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Commons Chamber

Volume 626: debated on Tuesday 27 June 2017

House of Commons

Tuesday 27 June 2017

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Speaker’s Statement

I have a short statement to make. I would like to draw Members’ attention to the fact that the book for entering the private Members’ Bills ballot is now open for Members to sign in the No Lobby. It will be open until the House rises today and when the House is sitting on Wednesday 28 June. The ballot itself will be drawn at 9 am on Thursday 29 June in Committee Room 10. An announcement setting out these and other arrangements, and the dates when ten-minute rule motions can be made and presentation Bills introduced, is published in the Order Paper.

Oral Answers to Questions

Business, Energy and Industrial Strategy

The Secretary of State was asked—

North Sea Oil and Gas

1. What recent discussions he has had with trade bodies and companies involved in extracting oil and gas from the North sea. (900016)

My Department is in regular contact with the oil and gas industry. As hon. Members will be aware, my predecessor, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), met industry representatives regularly, both in London and in Aberdeen. On 23 March the Oil and Gas Authority awarded licences for 111 blocks to enable exploration and production across frontier areas—the first licensing round to focus on frontier areas in two decades. I look forward to continuing this relationship, which is very important for jobs and the wider economy. Indeed, in my first week in post I attended a reception at Imperial College London and met several companies and trade bodies in the field.

I thank the Minister for that answer and warmly welcome him to his new post. In 2016 the Chancellor announced that action would be taken to improve the tax regime for late-life asset transfers. In the 2017 Budget he re-announced the same policy, but now an expert panel is to be set up. Can the Minister let me know how many times the expert panel has met so far, and when we can expect the outcomes of its deliberations to be made public, as it says they will be on the website?

I thank the hon. Lady for that question. She and I have worked together in previous roles, and I look forward to visiting Aberdeen, where hopefully she will be able to explain this further. As far as late-life assets are concerned, we realise how important it is to get this right, and not just for the jobs and tax revenue, but for generating further investment. The discussion paper and the panel of experts are considering this. We look forward to hearing a wide range of views and will report our findings at the autumn Budget.

The Minister will be aware that over the past decade Qatar has become an increasingly important source of gas for the UK, not least from imports of liquefied natural gas through my constituency. What steps is he taking to ensure that the current diplomatic crisis in the Gulf affecting Qatar does not lead to any disruption of energy supply into the UK?

As my right hon. Friend will be aware, the Government are monitoring the situation very carefully, and we do not believe that it will make any difference whatsoever to liquefied gas supplies.

I welcome the Minister to his new post. Getting back to the North sea, the kind of action described by my hon. Friend the Member for Aberdeen North (Kirsty Blackman) is vital, especially to help along the return optimism. The Scottish Government have invested £5 million to explore decommissioning opportunities in oil and gas that could grow many new jobs. When will we get action from the UK Government, and when will we see a robust and comprehensive future energy strategy from the UK Government?

As the hon. Gentleman will be aware, the Government have been very actively involved in funding seismic surveys and the 3D visualisation centre at Heriot-Watt University. I am looking forward to the next licensing round and to dealing with the strategy he mentioned. I should mention the Kraken development, which the Government have supported, because the first barrels of oil were produced last week, and we look forward to there being 50,000 barrels a day at peak.

The fact is that the UK Government have been slow to realise the potential of decommissioning, pulled funding from vital carbon capture and storage pipeline projects, failed adequately to address the drop in renewable energy investment and plunged public funds into risky and poor-value nuclear power projects against the advice of experts. When will this Government wake up and take our energy opportunities seriously?

I am afraid that I must completely disagree with the hon. Gentleman’s view of things. We are committed to supporting the development of a decommissioning industry. I think that there are significant opportunities. We are currently considering options for the delivery of a port and yard, and we will continue to engage closely with all relevant stakeholders as we develop our options.

Leaving the EU: Business Consultation

Since the referendum, I have held discussions with businesses, workers and local leaders across the UK, and investors all around the world. These will continue over the coming months, including my weekly meetings with the directors general of the five main business organisations. The Government are creating a new EU exit business advisory group to ensure that business is not only heard but is influential throughout the negotiations.

My particular interest is in the UK’s life science sector, which is worth some £30 billion to the economy and involves nearly half a million jobs, many of which are in my constituency of Bury St Edmunds. Will the Secretary of State tell me how he will ensure that there is continued support to this vital leading research and science sector as we leave the EU?

I will indeed. My hon. Friend is a great champion of the sector. In our negotiations, we want to ensure that we can continue these successful collaborations, as well as making further investment in the future of research through our industrial strategy. The House may be interested to know that I can announce today that the Government’s commitment to underwrite the UK’s fair share for the Joint European Torus costs—the leading nuclear fusion facility in Oxfordshire, supporting 1,300 jobs—will be made. The facility is funded through a contract between the European Commission and the UK Atomic Energy Authority. In making this commitment, the Government hope to provide the certainty and reassurance needed for a mutually beneficial extension of the contract.

All the five business organisations to which the Secretary of State refers have come out against the Prime Minister’s extreme and damaging Brexit. What is he personally doing to ensure that the Prime Minister not only hears what they are saying, but listens to it?

The right hon. Gentleman will know that the five business organisations have put forward a sensible set of principles to govern the transition and the shape of a final agreement. Those suggestions seem very sensible. Part of the point of engaging with business, as I do rigorously and frequently, is to ensure that that voice is heard.

One of the important principles that those business organisations have stressed is the essential nature of having contractual and legal certainty for those who are entering into legal obligations so that they know that that will continue to be enforceable once we leave the EU. Will the Secretary of State therefore ensure that particular regard is had to the need for transition periods to be based on the reality of business practice, rather than on arbitrary considerations?

My hon. Friend makes an excellent point. If he has the continued privilege to chair the Select Committee on Justice, I am sure that it will provide some help in this.

Many businesses are particularly concerned about additional checks on trade imports and exports if we leave the customs union. Can the Secretary of State give businesses any reassurance at all that there will not be additional checks if and when we leave the customs union?

I have always been clear, as have the Government, that we want not only no tariffs, but no bureaucratic impediments of the type described by the hon. Lady. That is one of the objectives set out by the business organisations. As she knows, the negotiations have just started, but we are clear that that is our objective.

Will my right hon. Friend be asking businesses to list the most egregious and restrictive EU directives that may be removed once we leave in order to make British business more competitive and efficient?

I am sure that my hon. Friend will be an assiduous contributor to the scrutiny of the repeal Bill. The approach is to transfer into UK law that which was part of EU law precisely so that this House can scrutinise and consider what should be continued.

The Government said yesterday that EU citizens will be able to apply for what they called “settled status”, so that they can continue to live and work in the UK. Application processes can be time-consuming, not to mention complicated, expensive and off-putting, especially when this Government are involved. How can the Secretary of State guarantee that all EU nationals working in the UK will be allowed to stay not just in theory but in practice, to the benefit of the many businesses that rely on EU workers?

I welcome the hon. Gentleman back to his place. In fact, I think that Labour’s whole Front-Bench team has been reappointed. It is nice to see loyalty rewarded. The hon. Gentleman is absolutely right, and I thought that he would welcome the Prime Minister’s very positive statement. It is important that the process is implemented with no bureaucracy so that people can apply with confidence.

Construction Industry: Cash Retentions

Unjustified late and non-payment of a retention payment or any amount owed is unacceptable. These practices cause particular problems for small businesses in the construction sector, and the Government are committed to tackling them. We will shortly be publishing research into these issues, alongside a consultation document.

The system of cash retentions has been wreaking havoc in the construction industry for decades. Can the Minister assure us that there will soon be radical action to overhaul the system, and can she explain why it has taken so long?

There is, indeed, far too much abuse of the system of cash retention, and it has been going on for too long. The burden of administrative time spent securing payments and the drain on working capital weigh far too heavily on smaller firms in the supply chain, and I can assure the hon. Gentleman that we will be taking action.

If the Government had only listened in 2015 to the amendments the Labour party tabled to the Small Business, Enterprise and Employment Bill, we would already have a solution. We were told then that the Government were going to take action. We were told again a few months ago that they were taking action with their proposals about naming and shaming businesses that did not publish their late payments. We now have yet another consultation. Research from Crossflow Payments shows that 74% of small businesses do not believe that the Government’s recent changes will make any difference. Can we have a policy that actually enforces action on late payments, rather than the series of consultations that we have had?

I agree that action is needed, but it is important that we take the right action. We have undertaken a consultation, the results of which will be published shortly. That will be followed by a consultation on the 2011 changes to the Housing Grants, Construction and Regeneration Act 1996, which will consider the merits of ring-fencing retentions and the extent to which contractors are making the payment of retentions conditional on the performance of obligations under other, completely separate contracts.

Electric Cars

4. What steps he is taking to ensure that the electric grid is able to support the charging of the number of electric cars estimated to be in use by 2020. (900019)

I congratulate my hon. Friend on his pathfinding work in this area. I understand he is a proud owner of a Nissan Leaf—an electric vehicle made in the UK. He will therefore know that this is an exceptionally important point for us. I am very proud of the Government’s ambition for almost all cars on our roads to be zero-emissions by 2050, and also of our success in positioning the UK as a leading destination for the manufacture of and research into these vehicles. He will be reassured to know that good progress is being made with grid-readiness, and the upcoming smart systems plan and the automated and electric vehicles Bill will ensure that electric vehicle demands are managed efficiently, and the roll-out of electric vehicles is accelerated.

I thank the Minister for her response, and I am glad to hear that, because a study of the impact of electric vehicles on the UK’s distribution network has estimated that

“voltage imbalances, coupled with overloaded distribution transformers could…impair power lines.”

How quickly can we have a report on that, given that the usage of such vehicles is likely to rise substantially in the coming years?

I think my hon. Friend is right. With policies to really accelerate the usage of electric vehicles, this is a critical thing. He will know that Ofgem has approved business plans for the local network companies, which already bake in billions of pounds of investment, to ensure that the expected demands on the grid can be met. But, equally, it is not just about raw investment in cables; it is actually about changing consumers’ behaviour to ensure they can charge their vehicles at a time that puts least demand on the grid and perhaps saves them money. I refer back to our plan and to the Bill, which will enable smart charging and help people to charge their vehicles at a time when it puts least demand on the network.

Does the Minister ever worry that the country looks like investing £100 billion in High Speed 2, which will open at the earliest in 2033, but that, by that time, we will be able to use our phone to call to our home a driverless Uber-type vehicle powered by electricity that can take us anywhere in the country? Is that £100 billion not wasted money?

I would define seeing you in an electric vehicle, Mr Speaker, as a success in my new role. We can have a conversation afterwards.

The hon. Gentleman will know that I think that upgrading our rail and road networks is one way to reduce congestion on the roads and to open up business opportunities and create potential new capacity for things such as electric rail freight, which has been severely neglected by successive Governments over many years. That is why we want to position ourselves not only as a leading manufacturer of electric vehicles—one in five electric vehicles sold in the EU are made in Britain—but as a hub for innovation. We are putting millions of pounds into innovation studies and research, to see how those new technologies can work together to ultimately achieve the aim of zero emissions by 2050.

Electric vehicles are a vital part of meeting our climate change commitments. Can the Minister update us on further action to tackle climate change after the USA’s repudiation of the Paris agreement?

I thank my hon. Friend for that valuable question. I was delighted to be sent, on almost the first day in the job, to Luxembourg to meet our EU counterparts to discuss the fact that we are all very disappointed with Mr Trump’s decision to withdraw the US from the Paris agreement, and accept that more work needs to be done by the remaining countries to emphasise that Paris is non-negotiable, although we would like him to come back to the agreement. I was also personally able to increase the level of UK funding for the Intergovernmental Panel on Climate Change trust fund, across the board with other European friends and neighbours, to ensure that any reduction of USA funding can be met.

May I welcome the hon. Lady to her new position and, indeed, Front-Bench Members, new and old, to their roles? Can we have proper local accountability and ownership of local community grids, so that we break the monopolies of the distribution companies, which make masses of money and do not always reinvest?

The hon. Gentleman raises an incredibly valuable point about how we start to move ourselves away from generating emissions in the heating and lighting sector. He will be pleased to know that I was able to put more innovation funding into trials that are doing exactly that.

As the hon. Gentleman knows, I like to do these things seriously. We are already funding pilots to see how peer-to-peer exchange of power can work, and how further to improve community generation and storage of energy.

Thames Gateway: SMEs

5. What steps he is taking to support the growth of small and medium-sized businesses in the Thames Gateway. (900021)

Supporting small business is a crucial part of our industrial strategy. The Government are investing in the Thames Gateway, including through the local growth fund and the new lower Thames crossing. We will continue to work with industry and local authorities in the Thames Gateway to create the conditions for all businesses to thrive.

The lack of connectivity between Kent and Essex frustrates commerce between those two counties. The lower Thames crossing will help with that, but it will take some years for it to be built. Will the Minister use that time to work with local businesses in the area to unlock its huge potential, which has yet to be fully realised?

The lower Thames crossing is due to open in 2025. In the meantime, local growth hubs will continue to deliver support services to help businesses in the area to grow over that period. In addition, almost half of the South East local enterprise partnership funding of £274 million is directly supporting growth in north Kent and south Essex by improving transport infrastructure, addressing skills needs and creating new business spaces.

The Minister will know that one of the strengths of the Thames Gateway is the closeness of connections elsewhere in Europe, and one of the worries that small and medium-sized businesses have is whether they will be able to continue to recruit staff from other EU countries after Brexit. Will she acknowledge the strength of concerns of firms in the Thames Gateway, and can she offer them any reassurance about the prospects after Brexit?

Having travelled around the country talking to many businesses over the past year, I acknowledge those concerns in the Thames Gateway area. However, I was reassured—I hope the right hon. Gentleman was, too—by the Prime Minister’s opening contribution to the negotiations last week and the reassurance she offered many hundreds of thousands of EU citizens currently residing in the UK, including those working in the right hon. Gentleman’s area.

Order. The hon. Gentleman is an estimable fellow, but West Dunbartonshire is a considerable distance from the Thames Gateway. Knowing the intellectual eclecticism of the hon. Gentleman, I think he may have a pertinent inquiry and I am absolutely fascinated to discover whether that is the case.

Thank you, Mr Speaker.

Businesses—those in the Thames Gateway, along with those in West Dunbartonshire—require confidence in those who form Governments and in those who support them. Does the Minister agree that that requires transparency? Will he call on every political party in Northern Ireland to publish fully everything in terms of the political donations and campaigns they are involved in?

No, that is manifestly out of order. The hon. Gentleman, I think, was more interested in what he had to say to the Minister than in anything the Minister might have said to him.

Gas Storage Facilities

6. What estimate his Department has made of the future level of investment required in the UK’s gas storage facilities. (900022)

There has been significant investment in the UK’s natural gas supply infrastructure over the past decade. It is highly complex, because we benefit from highly diverse and flexible sources of natural gas. They include: indigenous production from the North sea; six international gas pipelines with Norway, Belgium and the Netherlands; three liquefied natural gas terminals that can bring supply from anywhere in the world; and a number of modern, responsive gas storage facilities. We are confident that market-led investment will continue to deliver secure gas supplies, but I will continue to monitor the position.

I thank the Minister for his answer. The ceramics industry is a major employer in my constituency. It is very energy-intensive and heavily reliant on a secure supply of gas for business continuity. In the light of the announcement that the Rough gas storage facility is to close, what assurances can the Minister give the ceramics industry that the gas it needs will not run out or become unaffordable?

As I explained in my answer to the hon. Gentleman’s first question, we have a very diverse range of sources. Analysis conducted by the National Grid and others confirms that the closure of Rough will not cause a problem with security. I give the hon. Gentleman an undertaking to monitor this, with my Department, on a weekly basis.

Business Confidence

The industrial strategy Green Paper was launched on 23 January and has been warmly received across the country. We have received over 1,900 responses to the consultation, with respondents from every part of the United Kingdom. I look forward to taking our modern industrial strategy forward, with the involvement of all Members of this House, in the months ahead.

In a damaging blow to business confidence and the wider economy in Renfrewshire, Chivas Brothers announced that it was moving operations from Paisley in 2019. The workforce have voted to strike over a pay offer that Chivas Brothers itself admits does not meet commitments it made to the workforce. Will the Secretary of State join me in urging Chivas to offer a deal that prevents industrial action and recognises the contribution the Paisley workforce have given to Chivas over many, many years?

Of course we want to avoid industrial action. I am not aware of the particular circumstances, but I am very happy to meet the hon. Gentleman so he can inform me of them in more detail.

Does the Secretary of State agree with the Secretary of State for Defence, who spoke this morning about the need to provide extra investment in those areas that are left behind—even if the bill comes to something like £1.5 billion? When is he going to open talks with other hon. Members about the needs of their areas, so we can ensure that those left-behind regions are not left behind and left out?

I am very surprised to hear that question from the right hon. Gentleman. Of all the people in this House, he was a great proponent of a city deal and a devolution deal for Birmingham and the west midlands, the value of which is over £1 billion. Looking around the Chamber, there are many Opposition Members who have made precisely such a case that we should invest in areas of the country, outside of national programmes. It seems to me to be reasonable to continue that programme.

I took soundings from small businesses in Rugby at a small business expo run by the Federation of Small Businesses on Friday. Their single biggest concern related to the recruitment of staff, in that the skills they are looking for often are not available among local jobseekers. Given those instances, will the Secretary of State reassure us about the training of young people and the ability to recruit staff from the EU moving forward?

I will indeed. One of the big findings, which has been reinforced by the consultation on the industrial strategy, is that we need to ramp up the level of skills and technical education and training in this country. We will respond to the consultation in the weeks ahead, but my hon. Friend can rest assured that that will be one of its key pillars.

The Kingswood Lakeside business park in Cannock is home to many leading businesses, and the new developments there will create hundreds of new jobs. Does my right hon. Friend agree that those developments are evidence of business confidence, and show that Cannock Chase is well and truly open for business and is a great place to do business?

I do indeed. Having visited Cannock Chase with my hon. Friend, I know that she is a great champion of the businesses there. It is fair to reflect that the confidence of manufacturers and employers in other sectors is high. As the CBI attested this week, it is high across the country, including in Cannock Chase.

Euratom Treaty

8. What discussions he has had with Cabinet colleagues and other key stakeholders on the potential effect of the UK leaving the Euratom treaty on energy suppliers and on the availability of radioisotopes for the NHS. (900024)

We have discussed the UK’s exit from Euratom across the Government and with key stakeholders. Our objective is to ensure that leaving Euratom has no adverse impact on energy suppliers or on our international commitments on nuclear non-proliferation. Medical radioisotopes are not special fissile nuclear material, and are not subject to international nuclear safeguards. Therefore, their availability should not be impacted by the UK’s exit from Euratom. As the hon. Lady will have seen, the Queen’s Speech announced the Government’s intention to legislate to establish a domestic nuclear safeguards regime.

Yesterday The Times reported that officials from the Minister’s Department estimated that it would take seven years to negotiate equivalent terms to this treaty. Given that experts have warned that, above all, we must avoid a cliff-edge withdrawal, does he not agree that leaving on the current timeline is infeasible and that it would be in the UK’s best interests to stay in Euratom and avoid this mess?

I should have welcomed the hon. Lady to her place in the House. Our objective in these proceedings is clear: we want to maintain the UK’s leading role as a responsible nuclear state, with world-leading nuclear research and development and a flourishing nuclear power industry. We will establish a regime that ensures that nothing changes in that regard as we leave Euratom.

Zero-hours Contracts

I welcome the hon. Gentleman to the House, along with the considerable expertise he brings on labour market issues from his former employment.

Zero-hours contracts allow people to access the labour market who cannot or do not want to commit to standard, regular work. The Government recognise the concerns about employers who may be breaching the rules or otherwise exploiting their position. We want to make sure that everyone is paid properly and receives the employment rights to which they are entitled.

I thank the Minister for her response and for her kind words. Given the ease with which, just yesterday, £1 billion was found to protect only one job in Westminster, will the Minister please say what actions the Government are taking to encourage business to offer genuine financial and personal security to the nearly 1 million workers on zero-hours contracts?

The Government believe that people are entitled to be treated fairly at work, regardless of what type of contract they have with the company for which they work. The Prime Minister commissioned Matthew Taylor to undertake a review of the rights of employees. He will report on the ways in which employment regulations need to keep pace with changes in the labour market very shortly.

I welcome the Minister’s statement that the Government are determined to ensure that employees get their employment rights. Why, then, did the Government introduce the huge fees for access to employment tribunals? Will they now abolish those fees?

Employment tribunals are a matter for the Ministry of Justice, but I am in discussions with it over the review of employment tribunals that it has undertaken and we keep a watching brief on the matters the hon. Lady raises.

What does the Minister have to say to the young dustman who said to me, “Jack, I’ve just got married. We’re about to have a baby. We’re paying a fortune in rent. We’d love to buy our own home, but no chance, because I’m on zero-hours contracts”? Is not the truth that he and millions of workers like him have seen through the pretence that the Conservative party is somehow the party of the working class, and the false claims and the phoney promises, and have simply had enough of falling pay, squeezed living standards and insecurity in the world of work?

I think we should have perspective on these matters, because less than 3% of the UK workforce are actually on zero-hours contracts, and according to the most recent research 70% of those people are content with the number of hours they are working. I do accept the hon. Gentleman’s point about his constituent, however, and that is precisely the scenario that Matthew Taylor has reviewed and will report on very soon.

Leaving the EU: Small Businesses

10. What safeguards the Government plan to put in place to protect small businesses as part of negotiations on the UK leaving the EU. (900026)

Ministers in the Department for Exiting the European Union and I are in regular discussions with small and medium-sized enterprises and their representatives, and we are arranging a joint ministerial roundtable with SMEs to ensure that their voices are heard throughout the Brexit negotiations. Only last week, the permanent secretary of the Department for Business, Energy and Industrial Strategy and I held a roundtable with small businesses on the negotiations.

A survey by the Federation of Small Businesses found that 92% of exporting small businesses trade in the EU single market. How does the Minister predict those small businesses will be affected by the loss of our membership, and how will she ensure that the sector continues to be represented in any future negotiations?

The Government are committed to negotiating a full and open trade agreement with the European Union on our departure. As my right hon. Friend the Secretary of State said earlier, we are aiming for a situation in which no tariffs are applied to SMEs that export into the single market and there is no unnecessary bureaucracy.

Many SMEs in my constituency are part of European and global supply chains. Does the Minister understand that those businesses, as well as larger financial services businesses, need clarity and certainty? When will she and the Government be in a position to give those businesses certainty about the transitional arrangements that will be put in place? As she knows, businesses are already making investment or de-investment decisions.

The hon. Gentleman’s points are valid, but they are part of the ongoing negotiations, which, as he knows, have some way to go. However, we are defending our position as the No. 1 destination for foreign direct investment, and we will ensure that SMEs have a strong position in global supply chains into the future.

Energy Price Cap

Our manifesto said that

“we will introduce a safeguard tariff cap that will extend the price protection currently in place for some vulnerable customers to more customers on the poorest value tariffs.”

I stand by that commitment.

The lived experience of many people in Hull West and Hessle is that the Conservative party has done nothing to fix the energy market for the past seven years. Although I welcome the Government’s move and transformation from calling an energy price cap Marxist and extremely dangerous to copying it, is the Minister facing calls to water down that policy either from the big six or from his own Back Benchers?

I welcome the hon. Lady to the House; she follows a distinguished predecessor. I would perhaps invite her to reflect on her own party’s history in this matter—the former Leader of the Opposition was the Energy Secretary and failed to do anything whatever about it. I have been clear about the commitment that we have made, and we will see it through.

Imitation is the sincerest form of flattery. To misquote Caroline Aherne’s question to Debbie McGee, what first attracted the Secretary of State to Labour’s financially astute, socially just and politically responsible energy price cap?

I welcome the hon. Gentleman back. What he describes as an energy price cap was launched as an energy price freeze. The problem with that was that as energy prices fell, consumers would be paying more than they needed to. That would have been disastrous for them, which is why the proposal that we have made, in response to the Competition and Markets Authority analysis, is a much more sensible approach than we got from Labour.

As we have heard, various media outlets have reported recently that senior Cabinet members were lobbying for the Conservative price cap manifesto commitment to be dropped. Indeed, the Secretary of State’s recent letter to Ofgem was silent on the price cap element and, when questioned last week, the Prime Minister refused to confirm unambiguously that the price cap would be upheld. Will the Secretary of State confirm for the avoidance of doubt that he will implement the promised price cap, and not just stand by it, to deliver to 17 million customers the £100 saving that his Prime Minister promised?

I welcome the hon. Lady back. It is very good to see her back in her place. I did not hear her name chanted at Glastonbury and it is probably unparliamentary to do it here, but I warmly welcome her back. I have been very clear and the Queen’s Speech is very clear. It said, in terms:

“My government will ensure fairer markets for consumers, this will include bringing forward measures to help tackle unfair practices in the energy market to…reduce energy bills.”

I am afraid it is not clear. The Secretary of State’s recent letter to Ofgem simply asks it to advise him of the action it intends to take to safeguard customers on the poorest value tariffs. It was not a direction to implement a price cap. Can the Secretary of State confirm that should Ofgem not take directions to implement a price cap, or if it directs a price cap that is narrower than the Conservative manifesto commitment, he will legislate to uphold his party’s manifesto commitment and, if so, when?

The powers that I have are to ask Ofgem to move in this way, not to order it; Ofgem is independent. As there is a strong body of opinion on both sides of the House that the detriment that consumers have been suffering should be put to an end, I would have thought that the hon. Lady welcomed it being put to an end as soon as possible, rather than waiting for legislation to pass through the House. Ofgem has those powers and I believe it should use them.

Industrial Strategy

12. What steps his Department is taking to ensure that all regions benefit from the Government’s industrial strategy. (900028)

The importance of our regions is a core pillar of our industrial strategy. We will build on successful clusters, of which the Humber Energy Estuary is a perfect example, as the hon. Lady knows. The Humber’s leading position in marine engineering has been further strengthened by the opening of factories around the offshore wind industry, including at Siemens, where 1,000 new skilled jobs have been created. This is the industrial strategy in action.

Ministers recently blocked Hull’s privately financed initiative to deliver rail electrification all the way to Hull, an important part of our infrastructure that is needed in east Yorkshire. Are people in Hull right to now believe that the £1 billion that was found for the Northern Ireland powerhouse comes at the expense of the northern powerhouse?

The hon. Lady knows as well as anyone in this House the commitment that this Government, and I in particular, have made to devolving funds to Hull and the Humber. They have benefited considerably, first from a city deal and then from a growth deal. That has contributed to the increased prosperity in her city, which I would have thought she would welcome.

Notwithstanding what my right hon. Friend has just outlined, and despite the fact that business confidence in the region is high, as outlined by the most recent Hull and Humber chamber of commerce’s quarterly report, there are still further initiatives that could be taken to advance the northern powerhouse. What further plans does my right hon. Friend have?

My hon. Friend is absolutely right. One of the aspects of the progress made around the Humber is the close working relationships that have been established by businesses and council leaders north and south of the Humber with the Government. I look forward to visiting the area again—I am a regular visitor—so that we can have further devolution of funds and powers there.

Over the last seven months nearly 2,500 job losses have been announced in York, including some at Nestlé, as well as the closure of two company head offices. There are clear challenges to York’s economy. Will the Secretary of State agree to meet me, along with his senior officials, so that we can address those serious challenges and ensure that the industrial strategy reaches York as well?

I should be very happy to do that. Nestlé is, of course, a major employer, and there is a cluster of food and drink and agriculture businesses in and around York. It has been identified in the industrial strategy as an area of real potential, and I look forward to working with the hon. Lady to realise that potential.

As the Secretary of State will know, expanding Torbay’s manufacturing sector is a key part of diversifying our economy for the future, but a lack of skills may hold us back. Will he confirm that the Government are still seeking to deliver institutes of technology throughout the regions in England?

I will indeed. As I said in an earlier answer, the importance of upgrading our skills education is vital in all parts of the country, including Torbay, and institutes of technology are a way of making sure that industries can benefit from the particular skills that they need.

Having abolished the regional development agencies, the Conservative party has refused to invest in growth for good jobs across the country. Ours is now the most unequal economy in western Europe. If every region produced at the same rate per head as London, we would all be one third richer, but instead working people have not had a pay rise for seven years. Will the Secretary of State commit himself to matching the specific proposals for investment for jobs that are laid out in Labour’s industrial strategy, or does his new-found largesse end at the shores of Ulster?

Again, that was a disappointing response. The hon. Lady knows, and the leaders of her local councils know, how important initiatives such as the city deal and the growth deal have been in the north-east. If she looks around the country, she will see that, whereas in past years most jobs were created in London and the south-east, that situation has been transformed, and the north-east of England is one of the areas that have created jobs at a more rapid rate than anywhere else in the country. She should commend that development.

Carbon Reduction Plan

13. What the reasons are for the time taken to publish the Government’s carbon reduction plan. (900029)

I welcome the hon. Lady to her new job. I also have a new job, and, since taking on the role I have been incredibly impressed by the progress that the United Kingdom has made, both in meeting its own climate emissions targets and in exercising international leadership in that regard. I want the carbon growth plan to be as ambitious, robust and clear a blueprint as it can be, so that we can continue to deliver on this hugely vital piece of domestic and international policy. I am therefore taking the time to ensure that the draft could be extended to become more ambitious, and I intend to publish the plan when Parliament sits again after the summer recess.

Order. I have been on the edge of my seat while listening to the hon. Lady, as has always been the case, but I think I am right in surmising that she was seeking to group Question 13 with Questions 15 and 19. So carried away was she with the excitement of her new responsibilities that I think she neglected to inform us of that.

I thank the Minister for her words. Will she join me in commending the work of the Moors for the Future partnership in my constituency in the Peak District for the purpose of carbon reduction? It is revegetating the large areas of bare peat that exist there, thus fixing carbon emissions. Will the Minister also please let us know what effect the new timeframe of the carbon reduction plan, which was due in 2016, will have on industries and other partnerships that are relying on seeing the plan?

I am, of course, delighted to welcome that incredibly innovative partnership, which was launched in 2002 and is making real progress in working out how we can naturally store carbon in the peat environment that the hon. Lady now represents. As I have said, I intend to publish the clean growth plan when Parliament returns from the summer recess. I look forward to cross-party discussion and, hopefully, consensus on a document that is hugely important both for Britain’s domestic future and for our international leadership.

The publication date that the Minister mentions is almost a year after the date originally intended by the Government. Does not this reflect a lack of commitment to tackling climate change? What is she doing to engage with other Departments to ensure that they carry out emissions impact assessments so that we can see a real commitment to tackling climate change across the whole of the Government?

May I gently say to the hon. Gentleman that, as the proud MP for the constituency that has Britain’s leading carbon capture and storage research facility, he ought to welcome the progress that successive Governments have made on this agenda? We were the first country in the world to set binding carbon budgets, and we have over-achieved on the first and second ones. Our full intention is to engage the whole of Government and industry in delivering on the upcoming budgets.

Again, we do not seem to have a date for publication. The Minister talks about a date after the recess, but what specific date is that? Does she not agree that this delay is creating considerable uncertainty for the business community, and that it has the potential to increase energy bills?

I welcome the hon. Gentleman to his place. He will know that we are talking about setting a trajectory of budgets from 2022 and beyond. The progress we are making is absolutely exceptional, both domestically and internationally. Perhaps he is new in his place, but he could look in his diary and check when the House returns from the summer recess. My intention is to publish the plan when the House returns from the summer recess.

The Minister spoke of peer-to-peer exchanges of energy. I have no idea what they are, but given the enthusiasm she has brought to her brief I believe that we all deserve a tutorial. Could that be arranged?

It would be a pleasure to educate my right hon. Friend. Let us think of it as a lot of hot air being generated by one particular point and being shared around many other data points. It is part of our future, Mr Speaker.

I am sure the hon. Lady’s ministerial peers in other countries—to whom I think she referred earlier—must have felt keenly conscious of their great privilege in meeting her.

I would like to applaud this Government’s record on tackling carbon emissions. Our carbon reduction plan, alongside investment in new technologies and ratification of the Paris agreement, will make us world leaders in this field and create many more jobs—particularly, I hope, in Taunton Deane, with spin-offs from Hinkley Point, the lowest carbon energy development in Europe. Can the Minister give any further indications of how the Government are responding to the United States’ withdrawal from the Paris climate change agreement?

Even those who do not think that this is a pressing international issue must surely welcome the fact that there are now more than 400,000 people employed in this industry—more than in the aerospace sector. Britain has shown, in the G7 and the Environment Council meetings, that we are absolutely prepared to stand shoulder to shoulder with our European and international partners to make up any deficit caused by Mr Trump’s withdrawal.

We were promised the publication of this report in the middle of 2016. In October 2016, the permanent secretary promised that it would be published by February 2017. In January 2017, the then Secretary of State promised that the report would be published in the first three months of this year. Now we hear that it might be published this autumn. A year and a half on from the original promise, we are now clearly defaulting on our commitment under the Climate Change Act 2008, which requires that the plan is published as soon as is reasonably practicable after the order has been laid. Is not the Minister ashamed of this lamentable failure to act on that legislative requirement to produce a report that is important to the future of climate change activity, and will she apologise to the House for the delay?

I would have expected more from the hon. Gentleman. Let me just remind him what has happened since the Committee on Climate Change’s report was produced. We have had Brexit, we have had a general election and we have had the withdrawal of the USA from the Paris climate change agreement. I want to take the time to ensure that this report exceeds his expectations. I will take no lessons from those on the Opposition Front Bench, who have consistently failed to welcome this country’s progress, which the right hon. Member for Doncaster North (Edward Miliband)—who is, sadly, not in his place—was sensible enough to kick off in 2009. I believe in delivery, not promises, unlike the Labour party’s manifesto.

Topical Questions

As outlined in the Queen’s Speech, our industrial strategy will drive prosperity across the country, and in the past month we reached an important stage in that process. While we analyse the nearly 2,000 responses, we continue to make decisions that help UK-wide industries. We have announced £1 billion over the next four years for our most innovative industries, such as artificial intelligence, medicine, and autonomous vehicles. We have boosted investment in UK bioscience, such as by providing the University of Edinburgh’s Roslin Institute with some £20 million, which will not only support its research on infectious diseases but create more highly skilled jobs and cement the UK as a world leader in science and innovation.

Energy security is essential for national security and for family finances. The essential Moorside energy project in Cumbria is key to such security, but with Toshiba now predicted to lose £7 billion and the French firm backing the project pulling out will the Secretary of State tell us if and when the project will go ahead and provide the assurances that industry, workers and consumers desperately need?

We have inaugurated a new era of nuclear power through the approval of Hinkley Point C. The NuGen consortium, the membership of which has changed from time to time, is confident that that investment will be able to proceed.

T5. I welcome the Government’s commitment in the Queen’s Speech to the new industrial strategy. Will the Secretary of State update the House on his plans to support new, cutting-edge technologies that will help Britain to lead the fourth industrial revolution? (900045)

My hon. Friend was a great champion of the strategy in the previous Parliament, and I hope that he will be here. One of its early fruits is the industrial strategy challenge fund, which is already making resources available for research in healthcare and medicine, artificial intelligence, clean energy, driverless cars, advanced materials, and satellites and space technology. That is exactly in line with what he and his group have been urging.

T2. The Conservative manifesto pledged to deliver a country“where wealth and opportunity are spread across every community in the United Kingdom”,and I see that Northern Ireland has just had its share. Will the Secretary of State tell me how the Government’s industrial strategy will bring wealth and opportunity to places such as Blackburn, where the national average wage is far less than it is in Maidenhead, for example? Blackburn has seen too many cuts from this Government and it is time that we had some investment, so how quickly can the strategy be delivered? (900042)

I welcome the hon. Lady to her place. She will discover over time, I hope, that a key part of the industrial strategy is to drive growth in all parts of the country. My Department and I have looked to get funds out of Whitehall and into local places in every part of the country, including £320 million in Lancashire for the funding of the growth deal. She will also be aware that it is necessary to have an economy that is prospering, and one thing that would stand in the way of that is the record peacetime taxation with which the manifesto on which she stood was threatening the country.

T8. Our emerging technology and universities sectors welcomed our manifesto commitment to increase R and D spending from 1.7% to 2.4% of GDP, but it was not in the Queen’s Speech, so what has happened to that commitment? (900048)

Fear not, Mr Speaker, legislation is not required to deliver on that commitment. It remains a priority for the Government and for the delivery of our industrial strategy. We want to get to 2.4% of GDP for our R and D spend, and we have a longer-term ambition of 3% after that.

T3. Research by Citizens Advice found that half the people on zero-hours contracts, and two thirds of people on temporary contracts, worryingly believe that they are not entitled to paid holiday. Kirklees citizens advice bureau has found employers deliberately misleading workers about their rights. What steps is the Minister taking to make sure that workers are aware of their rights to a fair holiday? What repercussions will there be for companies that mislead staff? Can the Minister confirm when the Taylor review will be published? (900043)

The hon. Lady is right to draw attention to workers who are misled and workers who believe erroneously that they have fewer rights than they do. We are absolutely committed that any individual, whatever contract they are on, is entitled to their rights. We have increased the powers open to Her Majesty’s Revenue and Customs to enforce those rights.

T9. Market towns are vital to the rural economy, and they are the heart of rural communities, drawing people together across the 531 square miles of my constituency. Modern shopping habits, however, can mean that it is difficult for businesses in market towns to survive. What are the Government doing to support our much-needed and much-loved market towns? (900050)

Market towns, such as the ones in my hon. Friend’s constituency, will have all the support we are giving to the retail sector and high streets so that they can flourish.

T4. The National Audit Office recently published a report on Hinkley Point C that is nothing short of damning, describing it as “risky and expensive”. When will the Government listen to the experts and scrap this costly expenditure, and when will they invest instead in carbon capture and storage? (900044)

If ever you decided not to be Mr Speaker, a career as chairman of the BBC Radio 4 programme “Just a Minute” would be appropriate. In answering the hon. Lady’s question, I will try to keep to your one sentence rule.

The Hinkley Point contract is entirely designed so as not to get the Government involved in expensive capital expenditure, and the nuclear power produced by Hinkley Point will be an excellent part of a mix of power for decades to come.

Having access to the next generation of skilled workers is vital for business confidence and growth. Will the Minister consider promoting the opportunities of our ambitious apprenticeship programme through the annual business rate mailer to increase awareness?

Significant attention was given in the Queen’s Speech to commitments to roll out new institutes of technology, to the extra £0.5 billion of spending that will be given to further education and to our target to deliver 3 million apprenticeship starts by 2020. High-quality further and technical education is an absolute priority for this country and this Government.

T6. The British ceramics industry owes its current success and future survival to the innovation and development of breakthrough technologies. With funds such as Horizon 2020 potentially disappearing along with our EU membership, will the Government assure me that domestic projects such as the advanced manufacturing research centre will receive support to keep us at the cutting edge? (900046)

We remain committed to ensuring that the UK remains the go-to place for science, innovation and tech investment in the years ahead. We want to remain open to collaboration and research partnerships with institutions across the European Union and around the world as we negotiate our departure from the EU.

It has been warmly received in Scotland, and we have had a positive response from businesses there. I had an enjoyable roundtable in Aberdeen, which was described by one local business as a “breath of fresh air.” I look forward to continuing that engagement with everyone in Scotland, and I am sure my hon. Friend will play a big part.

T7. While other countries, including our EU partners, have over the years used public purchasing to support their own industries, Britain often has not. As Brexit approaches, what are the Government doing to ensure that Government Departments, local services, emergency services, councils and other public bodies back British industry and British jobs by buying British first? (900047)

The right hon. Gentleman will know that we have already changed the procurement guidance so that local value can be taken into account. We have anticipated the issue he mentions and this is being done.

The Secretary of State is aware that I have long campaigned for parental bereavement leave, and I was delighted to see this policy in not only the Conservative manifesto, but the Labour manifesto. On that basis, will he kindly set out what steps the Government will take to introduce this important benefit?

I agree that bereaved parents should have the opportunity to grieve away from the workplace, and we will seek to provide for that. I am willing to meet my hon. Friend to discuss further how we might make such provision.

The Secretary of State has talked repeatedly today about the discussions he has had on Brexit. Which trade unions has he met, and when?

I regularly meet trade unions: I met Frances O’Grady of the TUC last week; I spoke to Roy Rickhuss of the steel union yesterday; and I spoke to Len McCluskey a few weeks ago. My contacts cover both sides of the employer and trade union mix.

Earlier this year, 116 MPs signed a letter I wrote to the Secretary of State urging him to implement the recommendations of the Hendry review for the world’s first ever tidal lagoon. When will a decision be taken?

The Hendry review also said that there are significant questions as to whether tidal lagoons can be cost-effective, and very complex issues are involved. We are fully aware that a Government decision is needed in order for anything to proceed, but it is absolutely right that we take the necessary time to consider this carefully.

Now that the hon. Member for Bolsover (Mr Skinner) has reached the midpoint of his parliamentary career, I had intended to call him if he was standing, but he is not and so I will not—but if he does, I will.

I have listened to the questions and answers for the past hour, and I hear about the city deals and all the rest of it, but why does the Secretary of State not answer the specific questions about the trade unions? If he wants to give the impression that he is on the side of working-class people, why do not the Government drop the trade union Bill and all the rest of it?

I could not have been clearer about the regular discussions I have with trade unionists. My concern, which I hope would be the hon. Gentleman’s concern, is to make sure that in all parts of the United Kingdom we generate the jobs and growth to ensure that all working people have a prosperous future to look forward to. That is the purpose of this Government, in contrast to the manifesto on which he stood.

Order. I must say to the hon. Gentleman that on the strength of his 47 years’ experience of this place he knows that not receiving an answer is not an altogether novel phenomenon in the House of Commons, irrespective of who is in power at the time.

New Members

The following Members took and subscribed the Oath, or made and subscribed the Affirmation required by law:

Jonathan George Caladine Lord, for Woking

Adam James Harold Holloway, Gravesham.

As we are about to hear the first urgent question of the Parliament, I think it right to remind the House, particularly the Front-Bench teams, of the conventions on time limits. Colleagues will understand that I do so because they have not been adhered to with any religiosity in recent times. For urgent questions, the Minister may speak for up to three minutes; the person asking the urgent question and the official spokesperson, where different, a maximum of two minutes; and the third-party spokesperson a maximum of one minute.

For oral statements, the Minister is usually limited to 10 minutes; the Official Opposition spokesperson to five minutes; and the third-party spokesperson to two minutes. Members wishing to take part in statements, urgent questions and business questions must be in the Chamber, in accordance with a very long-established convention, before such events begin, and colleagues should not expect to be called to ask a question if they are not in their place as the statement/urgent question/business questions begin.

In a moment, I shall call Jonathan Ashworth, but it might be helpful if I indicate to the House that, as there are not far short of 70 Members wishing to take part in the continued debate on the Queen’s Speech, I would like the exchanges on this question not to go on much beyond half an hour.

NHS Shared Business Services

As the House knows, on 24 March 2016 I was informed of a serious incident involving a large backlog of unprocessed NHS patient correspondence by the company contracted to deliver it to GP surgeries—NHS Shared Business Services. The backlog arose from the primary care services’ GP mail redirection service that SBS was contracted to run. No documents were lost, and all were kept in secure storage, but my immediate concern was that patient safety had been compromised by the delay in forwarding correspondence. A rapid process was started to identify whether anyone had been put at risk.

The Department of Health and NHS England immediately established an incident team. All the documentation has now been sent on to the relevant GP surgery where it was possible to do so, following an initial clinical assessment of where any patient risk may lie. Some 200,000 pieces were temporary residence forms and a further 535,000 pieces were assessed as low risk. A first triage identified 2,508 items with a higher risk of harm, of which the vast majority have now been assessed by a GP. Of those 84% were confirmed to be of no harm to patients and 9% as needing a further clinical review. To date, no harm has been confirmed to any patients as a result of this incident.

Today’s National Audit Office report confirms that patient safety was the Department and NHS England’s primary concern, but as well as patient safety, transparency with both the public and the House has been my priority. I was advised by my officials not to make the issue public last March until an assessment of the risks to patient safety had been completed and all relevant GP surgeries informed. I accepted that advice for the very simple reason that publicising the issue would have meant GP surgeries being inundated with inquiries from worried patients, which would have prevented them from doing the most important work, namely investigating the named patients who were potentially at risk.

A proactive statement about what had happened was again not recommended by my Department in July for the same reasons and because the process was not complete. However, as I explained to the House in February, on balance I decided that it was important for the House to know what had happened before we broke for recess, so I overruled that advice and placed a written statement on 21 July. Since then, the Public Accounts Committee has been kept regularly informed, most recently being updated by my permanent secretary in February. The Information Commissioner was updated in August.

In July 2016, I committed to keeping the House updated once the investigations were complete and more was known, and I will continue to do so.

I welcome the Secretary of State to his place, but is it not an absolute scandal that 709,000 letters, including blood test results, cancer screening appointments and child protection notes, failed to be delivered, were left in an unknown warehouse and, in many cases, were destroyed? Does not the National Audit Office reveal today a shambolic catalogue of failure that took place on the Secretary of State’s watch?

As of four weeks ago, 1,700 cases of potential harm to patients had been identified, with this number set to rise, and a third of GPs have yet to respond on whether unprocessed items sent to them indicate potential harm for patients. Does the Health Secretary agree that this delay is unacceptable? When will all outstanding items be reviewed and processed?

The Secretary of State talks about transparency, but he came to this House in February because we summoned him here. In February, he told us that he first knew of the situation on 24 March 2016, yet the NAO report makes it clear that the Department of Health was informed of the issues on 17 March and that NHS England set up the incident team on 23 March, before he was informed, despite his implying that he set up the incident team. Will he clear up the discrepancies in the timelines between what he told the House and what the NAO reported?

The Secretary of State is a board member of Shared Business Services, and many hon. Members, not least my right hon. Friend the Member for Exeter (Mr Bradshaw), have warned him of the problems and delays with the transfer of records from SBS. Given that those warnings were on the record, why did he not insist on stronger oversight of the contract?

The cost of this debacle could be at least £6.6 million in administration fees alone, equivalent to the average annual salary of 230 nurses. Can the Health Secretary say how those costs will be met and whether he expects them to escalate?

Finally, does the right hon. Gentleman agree with the NAO that there is a conflict of interest between his role as Secretary of State and his role as a board member? Further to that, can he explain why his predecessor as Secretary of State sold one share on 1 January from the Department to Steria, leaving the Secretary of State as a minority stake owner in the company, and never informed Parliament or reported that share in the Department’s annual report—

Order. We are immensely grateful to the hon. Gentleman, but sooner or later the discipline of sticking to the two minutes has to take root. I am afraid that it is as simple as that and I am sorry, but he has had two and a half minutes.

Let me respond to those points. First, what happened at SBS was totally unacceptable. It was incompetent and it should never have allowed that backlog to develop, but before the hon. Gentleman gets on his high horse, may I remind him that SBS and the governance arrangements surrounding it were set up in 2008, at a time when a Labour Government were rather keen on contracting with the private sector? I know that things have changed, but the fact of the matter is that throughout this process our priority has been to keep patients safe. Transparency is nearly always the right thing; I am the Secretary of State who introduced transparency over standards of care in hospitals—[Laughter.] It is interesting that Opposition Members are laughing, as Labour was the party responsible for sitting on what happened at Mid Staffs for more than four years, when nothing was done.

Transparency is incredibly important but it is not an absolute virtue, and in this case there was a specific reason for that. If we had informed the public and the House immediately, GP surgeries would have been overwhelmed—we are talking about 709,000 pieces of patient data—and they would not have been able to get on as quickly as we needed them to with identifying risk. That was the priority and that is what today’s report confirms: patient safety was the priority of the Department and NHS England. I put it to the hon. Member for Leicester South (Jonathan Ashworth) that if he were in my shoes, and faced with advice that said that it was wrong to go public straight away as that would compromise the very important work GPs had to do to keep patients safe, he would have followed exactly the same advice. That is why, while I completely recognise that there is a potential conflict of interest with the Government arrangements, I do not accept that there was an actual conflict of interest, because patient safety concerns always overrode any interests we had as a shareholder in SBS.

The NHS is a large organisation. It has a huge number of contracts with both the public and private sectors, and no Government of any party can ever guarantee that there will be absolutely no breach of contract. However, what we can do is ensure that we react quickly when there is such a breach, which happened on this occasion, and that we have better assurance than we had on this occasion. I assure the House that the appropriate lessons will be learned.

While Members from across the House will be relieved that so far no patients are identified as having been harmed by this appalling incident, will the Secretary of State set out what steps he is taking to ensure that this can never happen again?

Absolutely. There is a short-term and long-term lesson. The short-term point is that it is unlikely this would happen again because it was paper correspondence, and we are increasingly moving all the transfer of correspondence to electronic systems. The longer-term point is exactly that—[Interruption.] An Opposition Member mentions cyber-attacks; they are absolutely right to do so, because of course we have different risks. This clearly indicates that we need better checks in place, so that when we trust an independent contractor with very important work, we know that the job is actually being done, and that did not happen in this case.

The NAO’s findings are deeply concerning for the families of patients caught up in this chaotic shambles. For those involved and the wider public, this will only deepen their mistrust and misgivings in how the Tories are running the NHS; we can be grateful that they are not in charge in Scotland. Surely it is simply astonishing that a company partly owned by the Department of Health failed to deliver 500,000 NHS letters, many of which contained information critical to patient care. Not only were 1,700 people potentially at risk of harm, but thousands of others were put at risk. Was this SBS contract properly scrutinised by the Secretary of State? Was patient care or cost-cutting at the forefront of that decision? Why did he publish a vague written statement in July 2016 when he actually knew what was going on four months earlier?

I gently say to the hon. Gentleman that it is totally inappropriate to try to make political capital from this incident. The facts of the case are that the NAO today published a report saying that patient safety was the primary concern of both the Department of Health and NHS England throughout. There were some problems with the assurance of that contract, but the contract and the relationship with SBS in particular dates back to 2008. Both sides of the House need to learn the lessons of properly assuring NHS contracts, and I dare say the same is true in Scotland.

I fully support the Secretary of State’s actions, which were quite right in the difficult circumstances in which he found himself, but what action will be taken against the executives who presided over this shambles? Is there any enforcement mechanism under the contract against the other owner of the company?

The company has been stripped of that contract; it was relieved of the contract back in 2015. We are very clear that it will have to fulfil all its contractual requirements, including paying its fair share of the costs that have been incurred as a result of this wholly regrettable incident.

Patient confidentiality and safety must be treated with the utmost seriousness at all times, and the NHS fails if it loses the trust of its patients, so how did the Secretary of State for Health come to the conclusion that risk to more than 1,700 patients was merely due to an issue of mail redistribution?

I did not come to that conclusion. The hon. Lady is right, as a doctor, to say that patients’ trust in the way we hold their records is very important. In this case, the correspondence concerning patients was not forwarded, but it was not lost either. It was held securely, so no patient data were put at risk, but it should have been forwarded to another part of the NHS, and it was not; it was effectively stockpiled. That is what caused the concerns. We have been going through the high-priority cases. So far, the vast majority of cases have had two clinical reviews, and the ones we are still concerned about are having a third clinical review. We are taking this extremely seriously.

The Secretary of State mentioned Mid Staffordshire and patient safety, which is absolutely critical, but may I point out that the County hospital in Stafford now has an excellent record? It is currently seeing 27 patients in A&E with a waiting time of not much more than one hour, according to the app that I have on my phone. Will he confirm that the situation has been transformed because of the fantastic work of the staff in that hospital?

I am happy to confirm that. I am also happy to say that the problems in the old Mid Staffs, which I am afraid we had in many parts of the NHS, are being addressed much more quickly because of an independent oversight regime—the new Care Quality Commission inspection regime—and the appointment of a chief inspector of hospitals, who is independent in law and gives his judgment independently in law. That is something the Labour party regrettably tried to vote down.

May I commend to the House the record of the debate I secured in November 2011, in which I warned the Government in terms about the very poor record of SBS and urged them not to part-privatise what had been an excellent NHS service? Ministers said at the time that the new contract would save £250 million. Will the Secretary of State now tell the House how much this scandal has cost, rather than saved, the taxpayer? Will he apologise both to the staff and the patients affected?

The costs are in excess of £6 million, and we are seeking to recover as much of that as we can from the company involved. I know that the regime in the Labour party has changed, but to try to turn this into an issue of privatisation when under the right hon. Gentleman’s own party’s Government—and indeed, during his own time as Health Secretary—we had problems at Mid Staffs that were squarely in the public sector is wholly inappropriate. This is about proper assurance of what is going on in the NHS, and both sides of the House need to learn the lessons.

In order to reassure my constituents, will my right hon. Friend confirm that NHS SBS no longer provides this mail redirection service, that all backlogged correspondence has now been delivered to the relevant GP surgeries for filing and that no patient harm has been found in this case?

My hon. Friend is exactly right. Of course we welcome the fact that no patient harm has been identified to date. We have to wait until the process of the third clinical review is completed on at-risk patients’ records, which will happen by the end of December. She is absolutely right to say that SBS is no longer performing this contract; it has been taken in-house. Other parts of the SBS contract not related to what we are discussing today were given to another supplier.

Does the Secretary of State agree that this is a very straightforward case? It shows a woeful lack of transparency, is a good example of why so many of us have concerns about too much private sector involvement in the NHS and, bluntly, there is a conflict of interest for the Secretary of State.

I acknowledged in my statement that there is, or was, a potential conflict of interest when the contract with SBS was in operation, and the National Audit Office talks about that today. In reality, as the National Audit Office confirms, patient safety was always our overriding priority in all the decisions we took. I suggest to the hon. Gentleman, as I do to the shadow Health Secretary, that he would have taken exactly the same decisions had he been in my shoes.

My right hon. Friend has confirmed that the contract has now been taken in-house. Can he also confirm that it is a totally different operation and that none of the people who were involved in making the decisions is now involved in making the decisions on the current service?

I am pleased that the Secretary of State at least acknowledges that this was incompetent but, crucially, does this not run deeper? Problems were first raised in January 2014, and then again internally by an administrator in June 2015. He found out, as Secretary of State for Health, only in March last year, and the Public Accounts Committee found out and was able to look at this only in September, because information was released on the final day that Parliament sat last summer. He talks about transparency, but does he not think there are deeper lessons to be learned here not only about transparency but about how the NHS supports whistleblowers?

There are two big lessons that we need to learn. First, why did the company have no internal systems in place to deal with the fact that from 2011 the mail was building up into a backlog? According to the NAO report, the situation was not escalated to the chief executive’s level until the end of 2015. That is wholly unacceptable. Secondly, it is also unacceptable that we did not have the assurance systems in place that would have allowed us to know that a backlog was building up. That is why it is so important that lessons are learned.

The original contracts with SBS went back to 2008, which is when it started providing mail redirection services, but they were renewed in 2011, which is why I think Members on both sides of the House need to reflect on this.

Over 700,000 pieces of sensitive medical information went missing, and the situation was allowed to escalate over a five-year period without being discovered, which I think shows gross incompetence. What has been done to set right this wrong, especially for the families left behind who have been affected by this worrying incident?

There has been a huge operation to deal with this. As the hon. Gentleman will know, there were 709,000 pieces of correspondence. We did an initial clinical triage to identify which ones were low risk, such as notifications of change of address, and which ones were higher risk, such as test results. We identified 2,500 that had a high priority, and 84% of those have so far been identified as being of no clinical risk, but we are continuing to do more thorough clinical risk assessment.

As I am sure the Secretary of State is aware, for many patients the image created by the media is one of documents being lost. Can he confirm that at all times the correspondence was kept either in secure conditions on NHS premises or in secure archive facilities?

I am happy to confirm that. I think that in such situations it is important to allay public concerns about what might have happened. What happened was unacceptable, but no patient data were lost.

The Secretary of State says that no patients were harmed and that the documents were securely stored, but 35 sacks of mail were destroyed. How does he know that he made the right call in every situation?

Just to be clear, what I said was that to date there is no evidence of any patients being harmed, but the process of proper clinical review, with multidisciplinary teams, will take until the end of the year. We have to do this properly to get to the answer. We hope that it remains the case that no patients were harmed, but we will not know that until the end of the year. However, throughout this whole process we have prioritised the highest risk cases and made sure that they get the most urgent attention.

Following this failure, I welcome the Secretary of State’s decisive action in bringing in the national incident team. How will we learn the lessons and share the best practice, as discovered by that team?

The NHS is extremely good at responding to crises and emergencies, as tragically we have found out in recent months. This is an example of the NHS doing a very good job when it realises the scale of the problem. For me, the lessons that really need to be learned are about not the response to the issue but the assurance processes that allowed the problem to happen in the first place.

The National Audit Office says that the review of the backlog of correspondence has found 1,788 cases of potential patient harm, so what action is the Secretary of State taking to support those patients?

All those cases have already been looked at by two sets of clinicians, and so far, on the basis of those two reviews, no patient harm has been identified. However, because we want to be absolutely sure, we are having a third clinical review that will be even more thorough, potentially with more than one set of clinicians, so that we can get to the bottom of this and find out.

I understand that the inquiry has focused on patient risk, but has there been any analysis of the impact on patient waiting times, which are also extremely important for patient care? Exactly how many patients have waited longer than they should have for treatment?

The hon. Lady is right. That is one of the most critical questions when it comes to trying to understand whether there was any actual patient harm. Ordinarily, if a patient was waiting for a test result that did not arrive at their GP’s surgery, the GP would chase it up and get a copy, so there would be no delay in treatment. However, only by looking at the patient’s notes can we understand whether any harm is likely to have happened. So far we have not identified any patient harm, but we will continue to look.

The Secretary of State told the House in February that all correspondence was kept safe and secure, and he has repeated that claim today, so when did he know that 35 sacks of mail had been destroyed by staff, and why has he not mentioned it since?

As the hon. Lady knows, I was informed at the end of March 2016. The issue with the correspondence that was destroyed relates to procedures around what it is legitimate to do when patients have been dead for 10 years. At the moment we are not aware of any specific risk to patients as a result of those sacks of mail being destroyed, but we will continue to look at the issue very closely.

The Secretary of State was made aware of the failings of the contract and warned about the dangers in the House in 2011, yet he did not take up two places on the company’s board. Would that not have added to the overall scrutiny of the contract? Is he not guilty of being asleep at the wheel?

I have been Health Secretary for a long time, but not since as far back as 2011. However, the hon. Gentleman asks an important question. It is true that the Department was entitled to three seats on the SBS board but took up only one, but I do not believe that would have made a difference in this case, because the board directors were intended to represent the Department as SBS shareholders. What we needed was better assurance of the implementation of the contract. That needed to happen with the NHS as a contractor. That is the lesson that needs to be learned.

The Secretary of State talks about the need to learn lessons, but we have seen a pattern across Government—not just in the Department of Health, but in the Department for Work and Pensions and the Home Office, for example—of companies being awarded contracts and then failing miserably. Those companies have the contract taken away but are then awarded another one. Clearly the lesson to be learned across Government is that some companies are simply not fit for purpose when it comes to delivering public services.

We do need to be robust when companies fail in their contracts with the public sector. I do not think that this affects only private sector companies, because we contract with people in the public sector and are let down. Equally, we need to be robust when the right things do not happen. Most importantly, the lesson from what happened with SBS is that we need to understand much more quickly when things are going wrong, so that we can nip problems in the bud. That did not happen in this case.