important elements in that renegotiation for the benefit not just of the UK, but of the EU as a whole. We must grow that economy and see other European nations succeeding and creating jobs and employment in the way that this country has done. I recognise the concerns that my right hon. Friend has rightly highlighted about public services. Those issues remain a concern of this Government, but we have taken, are taking and will continue to take action to see net migration figures reduce to sustainable levels, and to address concerns about public services and the pressures on our communities.
Unlike my notorious predecessor in Wolverhampton South West, I see some positives to immigration. The right hon. Member for Wokingham (John Redwood) prays in aid the pressure on GPs—and there are pressures—but many GPs in the United Kingdom, particularly in areas such as mine, have trained overseas and are helping our constituents. The European Union brings us jobs, prosperity and environmental benefits through shared programmes, and it increases the sovereignty and security of our country. One in five carers looking after our growing older population have come to Britain from the EU and elsewhere, and it is currently estimated that 1.2 million UK citizens are taking advantage of the free movement of labour and are working or living overseas in the EU. It is a two-way process.
On the statement from the ONS, Glen Watson said this morning:
“National Insurance number registrations are not a good indicator of long term-migration. This research shows that many people who register for National Insurance stay in the UK for less than a year, which is the minimum stay for a long-term migrant according to the internationally recognised definition.”
I am grateful to the Library for its helpful brief, dated 8 September 2015, in which it cites the HMRC national insurance manual, which says, among other things:
“Initially applicants need to make an application”—
for a national insurance number—
“by phone…They may then be required to attend an interview at a DWP JobCentrePlus office, as HMRC’s guidance explains”.
It then goes on to cite the guidance. I suspect that, like me, the right hon. Member for Wokingham, when he turned 15, got his first job and had to go in person to apply for a national insurance number. He shakes his head. That is what I had to do and that was the general system then, but perhaps he did not start work at 15 in a factory, as I did. The Government should look again at the system, rather than simply mailing out national insurance numbers. I am not advocating a change; I am advocating that they look again at the desirability of the system of face-to-face interviews for everyone.
The hon. Gentleman’s last point is obviously a matter for colleagues in the Department for Work and Pensions, and clearly we continue to assess these matters, but his key point was about the long term versus the short term. The clear statements from the ONS highlight that the right measure to look at is the long-term immigration measure through the international passenger survey data. That is the clearest way to set out the pressures of migration. The ONS has also said very clearly that national insurance numbers are not an appropriate measure of assessment for that purpose. Yes, they indicate trends or patterns, but for overall net migration numbers the international passenger survey remains conclusively the best measure we have, and it is right that the Government use it, as we have been doing consistently, in line with the UN definitions for that mechanism. I note what he says and his endorsement of the ONS’s report this morning.
Has my right hon. Friend seen the report by the London School of Economics this morning demonstrating that wages in this country have continued to rise strongly since the first flood of arrivals to this country from Poland and elsewhere, and that the fall in wages in recent years was plainly caused by the deep recession—the worst since the second world war—in 2007? This refutes other anti-immigrant arguments that some of the Brexiteers keep using in the present campaign. Does he accept that the real migrant crisis facing him and this country is the problem of how to deal, in a civilised and effective way, with the flood of people coming from war and anarchy in the middle east and north Africa, and that the problem is not Polish construction workers and Romanian nurses, who make a valuable contribution to the economic life of this country?
I must confess that I have not had the opportunity to see the LSE report to which my right hon. and learned Friend has referred, but I shall seek it out after I have left the Chamber. He clearly makes a strong point about the challenges we face in dealing with the migration crisis, and obviously the Government are taking clear steps, both in region and in Europe, to respond to and deal with that. On the issue of new EU members, the Government are clear on how we would use our veto if we were not satisfied with the terms on which a country was to join the EU—in terms of convergence with the economies of the EU and those issues, which we recognise, of free movement. We have that veto and will certainly use it, if we are not satisfied with the terms of entry.
I am indeed, Mr Speaker. I welcome the publication of the data this morning because it can only help to give us a better understanding of migration patterns, notwithstanding the fact that, on their own, I do not think that these national insurance registrations are a reliable indicator for measuring long-term international migration.
It is vital that we remember that migration is a global phenomenon, not just a European issue, and that it is very much a two-way street. In Scotland, we are all too aware that for generations migration has meant that many of our citizens have moved abroad. Even now, many of our most highly qualified young people leave to build careers in other parts of the world. I am also conscious that in some sectors of our economy we are heavily dependent on migrant labour, not least for our NHS, but for other parts of our public and private sectors. Migrant workers not only contribute to our economy, but help to anchor the jobs of the local workforce in the UK. What assessment have the Government made of the number of UK industries and UK jobs that depend on the free movement of labour within the EU? Will the Minister be forthright in dispelling myths about migration and in articulating the contribution that migrant workforces make to our economy?
As a Government, we have always been clear that we want to attract the skilled and the talented, the brightest and the best to contribute to the UK’s economic growth. We therefore have a very clear policy for visa nationals from outside the EU in response to that. When it comes to the EU, what we are more concerned about is the perhaps artificial draw that might come from benefits, and we also want to ensure that we have a skilled workforce in the UK to meet the needs of the economy. That explains the Government’s important work on apprenticeships through the apprenticeship levy and indeed the skills levy that we will introduce in respect of skill visas. We want to provide people from this country with the right skills to meet those needs so that we are not overly reliant on labour from outside the UK.
The publication of the NI figures is simply one more confirmation that there is no chance—zero—of us fulfilling our promise to the British people to reduce immigration to the tens of thousands, unless there is a restriction on the free movement of labour within the European Union. The Minister mentioned the renegotiation, so will he tell us why the Government did not attempt in any way to get a reduction in that free movement as part of that renegotiation?
We remain focused on reducing net migration to those sustainable levels, and my right hon. Friend well knows that the renegotiation to which I referred brought about the welfare brake and indeed improved competitiveness across the UK by dealing with unnecessary bureaucracy. If we look at the differences between economies across the EU, we can see how that reformist agenda that the Prime Minister has championed is essential. As I have said, we are taking steps within the UK to ensure that we have the right skills for the UK workforce as well.
There is nothing new in an influx of east Europeans. The displaced persons system that operated immediately after the end of the second world war helped millions of people from around Europe who were without jobs and without states. I worked with many east Europeans in the pits on the basis that they were members of our union, the National Union of Mineworkers, and got paid the same money as we did. They did not undermine other workers in the traditional industries and some of them were very involved in the trade union movement. Today, however, thousands and millions of people are on the move, but the Government cannot see the possibility of doing what we did in the late ’40s by insisting on union recognition, the same pay for everybody and no undermining of workers’ rights. The net result would be no problem at all, and UK Independence party’s rise would disappear like snowflakes on an oven.
The hon. Gentleman has made his point in his customary colourful way, but the facts that we see before us show that national insurance numbers—which, after all, are what the urgent question was about—are not a good measure when it comes to the long-term issue of migration. The hon. Gentleman may be more interested in talking about snowflakes and union recognition, but I think that those are matters for another debate.
I am not sure that I saw the Minister last night at the world premiere of “Brexit: The Movie”. Unfortunately, it is not a war film.
A few months ago, the Prime Minister was telling us that unless he got his way on migration, he would consider leaving the European Union. That involved a minor change in migration figures and controls. The Prime Minister now says that if we left the EU, there might indeed be a third world war. I have a graph here, so that Members can see the difference between the two figures. Does not that mismatch show that we have no idea of the net migration figure? Migration is out of control. We need to regain control of our borders, and that is what the Minister should have done by means of an emergency brake.
I was not at the opening night of “Brexit: The Movie” to discover whether my hon. Friend had a starring role in it, so we shall have to wait and see.
The Office for National Statistics makes very clear that, in its judgment, the passenger survey is still the right way of assessing net migration, and that is the measure that the Government will continue to use.
May I remind my right hon. Friend that the report produced by the Public Administration Committee during the last Parliament cast grave doubt on the accuracy and reliability of the immigration statistics? The annual passenger survey is just that: a survey of a sample of passengers entering the United Kingdom. Those statistics may well be “the best way” of measuring our immigration, but the Committee decided that they were not a reliable way of measuring immigration, and the very large rise in national insurance numbers shows that there is something else going on.
May I also remind my right hon. Friend that the last census showed that the British population was larger by 467,000 than the Government had understood it to be, and that a very large proportion of that was due to unrecorded immigration? We do not have control over immigration into this country, because all EU citizens and their dependants have the right to come here, and the Government have no means of excluding them even if they are criminals and terrorists.
We do, in fact, exclude from the EU those who may be involved in criminality or terrorism, and the Prime Minister’s renegotiation has actually strengthened our ability to remove them. As for the annual passenger survey, the Office for National Statistics has made it very clear that it remains the best measure for determining net migration. The national insurance numbers do not provide such a measure. I am sure that the ONS, as an independent body, will continue to review the position and assess what improvement may be made, but today it has been specific in stating that the passenger survey is the most effective measure.
Can the Minister confirm that the number of Jobcentre Plus offices that are able to issue national insurance numbers has been reduced? I have been told of someone who applied in York, only to be told that they had to travel to Hull to get a national insurance number.
This is going to be a slightly different question from the one you were expecting, Mr Speaker. I am delighted that the Office for National Statistics has published this report to bust the myth that these national insurance numbers expose something about the immigration system. The report states explicitly that the main contributors to these national insurance numbers are people who are here for less than a year and will therefore not be included in the Government’s immigration targets and have nothing whatever to do with them. To be kind to those who are arguing the case for Brexit, I think they believe that short-term migrants are as bad as long-term migrants in many cases. That being the case, will the Minister acknowledge that many groups of short-term migrants—including 27,000 teachers, 28,000 care workers and 60,000 seasonal workers in the farming industry—do tremendous things for this country, both in our public services and in the private sector?
I am grateful to my right hon. Friend for making that clear point. He recognises, as I do, the benefit that we gain from the short-term migration of EU workers. Others who fall into that category include students on short-term courses, short-term contractors and, as he has pointed out, seasonal workers. The point is that this migration is short term: those people leave and therefore do not contribute to the long-term pressures.
Is it not the case that national insurance numbers that have been issued are not subsequently removed? Has the Minister made an estimate of how many of the numbers relate to people who are no longer here? Will he also gently ask the Brexit campaign not to descend into dog-whistle politics over immigration?
It is important that we focus on the issues at hand this morning—namely, the national insurance numbers and the best measure for assessing long-term migration. That is what the Office for National Statistics has clearly set out, and that is the issue that we should focus on. The hon. Gentleman makes an important point about the national insurance number system, but clearly that is not the best mechanism for assessing the overall impact.
These figures clearly lay bare the fact that the Government are powerless to control EU immigration for the benefit of our public services. How do the Government justify our present immigration system, which unfairly discriminates against economic migrants from outside the EU? Would it not be better, on leaving the EU, to design a fairer immigration policy with a level playing field for nationals of all countries, some of whom might be better qualified?
I will leave it to the hon. Gentleman to make the case for having a visa system for all EU nationals, which is what he appears to be suggesting. The Government have a clear approach to controlling migration from outside the EU through our skills-based visas and through other routes, as well as to dealing with the pressures that we have highlighted, with economic competitiveness and with draws such as the welfare system.
With discrepancies of 1.2 million national insurance numbers being reported, and with EU immigration increasing, it has become harder to tell whether new arrivals will stay for just a few months or for more than a year. This means that passengers from the EU who want to live permanently in Britain might have been incorrectly designated as visitors. What has been done to ensure that people coming from the EU are correctly identified, particularly in these difficult times when accurate figures are vital and being transparent is key to creating trust among the British people?
I agree with the hon. Gentleman’s point about the need for clarity and certainty in relation to the numbers. We have looked to the Office for National Statistics, which operates independently of me, of the Home Office and of other Government Departments, to give us that clarity. It has judged that the international passenger survey is the best and most appropriate measure for that, and it continues to review, as it does from time to time, how best to ensure that it captures effective data from its interviews and how those data are extrapolated to produce its quarterly numbers.
I recognise what the Minister has said about the reliability of the national insurance figures as a measure of immigration, but he must accept that there is significant uncertainty and ambiguity in the perception of the complete picture. Given the significant pressure on public services, I urge the Minister to respond to those concerns and perhaps outline what he thinks could be done to provide a more balanced overall picture of immigration and to address the grave concerns out there.
Obviously, one of the key elements is that we need a strong economy to be able to support our public services. As for the pressures on particular communities, the Government are introducing a controlling migration fund to assist those that may be specifically affected by population increases linked to migration, and we will continue with reforms to control migration.
The Minister knows that I represent a border constituency with a natural hinterland. I have constituents who cannot get national insurance numbers. They have worked in the south and are pensioned from the south, but they pay tax in the UK and have been issued with UK tax numbers under double taxation rules. However, they cannot get national insurance numbers. Can the Minister assure me that the sensitivity around the statistics and the nonsense about EU migrants are not factors in their predicament?
I will certainly ensure that his comments about people’s ability to obtain national insurance numbers are passed on to colleagues at the Department for Work and Pensions. I point the hon. Gentleman to the ONS’s clear statement on the lack of a connection between national insurance numbers and long-term migration and to what I have already indicated about the best measures.
It is quite clear from the Minister’s answer to the urgent question that there are more EU migrants here at any one time than was previously thought. That is now not in doubt. I suspect that the Minister is a good poker player, because he can clearly bluff and misrepresent the facts.
Indeed, Mr Speaker. What I was trying to say, clearly rather clumsily, was that the Minister would be a very good poker player. He is an excellent Minister, and I want to give him some career guidance. The Prime Minister clearly requires that immigration numbers come down to the tens of thousands, but these NI numbers prove that that cannot possibly happen while we are in the EU, so could he advise the Prime Minister to change his position on the EU and recommend that people vote to come out, and the Minister can keep his job?
My hon. Friend has given an exposition of the position. However, there is clearly large-scale EU migration to this country by people who want to work, and our public services and many of our service industries depend on those people coming to do those jobs. In my constituency, the number of EU nationals has grown from 1,000 in 2010 to 10,000 in just five years. It cannot be said that that is not a long-term trend, because it clearly is. At the same time, when it comes to people from the Commonwealth, some of my constituents cannot get their relatives in and businesses cannot get skilled people in to do jobs that are required.
Clearly, the net migration statistics show the challenges that remain in relation to both EU and non-EU migration, and how those numbers continue to be much higher than we want them to be. That is why we continue on our reform agenda. On visas from outside the EU, we have the shortage occupation list to prioritise those skills that are particularly needed, so that visas can be granted where there are gaps.
The statistics published today show that the number of national insurance numbers has risen exponentially since 2003, from just over 100,000 to 700,000. I do not believe that what the Minister has said about the data clarifying the issue is the case, because there is a variation in the estimate for the short-term element of more than 200,000. The Government think that, over the next 14 years, 3 million more people will come here from the EU to settle on a long-term basis—at current rates, the figure will be 5 million. This has a tremendous impact in every constituency, including mine, on housing, jobs and services. I just ask: do the Government not care about that?
Order. May I gently point out that listening to and observing our proceedings today are quite a large number of schoolchildren? If they asked questions in class that are as long as the questions we are getting today, they would probably be put in detention.
I certainly would not want to end up in detention, so I shall try to be as brief as I can in my answer. Let me direct my hon. Friend to the report, as it says that short-term migration to the UK
“largely accounts for the recent differences”
on the number of long-term migrants and that the international passenger survey is the “best source of information”. Clearly, we care about pressure on public services, which is why I have consistently made the point during this urgent question about the continued reforms that the Government are making to control migration.
That last question warranted not a detention but a gold star. I am a great believer that the waves of migration that our country has had have been unbelievably beneficial for the country I am proud to represent in this place. However, I am disappointed with the Government, because on 10 March I asked for these numbers to be released and yet for some reason, through the cloak and daggers and smoke-filled rooms behind different Ministries, these supposedly benign figures could not be released at that point. Why was that?
A clear amount of detailed work has been conducted by the ONS to produce today’s report, drawing together different information from the Department for Work and Pensions, Her Majesty’s Revenue and Customs and its own assessment. I hope my hon. Friend will recognise that the report comes independently from the ONS, in order to give that assurance and clarity, which I think it does give.
The ONS clearly says that the IPS is the best measure available to assess our long-term net migration numbers. We will continue to see how issues such as the availability of exit check data may help to enrich and support the ONS’s analysis, but its report’s conclusions today make it clear that the IPS remains the best measure.
National insurance numbers are obtained only by those who want to work legally and pay their tax or claim benefits. Inevitably, some EU nationals will be in the UK working illegally. What assessment has the Minister made of the number of EU nationals working cash in hand without a national insurance number, taking the jobs of our constituents? What is he doing to prevent illegal working by EU nationals?
My hon. Friend makes an important point about illegal working. It is why the new Immigration Bill, which we have been debating this week, includes new measures to target those engaging workers who do not have those rights to be here. Indeed, we will continue to work across government with Her Majesty’s Revenue and Customs and the Department for Work and Pensions to better identify those who are not complying with the rules and to take firm action against them.
There is no prospect of Turkey joining the EU any time soon. It needs to undertake significant steps as part of reform of a range of different elements, so that issue is not relevant to this. Again, let me underline how the Government will use their veto against any new country seeking to join the EU if they are not satisfied with the terms of that, particularly in relation to convergence and the impact that that would have on labour markets across the EU.
In my constituency, Boston has seen the highest level of eastern European migration anywhere in the UK, driven largely by seasonal work. I agree with the Minister that NI numbers would be a terrible way of measuring migration in an area such as mine, but does he agree that, in areas that have seen unusual concentrations of migration, we do need a better way of measuring migration if we are adequately to plan for public services?
Although I entirely recognise the point that my hon. Friend makes about the particular pressures that certain areas in the UK have experienced as a consequence of migration, I also recognise the benefits that are attached in terms of the contribution to our economy. It is why we are seeking to introduce the controlling migration fund, which will assist areas that are experiencing that growth in population linked to migration.
The Government’s case rests on ignoring the arguments set out by my right hon. Friend the former Secretary of State for Work and Pensions earlier this week, particularly in relation to people shuttling to and fro for a few months at a time. That is a problem that the Minister’s case would ignore by looking at the passenger service. If he will not listen to my right hon. Friend, will he at least listen to Lord Rose, the chairman of the pro-EU Britain Stronger in Europe campaign, who told the Treasury Committee that the wages of the lowest paid would rise if we left the EU and took control of migration?
I point my hon. Friend not only to the contribution that those who arrive here make to our economy—it is a net contribution of around £2.5 billion—and how important it is for our economy, but to the steps that we are taking to reduce those artificial pull factors. We need to focus not just on those pressures in our local areas, but on how we get the right skills for our economy to ensure that we are giving young people in this country the best opportunity, which is precisely what our apprenticeships programme is all about.
The Minister has sought to defend the Government’s position by continually referring to short-term workers, but will he acknowledge that short-term workers are replaced by further short-term workers, and therefore the pressure on our public services is continuous, as are the diminished opportunities for UK citizens to get those jobs.
Assessing the pressure on the population is about long-term net migration. That is the clear measure that we use, and that is the UN definition. It remains absolutely the appropriate way to assess those issues in respect of the potential growth in population and it is why we do remain focused on the measure that the ONS has clearly set out today, which is the passenger survey, and that assessment of long-term net migration.
With permission, Mr Speaker, I should like to make a statement.
The Government are today laying before Parliament and depositing in the Libraries of both Houses a White Paper on the BBC charter review. The royal charter is the constitutional basis for the BBC. It is the framework for the way in which the BBC is governed and guarantees its independence. The current royal charter will expire at the end of 2016; today we lay out our plans for the next one.
The White Paper represents the culmination of 10 months’ work. I thank everyone who contributed to the Green Paper consultation process, not least 190,000 members of the public. I am also very grateful to Sir David Clementi and his team for their independent review of the governance and regulation of the BBC, to the Committees in both Houses that made recommendations and to all the stakeholders, BBC representatives and others who helped inform our deliberations.
The BBC is one of the country’s greatest institutions, and 80% of those who responded to our Green Paper said the BBC serves audiences very well or well. Every week the BBC reaches 97% of the UK population and 348 million people across the globe, informing, educating and entertaining them and promoting Britain around the world.
It is our overriding aim to ensure that the BBC continues to thrive in a media landscape that has changed beyond recognition since the last charter review 10 years ago and that it continues to delivers the best possible service for licence fee payers. So today we are setting out a framework for the BBC that allows it to focus on high-quality, distinctive content that informs, educates and entertains while serving all audiences; enhances its independence while making it much more effective and accountable in its governance and regulation; makes support for the UK’s creative industries central to the BBC’s operations while minimising any undue negative market impacts; increases the BBC’s efficiency and transparency; and supports the BBC with a modern, sustainable and fair system of funding.
The BBC’s special public service ethos and funding allow it to take creative risks, to be innovative, and to produce high-quality content. That means more choice for listeners and viewers. The BBC delivers a huge amount of outstanding programming, including in drama, news and current affairs, sport, science and the arts. Many programmes have received awards, not least at the BAFTAs on Sunday, and they demonstrate that, at its best, the BBC is still the finest broadcaster in the world. However, as the BBC Trust itself has recognised, in some areas the BBC needs to be more ambitious, particularly in its more mainstream television, radio and online services.
The BBC director-general has called for a BBC that is
“more distinctive than ever—and clearly distinguishable from the market”.
The Government are emphatically not saying that the BBC should not be popular. Indeed, some of its most distinctive programmes, such as “Life on Earth”, “Wonders of the Universe” and “Strictly Come Dancing” on TV, or the “Newsbeat” programme or Jeremy Vine show on Radio 1 and 2 respectively, have very wide audiences because they are so good.
With a 33% share in television, 53% share in radio and the third most popular UK website, and with only 27% of people believing that the BBC makes lots of programmes that are more daring and innovative than those of other broadcasters, commissioning editors should ask consistently of new programming, “Is this idea sufficiently innovative and high quality?” rather than simply, “How will it do in the ratings?” So we will place a requirement to provide distinctive content and services at the heart of the BBC’s overall core mission of informing, educating and entertaining in the public interest, and we will also affirm the need for impartiality in its news and current affairs broadcasts.
The BBC’s existing minimum content requirements will be replaced with a new licensing regime that will ensure its services are clearly differentiated from the rest of the market, enhancing choice for licence fee payers and backed up by robust incentive structures. The BBC will also be required to give greater focus to under-served audiences, in particular those from black, Asian and ethnic minority backgrounds and from the nations and regions, who are currently less well served. That will involve the BBC building on its new diversity strategy, maintaining out-of-London production quotas, and ensuring that it continues to provide for minority languages in its partnerships with S4C and MG Alba.
Over the next charter period, we want the BBC to be the leading broadcaster in addressing issues of diversity. For the first time, diversity will be enshrined in the new charter’s public purposes. This, along with a commitment to serve all audiences in the BBC’s mission, will help hold the BBC to account for delivering for everyone in the UK.
Looking beyond these shores, the BBC World Service is rightly considered across the globe to be a beacon of impartial and objective news. It is a vital corrective to the state-run propaganda of certain other countries. So we will protect its annual funding of £254 million for five years and also make available £289 million of additional Government funding over the spending review period, as announced by the Chancellor last year, so that the World Service can represent the UK and its values around the globe.
All organisations need a governance and regulatory structure that is fit for purpose. The BBC’s is not, and it is no longer supportable for the BBC to regulate itself. Governance failures, including excessive severance payments and the costly digital media initiative, have illustrated that the division of responsibilities between the BBC executive and the BBC Trust is confusing and ineffective. As the independent review led by Sir David Clementi made clear, there is widespread agreement that reform is vital. I can announce today that we are accepting the review’s recommendations.
The new charter will create a unitary board for the BBC that has a much clearer separation of governance and regulation. The board will be responsible for ensuring that the BBC’s strategy, activity and output are in the public interest and accord with the missions and purposes set out in the charter. Editorial decisions will remain the responsibility of the director-general and his editorial independence will be explicitly enshrined in the Charter, while the unitary board will consider any issues or complaints that arise post-transmission. For the first time, the BBC will have the ability to appoint a majority of its board independently of Government. This is a major change, as previously the BBC governors, and then the members of the BBC Trust, were all appointed by Government.
Ofcom has a proven track record as a regulator of media and telecoms. It is the right body to take on external regulation of the BBC. We will require Ofcom to establish new operating licences for the BBC, with powers to ensure that its findings are acted upon. Ofcom will also take charge of regulating the distribution framework and fair trading arrangements for the BBC. It will be a strong regulator to match a strong BBC.
The Government will introduce four further changes to make the BBC more accountable to those it serves. The charter review process will be separated from the political cycle by establishing an 11-year charter to 2027, with an opportunity to check that the reforms are working as we intend at the mid-term. This will be the third longest charter in the BBC’s history, and allows for an orderly transition to the new arrangements. The BBC will become more accountable to the devolved nations; the complaints system will undergo long overdue reform; and new expectations will be set for public engagement and responsiveness. These are major changes to the way that in which the BBC is governed. They will take time to effect and it is important that this process runs smoothly, so the current BBC chair, Rona Fairhead, will remain in post for the duration of her current term, which ends in October 2018.
The creative sector is one of this country’s great success stories, growing at twice the rate of the rest of the economy since 2008 and accounting for £84 billion of gross value added and nearly 9% of service exports. The BBC should be at the core of the creative sector, supporting everyone from established players to SMEs. It is already a major purchaser, spending more than £1 billion on the services of around 2,700 suppliers involved in making programmes for the BBC.
The BBC already allows up to 50% of its content to be competed for by the independent sector. The Government now intend that the remaining 50% in-house guarantee for television should be removed for all BBC content except news and related current affairs output. Unless there is clear evidence that it would not provide value for money, all productions will be tendered. There will be a phased introduction of this requirement, which will open up hundreds of millions of pounds of production expenditure to competition. Not only will this benefit the creative industries, but it is fundamentally a good thing for viewers and listeners, with BBC commissioning editors given greater freedom to pick the most creative ideas and broadcast the highest quality programmes.
The BBC plans to make its in-house production unit a commercial subsidiary. We support these plans in principle, provided they meet the necessary regulatory approvals. However, the BBC can, by virtue of its size and scale, have a negative impact on the media market, crowding out investment and deterring new entrants, so Ofcom will be given the power to assess all aspects of BBC services to see how they impact on the market, with proportionate powers to sanction. Rather than seeing other players as rivals, the BBC should proactively seek to enhance, bolster and work in partnership with the wider broadcasting and creative industries. There will be a focus on that in the new charter. In particular, the BBC will support and invigorate local democracy across the UK, working with local news outlets.
The Government will also consult in the autumn on a new contestable public service content fund that will allow other broadcasters and producers to make more public service content in areas that are currently underserved, such as programmes for children and for black, Asian and minority ethnic audiences. It will be worth £20 million a year, and it will be paid for from unallocated funding from the 2010 licence fee agreement. There will be more transparency in the way the BBC promotes its own services, and a requirement to steer such activity towards areas of high public value. The BBC will be expected to share its content as widely as possible, and it will also be encouraged further to open up its archive so that other organisations and the public can enjoy its many treasures.
The BBC belongs to all of us. Making its archive more widely available is just one part of a broader opening up process. We want the BBC to be much more transparent, in particular about efficiency improvements. The BBC already plans to make £1.5 billion of savings by the end of this charter period, and the BBC Trust has driven some improvements in transparency, but the BBC needs to become more accountable to those it serves. Only 23% of the public believe that the BBC is efficient. Licence fee payers need the BBC to spend the nearly £4 billion they give it every year more wisely. The National Audit Office, which has an outstanding track record, will therefore become the financial auditor of the BBC and will have the power to conduct value for money investigations of the BBC’s activities, with appropriate safeguards for editorial matters. The BBC will also be required to ensure that it is transparent and efficient in its spending by reporting expenditure by genre.
The BBC already publishes data on the salaries of its staff by broad bands, and the names and detailed remuneration packages of those in management earning more than £150,000. The public have a right to know what the highest earners the BBC employs are paid out of their licence fee. The new charter will therefore require the BBC to go further regarding the transparency of what it pays its talent and publish the names of all its employees and freelancers who earn above £450,000—the current director-general’s salary—in broad bands. The Government also expect the new BBC board to consider other ways in which it can improve transparency of talent pay. The BBC will also be required to undertake a root-and-branch review of its research and development activity, laying out its objectives for the future.
Finally, the BBC needs a fair, accountable and sustainable funding system that is fit for the future. There is no perfect model for funding the BBC but, given the stability it provides and the lack of clear public support for any alternative model, the licence fee remains the most appropriate funding model for the next charter period. The licence fee has been frozen at £145.50 since 2010. We will end the freeze and increase the licence fee in line with inflation to 2021-22, at which point there will be a new settlement. In line with the other reforms to funding announced last July, this means that the BBC will have a flat cash settlement to 2021-22. This gives it the certainty and funding levels it needs to deliver its updated mission and purposes, and it will ensure that the BBC remains one of the best-funded public service broadcasters in the world, receiving more than £18 billion from 2017-18 to 2021-22.
Future funding settlements will be made using a new regularised process every five years, giving the BBC greater independence from Government. The licence fee concession for the over-75s will be protected during this Parliament, although voluntary payments will be allowed. We will give the BBC more freedom to manage its budgets. Protected funding of £150 million a year for broadband and £5 million a year for local television will be phased out. The World Service will be an exception to this, given its enormously important role.
The current licence fee system needs to be fairer, so we will close the iPlayer loophole, meaning that those who watch BBC programmes on demand will now need a TV licence like everyone else. There will be pilots of a more flexible payment system to benefit those on lower incomes and make it fairer for everyone. At the moment, people have to pay for the first year in only six months, meaning six much higher monthly payments. We will take forward many of the recommendations from David Perry QC’s review to make the process of investigating and prosecuting licence fee evasion more effective and fair.
Although the licence fee remains the best way of funding the BBC for this charter period, it is likely to become less sustainable as the media landscape continues to evolve. The Government therefore welcome the BBC’s intention to explore whether additional revenue could be raised at home and abroad from additional subscription services sitting alongside the core universal fee.
The Government are clear that any new subscription offer would be for additional services beyond what the BBC already offers. It will be for the BBC to set the scope of these plans, but we expect it to review progress and success in order to feed into the next charter review process. We would also like to see BBC content become portable so that licence fee payers have access when travelling abroad.
The BBC is, and must always remain, at the very heart of British life. We want the BBC to thrive, to make fantastic programmes for audiences and to act as an engine for growth and creativity. Our reforms give the BBC much greater independence from Government—in editorial matters, in its governance, in setting budgets and through a longer charter period. They secure the funding of the BBC and will help the BBC to develop new funding models for the future.
At the same time, these reforms will assist the BBC to fulfil its own stated desire to become more distinctive and better to reflect the diverse nature of its audience. They place the BBC at the heart of the creative industries—as a partner of the local and commercial sectors, not a rival. The BBC will operate in a more robust and more clearly defined governance and regulatory framework. It will be more transparent and accountable to the public it serves, who rely on the BBC to be the very best it can possibly be so that it can inform, educate and entertain for many years to come. I commend this statement to the House.
May I thank the Secretary of State for his statement and for early sight of it? Despite being very coy in the House yesterday when we asked about his plans, he seems to have managed to brief various newspapers overnight on a large part of the contents of the White Paper—a deplorable state of affairs. Indeed, for the last few weeks, we have had to read an increasing avalanche of briefing to Conservative-supporting newspapers—especially those hostile to the BBC—which appears to have emanated from his Department.
The fact that most of the Secretary of State’s wilder proposals appear to have been watered down, dumped or delayed by the Government, of which he is a member, is a reflection of his diminishing influence and lack of clout. He has not got his way in most things, and I welcome that.
There is no point the Secretary of State denying that he has been overruled by the Prime Minister and the Chancellor. We know he is extremely hostile to the BBC. He wants it diminished in scope and size. He recently told an audience in Cambridge that the BBC is merely
“a market intervention of around £4 billion by government”.
That was before he described the disappearance of the BBC if the charter was not renewed as “a tempting prospect”.
The Secretary of State has spent time in speeches trying to tell the BBC that it should not be making popular programmes or that, if it does, they should be scheduled at times when fewer people will watch them. The truth is that, in large part, he has not got his way. [Interruption.]
The Secretary of State’s views are also totally out of step with licence fee payers, who value and support the BBC. I said yesterday that the Opposition believe the BBC charter should have governance arrangements that guarantee the BBC’s editorial and financial independence and refrain from interfering with the BBC’s mission to inform, educate and entertain us all. We will examine the White Paper in detail to see how well it measures up against those criteria.
I welcome the fact that the length of the new charter is to be 11 years, but I am concerned with the imposition of a break clause that will, in effect, reduce that to five and a half years. That does not really give the BBC the certainty and stability it requires to get on with the job. I also welcome the fact that the licence fee is to continue until 2022, increased by CPI inflation, but we wait to see how his proposals over the second half of the charter period develop and will look very closely at what the Government do at that stage.
I still have some major concerns. On governance, I said yesterday that it is unacceptable for a majority of the unitary board, which will have major influence over output and therefore over editorial decisions, to be appointed by the Government. Today we learned that the Secretary of State plans that only up to at least half the board will be Government appointees. This board will run the BBC. Despite what he says, it will have influence over output and therefore over editorial decisions. Appointing a unitary board is different from appointing either governors or trustees, who have had no power to run the BBC day to day.
The Secretary of State’s suggestion that these proposals enhance the independence of the BBC are hard to reconcile with reality. We have seen overnight a political campaign—the leave campaign—headed up by Cabinet Ministers threatening a broadcaster with unspecified consequences for doing something that Cabinet Ministers did not like. How much more serious a threat would that be if those Cabinet Ministers got to appoint at least half the board of the broadcaster concerned? Yet that is the prospect facing the BBC under his plans.
I am still worried, therefore, that the Government are seeking unduly to influence the output and editorial decision making of the BBC—or can be seen to be doing so. Will he now promise that all Government appointments will be made by a demonstrably independent process, overseen by the Commissioner for Public Appointments, that prevents there being any suspicion that the Government seek to turn the BBC into something over which they have more control than is currently the case? Reports in today’s newspapers that the Prime Minister has personally intervened to insist that Rona Fairhead be installed as chair of the new board do not augur well in this respect. I make no comment on the merits of Rona Fairhead, but there has been no process at all to reach such a decision—simply a prime ministerial diktat. That does not augur well for these arrangements in future.
On financial independence, a funding agreement was struck by the Chancellor with the BBC last year. We will look to ensure that it is met in full by the Government, with no more top-slicing—I welcome what the Secretary of State said about that—and no siphoning off of licence fee payers’ money into funds to be given to other broadcasters. We are glad, in that respect, that his contestable pot proposals, widely briefed in advance of the publication of the White Paper, are now somewhat shrunken and are to be consulted on. Will he give the House an assurance that he will listen to the results of that consultation and be prepared, if necessary and if that is its outcome, to abandon these proposals?
I am very concerned that the Secretary of State wants to change the mission of the BBC when it has worked well for more than 90 years and is supported by the public. There is a great virtue to the simplicity and clarity of the current phraseology of its mission statement. Given what he has said, we will look closely at what he proposes to see how it might work. I do not believe that his obsession with distinctiveness should be imported into the BBC’s mission statement. However, we will look at the wording he proposes to see whether we have any concerns about what the implications will be.
I welcome the Secretary of State’s focus on improving the diversity of the BBC in respect of its staffing and the way in which it produces its output. Again, I am not convinced that the mission statement is the best place to put that. None the less, we will look closely at what he proposes, and I welcome the general tenor of his remarks and his intentions in this respect.
The Opposition do not accept the Secretary of State’s assertion that the size and scale of the BBC crowd out investment and have a negative impact on the media market—quite the opposite. The BBC already works well with other UK creative industries and other broadcasters, to the benefit of all. He might be better advised to keep his nose out of this rather than trying to tell the BBC how to do the job that it does on a day-to-day basis. He ought to stop his ideologically driven meddling and let it get on with the job.
We note what the Secretary of State had to say about the new and enhanced role that Ofcom will have in regulating the BBC. It will be a big job, and Ofcom already has a lot on its plate. Can he guarantee to the House that Ofcom will be given the proper resource—extra staffing, expertise and money—to do the job he now expects it to do? He said nothing about that in his statement today, but an important part of whether this will work is how Ofcom will be able to do this job.
In respect of what the Secretary of State said about the National Audit Office, I respect the National Audit Office and its work very much—I think everybody in this House does—so I have no objection. I note that he said in his statement that there will be appropriate safeguards for editorial independence once value-for-money reports have been done. That is tremendously important. It needs to be totally clear that any work done by the National Audit Office does not interfere with the editorial independence of the BBC. We will look at the detail of those safeguards, and I hope that he will be very open in setting out that detail.
The BBC is one of the UK’s most successful and loved institutions. There has developed a feeling, both inside this Parliament and outside it, that the Government are seeking inappropriate influence over the BBC. Will he now agree that when his proposals are debated in both Houses of Parliament, it should be on a substantive motion that enables Members of both Houses to express their views by way of a vote?
I have some sympathy for the hon. Lady. She had a dry run at this yesterday and rehearsed all her lines of attack, only to wake up this morning to discover that all the concerns that she had expressed were based on ill-founded, hysterical speculation by left-wing luvvies and others; and that, in actual fact, what the Government have proposed has been widely welcomed by, among others, the BBC. She said yesterday that she would judge the Government’s proposals on three key tests. She said that the charter
“must guarantee the BBC’s financial and editorial independence, and it must help it to fulfil its mission to inform, educate and entertain us all.”—[Official Report, 11 May 2016; Vol. 609, c. 629.]
I can tell her that the White Paper not only meets those three tests, but exceeds them. That is exactly what we intend to do.
The hon. Lady raised some questions of detail. I accept that they are important, and I am very happy to give her the answers. I am grateful for her welcome for the fact that, for the first time, the length of the charter will be 11 years, which will take it out of the political electoral cycle. The mid-term review is not a mini charter review. It is simply a health check to allow the Government to ensure that the reforms that we are putting in place, which are substantial, are working properly. It would be ridiculous to find that they were not working and to be unable to do anything about it for another 11 years.
On governance, this is the first time the BBC board—the body that has overall responsibility for running the BBC—will have at least half, and possibly more than half, of its members appointed independently by the BBC. Throughout the period for which the Labour party was in government, the appointments were made wholly by the Government, without even the public appointments process. The appointments that the Government will make are to six positions. They will be subject to the public appointments process, so they will involve the Office of the Commissioner for Public Appointments. Three of them will be made in consultation with the devolved Administrations of Wales, Scotland and Northern Ireland. It will be for the BBC to decide how many other board members there should be, ranging from six to perhaps eight, and who should be chosen to do that.
The other point I would make to the hon. Lady—I set it out very clearly in my statement—is that the board will have no involvement in editorial decision making. The director-general remains the editor in chief, and he is responsible for editorial matters. The board’s involvement will be only after transmission; it will not influence editorial content.
These are substantial changes and we think it right that the existing chairman should continue in post to oversee the transition to the new arrangement. She will be in post until October 2018. She was of course appointed through the public appointments process.
I can confirm that the funding agreement will be met in full. There will be no top-slicing and we will not raid it for any other purposes, as her Government did when she was in office. The contestable pot is outside the July licence fee funding settlement. It is intended to provide additional opportunities for production companies that aim specifically to serve children’s audiences or black, Asian and minority ethnic audiences. We will do more on that to see how it will work.
The hon. Lady said that we have somehow complicated the original trinity, but I would point out to her that the mission statement does not include the simple Reithian trinity that is so often quoted. The current BBC charter mentions
“the promotion of its Public Purposes through the provision of output which consists of information, education and entertainment”.
That is not quite as snappy as the original “inform, educate and entertain”. All we have done is to make it more succinct by saying that those three objectives should be delivered by producing “high quality distinctive content” and “impartial news”. I would just ask her whether she disagrees with either of those two provisions: does she think that the BBC should not make distinctive programming or should not be impartial?
The hon. Lady’s concerns about Ofcom are perfectly justified. She is right that Ofcom will need resourcing to enable it to undertake its considerable new responsibilities. However, the BBC Trust is paid for out of the licence fee at the moment, and it is certainly our hope that the regulatory cost of overseeing the BBC, once Ofcom takes it over, will be lower than the existing cost of the BBC Trust. Ofcom will be financed from the licence fee, just as the BBC Trust is at present.
I confirm that it will be made explicit—there is no disagreement between the National Audit Office and the BBC about this—that the NAO will not involve itself in editorial matters.
I finish by saying that the hon. Lady has made the best fist she can of saying that the White Paper somehow threatens the BBC, but it does not. I end simply by tel