House of Commons
Tuesday 21 March 2017
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
Domestic Students of Medicine
We are funding 1,500 additional medical school places each year to ensure that the NHS can continue to deliver safe, compassionate and effective care well into the future. Around 500 places will be made available in September 2018, and the remaining 1,000 places by September 2019.
In Taunton Deane, we are desperately short of trained health professionals, from dermatologists to nurses, but one of the worst shortages is of GPs, with some practices not even able to get locums. I know Ministers are working on this, but could my right hon. Friend update me on what the Department is doing to encourage more medical students to become GPs? It is hard to believe they do not want to come to Somerset, but what are we doing to encourage them?
There is no greater champion for Somerset than my hon. Friend. What I would say to her is what I would say to all medical students, which is that general practice is going to be the biggest area of expansion in the NHS over the coming years; in fact, we are planning to have the biggest increase in GPs in the history of the NHS.
It will take many years for the doctors the Secretary of State has just talked about to come on stream, and we have a workforce crisis in the NHS now, partly because of the cuts the Government made in the last Parliament, but also because of their irrational pursuit of the hardest of Brexits. He could do something very simple today to address this crisis in the short term, and that is to announce that all EU nationals who do vital work in our NHS will be able to stay when we leave the European Union.
The one simple thing the Government are not going to do is refuse to listen to what the British people said when they voted on 23 June. We will do what they said—it is the right thing to do. However, the right hon. Gentleman is absolutely right to highlight the vital role that the around 10,000 EU doctors in the NHS play in this country. I can reassure him that the number of doctors joining the NHS from the EU was higher in the four months following the referendum result than in the same four months the previous year.
I can absolutely confirm that the garden of England would be an ideal place for a new medical school—alongside many other parts of the country that are actively competing to start medical schools as a result of the expansion in doctor numbers. It is an independent process run by the General Medical Council, and we will await what it says with great interest.
On this wonderful first day of spring, will the Secretary of State think anew about the training of GPs? We want more GPs, we want them highly trained and we want them to know that someone who suffers from atrial fibrillation should not be neglected and should not be put on aspirin or warfarin, but should be given the new anti-coagulants.
The hon. Gentleman speaks very wisely about this, and he is one of a number of people who say we need to look at the training we give GPs on patient safety, on growing, new areas like mental health, and on things like the identification of cancers. This is something we are having an ongoing discussion with the Royal College of General Practitioners about.
Given the importance of training new doctors and nurses to the future of the health service, will my right hon. Friend welcome the building, which will commence later this summer at the Anglia Ruskin University in Chelmsford, of a new medical school that is solely there to train doctors to meet the needs of people in Essex and beyond its borders?
I absolutely welcome that, and I know my right hon. Friend has personally championed it as a local MP. The historical mistake that those on both sides of the House have made is not to do long-term workforce planning for the NHS, and that is something we want to put right.
Plans to train more UK doctors are absolutely welcome, but the Secretary of State knows that it takes at least 10 years to train a doctor, so what is his response to the surveys by the British Medical Association and the GMC showing that, having been left hanging for nine months, 40% to 60% of EU doctors are thinking of leaving?
My response is the one I give many times in this House, which is to stress to all those doctors how valued they are as critical parts of the NHS. We do not see any evidence of the number of doctors joining from the EU going down. The NHS is one of the best health services in the world, and it is a great place for people from other countries to work and train.
The workforce is one of the biggest challenges right across the nations of the UK, and particularly in rural areas, as we heard earlier. With a 92% drop in the number of EU nurses coming to the UK and a 60% increase in the number who left last year, how does the Secretary of State plan to avoid an NHS staffing crisis immediately post-Brexit, before there is time to train anybody extra?
The hon. Lady needs to be very careful in her use of statistics, because she will know that one reason for the drop in the number of nurses coming from the EU is that prior to the Brexit vote we introduced much stricter language tests, as that is better for the safety of patients and a very important thing that we need to get right. We are very confident that nurses will continue to want to work in the NHS, because it is a great place to work.
A&E Waiting Times
Between February 2016 and January 2017, there were just under 3,500 waits of longer than 12 hours from decision to admit to admission. That is completely unacceptable, which is why the Government took urgent steps to free up NHS bed capacity in this month’s Budget.
Earlier this month, the chair of the Royal College of General Practitioners said that the “best place for GPs” is working within their communities to provide the highest possible general practice quality. What forecast has the Secretary of State made of the reduction in A&E waiting times next winter as a result of the new GP triage units in A&E departments? Does he agree that this is simply a small sticking plaster on the gaping wound that is our drastically underfunded NHS?
Let me just tell the hon. Lady what is happening to what she says is a “drastically underfunded NHS”. In her local hospital, St George’s, we have got 36 more doctors—[Interruption.]
Order. The hon. Lady had a question, it was rather overlong and the least courtesy she can do the House is to listen quietly and with good manners to the reply.
Thank you, Mr Speaker. To continue, let me say that in this so-called “drastically underfunded NHS”, the hon. Lady’s local hospital—St George’s in Tooting—now has 36 more doctors working in A&E than there were in 2010. However, we also think that as a lot of people go to A&E departments with minor injuries and things that can be dealt with by GPs, we need to have GPs on site, and this Parliament we are planning to have 5,000 more doctors working in general practice.
In January, more than 1,000 patients at the Countess of Chester’s A&E unit had to wait more than four hours and only 81% of patients had to wait less than four hours. Now that the 95% target has been abandoned, until at least midway through next year, what guarantee can the Secretary of State give my constituents that we will not get a repeat of this next winter?
On the contrary, we have not abandoned the 95% target—we have reiterated its importance. There is, however, one part of the United Kingdom that has said it wants to move away from the 95% target—Wales. The Welsh Health Minister said last week:
“You can go to A&E and be there five hours but have…a good experience.”
That is not looking after patients; it is giving up on them.
On this important issue of A&Es, does the Secretary of State agree that it makes no sense at all for my local clinical commissioning group to be bringing forward a business case to spend an extra £300 million on bulldozing Huddersfield royal infirmary and downgrading our A&E?
I recognise the very strong arguments my hon. Friend makes and the strong campaigning he does on behalf of his constituents. We are waiting for the final recommendations to come from his local CCG, but I agree that too often we have closed beds in the NHS when we do not have alternative capacity in the community, and we need to be very careful not to repeat that mistake.
The cost of presenting with a minor ailment at a pharmacy is only 10% of the cost of presenting at A&E. What more can be done to help persuade those who present themselves to A&E that the pharmacy sector could be a better use of their time?
I entirely agree with my hon. Friend on that. Despite the current debates, the pharmacy sector has a very bright future, and we have set up a £40 million integration fund precisely to help pharmacists to play more of a role in the NHS and, in particular, to reduce pressure on A&Es.
This year, the winter crisis in A&E has been the worst ever. Things have got so bad that, rather than waiting in A&E, record numbers of people are just giving up—I am sure there are many who wish the Secretary of State would do likewise. In January, nearly 1,000 people were stuck on trolleys waiting more than 12 hours to be admitted to A&E. Will the Secretary of State accept that that is far more than just a small number of isolated incidents? After five years in the job, he has to accept responsibility for the crisis he has created.
I accept responsibility for everything that happens in the NHS, including the fact that, compared with 2010, we are seeing 2,500 more patients within four hours every single day. We are also seeing a big increase in demand, which is why there were particular measures in the Budget to make sure that we return to the 95% target, including £2 billion for social care, which is £2 billion more than the Labour party promised for social care at the election.
The urgent care centre at Corby has done much to relieve the pressures on Kettering A&E, and it is a class leader. Given the announcement of £100 million for new triaging projects, would the Secretary of State like to visit the Corby urgent care centre to see this beacon of best practice at first hand?
That is a very generous offer, and if I possibly can, I would love to take my hon. Friend up on it.
Cough-assist machines are one of a variety of respiratory treatments that may be appropriate for sufferers of conditions such as motor neurone disease or muscular dystrophy. In the end, it is a matter of clinical judgment.
There are good examples of best practice cough-assist commissioning policies for muscle-wasting conditions that can be followed by health boards and CCGs. Given the hard work being done to extend the lives of those who suffer from muscular dystrophies, what support and assistance can the Department provide to Muscular Dystrophy UK to ensure that such policy is more widely adopted?
It is not for the Government to direct clinicians regarding the efficacy of particular treatments; it is for clinicians to decide, based on guidance from the National Institute for Health and Care Excellence and others. In developing its recent motor neurone disease guidance, NICE found that the evidence base for the routine use of cough-assist machines was weak. However, the matter is kept under review, so that may change as and if new data emerge.
NHS: Export of Procedures
Many NHS bodies work with their international peers, and each makes its own assessment about the effectiveness of intended collaboration, rather than any determination being made at a national level. Trusts should only pursue opportunities that deliver value for money and do not impair their ability to deliver NHS services.
A team of clinicians at Southmead hospital in my constituency, led by Professor Tim Draycott, have developed and are now exporting internationally a system of maternity healthcare that is transforming maternity safety and childbirth. What is the Department doing to provide further support and ensure that the evidence base the team have developed is embedded and incorporated in policy making in this place?
My hon. Friend will be aware that the professor to whom she refers has presented his findings to the Secretary of State. Partly in response to that, we have set up an £8 million innovation fund to help to take such initiatives forward and to spread best practice throughout the country.
May I endorse what the hon. Member for Bristol North West (Charlotte Leslie) said? In the area of diabetes, for example, our country has some of the best clinicians in the world. Will the Minister ensure that the next time the Prime Minister goes on an official delegation she takes one of these professors with her to show the rest of the world what we are able to do for conditions such as diabetes?
The right hon. Gentleman is an acknowledged expert on diabetes. I have visited facilities around the world, including in Abu Dhabi, where Imperial College London has a joint venture with the diabetes centre there. The UK is an acknowledged expert, and we are launching the national diabetes prevention programme, which will roll out across 10 pilot sites for type 2 diabetes prevention work. I shall encourage the Prime Minister to consider the right hon. Gentleman’s proposal that we expand that work on other trade visits, certainly those for health, around the world.
Mental Health Treatment
This Government were the first to set a national ambition to eliminate inappropriate out-of-area placements by 2020-21. By then, no adult, child or young person will be sent away from their local area to be treated for a general mental health condition.
I thank the Secretary of State for his response. My 17-year-old constituent Jess needed an acute mental health bed. The nearest available was in Colchester. She was allowed to go home some weekends, but it meant an 800-mile trip for her mum. We can only imagine the emotional and financial hardship that that caused. The Secretary of State tells us that he is working on this matter, and I believe that he does want to improve things, but what progress has actually been made, as this is really, really not good enough for Jess and others?
I agree with the hon. Lady and she makes her case very powerfully. We need to make progress and we need to make it fast, particularly for young people, as their recovery can be very closely linked with the potential of their parents to come to visit them. Nearby places such as the Sheffield Health and Social Care Foundation Trust, which do not serve her constituents, have eliminated out-of-area placements and saved £2 million in the process. It is about spreading that best practice.
My hon. Friend speaks very wisely on this matter. In the end, schools are a vital place in which to spot mental health conditions early. We know that around half of mental health conditions become established before the age of 14, and this will be a big part of the Green Paper that we publish later this year.
Does the Secretary of State recognise the ways in which poverty, the associated financial strain and deprivation intersect with mental health; understand the need for him to work with the Secretary of State for Work and Pensions to ensure that mental health is properly recognised in personal independence payment assessments; and recognise that the problem is more acutely affected if people have to travel out of their area of residence?
I can reassure the hon. Lady that I have had a number of discussions with the Secretary of State for Work and Pensions. Indeed, we are producing a joint Green Paper on health and work precisely to make sure that we address those issues.
Some innovative and award-winning work is being done by Bradford District NHS Care Trust. It is working alongside excellent voluntary organisations and charitable organisations such as the Cellar Trust in Shipley, which is delivering much improved support for mental health patients. Will the Secretary of State congratulate the work that is being done in Bradford, and would he like to pay a visit so that he can share this best practice with other parts of the UK?
I am happy to congratulate the Cellar Trust, and to pay a visit if I can find the time to do so. My hon. Friend is right to say that voluntary organisations play a vital role. Very often, they can see the whole picture and they treat the whole person, not just the specific NHS or specific housing issue, so he is right to commend its work.
Recent figures show that 18 mental health patients were placed more than 185 miles away from their home for treatment, including five from the northern region—Jess is one such example. Their families will have to travel the equivalent of Manchester to London, or further, to visit them. We have also learned that £800 million was taken out of CCG budgets, which could be funding services such as mental health in-patient beds, just to help NHS England balance the books. Will the Secretary of State tell those patients and families why they should be treated so far from home when their local CCG should be able to fund the in-patient beds they need?
With great respect to the hon. Lady, we are the first Government to count out-of-area placements, and to commit to eradicating them. What she does not tell the House is the context, which is the biggest expansion in mental health provision anywhere in Europe, with 1,400 more people being treated every single day, and an extra £342 million being spent this year on mental health compared with last year.
As part of our plan to improve access to general practice, we are taking steps to ensure that there will be an extra 5,000 doctors by 2020. We are increasing the number of GP training places, recruiting up to 500 doctors from overseas and encouraging doctors who have retired to return to general practice.
I am aware of a number of issues with the recruitment of GPs in my constituency, such as at St Luke’s surgery in Duston. Will my right hon. Friend meet me to discuss the issues with that surgery in particular?
I am very happy to meet my hon. Friend. He will know that the surgery got an £80,000 grant this year through NHS England’s general practice resilience scheme, but I am aware that there are lots of pressures on surgeries such as St Luke’s and I am happy to talk about it further.
I am delighted to hear the Secretary of State issue some information about the additional GPs who will be coming on stream in the coming years. How many will be coming to north-east Lincolnshire and when will they be there? We have a critical shortage of GPs and people are struggling to get appointments.
The hon. Lady is absolutely right that areas such as Lincolnshire find it particularly difficult to attract GP recruits, which is why we have set up a fund that gives new GP trainees a financial incentive to move to some of the more remote parts of the country. This is beginning to have some effect, and I am happy to write to her with more details.
I warmly welcome the Secretary of State’s efforts to recruit more GPs, and I know that he wants all GPs and, indeed, doctors to have high levels of job satisfaction. Is he aware of the fact that reasonable numbers of doctors are leaving the UK to work overseas? Given the cost of medical training and the money that taxpayers put into that education, will he look at that issue, perhaps by requiring a certain commitment to the NHS?
My hon. Friend raises an important point. There is currently no evidence of an increase in the number of doctors going to work abroad, but there is an issue of fairness because it costs around £230,000 to train a doctor over five years. In return for that, there should be some commitment to spend some time working in the NHS, and we are consulting on that at the moment.
GPs around the country are facing unprecedented pressures as they work to deliver the highest possible standards of care, despite underinvestment and increasing patient demand. A record number of GP practices closed in 2016. Are the Government really serious about addressing the problem for the sake of GPs and their patients? If so, why has the promised £16 million resilience fund not been delivered in full, when it was promised by October 2016? There is very little evidence to date of the Government delivering on any of their promises in “General Practice Forward View”, no sign of the extra £2.4 billion, no sign of—
Order. We have got the general drift. May I gently say to the hon. Lady that the longer the Opposition Front Benchers take, the less time there is for Back Benchers on both sides? This is becoming a worsening phenomenon. It is not only the fault of the hon. Lady, but it really must stop. It is not fair to Back-Bench Members.
During my time as Health Secretary, the real-terms investment in general practice has gone up by £700 million or 8%, and we are planning to increase it by 14%—£2.4 billion—over this Parliament. A lot of extra money is going in, but I recognise that there are still a lot of pressures.
The Secretary of State’s plans to recruit doctors will be widely welcomed in Leicestershire, but should he not be making greater use of already properly regulated practitioners—those who are regulated by the Professional Standards Authority—of whom there are 20,000, including hypnotherapists?
My hon. Friend’s ingenuity in bringing these issues up in question after question never ceases to amaze me. As he knows, we recognise that the pressure in primary care cannot just be borne by general practice, but we must always follow the science as to where we get our help from.
Only recently, a surgery has been closed down in the borough of Halton. There is a clear shortage of GPs. Despite the efforts of the clinical commissioning group to try to find replacements, that has not happened. How will merging CCGs help, and can the Secretary of State rule out any merger between Warrington and Halton?
This is something on which we take guidance from what local CCGs say. There are times when the CCGs feel that their scale is not big enough to have the impact they want.
You set them up.
The hon. Gentleman says from a sedentary position that we set up the CCGs. I remind him that CCGs came together without central prescription as to what their size should be, but we will always listen to the advice we get on the ground if people want to change their size.
Mental Health: Digital Platforms
The Prime Minister herself announced our commitment to developing and expanding digital mental health services, and we have backed that with an investment of more than £65 million. This work includes improving digital technology for the mental healthcare system, developing digital tools and therapies, and improving mental health information and services provided through nhs.uk and 111 platforms.
The Minister will know that for people with mental health problems, attending accident and emergency or going to see their GP is not always the best point of intervention, so I welcome measures to improve accessibility. Stockport Healthy Minds, which serves my constituency of Cheadle, provides a range of services such as online self-help courses, one-to-one therapy sessions, and group workshops. What is her Department doing to provide projects like Healthy Minds with the support and accessibility they need?
In addition to the funding that we are providing to improve the mental health pathways through nhs.uk and 111, we are providing £500,000 for the development of six digital tools, with a particular focus on children and young people’s mental health. I pay tribute to the work of Healthy Minds in my hon. Friend’s constituency and to her own championing of this issue.
Order. It is always a pleasure to hear the hon. Member for Hyndburn (Graham Jones), but can I just say to him that it is a good idea to bob consistently, and then one knows of the interest of an hon. Member? On this occasion, he looked at me meaningfully but was not bobbing; I am not psychic. But let us hear the voice of Hyndburn: Graham Jones.
I am very grateful, Mr Speaker, for your asking me to ask a question. Mental health is a really serious, and growing, problem. I have been out with my local police force and I appreciate the emphasis on digital technology, but what are we doing on the frontline as well? We cannot just have digital operations. In the Lancashire constabulary, because of the Government’s cuts, we are removing the mental health worker from the frontline force. While we may be doing something around digital, we are removing mental health services, because that post goes on 31 March. Is this not ridiculous? Is it not the case that the Government do not have a coherent policy on mental health?
Order. I was quite tough on the hon. Member for Burnley (Julie Cooper), but the hon. Gentleman took his time—he really did.
The hon. Gentleman misrepresents the situation entirely. Not only are we investing an extra £1 billion year in mental health services and expanding mental health services at a faster rate than anywhere else in Europe, but we have invested £15 million extra in places of safety for those in crisis and are expanding triage services, precisely to address the problem that he raises of those in mental health crisis who come into contact with the criminal justice service.
A question of textbook brevity and eloquence from Helen Jones.
While digital platforms can be useful in guiding patients to the right service, does the Minister accept that there are still huge shortages of people who can carry out talking therapies, and long waits for child and adolescent mental health services? When are the Government going to stop talking about improving mental health services and actually ensure that the money is going where it is needed to recruit staff?
We are working extremely hard on increasing staff. We are not only introducing our new mental health workforce strategy, which we will publish shortly, but increasing the number of people who are seeing these services. Four million extra people have seen psychiatry services—talking therapies—and 90% of those patients are being seen within six weeks, which is exceeding our waiting time target.
We have engaged fully with the health and research community to ensure a positive and beneficial application of the GDPR in the UK. My hon. Friend is right that data are vital to the delivery of safe and high-quality care, but we need to ensure that there is a trusted system in place, and that people understand that their information is secure and have confidence in its use.
I thank the Minister for that answer, but I have to tell her that when the EU’s general data protection regulation becomes enforceable next year, it will be more difficult to share data. Cancer charities, including Cancer Research UK, are concerned because the progress of life-saving research, especially into rare and children’s cancers, would not have been possible were it not for data-sharing. Will she do what she can to shield the UK from this harmful regulation, given that it disproportionately affects us because of the wealth of our data?
We have been clear that we are going to introduce the data regulation. We are working on exactly how we will do that in a balanced way that encourages data-sharing for the purposes of research in a sustainable NHS. We have set up a sub-group to examine the impact of the GDPR on research. It is hosted by the Wellcome Trust and includes members of the Health Research Authority’s confidentiality advisory group, the NHS Confederation, the Medical Research Council, the Department of Health, and the PHG Foundation. We will ensure that this works in an effective way to address the concerns that my hon. Friend has raised.
Enriched Culture Medium Test
My right hon. Friend will be aware that Public Health England published a paper in June 2015 precisely on this subject, but it concluded that within the currently accepted clinical guidelines there are no clinical indicators for testing women using enriched culture medium methods. This test is not, therefore, recommended for routine use at present.
My hon. Friend will be aware from his reading of the British Paediatric Surveillance Unit report that the incidence of group B strep has increased by 30% over the last 15 years. Does he agree that this matter has gone on for far too long, and that the Government must come to a conclusion to prevent further tragedies?
As my right hon. Friend will be aware, the UK National Screening Committee is reviewing the evidence for antenatal screening, including the use of enriched culture medium tests for group B streptococcus, following a public consultation. I understand that its recommendation will be published very soon, and I assure him that I will consider the recommendation very carefully and write to him with my view.
“General Practice Forward View”
“General Practice Forward View” announced that investment in general practice will increase from £9.6 billion in 2015-16 to more than £12 billion in 2020-21. This represents an increase of 14% in real terms, which is almost double the increase for the rest of the NHS. Two years into the forward view, we remain on track to deliver that.
I appreciate the Minister’s response, but the reality on the ground in areas such as Redcar and Teesside is that we face a deficit of £281 million by 2020. How can he reassure my constituents, who are already finding it hard to get an appointment with a GP, that already scarce services will not become even more so?
We do recognise that in parts of the country there are shortages of GPs. As Members have heard, we are planning to have 5,000 more doctors working in general practice by 2020, and a proportion of those will be in Teesside. It is important that we meet that goal.
GPs in Wycombe cite long hours, bureaucracy and the declining attractiveness of the partnership model as reasons why people do not want to be in general practice. Will the Minister ensure that funding within the forward view is directed to deal with those key problems?
Yes, and the contract discussions that we have just completed with the British Medical Association addressed a number of the issues that my hon. Friend talks about, in terms of the pressures on doctors working in general practice. We acknowledge that the workload pressures are enormous, and, through the contract, we need to do all that we can to mitigate them.
More than 80% of clinical appointments are carried out by GPs, but they receive a proportionately much lower level of funding. What steps will the Department of Health take to make sure that all sustainability and transformation plans abide by NHS England’s recommended allocation of funding to general practice?
One of the criteria by which STPs are being judged is the extent to which they are making this tilt from secondary into primary care, exactly as the hon. Lady suggests. That is precisely why the extra funding for primary care that I have set out is so important and why it is happening.
“General Practice Forward View” talks about supporting general practice to improve digital technology for patients. Given the recent data challenges, does the Minister agree that putting a national data guardian on a statutory footing to protect patients and professionals is becoming an imperative?
I know that my hon. Friend has introduced a private Member’s Bill in this area, and the Government intend to support it.
The support that is provided to GP practices in relation to IT, information and so on is absolutely crucial to their effective operation, but problems continue today in my constituency with the service provided by Capita. Capita cannot, for example, now get prescribing certificates for locums and new GPs. When are the Government going to get a grip on this failing contract and, if Capita cannot perform adequately, get someone else to do it?
The hon. Lady is right. There have been issues with the Capita contract, and we have been let down by Capita. We are working hard to get that sorted, and my colleague the Under-Secretary of State for Health, my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood), meets Capita weekly to get this fixed. We are making progress, and we believe that the issues that the hon. Lady refers to will be fixed in the foreseeable future.
There is a shortage of GPs across Northamptonshire, especially in Kettering, and the age profile of local GPs means that a very large number are about to reach retirement, which will make the problem worse. What can be done to encourage experienced GPs to stay on longer and to encourage those who have retired to come back?
My hon. Friend is absolutely right that one of the things we need to achieve is either to encourage older GPs to work part time or to make it easier for them to step down into more of a mentoring role. With the Royal College of General Practitioners, we have brought forward a scheme called GP Career Plus, which enables GPs in 10 pilot areas—the pilots are being rolled out now—to work as mentors across practice areas, and not to feel as though they have to retire, as GPs too frequently do at the moment.
Heart Disease and Paediatric Services
Standards for paediatric co-location for congenital heart disease services are not currently met by the Royal Brompton, Leicester and Newcastle hospitals. NHS England is consulting on proposals to cease commissioning level 1 surgical services from the Royal Brompton and Leicester. No final decisions have been made on the proposed changes. Public consultation continues until 5 June 2017, and I encourage my hon. Friend to participate in that consultation.
I doubt the hon. Lady will require any encouragement.
Mr Speaker, you are absolutely correct in your comment.
Does the Minister agree that the standards review found that not all clinicians are in agreement about how essential the co-location of paediatric services is, bearing in mind that a child being treated right now at the Royal Brompton will have 24-hour access to all necessary medical specialties? Will he tell us what improvements co-location at the world-class Royal Brompton hospital would achieve?
My hon. Friend has considerable expertise, but I am advised that having all relevant children’s specialties on the same site is the optimal model of care for the most critically ill children. It promotes closer, more integrated ways of working between specialist teams, and ensures rapid access to key services, such as paediatric surgery, at the most critical times when they are needed.
Mortality rates for the treatment of congenital heart disease fell from 14% in 1991 to 2% last year. The Royal Brompton, where the service is threatened with closure, does better even than this. What evidence is there that the closure programme will produce any further improvement, and if there is none, why is it being pursued?
The hon. Gentleman is right to point out that we have some world-leading patient outcomes for congenital heart disease, and I recognise the statistics that he read out. This is being driven entirely by seeking to improve patient outcomes across the country—improving them even on that very good performance—and to ensure greater resilience of service in some areas where there are relatively low volumes and an over-reliance on locums. I accept that that is not the case at the Royal Brompton, but it is in some of the others.
The Leeds heart unit is performing very well, and is free from the threat that it was facing, unfairly, a few years ago. Will lessons be learned, however, from the disastrous Safe and Sustainable review process, which pitted hospital against hospital and clinician against clinician? Can we find a much better way—I hope the Minister will tell us that this is happening now—to reconfigure such services?
I recognise that when the proposal was put forward back in 2012, it led to a process that we felt was wrong, and we therefore stopped it. This process, we hope, is being conducted in a more rigorous and fairer way, and will lead to outcomes driven, as I say, by improving patient experience.
Labour’s legacy cost from the 103 hospital PFI schemes entered into between 1997 and 2010 was a public sector liability of £77 billion. The estimated total NHS PFI payments for the financial year ending at the end of this month is £1.97 billion, and the totals for the next three financial years are £2.04 billion, £2.11 billion and £2.16 billion.
Those are alarming figures, so what are the Government doing to support the trusts affected by those expensive and inflexible PFI and other deals reached under the previous Labour Government? What assessment has the Minister made of what the funds could be buying in the NHS now if it was not saddled by this Labour debt legacy?
My hon. Friend is right to point out that the Opposition constantly complain about the cost of the PFI programmes that they themselves initiated. The Government are making large efforts to support trusts in dealing with the PFI legacy. We are giving the seven trusts worst affected by PFI schemes access to a £1.5 billion support fund over a 25-year period. In 2014 alone, trusts negotiated savings worth over £250 million on their contracts.
The Department is urgently undertaking work to understand what the impact on the NHS will be. There have been regular meetings with the NHS Litigation Authority since the announcement. The Government will adjust the NHSLA’s budget to meet the additional costs associated with the change in the discount rate.
The hon. Member for Southport (John Pugh) shoehorned Question 21, which we did not reach, into a Question that we did reach. He blurted it out so quickly that it took us a while to notice that it had absolutely nothing whatsoever to do with the private finance initiative. Very naughty boy!
PFI always was idiotic. It carried on under the coalition Government and has left a huge financial hangover. Will the Minister have a word with his colleagues in the Treasury, because the Treasury figures on hospital liabilities are different from the figures that some of the hospitals themselves produce? As there is a discrepancy, we do not even know what the liabilities are.
The hon. Gentleman has been assiduous, as is his wont, in trying to get to the bottom of the costs of the PFI impact on the hospital in his area. If he has a discrepancy, it would be very helpful if he pointed it out to me in writing. I will then respond to him.
Social Care: Unmet Needs
Social care continues to be a key priority for the Government. That is why local authorities in England will receive an uplift in the money available for social care over the next three years of 17% in cash terms. That significant uplift will allow councils to support more people and sustain a diverse care market.
Does the Minister recognise that the figure he has just given—the additional £1 billion in the Budget—is just half of what is needed to fill the shortfall in social care? Will he tell the House what he is doing to ensure that the sector gets the additional money and to stop councils being bankrupted by their social care requirements?
The 17% cash uplift over the next three years exceeds what we have been asked for by a number of stakeholders in the sector. I have conceded at this Dispatch Box many times that the sector is under pressure. The additional moneys that we have come forward with will help to alleviate that and will make a big difference. In Lancashire, the figure is not 17% over three years; it is 18% over three years.
The Minister is quite right that central Government are providing extra money for essential care and allowing local councils to raise a precept on the council tax for social care. How will the Government ensure that councils actually spend that money on social care?
Much of the money will go through the better care fund and there is conditionality on that. We expect councils to spend this money, as they have requested it, on social care and we believe that that will be the case. We understand the pressures and have acted.
But 1.2 million older people are living with unmet care needs. The £1 billion that was announced in the Budget for this year is not enough to prop up the failing care sector, when many councils are suffering contracts being handed back. Given that 1 million people over the age of 65 do not have adult children, will the Minister explain how all those people living with unmet care needs are meant to manage?
The figure on unmet care needs comes from an Age UK analysis. I am meeting Age UK to go through its recent report, but we do not accept that analysis because the Care Act 2014, which had cross-party support, set statutory consistent definitions for what care councils have to provide. It is illegal for that not to be met, and our follow-up work with the Local Government Association has indicated that it is being met. Furthermore, we have put in a 17% increase over the next three years.
Our childhood obesity plan includes a number of measures, such as the soft drinks industry levy, reformulation and school-based interventions, that will help all children, including those in inner-city communities. We will monitor progress carefully, including through the national child measurement programme. We will routinely publish developments on all key measurements for the programme, but it stands to reason that those who are most in need will benefit most from these interventions.
I thank the Minister for that answer, but it remains the case that childhood obesity is twice as high in deprived areas as it is in more affluent areas. In Tower Hamlets, 20% of children are obese and a third are overweight. What will the Government do to reduce childhood obesity and when will the plan be published?
The childhood obesity plan has already been published. I think the hon. Lady may be talking about the reformulation targets and the baseline data, which are coming out imminently. The experts in Public Health England are working feverishly to make sure that the data are exactly as they should be. One measure I think she will be particularly keen to see is the investment in schools committed to by the Chancellor in the Budget, including the voluntary healthy rating scheme, which will be published in June.
What measure is being used to ascertain the success or otherwise of the strategy and when will we know whether it has worked or not?
As I mentioned, we will be publishing the reformulation baselines against which all future success will be measured. They will include measurement across all industry targets. In addition, we will of course have the voluntary healthy rating scheme for primary schools to recognise and encourage their contribution to preventing obesity.
As part of our ambition to make the NHS the safest healthcare system in the world, I will today be speaking at the largest ever conference on learning from avoidable deaths and what we can do to improve care in the future. As part of that, I can inform the House that the NHS Litigation Authority will radically change its focus from simply defending NHS litigation claims to the early settlement of cases, learning from what goes wrong and the prevention of errors. As part of those changes, it will change its name to NHS Resolution.
My constituent Pauline Cafferkey was cleared of misconduct last September, following a very public case surrounding her return from Sierra Leone and her contraction of Ebola. Will she receive an apology from Public Health England and will it reimburse her legal costs?
With respect to Pauline Cafferkey, who is a very brave lady and who gave very good service to this country and the people of Sierra Leone with her work during the Ebola crisis, the hon. Lady will understand that disciplinary procedures are an independent matter. They are not dealt with by the Government. They have to be done at arm’s length and we have to respect whatever is said or done.
We are firmly committed to improving the UK’s air quality and cutting harmful emissions. We have committed £2 billion since 2011 to increase the uptake of ultra-low emission vehicles, support greener transport schemes and set out how we will improve air quality through a new programme of clean air zones. In addition, in the autumn statement we announced a further £290 million to support electric vehicles, low emission buses, taxis and alternative fuels. I regularly meet the Department for Environment, Food and Rural Affairs to see how we can roll out this work.
The Government have not met the four-hour target for A&E since July 2015. In the NHS mandate, finally published yesterday, the Secretary of State is effectively telling hospitals that they do not need to meet it in 2017 and that it only needs to be met in aggregate across hospitals
“within the course of 2018”.
Is that not the clearest admission that the targets will not be met next year, because in the next 12 months the NHS will be denied the funding it needs and, as a consequence, patients will suffer?
Apart from observing that if the hon. Gentleman cares so much about the 95% target he might want to ask his colleagues in Wales why they are looking at scrapping it, on the money let me be very clear: in the next year, the NHS will be getting about £1.5 billion more than his party were promising at the last election and the social care system will be getting £1.5 billion more than his party were promising at the last election. We are doing our job.
The Secretary of State says he is doing his job, so why does he not take that up with NHS Providers, which is warning that because of the underfunding, it will be “mission impossible” in the next 12 months to deliver standards of care. Returning to the NHS mandate, did you notice, Mr Speaker, that in that mandate there is no mention whatsoever of Brexit, even though the NHS relies on 140,000 NHS and care workers? I know that the Secretary of State is not a member of the Cabinet Brexit committee, but will he use his considerable influence with the Prime Minister to ensure that when she triggers article 50 next week, she will finally give an absolute guarantee of the rights of all those EU workers in our NHS?
First, let me first reassure you, Mr Speaker, that I will be attending the Brexit committee when it is relevant to the NHS; in fact, I shall attend it this week, because issues relating to the NHS are coming up in it. What we are not going to do in that committee, however, is to take steps that would risk the welfare of British citizens living in countries such as Spain, Ireland and France. That is why, although it is a top priority for us to negotiate the rights of EU citizens living in Britain, including those working in the NHS, it has to be part of an agreement that protects the rights of British citizens abroad.
I absolutely agree. What I think my hon. Friend should tell her constituents—I am sure she will—is that general practice is going to be the most exciting, fastest-growing part of the NHS, where care is going to be transformed, making this the right thing to do.
With great respect to the hon. Gentleman, what was secured in the Budget was £2 billion for social care, which is £2 billion more than his party was promising at the last election.
Frist, let me pay tribute to my hon. Friend for his leadership of the APPG on rare diseases. I am sure he will join me in feeling proud that the UK is a recognised leader in research, treatment and care for rare diseases in particular. We are at the forefront of the genomics revolution. He is right that the UK strategy for rare diseases needs to be translated into an implementation plan, and that is one of my personal commitments.
The formula is based on the better care fund formula, which is based on the spending power of local authorities. Let me tell the hon. Lady that, over the next year, that improved better care fund is going up by 35%, and Surrey’s allocation is going up by only 5%.
There is no hitch. The Government remain committed to putting this into place, and the legislation will be brought forward shortly.
The hon. Lady is absolutely right to say that this is a serious issue. I commend the brilliant work done by NHS trauma centres throughout the country, which are world-beating, but, as well as setting up those centres, we have established much closer co-operation with local police forces so that we can work out where the crime hotspots are and help the police to prevent such things from happening.
As my hon. Friend will have heard from the Secretary of State earlier, a number of areas are competing to secure a new medical facility. One of our criteria will involve encouraging doctors to be trained in areas where there are shortages, and I am sure that Lincoln University will take that factor into consideration.
The British Medical Association said recently that the funds for sustainability and transformation plans that were announced in the Budget would be completely inadequate for the task. Health trusts throughout the country are being forced to consider rationing treatment and ending or downgrading local services such as A&E, which will result in even longer waits and journey times to access care. Why do the Government not call STPs what they really are—secret Tory plans to decimate the national health service further?
This is a year in which funding for the NHS has risen by £3.8 billion in real terms. I do not know how the hon. Gentleman can say what he has said, given that in 2015 he stood on a platform to give the NHS £1.3 billion less this year than it is receiving under the Conservatives.
I feel the onset of a happy visit to Northamptonshire. What might clinch it for me would be the promise of a potential meeting with the famous Mrs Bone.
What a magnificently enjoyable life the Secretary of State has—not to mention Mrs Bone.
Last week, to the distress of its vulnerable residents, Aldingham House care home in Blackheath became the latest care home in south-east London to close. Do the Government accept that the care home industry is at breaking point, and, if so, what are they doing about it?
The number of care home beds in the country has remained broadly constant at just over half a million over the last 10 years. There is variation and churn between areas, but I believe that the 17% cash-terms increase that we have injected into the social care market in the Budget, and the better care fund that is to come, will make a difference.
I welcome the new nursing associates role that is currently being piloted. Will other areas, such as Portsmouth, be able to offer the same opportunities in the future, and will the new role be open to older people wishing to return to the workplace?
As my hon. Friend knows, we are launching a second wave of nursing associates at the beginning of April. I am pleased to be able to confirm that Southern Health NHS Foundation Trust, which manages Portsmouth Hospitals NHS Trust, is one of the trusts that will receive nursing associates, and that the system is partly designed to give social care workers opportunities to upskill.
The Secretary of State will be aware of a recent High Court case concerning a surrogacy issue that has led to legal limbo. Does he agree that the existing legislation has let children down, and that reform is urgently needed?
I can confirm that the High Court has made a judgment, that the current orders for parental orders are discriminatory, and that the Government will act within a reasonable timescale. We intend to lay an order before the summer recess in an attempt to address some of the challenges.
One of my constituents, Harriet North, has been diagnosed with TRAPS—tumour necrosis factor receptor-associated periodic syndrome. Her consultants say that the drug Anakinra will not only transform her life, but will save her life. Will my hon. Friend meet me to discuss how we can get the best treatment for Harriet, and if it is possible for NHS England to review the decision on this?
My hon. Friend has raised this case with the Department and has been making a number of pleas on behalf of his constituent. It is a very difficult case and I would like to pass on my sympathies to his constituent. Obviously, the National Institute for Health and Care Excellence is independent and this drug is not recommended for TRAPS. I do not know the details of the case because it is confidential, but I will be very happy to meet my hon. Friend and his constituent to see if anything can be done.
I do not know if you spotted the rather topical news story about children’s dentistry this morning, Mr Speaker: there were 1,464 hospital admissions for children for teeth extractions across one clinical commissioning area of Birmingham last year, the highest figure since 2010-11. How does the Minister account for this, and what is he going to do about it?
The figures for child extractions are clearly disappointing and two key actions need to take place: less sugar, which we expect the soft drinks levy to help with; and getting more fluoride on to teeth, particularly through fluoride varnishing. That has increased across the NHS over the last year, and by 12% in Birmingham. We hope that that will make a difference.
The NHS mandate was published yesterday, just days before coming into force. Can the Secretary of State set out the reason for the delay, because it allows very little time for scrutiny of this important document by this House? Will he also set out how he is going to prevent money being leached from mental health services and primary care to prop up provider deficits, so that we can meet objective 6 on improving community services?
My hon. Friend makes very important points. The reason for the delay was because about a month ago we had wind that we might be successful in securing extra money for social care in the Budget, and we needed to wait until the Budget was completed before we concluded discussions on the mandate. Our confidence as a result of what is in the Budget has enabled us to make the commitments we have made in the mandate, including making sure that we continue to invest in the transformation of out-of-hospital care.
Order. We are out of time, but I want to get in two more questions.
The Secretary of State will be aware that many migrants in the UK are not registered with GPs, yet now when they come to Britain they have to pay an NHS fine. What is he doing, with the Home Office, to ensure that migrants are registered with a GP and are aware of community health facilities?
I am not quite sure whether I understand the right hon. Lady’s question, but there is not a fining system for migrants; what we say is that people who come to the UK as visitors should pay for their healthcare, or pay the visa surcharge if they are coming for a longer period. There is an exemption for public health, because it is important for everyone that we make sure that we treat people for things like tuberculosis.
The Secretary of State is aware of the concern that I and the people of Witney have about the future of Deer Park medical centre, which is a vital local resource. I am grateful to him for meeting me and for our correspondence. Please will he confirm that he will press the Independent Review Panel for a response at the earliest opportunity, given that the clinical commissioning group is determined to close this vital practice in three days’ time, and that he will consider the views of the patients of Witney very carefully indeed?
I am very happy to relay that concern to the IRP, and I thank my hon. Friend: we had a highly constructive meeting, and, as a new MP, he understands just how important this is to the constituents of Witney. He made the case very powerfully.
Order. I am sorry to disappoint remaining colleagues, but we must move on.
Money Laundering: British Banks
(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on allegations of money laundering against British banks.
We want our financial institutions to lead the way in the global fight against money laundering. This is not only a question of financial crime, with illicit finance used to fund serious organised crime groups, as well as terrorist organisations; this is about keeping our citizens safe. That is why the Government are going to do what it takes to prevent the practice and pursue anyone who might seek to abuse our financial system.
The Financial Conduct Authority and the National Crime Agency take any such allegations seriously and will investigate closely whether recent information from The Guardian newspaper—or, indeed, any other media source—regarding money laundering from Russia would allow the progression of an investigation. Beyond that, we need to ensure that sophisticated criminal networks cannot exploit our financial services industry.
This Government already do more than any other to tackle the global threat of money laundering. Since 2010, we have seized £1.4 billion in illegal funds and put hundreds of millions more beyond the reach of criminals. We have set up the Panama papers taskforce and we hosted the global anti-corruption summit last year. Now, we are preparing the most significant changes to our anti-money-laundering and terrorist finance regime in over a decade. We are strengthening the rules to put the UK at the forefront of international efforts to crack down on money laundering, with new regulations coming into force by the end of June. We are also bringing in a landmark piece of legislation in the form of the Criminal Finances Bill. That will allow banks to share more information than ever to help to uncover money laundering. It will also give law enforcement agencies new powers to bring criminals to justice.
However, domestic changes alone are not enough in a world of global criminal networks, which is why we are working closely with our international partners to stand up to this threat together. Work continues apace in groups such as the G20 and the Financial Action Task Force, whose membership includes all the world’s leading financial centres. We have led the way in getting more than 90 countries to exchange data on offshore accounts and to uphold the global standard of tax transparency. We are determined to make the UK the most difficult place in the world for international crime networks to channel their finances through, and we will not relent in our efforts to do that.
I hope that the Minister recognises the immense gravity of the situation that we are facing, because I believe that his statement reflects complacency on the part of the Government. Let me go through the allegations, which are of the deepest concern. First, it is alleged that, via an operation referred to as the “global laundromat”, banks based in Britain have been used to launder immense sums of money obtained from criminal activity in Russia linked to the FSB spy agency there. This appears to point to an overwhelming failure of basic management on the part of the banks. One of those banks, HSBC, is an institution that has previously faced money laundering charges in the US and across the globe. The direct intervention of this Government helped to block a 2012 US investigation on the purported grounds of its potential risk to financial stability. Money laundering through London and elsewhere threatens the stability of our financial sector and our economy.
In the case of another bank, RBS, the Government directly own a 72% stake. A third bank, Barclays, has been under investigation for its role in LIBOR rigging. Will the Minister give us specific details of what steps are being taken to address this scandal? Can we have an assurance that there is the potential to open criminal proceedings to break up what is effectively a criminal network? Will the Government also undertake that they will not—as they have in the past with HSBC—attempt to intervene in criminal or other investigations taking place elsewhere in the world? The major risk to financial stability is not from investigations intended to clear out criminal activity from our banking system; it is from inactivity on the part of the Government and others, and from failing to act to ensure that our major banks are clean and fit for purpose.
Secondly, all those banks claim to have strict internal policies to deal with money laundering. The Financial Conduct Authority places great stress on the need for banks to self-police and create appropriate internal procedures to prevent money laundering. It is obvious from today’s revelations, however, that the current arrangements are not working to prevent widespread, organised and sophisticated criminal activity. Will the Government tell the House what steps they will be taking to address this matter with the FCA? Will the Government today commit to opening an inquiry with a view to reporting rapidly on measures to be taken that will strengthen the regulations, including introducing tighter controls on and closer monitoring of the banks themselves?
Finally, when the Government own major stakes in the banks involved—RBS in particular, since they are no longer able to sell off that stake—there is an immediate need for them to reassure taxpayers that publicly owned banks are not indirectly involved in criminal activity. What steps will the Government, as a major shareholder in RBS, take to investigate the allegations against it and to reassure taxpayers? Our banks have been found wanting yet again. Urgent action is needed from the Government to protect the standing of our finance sector and to protect our economy. Complacency and inaction are not good enough.
I assure the right hon. Gentleman that the Government are far from complacent. As I outlined earlier, we have been updating the UK’s money laundering regulations, and I hope that the Criminal Finances Bill, which is currently in the other place, will receive Royal Assent in the near future, creating new powers for enforcement agencies. The FCA takes misconduct seriously and fined Deutsche Bank £163 million only last month. As for whether we should be telling the independent FCA or the NCA what to do, it is worth saying that if the information reveals new findings, the FCA will be able to investigate accordingly. It would not be appropriate for me to comment on potential legal proceedings.
Does the commitment expressed in our hosting of the anti-corruption summit not a year ago still exist to drive forward its agenda?
Absolutely. This Government are fully committed to ensuring that taxpayers are fully protected and that we do all we can to stamp out illegal money laundering activity.
This revelation is shocking, but it is not in the least bit surprising. For over a year, I have been campaigning in this House on associated areas. After the story was released yesterday evening, I undertook research that indicates that at the heart of the issue is the banks’ use of limited partnerships—not only Scottish limited partnerships, but many other forms—that allow the criminals to hide their ownership of companies. It is through that mechanism that these things are happening.
I have several questions for the Minister. First, the Department for Business, Energy and Industrial Strategy closed its review of limited partnerships on Friday. Will the Government allow me and other interested Members to resubmit to the review, although it is formally closed, so that we can raise this important matter and have it considered in the review?
Secondly, when one looks at the outcome and the extent of the situation, it is too much to believe that we are the world leader in money laundering regulation in general, so it is time for another look at that. Thirdly, a key concern of many in the House is that the banks have not had a supportive whistleblowing regime in recent years. We need to encourage, not inhibit, whistleblowing.
In this alleged case, my understanding is that the bodies used were limited companies, not limited partnerships. Last year, BEIS introduced the register of people with significant control, and we will be consulting shortly on UK property-owning foreign companies. That is a step forward.
The hon. Gentleman mentioned the limited partnership consultation; I am sure that any right hon. or hon. Member who wants to write to the Secretary of State for Business, Energy and Industrial Strategy can do so. It is also appropriate to say that we are world leaders in financial regulation. The FCA does a good job, is held in high regard by the rest of the world and strikes the right balance between consumer protection and fairness.
My hon. Friend takes this issue seriously. Will he tell the House how unexplained wealth orders will prevent criminals from using the proceeds of crime in the UK?
My hon. Friend raises an important part of the Criminal Finances Bill, which is going through the other place as we speak. I look forward to its receiving Royal Assent and becoming law, giving new law enforcement powers to stop any of this activity.
The Economic Secretary has shown real complacency about the huge and building scandal that has been revealed by The Guardian today. Given that our banking sector is very large and that the consequences of its being destabilised by such criminal behaviour are very serious for our economy, does he not realise that his complacent, process-driven answers today are simply not good enough?
I do not recognise that at all. The FCA and the NCA are well placed to investigate this, if appropriate. We have not only world-leading financial regulation but world-leading financial services. More than 1 million people across the country are employed in financial services in all our constituencies, and the vast majority of them work hard, do a good job and represent customers as well as they can. We have outlined the measures that the Government are undertaking—[Interruption.] I have addressed everything that the hon. Member for Wallasey (Ms Eagle) mentioned. This Government are doing more than at any time in the past 10 years to tackle this issue.
Given the overlap between money laundering networks and terrorist financing networks, does my hon. Friend agree that this is also an issue of national security and that, furthermore, the only way we can tackle it is with greater information sharing between the private sector, regulatory bodies and enforcement agencies?
My hon. Friend is absolutely right. Greater information sharing and transparency are the way forward. The register of people with significant control is an important step forward, and I look forward to additional transparency in the future. Ultimately, people with nothing to hide have nothing to fear.
To counter the impression that he has been promoted beyond his competence, can the Minister tell us which British banks have been convicted of money laundering over the past five years? What specific, individual thing has he learned from reading those judgments? [Interruption.]
Order. The question was discourteous, but it was not disorderly—there is a distinction. The hon. Gentleman has been practising that technique in all sorts of different forums in all the 30 years that I have known him. The question was not one of the more extreme variants on the theme.
I can tell the hon. Member for Bassetlaw (John Mann) that the FCA has carried out a number of enforcement actions, both large and small, over a large number of different financial services. It is right and proper that a balance between fairness and responsible behaviour is struck at all times.
If these allegations are proven, particularly against a bank in which the Government own a majority stake, will my hon. Friend commit to using the full powers of the Criminal Finances Bill to clamp down on this type of money laundering, which, if proven, will be a national disgrace and scandal?
It is worth saying that our shareholding in a number of banks is at arm’s length. We are not operationally in control, as is right and proper. The important thing is that we learn lessons from the past and make sure that the past is not repeated.
Has the Minister discussed the matter with the former Chancellor, the right hon. Member for Tatton (Mr Osborne), who the US House of Representatives found intervened with the American authorities to prevent HSBC from being prosecuted in 2012? What has the FCA specifically done since the “global laundromat” was discovered in 2013?
I have not had that conversation with my right hon. Friend. It is fair to say that the FCA has carried out a number of investigations, and it is right and proper that it does so. The FCA is an independent operational body that we set up as asked, and it would not be appropriate for me to comment.
It seems to me, and to many others, that there is an unwritten deal here: that Russians and others of dubious or illegal means can essentially come to this country, send their kids to our schools, buy our real estate or our sports clubs and get involved in this country on the basis—this is the other side of the deal—that they do no wrong while they are here. That is not an acceptable way forward, if it ever was. Is it not now time to rethink this issue?
My hon. Friend raises an interesting point. This Government are doing more than ever before to tackle this important issue. When it comes to money laundering, the Department for Business, Energy and Industrial Strategy has called for evidence on the use of limited partnerships, which were raised by the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin), and will in due course consider any action needed to address those concerns.
To a long list of misdemeanours committed by the banks for which directors have not been held responsible, we now have this allegation of extensive laundering of funds that were either stolen or of criminal origin. One of the explanations that has been given is that directors of banks see compliance as an expense with no return. Can the Minister assure us that the allegations will be properly investigated by criminal investigators and that, if it is found that directors have encouraged slack compliance for the profit of their bank, they will feel the full weight of the law and realise that slack compliance has a cost in their personal lives?
The hon. Gentleman is absolutely right that in this country we have not only a world-regarded financial regulation system but a rule of law that is both fair and effective. If there is any wrongdoing or impropriety, it is right and proper that those people face the full weight of the law.
How many money launderers have been sent to prison in the past five years?
I am not aware of the exact answer to that question, but I will write to my hon. Friend with all the information I have. I am convinced that, across the world and in this country, money laundering is taken very seriously.
Are the Government or any other public agency in Britain investigating whether laundered Russian money was channelled to any individuals in either the leave campaign or the Trump presidential campaign? Is the Minister aware of any other investigations?
I make it clear that I am not aware of any connection. It is right and proper that the FCA and the NCA have been watching that issue for some time. It is a confidential matter; if there is new information, I am sure they will consider it.
Compliance officers across the banking sector play a key role in stamping out some of the behaviour that has been reported. Will the Minister assure the House that the FCA and other regulators are making sure that compliance officers are properly trained and are proactive on the ground?
I reassure my hon. Friend that that is the case. It is right and proper that the issue of money laundering is addressed from top to bottom. Everyone has a responsible part to play.
Having previously claimed that
“there is little evidence of corporate economic wrongdoing going unpunished”,
the Ministry of Justice is now considering whether it should extend the criminal liability offences to money laundering. Does the Minister now agree that the “global laundromat” allegations clearly highlight that the law needs to be toughened up in this area?
I am sure that the MOJ will listen carefully to the hon. Lady’s point.
The report indicates that many of the laundered funds went into shell companies. Can the Minister explain how the world’s first open register of equitable ownership will help prosecuting authorities to bring to justice those who benefit from such funds?
The people with significant control register is open for everyone to see. Thousands, if not millions, of people are able to see it. Transparency is absolutely the best thing to make people aware of wrongdoing and to make sure that nothing is hidden.
It is clear that the current measures, though welcome, are simply not sufficient to tackle this sort of money laundering. Considering that dirty money is channelled through our British banks, how much worse would it be if the Chancellor achieved his vision of this country becoming a corporate tax haven—another Panama—post-Brexit?
That is not the Chancellor’s vision. The Government are currently consulting on the fourth money laundering directive. I have mentioned the Criminal Finances Bill, which is in the other place. The FCA is also vigilant in enforcing measures, and it takes misconduct very seriously.
Having witnessed at first hand the anti-money laundering procedures of UK banks, when I tried to keep open an existing bank account, I wonder how any organisation has managed to launder ill-gotten gains through our banks, and I can only conclude that it is because complying with the regulations is seen as no more than a tick-box exercise. Does my hon. Friend agree that banks should adopt a more proportionate and common-sense approach when dealing with members of the public?
My hon. Friend will be pleased that the fourth money laundering directive, which the Government are consulting on as we speak, includes provision for a more proportionate approach to that very issue, and I hope he takes part in the consultation. I also hope that the banks, with FCA guidance and a Government steer, will have to take a proportionate approach in the very near future.
The Home Affairs Committee estimates that £100 billion is laundered through London every year, but only 0.17% of that has been frozen, so the Minister might as well go to Heathrow and put up a welcome sign for Russian murderers and money launderers. Five criminal complaints have been submitted to UK law enforcement agencies about money laundering connected to the Magnitsky case. Not a single one has resulted in the opening of a criminal case, whereas 12 other countries have opened investigations on the same evidence. So the question is this: what is necessary to get UK law enforcement agencies to do their jobs and prosecute money launderers? Why has that not been working, and what is the Minister going to do about it?
I hope the NCA and the FCA would, if appropriate, do a considerable amount about it. They are independently operational bodies. It is right and proper that I cannot comment at the Dispatch Box about what may or may not happen. However, if there is wrongdoing, it is right and proper that it is addressed.
As we have heard, HSBC has been a serial offender on money laundering all around the world. It has had fines in the US and in Switzerland, and it has been mentioned again. There were calls for an investigation into other banks in 2012. The “laundromat” scheme was first reported in The Independent in 2014, so yesterday’s news is not actually new news; it just shows the scale of the problem with people using British banks and shell companies registered in the UK. If the UK really is a world leader in money laundering and other financial regulation, how bad are things in the rest of the world, and what is the UK doing to help stamp out the problem elsewhere?
The hon. Gentleman raises an interesting point. It is important to co-operate with countries around the world. We have been very clear that we will work with the Financial Action Task Force and other regulators around the world, and that is important. This is not something we can solve domestically on our own.
Investigators at the National Crime Agency are saying that Russian officials have been hampering their investigations by refusing to co-operate. What discussions has the Minister had, or will he have, with his Foreign Office counterparts to see whether they can broker a better relationship with those Russian officials?
I would imagine that the FCA is in contact with the Foreign and Commonwealth Office, and, if appropriate, they will have conversations about this issue. What is important is that, if these allegations are correct, and any new information is presented, the NCA and the FCA act on it appropriately.
May I ask why the Chancellor is not here, because, frankly, the Minister’s answers today have been appalling? Some £80 billion could have been laundered, according to this story. Should we not think again about the powers the FCA and other regulators have to prevent these things from happening? Can he please answer some questions?
I am very sorry, but I have been doing my very best to answer the questions that have been asked. Sadly, I cannot be held responsible for the quality or the content of the questions. What I would say is that I am the Minister responsible for financial services, and the Government are responsible for legislating in this place and in the other place. To answer the hon. Lady’s question, the Criminal Finances Bill is an example of what we are doing now, as we speak, to improve things. The FCA is in constant dialogue with not only the banks but the Government to make sure it moves with the times.
If it is found during the investigation that terrorism has been facilitated, what personal responsibility will the Minister take for that dreadful finding?
It is important to say that these schemes operated from 2010 to 2014. The hon. Member for Kilmarnock and Loudoun (Alan Brown) mentioned that The Independent first raised the story in 2014. However, if there is new evidence, it is important that the NCA and the FCA look at it and act accordingly. We set up those bodies to act operationally and independently from Government, and that is right and proper.
I call Mr Ian Lavery on a point of rectification.
On a point of order, Mr Speaker. On Thursday 16 March, the Parliamentary Commissioner for Standards published her report on a complaint about my declarations in the Register of Members’ Financial Interests, which concluded that I had breached the rules relating to how I registered information and, in a subsequent and inadvertent omission, had failed to draw the House’s attention to these interests while asking a question about the future of deep coal mining in the UK on 13 March 2013. Mr Speaker, I wish to apologise to the House fully and unreservedly for what was a genuinely inadvertent breach of the rules, with which I have at all times sought to comply.
I am extremely grateful to the hon. Gentleman for what he has said, and I think it will have been heard and appreciated by the House.
Point of Order
On a point of order, Mr Speaker. I seek your advice concerning the emergency personal independence payments regulations, which came into force last Thursday. Over 160 Members of this House have signed a prayer against the regulations, for which the praying-against period comes to an end on 3 April. A debate has been arranged for next week in the other place, but to date the Government have refused to arrange a debate and vote on the Floor of this House.
There is a huge democratic deficit, with the regulations enforced by negative statutory instrument. That is a sad reflection of the Government’s attitude to this House. On top of that, over 180,000 people have signed a petition against the regulations. Some 81,000 disabled people will have been through a PIP assessment that will deny people in psychological distress access to additional support. Please can you advise me how I can press the Government to hold a debate on these regulations before we rise for the Easter recess?
The hon. Lady has raised her point with very considerable force, and she has underlined the reasons for its urgency. I have noted the number of Members, to which she referred, who have prayed against the regulations. Her point of order is not, sadly, a matter for the Chair, but it will have been heard on the Treasury Bench, and it is not an unreasonable hope and expectation on her part and that of those Members who prayed against the regulations that a debate will be arranged in a timely fashion.
In so far as she seeks advice, I would say to her that she and her colleagues could use the opportunity of business questions on Thursday to press their claims in respect of the schedule for next week’s business, for it is with next week that the hon. Lady is concerned. Whether group activity—that is to say, significant numbers raising the matter—will be effective, I do not know, but it seems a reasonable supposition that, if anything will, it might. I think we will leave it there for now.
Short and Holiday-let Accommodation (Notification of Local Authorities)
Motion for leave to bring in a Bill (Standing Order No.23)
I beg to move,
That leave be given to bring in a Bill to require householders to notify local authorities of an intention to register accommodation for short or holiday lets; and for connected purposes.
Good ideas can be undermined when a minority abuse or exploit them, causing harm to others and undermining the wellbeing of the wider community. The “sharing” economy is fizzing with good ideas and opportunities. We are in an era where the potential use of resources—from labour to transport to homes—can be made more of by the speed and flexibility of digital communications, and we should not be putting unnecessary barriers in the way. Yet, that is not the same as saying there should be no rules. Individuals and communities need to be protected, and the rules we agree on must be enforced.
We now have an emerging consensus, including London councils of different political complexions, the Mayor of London and London Assembly members, on the need for further action. So today I am putting forward a proposal that will make it possible to effectively enforce the rules preventing the abuse of short and holiday let accommodation. Although I welcome the freedom for homeowners to let their properties for such purposes without excessive bureaucratic interference, it is difficult and expensive for cash-strapped councils to police the rules. With no requirement to seek permission for a short let, the only way to identify where such lettings are taking place—and, more importantly, where they are in breach of the rules—is by having staff comb the various websites to find them.
As some of us flagged up during the passage of the Deregulation Bill, which set the 90-day annual maximum for short lets, proving a property is let at all can be tough when there is no notification, and proving a property is let for more than three months in any one year is labour-intensive, expensive and cumbersome. Officers of my own local authority, Westminster, have been of great help in preparing this short Bill, and they have told me:
“It is difficult to determine the addresses as there is no prior notification system. My officers spend an inordinate amount of time trying to identify properties from website photographs where addresses are not provided like Airbnb. We also rely heavily on members of the public notifying us of people short-letting properties.
We are up against it but remain vigilant and continue to do all that we can to deal with the commercial lets (i.e. Those let in excess of 90 nights).”
People who are using Airbnb and others of the various platforms for short and holiday lets sometimes say to me, “Why does it matter? Why shouldn’t we, as homeowners, do what we want with our properties?” For many of them, it should not matter at all, as they are the occasional hosts—they are the sharing economy—earning a bit of extra cash from a spare room or when they are away. They are aware of their own legal responsibilities and are considerate of neighbours—let them flourish. The problem is that they are not alone. Alongside the responsible owner-occupiers are irresponsible ones, illegal sub-letters and an increasingly significant commercial operation seeking to take advantage of potentially higher yields.
Across all London boroughs, in the year following the Deregulation Act 2015 there was a city-wide 126% increase in the number of short lettings advertised on Airbnb alone. Westminster had an 80% increase, but some boroughs saw even bigger rises, with Camden’s figure going up by 124%, Southwark’s by 139% and Brent’s by a staggering 762%. There is now evidence to suggest that the short let phenomenon is spreading across the UK, with Edinburgh and Manchester following London—Brighton and Bristol are among the other authorities experiencing this. The latest data on InsideAirbnb.com confirms that, with nearly 50,000 listings across Edinburgh and Manchester alone. In terms of potential breaches of the law, my borough is currently investigating more than 1,100 properties believed to have breached the 90-night limit.
Also in the early part of last year, the number of whole properties—as opposed to rooms—in London listed on Airbnb increased by a quarter, from 17,625 to 21,861. Research by the Residential Landlords Association shows that 41% of all Airbnb listings in London last June were multi-listings, meaning that the property owners had more than one property advertised; this increase, to some 17,590 properties, is also a sign that the website is increasingly becoming commercialised. Meanwhile, 54% of entire home and entire apartment listings in Manchester, and 43% of those in Edinburgh, were identified as multi-listing properties, again indicating that the trend is going well beyond the image of the sharing economy.
Two concerning issues arise from that, the first of which is the loss of residential accommodation. Short lets can bring in up to three times the income of more traditional flat rentals: £1,800 a week, on average, for a two-bedroom flat, as opposed to £620 a week for a traditional assured shorthold tenancy, according to Westminster City Council. Even before the Deregulation Act, evidence suggested that flats were being, in effect, converted into semi-permanent holiday lets, but now the pressure is even more intense. The potential to earn more from short lets is a key selling point on some of the sites. People are told:
“The rents you can achieve during weekend stays or overnight stays can easily match or beat what you could achieve for a monthly rental income from a normal tenancy—plus you can enjoy the flexibility of choosing when to put your property up for rent, and when not to.”
Another company states:
“A short term let normally generates 50-100% more income than a long term let.”
So, alongside the genuine sharing economy lettings by homeowners, that leads to a longer-term loss of residential homes, even those available for traditional assured shorthold lettings. Westminster City Council alone estimates there to be 3,000 whole properties on listings sites, with about 1,000 each in a number of other individual boroughs.
One constituent wrote to me to say:
“This style of letting has nothing to do with people make a bit of extra money on the side from their homes, by renting out the odd room, (which was the original premise of Airbnb) and has now become a licence for people to make big (non-tax-declared money) at the expense of local residents who are subjected to its considerable downsides”.
Where this all began for me was the number of constituents coming to raise concerns about the impact of their communities becoming an unofficial part of the hospitality industry. Their questions were about issues including: the impact of transience; their security; antisocial behaviour arising from noise; waste issues; overcrowding; and a range of other sources of disturbance. Those disturbances place a cost on the local authority, too. Enforcement costs, and the costs of dealing with noise and other breaches of regulations have to be met by cash-strapped local authorities.
One constituent wrote to me to say:
“We are a single house in Bayswater (six flats) and we manage ourselves. All the flats but one (ours) are now non-owner-occupied. A few weeks ago it became obvious that one flat was renting on Airbnb, and I’m fairly sure had broken the 90 day limit. This is technically in breach of the terms of our leases, which have that ‘single private use’ clause in them, but more than that I really hate the idea of our house turning into a hotel, our front door key in strangers’ hands. And I’m fairly sure it breaches the terms of our buildings insurance which is a bit scary.”
That whole area of downsides from short lettings—insurance and other lease requirements regularly being breached as a consequence of short lets— is beginning to come to the public’s attention.
Meanwhile, tax revenues are, if anything, going down—that is certainly what other cities are finding. One article looking at the American experience found:
“First up on the list of grievances big cities have with vacation rental sites is lost tax revenue. The number of missing tax dollars is truly astounding. A study from AllTheRooms.com, a vacation rental and hotel search engine, found that the total 2016 tax revenue from room rentals brokered through Airbnb would amount to almost $440 million if they were taxed at the same rate as traditional hotels.”
That is the American experience. We do not have a local UK experience, but that is where we are going.
Unlike before the 2015 Act, councils now have to prove not merely that a property is being short let, but that it has been short let for more than 90 days in a year, which is a far harder and more resource-intensive task. What can be done to resolve this? Local authorities are looking for the Government and the Department for Communities and Local Government to be more prepared to intervene to exempt neighbourhoods from the current set of regulations—they have the powers to do that. Westminster City Council applied for such an exemption but was turned down, although I know it is considering making a fresh application. The platforms can also do more. I welcome the fact that Airbnb has said it will enforce the 90-day maximum rule, but not all other letting platforms are taking the same approach—in some cases they are making it clear that they believe it is for the host to uphold the law, not for themselves, as letting platforms, to do so.
What I believe is now necessary, and what this short Bill aims to do, is to introduce a light-touch online notification system that is mandatory for homeowners to complete, where they merely confirm the dates their property is to be used for short letting. This is not about seeking permission, but is merely about allowing local authorities to know where short and holiday lets are taking place so that they are able to enforce effectively. By all means encourage people to make good use of their homes and earn extra cash, but let us make sure that this does not intensify the housing crisis, land costs on others—while sharing none of the rewards—and inflict misery on long-term residents who, to their shock, can find themselves waking up in a hotel annexe, but after all the caretakers have gone home.
Question put and agreed to.
That Ms Karen Buck, Mark Field, Tulip Siddiq, Jim Fitzpatrick, Andy Slaughter, Victoria Borwick, Kate Green, Peter Kyle, Rushanara Ali, Kerry McCarthy and Ruth Cadbury present the Bill.
Ms Karen Buck accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 24 March, and to be printed (Bill 159).
Intellectual Property (Unjustified Threats) Bill [Lords]
Consideration of Bill, not amended in the Public Bill Committee
New Clause 1
Review of the impact of exiting the European Union on provisions within this Act
“( ) Within 12 months of this Act coming into force, the Secretary of State must prepare and publish a report on the impact of the Government’s plans for exiting the European Union on the provisions within this Act, and must lay a copy of the report before Parliament.”—(Bill Esterson.)
This is a probing new clause to assess the impact of exiting the European Union on the provisions within this Act.
Brought up, and read the First time.
I beg to move, That the clause be read a Second time.
Intellectual property makes a significant contribution to the UK economy each year. In 2014, UK firms invested an estimated £133 billion in knowledge assets, compared with £121 billion in tangible assets. As the Intellectual Property Office notes, UK investment in intangible assets that are protected by intellectual property rose from £47 billion in 2000 to £70 billion in 2014, and is estimated to represent 4.2% of total GDP. What is more, the UK system of regulating intellectual property is considered to be one of the best: it was rated No. 3 by business in the 2016 Taylor Wessing global IP index in respect of obtaining, exploiting and enforcing the main types of intellectual property rights. It is clear that intellectual property is of great importance to the UK economy, so the impact of leaving the European Union on IP and the provisions in the Bill is vital to the economy. It is of great interest to businesses, which value certainty, and it is crucial to potential investors in businesses in the United Kingdom.
The Bill will apply to patents, trademarks and designs. The Minister stated in Committee, and in a written answer on 20 October last year, that the European Patent Office was established by international treaty and that our participation in its work will be unaffected by our leaving the EU. The suggestion is that patents will be relatively untouched by Brexit; it is to be hoped that the Minister’s confidence is not misplaced. Several IP rights that derive from EU regulations will no longer apply to the UK, and the impact of Brexit is far from clear at this stage. As the Chartered Institute of Patent Attorneys recently commented:
“The continued validity of these rights in the UK is uncertain. Transitional agreements may be negotiated to allow time for rights holders to convert these into national rights or to file separate national rights... The government has remained silent on whether or not it intends to implement the new Trade Mark Directive into UK domestic law.”
The Minister signalled in Committee the Government’s intention to ratify the unified patent court agreement by the end of April. The court will deal with disputes relating to European patents and help the business that the Bill seeks to assist by removing the threat of unjustified litigation—a point made by my hon. Friend the Member for Garston and Halewood (Maria Eagle) in Committee. Will we still be members of the court after we leave the EU? The court is part of the effort to reduce costs across jurisdictions and make it easier to do business. As we prepare to leave the EU, the last thing we need is additional costs on businesses, so clarity is needed about our membership of the court. The Minister said in Committee that decisions had not yet been taken, so will he provide an update and confirm that he understands just how important it is that we minimise costs across jurisdictions, including those relating to intellectual property rights? What is his view on our potential membership of the patent court after we leave the EU?
The CIPA said:
“For the UK to continue participating after Brexit, there would need to be a new international agreement with the participating Member States and the UK to provide compatibility with EU law... If the UK does not remain a member of the UPC…there will be a need for further transitional provisions to protect any rights acquired or cases in progress at the time the UK leaves. It is still unclear whether UK European Patent Attorneys will be able to represent parties in the different Divisions of the UPC after Brexit.”
It went on to say:
“CIPA has a strong preference for the UK to participate in the UP and UPC system, if a solid legal basis for this can be agreed.”
Given the UK’s leading position in patents and patent law, it makes sense to do all we can to maintain our position and to ensure that confidence in our position remains as high as possible. It is important that we avoid taking a step backwards on IP law and losing the potential benefits that the development of single European patent protection will bring. The economic and competitive advantages of such protection are clear enough. The alternative of having a separate UK system, with the likely need for rights holders to apply for UK and EU protection separately, will mean additional burdens for UK businesses and for our economy, compared with the UK remaining a central part of the European-wide patent system.
As my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) said in Committee, it is vital that the Minister takes all steps to ensure that patent law and IP law more generally do not take a retrograde step following Brexit. IP is how innovation is rewarded; it is fundamental to ensure our ability to deliver a high-pay economy and prosperity, and to Britain’s promise that the next generation is better off than the previous one. Since 2010, we have seen living standards fall while the economy as a whole has grown. The people of this country cannot afford to miss opportunities, including this one. The alternative of a race to the bottom, a low-wage economy and our competing as some kind of tax dodger’s paradise off the coast of continental Europe will not deliver better living standards.
Intellectual property is one of many ways in which we must build on our success as a country and not allow decline. How intellectual property rights are protected, and how they are seen to be protected during the Brexit negotiations, will be crucial to delivering and enhancing business and investor confidence and to getting the best possible outcome from the negotiations. The Prime Minister may not wish to give a running commentary, but she and her Ministers need to reassure businesses, their staff and the whole country that everything is being done to secure our future. That is why I tabled the new clause to call for the Government to review the impact of Brexit on the IP provisions in the Bill.
A report after a year would not only help to bring sovereignty back to Parliament—something we heard a great deal about during the referendum debates—but help UK businesses and foreign investors to understand the post-Brexit intellectual property world with respect to the provisions in the Bill. The protections being harmonised in the Bill are important to help to protect our businesses, ensure a fair market and encourage entrepreneurs and inventors, and especially to ensure opportunity for smaller businesses. Nevertheless, those businesses, entrepreneurs and inventors all want to know, as far as possible, what the arrangements and relationships with the EU will be like post-Brexit.
The law firm Charles Russell Speechlys says:
“Discussions are taking place regarding the post-Brexit options for IP. National IP rights are unlikely to be affected post-Brexit. Pan-European IP rights will be affected. Trade marks and designs are likely to be the IP rights most affected but it will impact on other IP rights as well.
On leaving the EU, the UK will no longer automatically be covered by EU trade marks. An orderly transitional period is expected with the potential to split existing EUTMs into UK national and EUTMs post-Brexit (subject to negotiation and relevant supporting legislation). Trade mark owners will need to reinstate lapsed UK marks which have been subsumed into EUTMs by seniority but it is not yet clear how that will work.”
The firm goes on to say:
“New EUTM filings post-Brexit will not extend to the UK (they will be limited to the EU). Trade mark owners will need to seek national protection in the UK for their trade marks. Application through the Madrid Protocol will still be available for IRs designating the UK.
The UK court system will no longer have EU trade mark courts post-Brexit. EUTM holders will not be able to enforce them in the UK and obtain pan-EU injunctions under the EUTM Regulation. The effect on pan-EU injunctions already granted is unknown. Brexit will also impact on the general jurisdiction of the UK Courts and enforcement of their judgments. Infringement proceedings may need to be brought separately in the UK and EU.
UK trade mark laws may develop independently over time and diverge from EU trade mark laws. CJEU decisions will not be binding but are likely to be persuasive.”
The firm ends by saying:
“There will be no obligation to implement the new Trade Marks Directive (in line with the already in force new CTMR”—
Community trade mark regulation—
“if Brexit takes place before January 2019.”
The uncertainty that is set out by that legal opinion shows the need for proper analysis and for confidence to be built in during negotiations, rather than after we have left the EU. Clearly, there is a considerable amount of uncertainty. We are unlikely to be able to remain in the new European unified patent court after Brexit. The Government have not said whether we will implement the trademarks directive.
To provide the certainty that business needs, perhaps the Minister could use this opportunity to confirm which IP rights not currently on the UK statute books will be enshrined in UK law once we leave the EU. Does he understand from the detailed analysis that I read out from Charles Russell Speechlys just how much of a concern this is, just how complex it is, and just why businesses want and need that certainty for the good of themselves and the wider economy?
This new clause would require the Secretary of State to issue a report on the impact of the Government’s plans for exiting the European Union on the provisions in the Bill within 12 months of it coming into force.
The Bill does not take forward any EU obligations. The IP unjustified threats provisions do not derive from EU law. They are “home grown” provisions that were first enacted for patents back in the 19th century. The important protections provided by the Bill will not in themselves be changed by Brexit. Businesses pushed for clarity and certainty about how they can contact others over IP disputes, and the Bill will deliver that. Our leaving the EU does not alter that. Of course some IP rights are EU-wide, and the Bill will apply properly to those rights. The threats regime will be consistent across all relevant rights that have effect in the UK.
Furthermore, the Bill will ensure that our UK threats regime works appropriately with the proposed unitary patent and unified patent court when they come into effect. The hon. Member for Sefton Central (Bill Esterson) asked about the UPC following our exit from the EU. The options for the UK’s intellectual property regime after our exit, including our relationship with the unified patent court, will be the subject of negotiation, and it would be wrong to set out unilateral positions in advance. None the less, our efforts will be focused on seeking the best deal possible in negotiations with our European partners, and we want that deal to reflect the kind of mature co-operative relationship that close friends and allies enjoy.
As long as we are members of the EU, the UK will continue to play a full and active role, and making sure the IP regime continues to function properly for EU-wide rights is an example. The UK’s involvement in the EU IP framework after exit is not a matter for the Bill; it will be part of the EU exit negotiations, which of course have not yet begun. It is likely that those negotiations will still be in progress at the point at which the new clause would require us to report. Publishing the suggested report would be unnecessary and could well undermine our ability to negotiate the best deal for Britain in this area.
The hon. Gentleman asked about EU-wide IP rights on Brexit. Of course we are already talking to businesses and to other stakeholders about this important issue. There will be time to address it fully and properly during exit negotiations. Naturally, we will want to see the best outcome and one that supports our innovative businesses. He asked also about EU trade marks and designs. We recognise that users will want clarity over the long-term coverage of those rights. We acknowledge the importance of involving users in the consideration of these issues, and we are working with stakeholders at the moment to gather views on how to address their concerns.
The hon. Gentleman asked on a number of occasions about the EU trademark reform package and the directive. On balance, we think that the reform package is a good one, with modernisations that will make the overall system easier and cheaper for businesses to use.
We are committed to getting the right deal for the UK and we will work with Parliament to ensure a smooth and successful exit. The new clause would not help us in any of this work; it is unnecessary and potentially harmful to the UK’s interests. For that reason, I ask the hon. Gentleman to withdraw the new clause.
I am glad that the Minister said that he was already having discussions with businesses; that is incredibly important. I urge him to make it clear very publicly, sooner rather than later, exactly what the nature of those discussions are. Businesses are already exceedingly worried about the consequences for intellectual property. I thank him for picking up the points that I made about the relationship between EU patent law and UK patent law. I think that he understands that a great deal of reassurance is needed. I do not agree that we would make life more difficult by having this requirement on Government. In fact, it is a sensible move. I would be surprised and very concerned if we did not see a degree of reporting back during negotiations on these and many other matters. None the less, he has put forward the Government’s view in response to the points that I have raised, so I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
I beg to move amendment 1, page 2, line 15, after “do,” insert “or claims to do,”.
This amendment deals with people or companies who hold themselves out as the primary infringer: ie, they claim to be the manufacturer or importer of a product (and therefore can be written to freely) when, in fact, they are not. A definition is provided in amendment 3.
With this it will be convenient to discuss the following:
Amendment 2, page 2, line 19, at end insert—
“(4A) A threat of infringement proceedings is not actionable if the threat—
(a) is made to a person mentioned in subsection (4), and
(b) relates to—
(i) potential future acts of infringement, or
(ii) other acts of infringement
which are fundamentally similar to the current alleged act of infringement.”
This amendment would allow communications from the rights holder to the primary infringer to also refer to secondary infringing acts (by the primary infringer), without it constituting a threat.
Amendment 3, page 2, line 24, at end insert—
“(7) In subsection (4)(a) “claims to do an act” means the person makes an explicit claim in public that they are the manufacturer or importer of the product or process.”
This amendment provides a definition of “claims to do” in amendment 1.
Amendments 1 and 3 are related to primary infringers and those who claim “to do”. Amendment 1 addresses the concern about the impact on those who claim to make a product and the potential for action to be taken against them. Amendment 3 defines “claims to do”.
We are dealing here with communication and threats. As the Bill stands, the onus is on a rights holder not to communicate with a party that claims to be a primary infringer of rights. The example that springs to mind is that of an own-label brand in a supermarket. Under the Bill, a manufacturer who believes that a product contravenes their rights may not communicate with the supermarket unless they are confident that there is no other way of finding out who the manufacturer really is. The problem is that smaller manufacturers wanting to challenge the bigger players may not have the expertise or access to expertise needed to comply with the provisions of the Bill. They do not have the staff, time or money to engage legal services or to search for the true identity of the manufacturer. The Minister said in Committee that if action were taken against a rights holder, they would be able to defend themselves in court. Now, that is entirely accurate in legal terms, but the problem is that smaller organisations lack the resources to be able to do so.
As I think I said.
As my hon. Friend may well have said in Committee.
The problem is one of imbalance. Our court system necessarily favours those who have the deepest pockets and the greatest resources, and that does not mean smaller businesses. Will smaller businesses risk winning or losing in court? Will they have the money to defend themselves against an action, or will they think it is worth defending their intellectual property in the first place? It will be for the courts to decide whether a rights holder could have found out who the primary infringer was. For smaller businesses, it could well be a tough choice as to whether they believe the court will back them when they say in court that they did not realise that they should not have contacted the apparent infringer.
If not through what I am proposing, and what my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) proposed in Committee, how does the Minister propose to ensure that there is a level playing field between protecting the rights holder, especially the smaller rights holder, and preventing unjustified threats, especially where the rights holder is the smaller party? How does he propose to guarantee smaller businesses the ability to operate on a level playing field? To be entirely fair to the Minister, I completely understand that that is the purpose of the whole Bill. My thanks go to the Law Commission for its work in delivering to such an objective. The Bill very much has in mind the need to balance protection and encouragement for innovators, entrepreneurs and investors with the need to ensure a fair market and to prevent unfair and exploitative competition. However, there appears to be a degree of ongoing potential for imbalance in the legislation regarding those who claim to be the manufacturer or the primary infringer, and the Minister’s answers in Committee did not go far enough to guarantee that smaller businesses will be protected.
Amendment 2 would address some further concerns of smaller businesses that lack the resources for legal advice and that may fall foul of the Bill’s narrow remit. The amendment addresses the problems where a rights holder challenges not just the primary infringement but secondary acts of infringement. The rights holder may wish to prevent future infringement or to comment on related infringements of a similar nature. The amendment would minimise the fallout from inadvertent infringements. The amendment would not penalise a rights holder for mentioning secondary infringements when such communication was about potential future infringements or similar current infringements. The Chartered Institute of Patent Attorneys raised the concern that future infringements are excluded as the Bill is now drafted.
It seems reasonable to ask an infringer to stop now and in the future, and not to carry out similar infringements, so amendment 2 also deals with the concern of smaller businesses that lack the resources or expertise to ensure that all their communications are strictly compliant with the Bill’s provisions. I agree with the Minister that rights holders ideally should get their communications right, and that is a large part of the thrust of the Bill, but my concern is that the lack of access to legal expertise for smaller businesses could be a real problem.
I am afraid that I did not follow some of the Minister’s counter-arguments to the amendment in Committee—for example, that the amendment would make it harder for rights holders to approach alleged primary infringers with confidence. In fact, our intention is precisely to increase confidence, especially among smaller businesses as they attempt to protect their intellectual property. Again, if the Minister will not do this through amendment 2, how will he? If CIPA is wrong, in what way is it wrong? If the language is vague—a point that the Minister made in Committee—why has his Department not suggested clearer language? With all the expertise here today and in the Department, it should be possible for the Minister to obtain the clarity of language to address the concerns we have raised. Did he actually ask for that kind of advice, clarification and language that would have addressed the problems, provided the additional assurance to smaller businesses and helped to alleviate some of these concerns? If not, why not?
One of the key purposes of the Bill is to simplify an important but complex area of intellectual property law, making it more accessible and easier to use. One way in which it does this is by setting out a clear statement of those acts that a rights holder can safely refer to in a communication, and that will not trigger an unjustified threats action. This helps to encourage rights holders to communicate with the trade source of an alleged infringement. It would include those who manufacture or import patented products or use patented processes, for example. Such acts are known as primary infringements.
Amendments 1 and 3 seek to make it allowable to approach someone who explicitly claims to be a primary infringer. I am not convinced that there is problem that needs to be solved, but, in any event, there are two key points. First, under the reforms as they stand, a rights holder can already communicate with potential infringers of all types, including those identified by amendments 1 and 3. The Bill provides clear guidance on how this can be done. The provisions therefore make it easier for parties, including small and medium-sized enterprises, to communicate and resolve issues without the need for litigation. Secondly, it is perfectly allowable to make a threat to anyone so long as that threat refers only to manufacturing and importing, or other primary acts. Someone making such a threat would not be at risk of being sued, even if the recipient was falsely claiming to do those acts. For these reasons, as well as the additional complexity introduced, I do not accept that amendments 1 and 3 are appropriate.
Moving on to amendment 2, I agree it is important that issues of infringement can be raised early, before real commercial damage is done. For that reason, the Bill already allows threats to be made in relation to future or intended acts of primary infringement, so amendment 2 adds nothing in that regard. Furthermore, the Bill already allows the rights holder to refer to certain secondary acts when communicating with an alleged primary infringer. When someone is manufacturing an allegedly infringing product, the rights holder can also discuss the retailing of that same product. Users wanted this, as it is pragmatic and helps to save time and money, but it would not be right to extend this further and allow threats to be made to that same manufacturer about the retail or stocking of other products that they did not make themselves. That could damage businesses that retail products acquired from a legitimate manufacturer, and would disrupt the ability of that legitimate manufacturer to operate in the marketplace—an outcome that the threats provisions exist to prevent.
Finally, it is highly uncertain for businesses what would be considered to be “fundamentally similar” acts of infringement, as set out in the amendment, and litigation on the meaning would no doubt ensue. If the intention is to capture only similar products, I do not think that is achieved.
These amendments would introduce additional and unwelcome complexity. They would blur the line between who is protected from threats and who can safely be approached. Rather than benefiting rights holders, this could instead make getting legal advice more difficult and costly. For those reasons, I ask the hon. Gentleman to withdraw his amendments.
We appear to have rehearsed, more or less word for word, what happened in Committee. I am disappointed by the Minister’s responses, because he does not appear to have picked up on the concern about the imbalance between larger and smaller businesses—a fundamental element of what we think is missing from the Bill as drafted. I would like greater clarity from him, but perhaps that will come as the Bill is implemented. I urge the Government to consider the impact on smaller businesses. On own label, apparently once the rights holder has found out that an own label product is not made by a supermarket, such action would have to cease or it would be covered by the legislation. That was certainly our intention in the amendment.
I hope that our points about the need to protect smaller businesses have been well made. I thank the Minister for his responses, and beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
I beg to move, That the Bill be now read the Third time.
Intellectual property is crucial to supporting economic growth and a key part of our industrial strategy. I am therefore pleased that this small but important Bill is completing its passage today. The Bill will ensure that businesses, especially SMEs, are best able to make use of the IP regime. In doing so, it will help to deliver the Government’s manifesto commitment to make the UK the best place in Europe to innovate, patent new ideas, and set up and expand a business. The Bill brings clarity and consistency, making it easier and cheaper to solve infringement issues quickly and without litigation. It clearly defines how information can be exchanged to resolve disputes over IP infringement. It also means that legal advisers will now be better able to help to settle disputes without becoming embroiled themselves.
The reforms contained in the Bill are widely supported by stakeholders, not least because of careful research and consultation by the Law Commission. I thank the Law Commission and the Scottish Law Commission for their hard work and expertise in developing these reforms, and for the excellent support they have given the Bill during its passage. I would like briefly to highlight the value of the Law Commission special parliamentary procedure used in the passage of this Bill. The Bill has been strengthened by, in particular, the detailed scrutiny in the other place afforded by that procedure. I am grateful to hon. Members in this House, particularly those who served on the Committee, for their interest and for giving this Bill due consideration. My thanks also go to the hard-working Bill team and to Intellectual Property Office officials for their exceptional work.
The unjustified threats provisions are a valuable part of the wider IP regime and provide much needed protection. These reforms will ensure that those provisions are fit for purpose and make a real difference to our innovators, designers and businesses. I commend the Bill to the House.
I join the Minister in saying that the provisions of this Bill are, overall, exactly what is needed to create a level playing field and support and encouragement for innovation and creativity. Those who develop ideas need to have their ideas protected and supported, and bringing together the different elements of intellectual property legislation in the way that this Bill does is very much the right way to go. I mentioned on Report some of the figures and the benefits derived from the fact that the UK has one of the finest IP systems in the world. We must do all in our power to ensure that that continues because it is one of the reasons that this country is an attractive place for investment, and that is one of the reasons we must be optimistic about our future, despite the many challenges that we currently face, particularly the uncertainty around Brexit.
However, we have raised concerns throughout this process. It is a shame that there was not more in the Bill about alternative dispute resolution. The opportunity to tighten things up in relation to smaller businesses would have been welcome, but that has not happened. We need to reward innovation and entrepreneurs, and to balance that against the creation of a fair market and a successful economy. The Minister mentioned the industrial strategy Green Paper. It is critical to the success of the industrial strategy that our intellectual property system functions as well as possible. I hesitate to say that I look forward to how this will develop during the Brexit negotiations, but we certainly need to work extremely hard to make sure that the success of our IP system is retained during those negotiations because of the very close linkage between IP in this country and across the European Union. The Minister mentioned the protection for legal advisers. That is a welcome step forward, as is the clarity and consistency achieved by this Bill. We certainly support its core principles and the overall aims and objectives that have been achieved.
I add my thanks to the Law Commission, to those who have worked on the Bill, and to those who served on the Bill Committee. I hope that the Bill will achieve what is intended for it.
Question put and agreed to.
Bill accordingly read the Third time and passed, without amendment.
I must say that that is the most efficient debate on a Bill I have ever seen in this House, and I think that somebody somewhere ought to be commended for it.
I beg to move,
That this House has considered fuel poverty.
I am delighted to open the first annual debate on the important issue of fuel poverty. The fact remains that far too many of our fellow citizens and constituents struggle to afford to keep their homes at reasonable, comfortable temperatures. As I will argue, we are making progress, with some 780,000 fewer fuel-poor homes in 2014 than in 2010, but there is a lot more to do to meet the demanding targets we have rightly set ourselves, as a country, for 2030. It is quite right that the Government of the day are regularly held to account for what they are doing, and encouraging others to do, in the face of this stubborn and complex social challenge.
The debate is important because it is an opportunity for Government and Parliament to hear directly from MPs from across the nation about their experience and insights. In our day-to-day work, we, as MPs, come across the consequences of fuel poverty, not least its impact on the wellbeing and health of our constituents.
Before we get into the discussion, I want to set out the context. Over the past five years, Government have taken action to overhaul the framework for tackling fuel poverty in England. At long last, we have a long-term strategic framework for action on fuel poverty, which is rooted in the 2015 fuel poverty strategy and the long-term statutory target. The journey began in 2012 with the independent review of fuel poverty led by Professor Sir John Hills. The review found that fuel poverty is a distinct issue, separate from income poverty.
However, the debate clearly links to other areas of policy, such as the action the Government are taking to improve living standards by means of the national living wage and by increasing tax thresholds for the lowest-paid. Likewise, we could not have made clearer our determination to make sure that the energy market works for all. Ofgem’s introduction of a prepayment meter tariff cap is a welcome first step. As the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), indicated last week, a consumer Green Paper will be out shortly.
Today, I want to focus on the policy framework that is specific to fuel poverty. The journey to this point started with Professor Hills’s review, which reflected on previous activity and measures to tackle fuel poverty. The review highlighted the fact that although the 10% indicator that had, until that point, been used to measure fuel poverty was well-meaning, it was fundamentally flawed. In 2013, the Government confirmed that the findings of the Hills review of fuel poverty would be adopted, including the low income, high costs indicator. That measure finds a household to be living in fuel poverty if its income is below the poverty line and it has higher-than-typical energy costs.
In 2014 the Government introduced the fuel poverty target for England. The target is to ensure that, so far as is reasonably practicable, fuel-poor households are improved to a band C energy efficiency rating by 2030. In 2015 we saw the publication of “Cutting the cost of keeping warm: a fuel poverty strategy for England”, which set out the principles that the Government would apply and the approaches to be taken when making progress towards the fuel poverty target. The strategy set out the importance of effective levels of public accountability and the role that the Committee on Fuel Poverty, a non-departmental public body formerly known as the Fuel Poverty Advisory Group, will play in that. I welcome the insight and challenge that the committee brings as we look to tackle the serious and long-term societal issue of fuel poverty.
Recognising that 2030 is some way off, the strategy includes interim milestones to guide activity in the shorter term, helping to focus our attention on making progress as we move forward. The milestones are to ensure, so far as is reasonably practicable, that fuel-poor households are improved to a band E rating by 2020 and to a band D rating by 2025. That is the framework.
The fuel poverty target is certainly ambitious, and I have not heard anyone argue to the contrary. The band C target is set at a level that only 7% of fuel-poor households currently enjoy. We are aiming high, and it is right for us to do so. As the Committee on Climate Change reiterated in its report last week, the target is extremely challenging. However, we must be clear that meeting that challenge may provide huge benefits for households that need support. Improving those E, F or G-rated homes to band D can reduce energy costs by an average of £400. I am pleased to be able to say that although the challenge is significant, progress is being made.
Looking to our 2020 milestone, the percentage of fuel-poor households living in homes rated band E or higher has already improved from 79% in 2010 to 88% in 2014—the latest year for which statistics are available. Looking at the 2025 milestone, we see that the percentage of homes rated band D or higher has improved from 29% in 2010 to 59% in 2014.
I would be delighted to give way to the hon. Lady.
There is a competition going on here over who will intervene. It is kind of the Minister to give way. I am sure he is aware that fuel poverty is particularly acute in Northern Ireland. Many households are still dependent on heating oil, the cost of which is increasing. Will the Minister pledge that if, as I optimistically forecast, a devolved Administration is restored in Northern Ireland next week, he will liaise very closely indeed with his counterpart in Northern Ireland to develop a strategy that benefits all households across the United Kingdom—not just those in England—rather than leaving Northern Ireland to fend for itself? That is an optimistic forecast, but we have to live in hope.
We do indeed. The hon. Lady is entirely right; the fuel poverty statistics for Northern Ireland are particularly striking and stubbornly high. As she indicates, she hopes for better times. Although this is, as she well knows, a devolved matter, the Government are ready and happy to co-operate with the Administration when it is formed.
What consideration have the Government given to developments in currency levels? We live in an age in which sterling is devaluing. The harder the Brexit, the more sterling will have to devalue. The US dollar, on the other hand, is likely to strengthen as a result of Trump’s expansionary fiscal policy, and the Fed has increased interest rates. Oil is traded in dollars, and the gas price is pegged to oil, so those two developments inevitably mean that energy prices in the UK will increase significantly. What are the Government going to do to mitigate that?
As I said earlier, I do not think that anyone can be under any illusions; the Government are very serious in their intention to make the energy market work more effectively for all. We are all clear that it does not work effectively for all, and the steps that the Government will take will be set out in a consumer Green Paper very shortly.
I was talking about the Government’s performance against the 2025 milestone that we have set, and I stated that the percentage of homes rated band D or higher has improved from 29% in 2010 to 59% in 2014. That represents approximately 780,000 fewer fuel-poor homes rated E, F or G in 2014 compared with the position in 2010. I hope that the House will welcome that. In terms of the trajectory of improvement, there were 174,000 fewer E, F or G-rated homes in 2014 than there were in 2013, which shows that existing policies are making a difference. As an example, since the scheme started in 2013, approximately 700,000 measures have been installed in 500,000 low-income households as a result of the energy company obligation. That is part of a total of 1.6 million homes that have been improved under ECO.
My constituents in South Leicestershire want to know that the Government are doing everything they can to ensure that the energy market works for all of us, whether we are in South Leicestershire or across the United Kingdom. Does my hon. Friend share my view that energy companies should be expected to treat all their customers fairly, not just those who decide to switch?
I agree with my hon. Friend. We all know from our constituents about the stress that is caused by anxiety about fuel. I represent a relatively affluent constituency in London, but the statistics show that 8% of my constituents qualify as fuel-poor. This issue affects constituencies across the country. I certainly give my hon. Friend that assurance, and I hope that he will be very satisfied by the material in the consumer Green Paper that will be published imminently.
Recognising that improving household energy efficiency is the most sustainable long-term solution to tackling fuel poverty, we are not complacent, and we are going further to take action. Today, the Electricity and Gas (Energy Company Obligation) (Amendment) Order is being debated in the House of Lords. It will extend the scheme from 1 April 2017 to 30 September 2018. Should the scheme proceed as planned, we expect more than 500,000 homes to be improved over the coming 18 months. The order will also reform the energy company obligation so that 70% of the support available under it will be directed at low-income homes. That represents a real-terms increase from £310 million to £450 million per year, which will be invested in improving the energy efficiency of homes that most need support.
I have no doubt about the Minister’s personal commitment to this agenda, but I wonder why the Government will not make energy efficiency into a national infrastructure priority. Why is energy efficiency not part of the national infrastructure assessment? That would be the way to scale up and meet the ambition he claims the Government have.
It is not a claim about ambition; the ambition is set out in long-term statutory targets. The figures I have given show that these are substantial investments. As I will come on to clarify, there is some £770 million of support for low-income and vulnerable consumers in the financial year 2017-18, so there is no shortage of ambition or of investment. The hon. Lady and I share a strong belief in the importance of energy efficiency. I am trying to stress that what we are doing will increasingly focus on the most vulnerable, and, with public finances constrained, that must be the right priority.
May I welcome the efforts that the Government have made and their clear success in improving energy efficiency? My hon. Friend is so right to highlight the fact that making the obvious saving of getting people to spend less on energy through using less is much more important than the amount we give people to subsidise their energy costs or any intervention we make in the market to cap energy costs.
I could not agree more with my hon. Friend. As I have said, previously, he is one of the most thoughtful Members of the House on this subject. He will know that we are on the cusp of something very interesting in our relationship with energy and our ability to manage it more intelligently. Such an opportunity must be just as much available to well-to-do people as it is to those struggling with their bills, and that must be a priority for us. That is partly why I stressed the point that the reforms we are making to the existing policy instruments will increasingly focus on the most vulnerable and the poorest in our communities.
However important it is to improve the energy efficiency of people’s homes, it will inevitably take time, and Government recognise that people also need immediate support with energy bills. We therefore have in place the second pillar of the strategy, the warm home discount. This scheme now provides over 2 million low-income and vulnerable households with a £140 rebate off their energy bill each winter, when temperatures are lowest and bills are highest.
Together the schemes mean that, as I have said, there will be at least £770 million of support for low-income and vulnerable consumers during the financial year 2017-18. This is a significant level of support for households across the country. Other policies will also make a contribution, such as the prepayment safeguard tariff, which I hope the House welcomes, and the roll-out of smart meters. Smart meters are regularly debated in this place, and the evidence is already showing the consumer popularity of this technology and its ability to help people save money and manage their energy use in a smarter way.
Making progress cannot be just about subsidy; regulation will play an important role as we take action to ensure that tenants can live in a home that keeps them comfortably warm. The private rented sector regulations will target the least efficient F and G-rated properties from 2018 by requiring landlords to improve those properties to at least a band E, unless a valid exemption applies. The Department is currently considering options for the implementation of the regulations, with a view to ensuring that they can be implemented effectively by April 2018.
Of course, there is more work to be done. One key area will be to improve targeting on the households most in need. The Digital Economy Bill, which is currently going through Parliament, will be important in that regard, as it will make available better data on householders and properties. We believe that that will in turn reduce the costs that energy suppliers face in identifying the households most in need, and allow more measures to be installed for the same cost.
The actions I have described are all led by the Government. However, fuel poverty is a problem for all of society, and the Government cannot tackle it alone. That is why partnership is a key theme of the fuel poverty strategy. It is important for the Government to play a leadership role, but also to work in partnership with local government, businesses and the charitable sector. Only by making the most of the varied skills and resources of each of those partners will we, collaboratively, be able to tackle fuel poverty.
According to the Government’s own statistics, the EU ecodesign directive has helped households, small businesses and industry to save thousands on the cost of energy. Indeed, the average annual saving from ecodesign policies for homes is expected to be £153 by 2020, which is 20% of the average annual energy bill. Will the Minister assure us that such rules on energy efficiency will continue to be implemented and updated both during and after our renegotiation with the EU?
I certainly agree with the hon. Lady about the importance of good design. In fact, some of the most important progress we have made as a country on energy efficiency has been through building regulations and standards for the quality of our homes and offices. The Government remain ambitious in that respect, and she will know how important that is. She will know that I obviously cannot at this stage clarify our intentions post-Brexit, because that is tied up in a series of wider issues, but I hope I can reassure her that we understand completely the importance of continued ambition in this area. We are very clear that there remains considerable scope for harnessing creativity and innovation in using design to improve standards, which will in turn reduce costs.
The Minister is commenting on the need to work in partnership, and I absolutely agree. May I just point out that the warm home discount scheme does not apply in Northern Ireland, which makes fuel poverty there even worse? In partnership with the incoming Administration in Northern Ireland, will the Minister pledge to prioritise the need to introduce the warm home discount scheme in Northern Ireland, even if that means that the Government in Westminster have to provide additional funding to the Northern Ireland Executive?
I listened very carefully to the hon. Lady, but the bottom line is that this is a devolved matter. I am more than happy to discuss the fuel poverty strategy with counterparts in Northern Ireland, but it is categorically a devolved matter.
I was talking about partnerships, and I am glad that the House has filled up a little—when we started it was a little bare—because I am looking forward to hearing from hon. Members about their experience of what is happening with partnerships in their constituencies, including what is and is not working, and more widely about what is going on in their constituencies to help bring about change to support households that need support.
The Minister is talking about partnership at the local level. A huge variety of organisations in Greenwich and Woolwich are working on this very issue, not least South East London Community Energy. Is the Department giving any thought to how such organisations can link up with local authorities to avoid the fragmentation that can exist at the local level, and ensure they work in partnership to target people who need their help the most?
I am very sincere in what I say about partnerships—when I was the Minister for Civil Society, it was absolutely core to our approach—so we are very keen to get good information about what is working and what is not working with partnerships, because they are easy to talk about, but they are actually quite hard to implement in practice. We are doing some work with local authorities, but the hon. Gentleman has made an important point about the sharing of knowledge and information so that we can get a better understanding of what works. Some of this stuff is quite complex in relation to breaking down the social barriers to people accepting help when it is offered.
The hon. Member for Brighton, Pavilion (Caroline Lucas) quite rightly said that we must be ambitious in the way we design buildings, and I could not agree more, although I am not sure that this is really connected to Brexit. The fact is that it is not merely the affordability of purchasing or renting a building that is so important, but the affordability of the operation of that building thereafter. By having good design principles for energy efficiency and insulation in its design process, we can make a building more affordable to live or work in, rather than simply making it more affordable to buy in the first place.
On co-operation and partnerships, what are the Minister’s plans for using the data owned by the Data Communications Company from smart meters not only to nudge people to switch tariffs, but to make the data available to other organisations that could advise people on emerging technologies, such as demand management, so that they can load shift to minimise their bills in that way?
My hon. Friend makes important points not only about the importance of good design and the opportunities attached to it, but about the potential for data to make us more efficient in targeting support and to help us develop the smarter system that he talks about so eloquently. He will know that there are tremendous sensitivities around the sharing of data, towards which the Government have to take an extremely responsible attitude, but he is right about the opportunities. What he talks about is under active consideration, as he knows.
I ought to bring my remarks to a close so that colleagues can contribute to the debate, but I want to bring us back to why we are here today. Fuel poverty affects households in all our constituencies and it is a problem that we should work together to solve collectively. The fuel poverty strategy made it clear that the Government are committed to ensuring that there is sufficient parliamentary scrutiny of fuel poverty through the means of this annual debate, so I welcome the views of the hon. Members who are in the Chamber.
As I have suggested in my opening remarks, it is clear that we have made progress, not least in setting up, after too long, the much-needed strategic framework and statutory targets that will drive progress and ambition through successive Governments. The numbers show that since 2010 this Government and the previous Government have made progress, but the social challenge we face is very stubborn indeed. I reassure the House that the Government remain extremely committed not just to delivering on our manifesto commitment, but to keeping the country on track to meeting the 2030 target, however challenging.
I am delighted to be debating such an important issue with the Minister in this, our first debate together in this Chamber. I welcome the comments he has made thus far.
As Members are aware, this debate is a statutory requirement. As such, it is a prime opportunity to examine the efficacy of the Government’s actions to date in tackling fuel poverty. As the Minister has said, it is an opportunity for Members to share experiences from their own constituencies on this matter.
My local authority has been championing its own fuel poverty strategy. “A Fair Energy Deal for Salford” is one campaign that it is working on with partners such as National Energy Action, energy companies, registered social landlords and landlords in the private rented sector to obtain a pledge to reduce the number of prepayment meters and replace them with standard meters. A shocking 22% of households in Salford have prepayment meters, whereas the national average is 15.1%, as the Minister knows.
In addition, the ability of my local authority to assist vulnerable households has been extended. It launched the “Warm Salford” campaign in 2015, which provides additional grants to give vulnerable households better access to energy company obligation products or to assist those who are vulnerable, but who do not meet the criteria of the national schemes.
We also launched the Warm Salford Referral Network in October 2014, which brings together a partnership of local authorities, the NHS and third-sector partners. It aims to reach those who are most vulnerable to fuel poverty. The good news is that from 2015 to December 2016, more than 310 vulnerable households were referred to it, given advice and referred on for the help they needed to access local, regional and national schemes.
Despite that positive news, 11,333 homes—that is 10.8% of Salford’s households—are still living in fuel poverty. Nationally, despite similar action by other local authorities, more than 4 million families and households are living in fuel poverty in the UK. That is 15 homes in every 100. Members from all parts of the House will no doubt have been contacted by their constituents about fuel poverty. If not, I suggest that they watch the film “I, Daniel Blake”, which shows in painful detail the desperation of one family trying to warm themselves on tea lights in a plant pot because they cannot afford to top up the prepayment meter.
I met one such constituent in Salford—a mother who was living in poorly maintained private sector accommodation, with small children sleeping beside walls covered in black mould. There was not enough money for that mother to pay the bills or even turn the heating on to alleviate the damp conditions. The desperation in that mother’s eyes when she told me she just could not cope any more, as I tried to find help out there, will haunt me forever.
Sadly, that is not a stand-alone case. A cold, poorly insulated home does not just mean that lots of heat is wasted, resulting in a high bill; it means people getting ill, repeated visits to the doctor, a much longer recovery time and, ultimately, greater pressure on the NHS.
If I heard the hon. Lady correctly, she said that 15% of households in the UK live in fuel poverty. In Wales, the figure is considerably worse at well over a third. The Welsh Government have failed to make any inroads into that over the past 20 years or so, despite Wales being an energy-rich nation and a substantial exporter of electricity. Does she agree that for the people of Wales, at least part of the answer should be Welsh communities getting control over their own energy resources?
The hon. Gentleman makes a very interesting point. There is scope for communities to regain control of their energy supplies in the longer term. That is certainly something the Government should look at. There are a number of other important points that I would like the Minister to address today, so I will continue with my submission.
The health impacts of fuel poverty are worst for those who are most vulnerable—for example, disabled people who find it difficult to move around and do not get the chance to warm up; young people, who run twice the risk of developing a respiratory condition such as asthma; and adolescents, who face a fivefold increase in the likelihood of mental illness. Evidence also highlights that infants living in cold conditions have a 30% greater risk of admission to hospital or primary care facilities. Older people also face a significantly high risk, as the Marmot review team highlighted, stating that they are almost three times more likely to suffer from coughing, wheezing and respiratory illness.
Sir John Hills, professor of social policy at the London School of Economics, states that there is a body of persuasive evidence that links low temperatures with a number of health impacts, ranging from minor infections to serious medical conditions that can ultimately prove fatal. Sadly, that has proven to be the case, with the NEA finding that an average of over 8,000 people in England and Wales die each winter because they cannot keep their homes warm at a reasonable cost. That estimate includes eight attributable deaths in my constituency of Salford and Eccles—eight deaths.
The shadow Secretary of State makes an important and compelling point on the importance of heat to providing a healthy home. Does she agree that one solution is to give more encouragement to heat networks, particularly those that take waste heat from industry or business and use it to heat homes in the immediate vicinity, as I believe happens at MediaCity in Salford in her own constituency?
The hon. Gentleman makes another important point. That is certainly something that the Government should be giving due consideration to.
They are. They are encouraging it.
They need to give greater consideration to it and provide greater investment. I will move on.
Fuel poverty has a greater social impact. Children who live in cold homes see an impact on their ability to achieve, whether because of illness or simply because of a poor quality home environment. The financial and emotional stress it can place on families can damage relationships and lead to long-term stress-related mental health issues.
I am concerned that, although some work has been done in this area, the fact remains that the number of homes in fuel poverty has slowly been creeping up. The fuel poverty gap, which is a measure of the difference between a household’s energy bill and what it can afford to pay, increased from £235 in 2003 to £371 in 2014. At the same time, we have seen stagnating wages, or a lost decade in earnings as the Bank of England has termed it. What is more worrying is that after the recent Budget, the Institute for Fiscal Studies stated that, on the Government’s current economic trajectory, average wages in 2022 will be worse in real terms than before the financial crash. The Minister will appreciate that as inflation pushes up, the differential between price increases and wage growth will continue to close. Even if energy prices are capped, which I know is an option being considered by the Government, the amount that families have to spend on bills will still get smaller and smaller.
It is not enough, therefore, simply to tackle fuel poverty as a stand-alone issue. The Government must tackle the causes of fuel poverty. Without investing in the tools that businesses need to drive up wages and productivity, wages will continue to stagnate in the long term. Sadly, in the Budget we did not see the investment required from the Government that would in any way go towards bringing us in line with other industrial countries. It is therefore no shock that Britain is the only large developed country where wages fell even as economic growth returned after the crash. I digress slightly, Madam Deputy Speaker.
I will gently move the hon. Lady back to energy efficiency. She is making a very compelling public health case for the need to tackle energy efficiency and fuel poverty. Does she share my frustration that the national infrastructure assessment is a golden opportunity with respect to putting energy efficiency front and centre in the Government’s low carbon green strategy and industrial strategy? They should do that, because it could help to sort out not only the health crisis, but the climate crisis.
I completely agree with the hon. Lady. I share her frustrations and I will come on to that point shortly.
Looking at the efficacy of the Government’s fuel poverty initiatives thus far, they made a manifesto commitment to install one low-cost insulation measure in 1 million homes over the five years of the parliamentary term. That is welcome, but I suggest the Government need to be far more ambitious. Labour, for example, delivered 2.5 million insulation measures installed in homes in just one single year.
Turning to the funding through the warm home discount, whereby money is given as relief to bill payers, this is commendable and it should certainly continue, but it is physically insulating homes themselves that will provide the long-term solution. On the energy company obligation, the main mechanism by which the Government take action on fuel poverty, it has a clear pathway only to next year. There is currently no clear indication of what will happen to the obligation after 2018 and the Government’s consultation on its future has not been forthcoming. I would be grateful if the Minister provided in this debate an update on progress on that area.
The Minister will be absolutely distraught to hear that the UK ranked 14 out of 16 western European countries for fuel poverty, and ranked bottom for the proportion of people who cannot afford to adequately heat their home. I think he would probably agree that this is not a brilliant record for the country with the fifth-largest economy in the world. A helpful comparison to draw is Sweden, where incomes are similar to the UK’s but winters are much colder and gas is more expensive. One might think that Sweden would have a significant fuel poverty problem that far outstripped that of the UK, which by comparison has mild winters, but levels of fuel poverty in Sweden are approximately half those found in the UK. The major difference is that Swedish homes are properly insulated. A typical Swedish wall is three times more energy efficient. A commitment to that kind of innovation, along with providing the necessary funding, will truly tackle fuel poverty.
The Labour party is keen to make that commitment as part of its industrial strategy to end social injustice and to build a world-leading UK-based renewables and energy efficiency sector with UK-based supply chains. Labour agrees with the NEA, and the hon. Member for Brighton, Pavilion (Caroline Lucas), which states that the National Infrastructure Commission and the UK Government must act on the strong case for domestic energy efficiency to be regarded as a hugely important infrastructure priority. The Minister might wish to outline the Government’s position on that and whether he agrees with Labour.
Economic analysis by the well-regarded Frontier Economics suggests that the net present value of investing in insulating homes could be as valuable as the HS2 project. Cambridge Econometrics found that for each pound spent on insulating homes £1.12 is generated for the Treasury and £3 for the economy in GDP, and 42 pence is saved by the NHS. It is clear that investing in insulation has a positive effect not just for those in fuel poverty or for climate change, but for the wider economy. Unfortunately, however, the fact is that if we compare major insulation measures being installed today to 10 years ago under the previous Labour Government, there has been a huge 88% fall. Put another way, the long-term solution to fuel poverty gets 12% of the support that it originally received.
The fuel poor, by definition, are not in a place to insulate their own homes. It is therefore incumbent on the Government to step in. It is also important for the Government to recognise the wider benefits a real fuel efficiency infrastructure plan would have for all income groups, industry and the wider economy. A little more support from the Government, both to those affected by fuel poverty and to industries waiting to blossom in the renewables sector, could unleash untold economic and social benefits.
To conclude, the Government’s intentions, and those of Ministers, might be good, but there is still a mountain of work to be done. The Labour party is open to working across the House to end fuel poverty for all our constituents. I do hope the Minster has listened to my concerns and will respond accordingly.
I welcome this debate. I hope the Minister, in summing up, will reflect on the impact of high energy costs and high energy demand on the highlands and islands of Scotland in particular. As a highlands MP, I know that fuel poverty is a massive issue.
We need the Government to listen to our story, appreciate our particular situation and work with all of us to deliver fairness in energy charging that can offer hope that, working together, we can drive consumers out of fuel poverty. According to Scottish Government statistics, 34% of Scottish households are in fuel poverty, while for the highlands the figure is 56%; for the western isles, it is 59% and for Orkney it is 65%. Those are shocking statistics. More than half of households in much of the highlands and about two thirds of households in Orkney are in fuel poverty. Can we in this House accept those statistics?
I have to say that there have been times in the past when the House listened to the legitimate grievances of highlanders and islanders, and took action to improve our situation. Just over 100 years ago, in 1886, the House passed an Act that for the first time gave security of tenure to crofters. The clearances and the removal of people, often in a brutal way, was stopped by the crofting Act’s coming into force. In 1965, the Government established the Highlands and Islands development board, now known as Highlands and Islands Enterprise—a venture instrumental in reversing decades of economic decline in the highlands and islands.
I ask the House today to recognise the unfairness in the market for electricity costs that penalise highlanders and islanders. I am asking for the same consideration that was shown when the highlands required Government intervention in the past. We need it now to create fairness in electricity pricing. I accept that those of us from these areas live in some of the most beautiful parts of not just Scotland and the UK, but the world. But we cannot heat our homes with the breath-taking scenery. It is perhaps an enchanting landscape, but often there are biting winds, driving rain and long dark cold winter nights. The aesthetic beauty of the highlands can gladden the heart, but it will not deliver warmth to a pensioner at an affordable cost over a long winter.
We hear repeatedly that the Government want to help those who are just about managing. In many cases in the highlands, the cost of heating means that too many of our people are having to make the choice between putting food on the table and heating their homes. I mentioned that 56% of highland households are in fuel poverty, but 74% of our elderly population are in fuel poverty, of whom 34% are in extreme fuel poverty. I ask the House to dwell on these statistics and then consider what we can do to challenge this situation.
On the island of Skye, electricity came with the construction of the Storr Lochs hydro scheme in the early 1950s. The facility, apart from a small upgrade over the last few years, will now be virtually fully depreciated. It will be producing very cheap, almost free electricity on to the grid: cheap electricity that islanders then have to pay a premium to get back. It is simply an injustice that in an area of the highest levels of fuel poverty, where we produce cheap electricity, we are being overcharged. That is the reality.
There is the broader point that Scotland is an energy-rich country, whether from fossil fuels or our ability to deliver renewable energy today and in the future. Our unique characteristics as an energy producer should not be trapping our people in fuel poverty. Let us not forget that Westminster has extracted a bounty of £360 billion in taxation receipts from North sea oil since the 1970s. Where is the long-run benefit of this dividend? Why is it that the citizens of an energy-rich country such as Scotland, which has produced a bonanza for the Government, suffer fuel poverty to such an extent? We need to take into account the human cost of this failure to tackle head on the root cause of fuel poverty—high and unfair pricing through the lack of a universal market as one issue.
The charity Turn2us has found that one in two low-income households are struggling to afford their energy costs, despite being in work. Among the hardest hit are people with disabilities, with more than two in three of them, 67%, reporting their struggles. Families are also hard hit: almost two thirds of working parents, 65%, are unable to meet these costs. Worryingly, of the households that are struggling with energy costs, nearly half have done so for more than a year.
The knock-on effect is severe, with a third forced to skip meals and over a fifth experiencing stress and other mental health problems. Some of the comments made to Turn2us included these:
“The bills are killing me, sometimes I have to contemplate paying all the rent or heating my home…There are many pensioners like myself that don’t qualify for any help but still have to decide whether to heat or eat…Starve or freeze? Either way you get ill, can’t work, eat or pay any bills… No lights only candles, only hoover once a week, only use washing machine once a week, no heating, meals that cook quickly.”
This is not an abstract discussion. These are comments from real people who are struggling on a daily basis. I remind Members that 70% of elderly highlanders are in fuel poverty. That is why people get angry when they see a lack of action. When we hear hon. Members questioning the retention of the triple lock on future rises for the state pension, many of us proclaim that this will not happen in our name. I became an MP to stand up for my constituents and I cannot accept that so many highlanders are in fuel poverty. There is a debate on Scotland’s constitutional future, and we will have a vote on our independence. Let me say that in an independent Scotland, we would recognise our responsibilities to those in fuel poverty and would take action to eradicate it.
The UK has a universal market for postal delivery, as for many other services. People pay the same price whether they live in Skye or Somerset, in Ardnamurchan or Avon, in Gairloch or Gloucester. Why is that not the case for electricity distribution charges? Why are highlanders and islanders facing a premium in electricity distribution charges just because of where they live?
The right hon. Member for South Northamptonshire (Andrea Leadsom) said in her capacity as energy Minister in 2015:
“It is not right that people face higher electricity costs just because of where they live.”
I commend the right hon. Lady for those remarks, but if they are to mean anything they have to be matched by actions from this Government. The issue is not just about the highlands and islands; there are 14 regional markets throughout the UK with different levels of network charges. It is not about price competition either, but about a regulated charge varying from region to region through a price control framework. The reality is that if people live in the highlands and islands, they will pay for the privilege—courtesy of the UK Government.
Electricity distribution charges for the north of Scotland are 84% higher than they are for London. Fuel poverty is exacerbated by the lack of a universal market. Westminster calls the tune; highlanders and islanders pay the price. We pay a high price for transmission charges, but we also have a high rate of energy consumption. The highlands and islands are noted for windy and wet conditions. It is not unusual for people in the highlands to have their heating on all year round. Ofgem noted in a study on the matter that households in the north of Scotland would benefit from a cost reduction of about £60 a year if there was a universal network charge. Sixty pounds would make a significant impact on someone on a low income or a pensioner.
In the highlands and islands, not only are people faced with high transmission charges, but many consumers suffer from a lack of choice in energy provision. Most households cannot benefit from a gas grid connection; the choice is often between electricity and domestic heating oil. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), who is no longer in his place, noted that prices will go up substantially because of currency movements in the recent past. With such limitations, the last thing we need is price discrimination—for that is what it is—being foisted on us.
Where people live should not result in their being penalised by having to pay higher network charges. Where is the “one nation” that the UK Government speak of so fondly? [Interruption.] I notice that the Under-Secretary of State is laughing. I will happily give way to him if he wants to explain why he thinks this is a laughing matter; it is no laughing matter to people in the highlands and islands.
I am delighted to intervene on the hon. Gentleman to ask how he can seriously invoke the principle of “one nation”, to which my party has been an adherent for 100 years, when he is a Scottish National party Member who is campaigning to remove his country from this nation.
I am glad that the hon. Gentleman has risen to explain that, but he cannot get away from the fact that he sat there and smugly laughed when I made my point about the one nation. The point I am making is that it is your Government—I apologise for using the word “your”, Madam Deputy Speaker. It is the Government who are responsible for over-charging highlanders, because they will not recognise that we should have a universal market. It is the Government of the United Kingdom who should address that. Laughing, which is what the hon. Gentleman did, at highlanders and islanders is not acceptable. I hope people in Scotland were watching what happened on the Government Front Bench just now.
As ever, the hon. Gentleman is standing up to make an impassioned, eloquent and compassionate speech, but may I pick him up on one point? He mentioned “one nation”, and my hon. Friend the Under-Secretary intervened. Earlier in the hon. Gentleman’s speech, he mentioned the triple lock. Is that not something for which to thank the Government, rather than castigate them? Will he acknowledge when the Government get things right, as well as challenge them when he perceives there are errors?
I will happily do so, and I have spoken about the triple lock on many occasions, but we have had debates here in the recent past in which many Members have questioned continuing with the triple lock. I am asking the Government to commit to retaining that triple lock in order to drive pensioners out of poverty. I commend the Government because they did the right thing in that particular case, but I hope that their commitment to the triple lock will be sustained so that it continues to drive pensioners out of poverty.
When they are right, I happily give credit to the Government, but I do not take kindly to Front-Bench Members laughing when I am standing up for my constituents in pointing out that the definition of “one nation” that the Government talk about is inappropriate when highlanders and islanders are not being treated fairly. There should be equity and fairness, but they do not exist in the UK today.
The highlands and islands of Scotland experience the harshest climatic conditions in the UK and record levels of fuel poverty. There is far greater, area-wide dependence on the use of electricity for heating as well as lighting, but the standard unit price charged is 2p per kilowatt-hour more than in most other parts of the UK, and 6p or more for the various “economy” tariffs on offer. Perhaps 2p per kilowatt-hour does not sound much, but it is a price premium of 15%. That is what this Government are doing to people in the highlands and islands. They are punishing people there on the basis of where they live, despite the fact that, in many cases, we produce the cheapest electricity, as we do in Skye. The Government are culpable over that, which is why I am asking the Minister to address the point when he sums up later this afternoon. That price for living in the highlands and islands is set by the Government, and it is not acceptable.
On top of all this, there is far greater reliance in off-gas areas on using domestic heating oil and solid fuel, which pushes up household heating costs further still. As a result, domestic energy bills in off-gas areas are, on average, £1,000 more per annum than the £1,369 dual fuel national average for 2014. Figures from the Lochalsh & Skye Energy Advice Service in my constituency suggest that the average total heating bills in Skye and Lochalsh amount to an eye-watering £2,218 per annum; for those whose primary heating is from oil, the average is as high as £2,519. To cap it all, electricity customers with prepayment meters, often the least well off, not only have to pay additional standing charges, but are discovering that their notional right to change to a cheaper supplier has become impracticable.
The Government must also accept that having 14 regional markets in the UK, with consumers in the highlands and islands paying a premium, is discriminatory. Many Members claim that responsibility for fuel poverty is devolved, which of course it is, but we have no control over the pricing or the regulatory environment; we can deal only with the consequences of fuel poverty that are symptoms of a market that is wholly under the jurisdiction of Westminster.
Our Government in Edinburgh have taken a range of actions to mitigate the effects of fuel poverty, but we need the tools that would come with having greater powers—notably through independence—to be able to deal fully with the circumstances that lead to fuel poverty. We are having to clear up the effects of the lack of a universal market and the pricing regime. Tackling fuel poverty has been a priority for the SNP Government, and by 2021 we will have committed over £1 billion to making Scottish homes warmer and cheaper to heat.
The financial support to tackle fuel poverty is increasing. The Scottish Government’s budget for fuel poverty and energy efficiency measures in 2017-18 will be £114 million, an increase of more than 11% on the previous year. An independent review of the way in which fuel poverty is defined has been undertaken by a panel of four academic experts in the light of concerns that current definitions may be impeding efforts to target those most in need. In the meantime, there is a new pilot programme in rural areas offering targeted support to cut energy bills.
Although fuel prices are beyond our control and fuel price moves can militate against our efforts to reduce fuel poverty, it is welcome that, owing to relatively stable market conditions, the number of people in fuel poverty in Scotland has fallen by 100,000. That reduction was heavily influenced by the measures that we have introduced. However, it is worth noting that fuel poverty in Scotland would be at only 8% if fuel prices had only risen in line with inflation between 2002 and 2015. High and rising pricing is our biggest enemy—and I use that word advisedly.
Scottish Government action has been commended by, among others, the Scottish Fuel Poverty Strategic Working Group in a recent report, but more needs to be done in a holistic manner to tackle the scourge of fuel poverty. New affordable homes are part of that mix, and this year the Scottish Government will invest £590 million to increase the supply of affordable homes in Scotland. Targeted financial support of £1,900 for low-income families through the Best Start grant also helps—support, incidentally, that is £1,400 higher than what is on offer from the UK Government.
We are taking our responsibilities seriously. Through those measures, through such initiatives as supporting a real living wage and through the recently published Child Poverty (Scotland) Bill, we will use our powers to improve the conditions of many of those who are suffering fuel poverty in Scotland.
Finally, I want to reflect on the recently announced 14.9% increase in electricity pricing by SSE and on the fact that a 5% increase in prices pushes an additional 46,000 people in Scotland into fuel poverty. In the past, I have commended SSE for its customer service and the astonishing way in which its staff respond when bad weather leads to power interruptions, as it sometimes does during the winter months in the highlands. The speed of the response of the company and its customer service have been exemplary. Notwithstanding that commendation, however, it should be recognised that being effectively a near-monopoly supplier in the highlands and islands also brings a duty to act in a spirit of social responsibility. After all, in many respects SSE is a public utility in all but name. A price rise of this magnitude is simply not justified; the company has let itself down.
We await SSE’s financial results for the year to March 2017, but its interim statement forecast a year of growth and dividend increases. In the year to March 2016, its dividends to shareholders increased by 18.3% to £708 million. I would caution the company to ensure that it behaves in a socially responsible manner at all times. Increasing rewards to shareholders so generously does not sit well with the reality of so many of its customers being in fuel poverty, and now being pushed further into fuel poverty by this price increase. I am not against the company’s making a reasonable return on its investments—it must generate sufficient cash to invest in future electricity generation—but it must also balance the needs of all its stakeholders. In particular, affordability and the ability to pay bills must be at the heart of its thinking when it is addressing executive pay and shareholder rewards.
I welcome today’s debate, but we need action from the UK Government, most notably on the creation of a universal market. People should not be penalised because of where they live. Equity and fairness must be introduced, and it is time for the Government to take appropriate action.
I want to approach today’s debate from the perspective of older people and those who are particularly vulnerable as a result of fuel poverty. I want to be a voice for the people in Scotland who are disproportionately affected by fuel poverty, as others are across the United Kingdom. I commend my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) for talking about the difficulties faced by those in his constituency and throughout the highlands.
In Scotland, 58% of single pensioner households are in fuel poverty, as are 44% of pensioner couples. The UK as a whole has one of the highest rates of fuel poverty and one of the most inefficient housing stocks in Europe. Fuel poverty rates are higher in Scotland. It is an indisputable fact that more often than not it is colder in Braemar than in Bournemouth, and that means that houses must be heated from a lower ambient temperature and for longer periods throughout the year.
Today in London the sun is shining, and although it is cold, older and vulnerable people could probably venture outside.