Wednesday 22 November 2017
[Mr George Howarth in the Chair]
Rural Communities in Scotland: Broadband
I beg to move,
That this House has considered the roll-out of broadband to rural communities in Scotland.
It is a pleasure to serve under your chairmanship, Mr Howarth. One of the biggest issues raised with me as Member of Parliament for Berwickshire, Roxburgh and Selkirk is the poor or non-existent broadband service that many of my constituents have to endure. In my maiden speech in the House of Commons in June, I committed to pursuing better broadband for all my constituents. I am therefore pleased to have secured today’s debate on a topic that affects so many people in the Scottish borders.
We bank, shop, make travel plans, watch TV and speak to relatives on the other side of the world on the internet, so a reliable superfast broadband connection is essential. Superfast broadband is not a luxury. I view it as a fundamental service to which everyone should be entitled to have access. Having superfast broadband is comparable to being connected to the mains electricity, water or gas supply. It is also essential to allowing businesses to operate and to advertise, and to allowing farming businesses to manage essential paperwork. The model of how people do business has changed. Yes, the large employers and multinationals are still based in our bigger towns and cities, but increasingly a large part of our country’s economic activity is undertaken by micro- businesses outwith the urban environment—people working from home and people working in their attic or garden shed. More importantly for the purposes of this discussion, this economic activity is happening in some of the most remote parts of our country.
In my area of the Scottish borders, successful businesses operate at the end of farm tracks at the top of the Ettrick valley, in the Lammermuirs above Duns, or in the foothills of the Cheviots, south of Kelso. The opportunity to set up a business in a rural area should not be limited for lack of a good broadband service. The attractiveness of moving to rural Scotland, either to live or to set up a business, should not be diminished because of inadequate broadband connectivity.
My constituency is in the bottom 30 constituencies for average broadband speeds. I suspect that we will hear from hon. Members representing other constituencies towards the bottom of that list too. According to figures from the Department for Digital, Culture, Media and Sport, 45% of my constituents receive slow internet speeds. The House of Commons Library briefing paper for this debate states that Berwickshire, Roxburgh and Selkirk ranks 621st out of the 650 constituencies in the United Kingdom for superfast broadband availability. Indeed, two council wards in my constituency—Mid Berwickshire, and Jedburgh and District—have superfast availability below 50%, which puts them in the bottom 10% of wards for that in Great Britain.
That is backed up by a broadband survey that I recently carried out across the Scottish borders. Hundreds of responses were sent in—I had never seen such numbers before. Of those who responded, 71% said that their broadband speeds were slower than 10 megabits per second, and 80% said that they were unhappy with their broadband service. More than half of respondents said that they used their broadband connection for business, and only a handful of these respondents said that they were happy with their service. In this day and age, that is just not acceptable.
Who is responsible? It is of course true that legislative competence for broadband is reserved to the UK Parliament. Indeed, when official figures show that Scotland is lagging behind the rest of the United Kingdom for broadband roll-out, the Scottish National party Members and their colleagues in the Scottish Parliament like to jump up and down and blame the UK Government, but they do not like to remind us that the Scottish Government have the task of delivering superfast broadband in Scotland and implementing UK Government targets to improve broadband.
The hon. Gentleman is surely aware of the Ofcom report entitled “Connected Nations 2016”, which highlighted the fact that superfast broadband coverage in Scotland saw the largest increase in the UK over the previous 12 months.
I am grateful to the hon. Lady for making that point. Of course, we are playing catch-up in Scotland, because of the dither and delay from the SNP Government and Digital Scotland. I will come to the Ofcom report shortly.
The slow roll-out of superfast broadband by the Scottish Government has left my constituency with one of the slowest speeds of any urban area in the UK. For example, Blacktop in my constituency achieves only 1.5 megabits per second, which is about one 20th of what the average UK home achieves. Does my hon. Friend agree that, as Aberdeen is Europe’s energy capital, that is simply not good enough?
My hon. Friend makes a very valid point. Of course, the SNP Government have let down not just urban Scotland, but rural Scotland. Both parts of Scotland—urban and rural communities—have been let down by the Scottish Government’s failures to meet their obligations to deliver superfast broadband.
With regard to the previous intervention and the complaint about slow download speeds in urban areas, does the hon. Gentleman agree that the UK Government should have accepted an SNP amendment for the universal service obligation that would have covered upload and download speeds?
I will come to the USO shortly, and the hon. Gentleman might agree with some of the points I make, but first I want to make some progress.
Unlike what has happened in England and Wales, the Scottish Government have decided not to devolve further to local authorities the delivery of broadband. Instead, they have set up two delivery programmes, with the bulk of Scotland being covered by Digital Scotland. That means that the focus has inevitably been on the central belt and connecting the easier-to-reach cities and towns in order to meet the targets. That is yet another example of the central belt bias of the SNP Government in Edinburgh and of the centralising tendencies of the nationalists
I would like to look a bit more closely at how Digital Scotland has been performing and how it has been serving my constituents in the borders and people in other parts of Scotland. The problem that I come up against time and again is the lack of consistent information from Digital Scotland and the Scottish Government. Let me give colleagues just one example.
Colin from Foulden in Berwickshire first contacted me a few months ago, when trying to find out when improved broadband would be coming to his property. He moved into his house five years ago. Before finalising the purchase of it, he checked the broadband speeds on the BT website to find out when superfast broadband would be available. The website stated that for his landline and postcode, superfast broadband would be “coming soon”. Since then, he has been waiting patiently for his upgrade.
After Colin contacted me, I wrote to Digital Scotland, the Scottish Minister and my right hon. Friend the Minister in this debate to raise my constituent’s concerns. I received an email from the Scottish Minister in charge of broadband delivery, Fergus Ewing MSP, who said that fibre roll-out was planned for my constituent’s area. A month later, I received an email from Digital Scotland, also saying that there were plans to roll out fibre broadband. After I pushed for a more accurate date, I was told that my query had been passed to the policy team in Digital Scotland, who a month later responded that there were in fact no plans to upgrade my constituent’s broadband. Colin told me:
“I am left with the impression that nobody really knows what is going on.”
Sadly, across my constituency and, I suspect, many other constituencies, there are many people in Colin’s position. I am sure that my right hon. Friend the Minister would agree that that is just wrong and cannot be allowed to continue.
The Scottish Government and Digital Scotland have dithered and delayed too long. Most superfast projects in the United Kingdom have already begun their phase 2 procurement. Digital Scotland has delayed the procurement process and is considerably behind other parts of the United Kingdom.
I congratulate the hon. Gentleman on securing this debate. Far be it for me, coming from Northern Ireland, to get into an argument between the Conservatives and the SNP, but does he agree with me—indeed, he has made this point—that it does not matter which Government are responsible if they say they are going to deliver; the delivery problem is on the ground, with the infrastructure? The organisations that are meant to be delivering are not delivering for the people on the ground. That needs to change, and Government need to change it.
The hon. Gentleman makes an important point. The constituents we represent do not really care about the infrastructure and who is responsible for delivery; they just want better broadband servers connected to their homes and communities.
I urge the United Kingdom Government to consider alternative models for broadband roll-out across Scotland. The time has come for the Scottish Government to be stripped of their responsibilities for future broadband delivery projects and for the job to be given to local councils in Scotland instead.
Further to the point made by the hon. Member for Aberdeen South (Ross Thomson) about coverage in Aberdeen and Aberdeenshire, coverage across that city and the shire has reached 95% and 81% respectively. Without direct intervention by the SNP Scottish Government, coverage would have been only 72% and 25% respectively. That clearly shows the benefits and progress of Scottish Government-led broadband investment.
I thank the hon. Lady for that point, but the fact is that Scotland is lagging behind the rest of the United Kingdom in superfast broadband delivery. That is a failure of Digital Scotland and a failure of the Scottish Government—I suspect they have been distracted by priorities other than the delivery of broadband for the communities that we represent.
In reply to the previous intervention, my constituency of Gordon, which is clearly a big part of Aberdeenshire, is 613th for broadband in Scotland. That is disappointing for constituents and disastrous for business. My hon. Friend mentioned alternatives. Point-to-point technology, already used by wind farms in isolated communities, is often cheaper than delivering fibre. Does he agree that that should play a bigger part in the solution?
My hon. Friend makes an important point. I will come on to the alternatives and self-help options, which many communities have to consider because of the failures, particularly of Openreach, to deliver to some of the harder-to-reach communities.
Returning to a point my hon. Friend made a moment ago, my constituency of Dumfries and Galloway is in the bottom 30 of constituencies in the UK. We have done a broadband survey and had over 300 responses. When we speak to people directly, it is undoubtedly the case that they think the Scottish Government are focusing on the central belt, and they want the UK Government to put the money directly into Dumfries and Galloway, not to go through an organisation that is concentrating on population rather than square miles.
My hon. Friend makes an important point, which supports the point that I am making about the role local councils should have. Local councils, whether it is Dumfries and Galloway, Scottish Borders or Aberdeenshire, have a much better understanding of how to deliver better superfast broadband to the communities they serve. I strongly believe that central Government, particularly the nationalist Government in Edinburgh, are so focused on other priorities and the central belt that they are failing rural Scotland and many of the constituencies that we represent.
The constituency of the right hon. Member for Ross, Skye and Lochaber (Ian Blackford)—the SNP Westminster leader—has the slowest average download speed in Scotland. Given that, it is particularly surprising that he does not seem to see fit to attend this debate.
It is telling that only three nationalist Members are here this morning. That shows what their priorities are. While we are standing up for our constituents, who want better broadband, the nationalists are perhaps focused on other things.
On the point that the hon. Member for Angus (Kirstene Hair) made, I will not embarrass myself or my party by asking where the Secretary of State is, because we would not expect him to attend such a debate. Can I take the hon. Gentleman back a few minutes? We all have localised problems with broadband and BT roll-out, but will he confirm that he said that he wants the Scottish Government stripped of their powers over broadband roll-out?
Order. Before the hon. Gentleman continues, I realise that this subject is generating quite a bit of passion on both sides, but there is too much chuntering and calling out. If we listen in an orderly manner, I am sure everybody will get the opportunity to have their say.
I am more than happy to confirm the point. The Scottish Government and Digital Scotland have failed. That is also the view of many of my constituents. The Scottish Government have had their chance and it is time for—
Stripped of their powers?
Order. The hon. Gentleman is a spokesman for his party. I realise he is very exercised about what Mr Lamont is saying in his speech, but he really should not be making comments from a sedentary position.
Thank you, Mr Howarth. Having spent 10 years in the Scottish Parliament, I am well used to listening to the SNP shouting from the sidelines, but not actually delivering anything for Scotland. Thankfully, we now have 13 Scottish Conservative and Unionist Members of Parliament, who are actually here to do a job, namely getting a better deal for our constituents, whether it be on broadband or any other policy area, unlike my nationalist friends, who are determined to take Scotland out of the United Kingdom and ignore every other policy area in this place.
I want to make some progress.
I have been critical of Digital Scotland and the Scottish Government for their failures to deliver for Scotland a broadband network fit for the current age. However, BT and Openreach are not without blame. Following negotiations and demands from Ofcom, Openreach is now a legally separate entity, but it is still wholly owned by BT’s parent holding company, BT Group plc. The situation we find ourselves in, with the digital divide between urban and rural, has been created by historical decisions made by BT. Had BT invested in our network in the way that I believe it should have, we would not be facing these challenges today. It has picked off the low-hanging fruit in broadband roll-out, focusing more on cities and commercially viable areas. I suggest that it has ignored the harder-to-get residents and communities because it knew it would cost too much. Too many communities have been forced to look at self-help options to find solutions for their poor broadband connections when Openreach has refused to help. My constituents are innovative and smart, but many have struggled with the bureaucracy of the schemes and the cost involved.
Ofcom’s December 2016 report, “Connected Nations”, which has been referred to, describes the urban-rural divide well. While 89% of premises in the United Kingdom can receive superfast broadband, there are 1.4 million premises that cannot get download speeds greater than 10 megabits per second. Those are disproportionately in rural areas, and the problem is particularly bad in Scotland.
I have no reservation about interfering in an argument between the Tories and the SNP. Does the hon. Gentleman see any connection between these rural broadband figures, particularly in the highlands, and the way in which Highland and Islands Enterprise, which was originally closely involved in the roll-out of broadband, has slowly been denuded of all its funding and powers and was recently under threat from the Scottish Government?
The hon. Lady makes an important point, which demonstrates yet again the centralising tendencies of the nationalist Government in Edinburgh and their focus on the central belt, rather than devolving powers to the communities that we all represent.
The “Connected Nations” report highlights that only 46% of premises in rural Scotland can access superfast broadband, compared with 62% of rural premises in England. It is those premises that will benefit from the universal service obligation. I fully support the universal service obligation contained in the Digital Economy Act 2017, but I would argue that the minimum speed should be higher than 10 megabits per second, as originally suggested. I know that the Minister is considering a proposal by BT to deliver the USO outside the 2017 Act, which BT says it will be able to deliver quicker. However, I believe that BT has had its chance to deliver and has failed. The 2016 report from the British Infrastructure Group highlighted that in 2009 BT promised that 2.5 million homes would be connected to ultrafast fibre to premises services by 2012, which was 25% of the country, yet by September 2015 BT had managed to reach about 0.7% of homes.
Lastly on BT, residents in many rural communities feel angry—frankly, I share their anger—when Openreach tells them that it is not commercially viable to invest in their broadband connections, and yet they read in the press about BT splashing out £1.2 billion on the rights to televise the champions league. No, BT and Openreach have had their chance and they have failed to deliver for rural Scotland.
I suspect we will hear similar experiences from other Members, so I will draw my remarks to a conclusion. Ofcom’s “Connected Nations” report describes the situation well when it states:
“Fast, reliable communications enable businesses to generate prosperity and employment, and our countries to compete. They empower every citizen to take a full part in society and benefit from life’s opportunities. Communications also save lives, bind families and friends together, and keep us entertained.”
We need to act to bridge the broadband gap between urban and rural Scotland—the broadband haves and the broadband have-nots.
As the hon. Gentleman is bringing his remarks to a close, could I return to the question I asked a couple of moments ago, which he did not answer? He said that he wanted the Scottish Government stripped of its powers. Is that what he was saying?
I have been absolutely clear. The UK Government have tasked the Scottish Government to deliver superfast broadband in Scotland. The SNP Scottish Government have failed. These powers should be taken away and given to local authorities—Scottish Borders Council, Moray Council, Dumfries and Galloway Council; rural councils that understand what the local communities need—not this central-belt biased SNP Government in Edinburgh who are determined to have a second independence referendum while everything else gets ignored.
I ask the Minister to consider addressing the following points in his remarks. First, to confirm the point I made earlier to the nationalist Members, will the UK Government look at ensuring that local authorities in Scotland have a much greater role in the delivery of broadband, rather than the centralised model currently adopted by the SNP Scottish Government? Secondly, will the Government consider a higher level of universal service obligation to ensure that rural communities are future-proofed as digital technology continues to evolve? Lastly, I look forward to welcoming the Minister to my constituency in the near future so that he can hear at first hand the very challenging experiences that many of my constituents in the Scottish Borders have to deal with in terms of access to broadband.
As always, it is an honour to serve under your chairmanship, Mr Howarth.
I congratulate my constituency neighbour, the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont), on securing this debate. He has spoken eloquently about the importance to his constituency and Scotland of the roll-out of broadband. Unfortunately, I believe some others—possibly people who have superfast broadband—trivialise this matter.
Let me say, however, that no one should downplay the force of the statistics for Scotland as a whole and the figures for my constituency of East Lothian. Fewer than half of our rural communities—46%—have access to superfast speeds. Some 37% of premises in rural areas are unable to receive download speeds greater than 10 megabits per second. Closer to home, 80% of rural constituents in my area said that they were dissatisfied with their internet, and the median download speed in East Lothian—the constituency that lies just south of the central belt—is just 14.1 megabits per second. Those figures should rightly be viewed as a catalyst for change and although I welcome the UK and Scottish Governments’ commitment to the roll-out of superfast broadband, I think those on all sides can agree that an enormous amount of work still needs to be done.
Another notable figure that struck me and came to my attention during the campaign is that 12% of my constituents work from home. That is not only above the Scottish average, but well above the constituency average for the whole of the UK. There are in fact only 34 constituencies in the UK where there are more home workers than in East Lothian. Herein lies the problem: business owners who work from home in rural areas, dependent on broadband, are resigned to travelling to cafés and coffee shops just to email or download information. That is a situation that I know many business owners across East Lothian regrettably recognise.
In East Lothian we have Lothian Broadband Networks Ltd, which started as a community company that offered access to the internet in areas not served by BT Openreach. These social entrepreneurs used innovative technology to beam access from transmitters to individual houses, via dishes, to allow people to access the internet. They form part of the third sector that competes with BT Openreach and Virgin Media. Many of those third parties are members of INCA, the Independent Networks Co-operative Association, and in its response to Ofcom’s wholesale local access market review it pointed out that current policy appears to highlight a mysterious absence of these third parties in solving the problems that face whole communities.
Like many constituencies in Scotland, Ayr, Carrick and Cumnock has very poor coverage of broadband. Does the hon. Gentleman agree that there are many fragile communities in Scotland with falling school rolls, poor transport, shops closing and pubs closing, and that an efficient level of broadband is essential to secure the future of those fragile rural communities?
I wholeheartedly agree. Broadband is now an essential; it is not a luxury. It is one of the things that matrix together our communities, particularly those that are facing other challenges such as school closures, community cuts and local authority cuts.
The Scottish National party Government in Scotland have set themselves a target of 95% of homes with superfast broadband by the end of this year, and the other 5% by 2021. While I and the Liberal Democrats welcome that 95% target, we would say that the remaining 5% is perhaps the 5% that was the most difficult for the very reasons that the hon. Gentleman is outlining. Perhaps the priority was wrong, and that 5% should have been looked at earlier.
I will come back to that point later, but I agree with the sentiments behind it.
In its response to Ofcom’s wholesale local access market review, INCA talked about copper switch-off, which is coming and has to come. It needs to be considered along with the rural local loop unbundling. It needs to be addressed, and the suggestion at the moment that BT is possibly released from its LLU obligations and its sub-loop unbundling obligations might not solve the problem, but might inadvertently stifle the competition to challenge this and to address the 5% that seems to be being missed.
All of these challenges will not be solved by silo thinking, with one discussion about households, one about business and one about wireless. The answer must come from joined-up thinking. Whether working from home or operating from private premises, people in rural areas of East Lothian demand solutions that provide access to fast, reliable broadband.
Behind these figures there is the real-life impact of digital exclusion, which I wish to address as I come to the end of my speech. I worry that participation and digital inequality could be two of the defining features of the near future. We must start to see connectivity more as a household utility than as a luxury. Our future generations will be fully engaged in a digitised economy, so we must ensure that they are fully prepared and no one is left behind. Location or income inequality cannot be a barrier to digital inclusion; indeed, universal credit—what would a debate be without mention of universal credit?—requires access.
I wholeheartedly agree with the aspiration of the Scottish Government to build a “world-class digital nation” by 2021—four years away—but I believe we have a long way to go to achieve that, in a very short space of time. The infrastructural weaknesses in rural connectivity will have long-term effects, and the answers are there. With the success of all sectors—the communities, the local authorities, BT Openreach, the third-party sector and the leading companies such as Lothian Broadband in East Lothian—that is achievable, but we need to move from silo thinking to joined-up thinking.
Rural connectivity should be transformative for all the communities across Scotland. I reiterate my support for this Government’s commitment to provide superfast broadband, but that must move from being a commitment to a reality. The roll-out cannot be capped at certain areas. It must not cut off communities in East Lothian and in other rural parts of Scotland. Digital inclusion is not an indulgence, but a necessity.
Six people have indicated that they want to speak and we have roughly 30 minutes left. If you do the maths, we ought to get everybody in without imposing a time limit, but if necessary I will impose one. I call Kirstene Hair.
It is a pleasure to serve under your chairmanship, Mr Howarth, and I am grateful to my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) for providing the opportunity for me to speak in this important debate.
Since I was elected in June, my casework has been dominated by yet another Scottish National party Government failure: the delivery of broadband in my constituency and, indeed, across Scotland. Scotland lags behind the UK on roll-out and Angus is even further behind that poor Scottish average. Rural communities such as mine make a huge contribution to Scotland’s economy, but they are again being left behind by the Scottish Government’s focus on the central belt.
Complaints continually flow into my inbox from constituents about their access not even to superfast broadband, but to a basic internet connection. That connection would enable them simply to operate emails, pay bills or—fundamentally in a constituency with a higher-than-average unemployment rate—apply for jobs. Do not get me wrong: in my constituency there are schemes where residents have grouped together after losing faith in the Scottish Government to deliver. However, the expense simply cannot be afforded by most. A hospitality business was quoted £85,000 to get a connection because it is not included in the current roll-out. Frankly, that is simply not good enough.
Will the hon. Lady give way?
I want to make some progress.
Of course, the situation does not stop SNP representatives muddying the waters further by talking about superfast availability that realistically only exists on paper. It is incredibly disappointing that SNP Members of the Scottish Parliament misrepresent the situation to their constituents by talking about how more than 90% of premises have access to superfast broadband, when we are all perfectly aware that long copper lines prevent households and businesses that are further away from enabled cabinets from getting those speeds. That further adds to the frustration of my residents, some of whom are now at their wits’ end.
Is the hon. Lady blaming the SNP Government for the historical BT infrastructure of long copper wire in the networks?
I thank the hon. Gentleman for his intervention; it was a prime example of the SNP Government trying to push the blame on to somebody else.
I understand that leopards do not change their spots—again, that was a prime example—so, of course, SNP Members will blame the UK Government and anyone else, just as they did with the botched common agricultural policy payments and the failed centralisation of police and fire services. This is a problem purely of the SNP’s making, but time and again we have seen the Scottish Government fire up their PR machine, which churns out all-singing, all-dancing press releases with the aim of pulling the wool over the eyes of Scots.
Will the hon. Lady give way?
I am going to make some progress. What is abundantly clear is that when we scratch the surface—
Will the hon. Lady give way?
Order. the hon. Member for Angus (Kirstene Hair) has indicated that, for the time being at least, she is not going to give way, so the hon. Member for Edinburgh North and Leith (Deidre Brock) should not just keep interrupting on the basis that she hopes she will.
What is abundantly clear is that when we scratch the surface there is often no regard for the practicalities, and then, when the Scottish Government cannot deliver—yes, you guessed it—the blame lies at someone else’s door. They want all the powers but none of the responsibility.
This issue is not just about Government in Edinburgh. It is having a real impact on the day-to-day lives of those living without proper connectivity. Increasingly, businesses in my constituency tell me that it is becoming more and more difficult to keep up with day-to-day work and to compete both nationally and internationally —never mind thinking of investing in new technologies, which would greatly enhance their output—all because the connectivity levels cannot support it. This issue is seriously hampering the growth of our economy. My largest town of Arbroath has more than 20,000 residents, so it is hardly rural, but it has speeds of less than 10 megabits per second.
As a central belt MP, I feel slightly guilty about having a significantly higher accessibility rate than most, but even in my constituency there are individuals and businesses that are some minutes’ drive away from Glasgow, in communities in Eaglesham and Uplawmoor, which have no access to sensible broadband. Does that issue not affect connectivity and business future-proofing as we go forward?
My hon. Friend is absolutely right. With Scotland’s economy growing at a slower rate than the rest of the UK, it is fundamental that we have basic infrastructure in place.
Angus has one of the lowest download speeds in the UK and one of the lowest rates of superfast broadband across our UK. Angus is simply being failed by the Scottish Government. Imagine a business trading across the world that can barely get an internet connection for their office. So many other countries have higher speeds and levels of connectivity than Scotland, so what do the Government in Edinburgh do for people? The answer is, nothing. Actually, I tell a small lie: they will happily explain that it is nothing to do with them—that is, until a cabinet is connected to fibre, and then a Minister and his team will race out to get a photo opportunity and shout about how they are delivering for Scotland.
I wish the Scottish Government would listen to one of their own—Winnie Ewing, who once said:
“Stop the world, Scotland wants to get on”.
I ask them to stop the games and the grievance and get on with delivering vital broadband services for Angus and Scotland, so that my constituents can get the services they need and deserve.
It is a pleasure to serve under your chairmanship, Mr Howarth. As the phrase goes, there are supposed to be three types of lies: lies, damned lies and statistics. I think we can add to that the parallel universe of the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont). His Tory grievances know no bounds, and we have heard the same things from Government Members. This is the week that he tried to politicise Poppyscotland, so the Tory grievances really do know no bounds.
The hon. Gentleman talked about stripping the Scottish Government of their powers and giving them to local authorities. I hope that he is aware that local authorities have been involved in the roll-out. I know from my time as a councillor that East Ayrshire Council was involved in discussions with Digital Scotland and the Scottish Government and put money in to achieve a target of higher than 95% in my area.
The hon. Gentleman blithely ignores the fact that the UK Government’s target of 95% superfast coverage for the UK was based on a pan-UK approach, which allowed the UK Government to set a target that was skewed towards England, where there is a greater population. Were it not for the Scottish Government’s investment, we would not even be close to the 95% target.
Broadband Delivery UK allocated £100 million for broadband in Scotland, but the Scottish Government and other local authorities have had to add £185 million—additional funding of 185%—to get to a 95% target for Scotland. To achieve the 95% target in England, additional funding of only 108% was required, which shows the disparity in approaches and the level of commitment to it in Scotland.
Scotland’s landmass is the equivalent of 60% of England’s landmass, so clearly the funding allocation should have been done on that basis alone, which would have meant a much higher funding allocation initially of close to £338 million, instead of the £100 million that was received from the UK Government. With more densely populated areas elsewhere in the UK, commercial roll-out was always going to be more attractive and hit those areas first. Scotland’s challenging geography has resulted in the requirement for 400 kilometres of subsea cables.
Does my hon. Friend agree that the Scottish Government are clearing up the mess made by the UK Government and the absolute lack of ambition to connect Scotland that has been shown over several years?
I wholeheartedly agree. This may surprise people but the Tory grievances know no bounds, as I said, and they do not know where the responsibility lies.
I hope the hon. Member for Berwickshire, Roxburgh and Selkirk is aware of the issue with Scotland’s historical infrastructure. Scotland has a much higher proportion of exchange-only lines, which has resulted in different solutions having to be implemented, and those were back-ended as well. That accounts for some of the initial slowness of roll-out.
I am sure that the hon. Gentleman is also well aware that rural Scotland suffers in mobile coverage, due to the licensing system in the UK and—again—a UK Government strategy that has overlooked rural Scotland. If we had good 4G coverage, at least that would mitigate the problems with broadband access in rural areas, but of course it is the rural areas of Scotland that are also subject to the notspots. The blame for that lies firmly with the UK Government.
It could all have been so different. The 3G auction in 2000 raised £22 billion for the Treasury, but that money was squandered. The 4G auction in 2013 raised nearly £2.5 billion. That money could have been invested in broadband and telecoms, but it was not, which again is a failure of UK Government policy. We could have had a new and complete fibre infrastructure roll-out instead of relying on 100-year-old copper to deliver our broadband services. There could have been a much better strategy, instead of the piecemeal approach that we now have.
It is the same with the universal service obligation. At least the hon. Gentleman was willing to admit that it should be a 30 megabits per second USO to meet customer demands and expectations, and at least the Scottish Government have shown ambition and are committed to delivering that by 2021.
I cannot pretend that there have not been issues with the roll-out of broadband. One issue has been managing expectations, as everybody wants broadband and wants it now. I agree that the Digital Scotland website, which allows postcode checking as well as live interaction and live updates, could have been rolled out in a much better way, to allow people to have a better understanding of when they are likely to get broadband. Also, individual delays in the roll-out have not always been reported accurately; the updates could be much better.
BT has not covered itself in glory either. Many of my constituents have been frustrated by the lack of progress, and I held a public meeting on broadband, to get stakeholders in front of the public and allow interaction with them. That event was well-received and gave people a better understanding of the problems. As an MP, I have personally intervened at times to seek resolution for different cabinet upgrades. I fight on behalf of my constituents as well, and I recognise that there have been some problems along the way.
Overall, however, there is definitely a good story to tell. If the Scottish Government and local authorities had not invested as much money, the consequences do not bear thinking about. We are also at the mercy of the commercial roll-out. Commercial companies are not even obliged to tell us if they have achieved 100% roll-out where they said they were going to do so, and under state aid rules public funds cannot be invested in those areas.
Additionally, pillar two money has been used to support the roll-out of rural broadband in Scotland. The UK Government have not committed to providing the same levels of funding post-Brexit, so I hope that the hon. Member for Berwickshire, Roxburgh and Selkirk will bring that issue up with the UK Government. However, I note that he has refused to work with the SNP on the common agricultural policy convergence issue, which is also associated with the pillar two funding and overall European funding.
As has already been touched on, it is natural to leave the hardest areas until last, but I agree that that approach could perhaps be reviewed for future programmes, because it means that the same areas are always left behind. Again, the initial targets and initial allocations of money skewed the 95% target away from Scotland, leaving it to play catch-up.
It is also worth pointing out that of the 20 wards in the UK with the slowest broadband speeds, only one is in Scotland. Seven of the 10 slowest UK wards are in Wales, which has also suffered the same fate of having a devolved Administration that is overlooked by the UK Government. Also, in my time here in Parliament, many Tory MPs from the rest of the UK have complained about rural broadband access in their constituencies, so there is no point pretending that this is just a Scottish matter.
In conclusion, only the Scottish Government have committed to 100% superfast broadband by 2021. There might be some more frustrations along the way, but I am confident that only one Government will deliver on that superfast commitment for their country.
It is a pleasure to serve under your chairmanship, Mr Howarth.
I start by congratulating my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) on securing this debate. Anyone who has followed me in my short time in this House will know that broadband and connectivity are key interests of mine and subjects that are as close to my heart as they are to the hearts of my constituents.
We live in an increasingly digital world. Digital pervades every aspect of our lives today: in communication, through email, Facebook and Twitter; in banking, business and bitcoin; in farming, as farmers fulfil their CAP obligations; in retail, as retailers try to reach domestic and international customers; and in benefits, welfare and healthcare, all of which are moving online. You name it—now, pretty much every public and private service has a digital footprint. Therefore, access to broadband, specifically superfast broadband, is vital for the businesses and individuals in rural Scotland, including those in my constituency.
In an increasingly digital world, access to superfast broadband is crucial for rural areas in Scotland to flourish economically. The UK Government have invested £122 million in the broadband roll-out in Scotland. Despite that, Scotland is lagging behind the rest of the UK in the superfast broadband roll-out, which will surely harm Scotland’s rural economy.
To be clear, because there has been some confusion about this matter in the past, responsibility for broadband policy lies with the UK Government; however, in Scotland the delivery of the roll-out is the responsibility of the Scottish Government. From a policy perspective, the UK Government have embarked on a programme to roll out superfast broadband across the UK. They have also put in place the universal service obligation, giving every household the right to request a broadband connection at a minimum level, up to a reasonable cost threshold. That is the policy that Holyrood has received hundreds of millions of pounds to deliver. By the end of 2016, however, 17% of Scottish households lacked access to superfast broadband, as opposed to just 11% of households across the United Kingdom.
On the allocation of funding, does the hon. Gentleman accept my point that that £100 million or £120 million from the UK Government was nowhere near enough to achieve a 95% roll-out target in Scotland?
I am glad that the hon. Gentleman raised that issue, because he mentioned that Scotland’s landmass is only 60% of the landmass of England, and said that the funding should be distributed proportionately. Surely, however, that would result in our having less money, not more, so I was a little confused by what he said.
I will make some more progress and then the hon. Lady can come in.
It is true that superfast broadband availability in Scotland has improved from 73% to 83% since 2015, but it still lags behind the rest of the UK. Also, that improvement has largely been achieved by focusing on urban areas around the central belt of Scotland. The slow roll-out of broadband in rural Scotland reflects a Scottish Government who are intent on centralising power and leaving behind areas outside the central belt.
That is particularly true of my constituency of Ochil and South Perthshire. Ochil and South Perthshire enjoys only 69.1% of superfast broadband availability, compared with 83% in Scotland and 89% across the UK. Scotland also has lower than average download speeds than the rest of the United Kingdom.
The UK Government define superfast broadband as 24 megabits per second, yet the average download speed in my constituency is only 19 Mbps. That puts Ochil and South Perthshire in the worst 4% of broadband coverage in the whole of the UK. In 2017, that is unacceptable.
I accept that measures have been taken by both by the UK Government and by Holyrood to step up progress. In Scotland, the roll-out is part of the Digital Scotland programme, which includes the “Reaching 100” scheme to try to deliver superfast broadband to 100% of the premises in Scotland by 2021. The UK Government have named a number of pilot areas for ultrafast broadband, including Aberdeenshire.
I also welcome some of the draft proposals put forward by the Minister in the UK Government to ensure that some of the future rounds of broadband funding are given directly to local authorities and communities. That is not stripping Scotland of powers but empowering local communities and local councils, which is what devolution was intended to do.
Digital Scotland Superfast Broadband is delivering more than £400 million of investment, to deliver 95% future broadband access by 2017. But the USO commitment of the UK Government will not deliver broadband at superfast speeds for 100% of the country, unlike the Scottish Government. Does the hon. Gentleman not welcome that?
As I have said already, I welcome some of the measures introduced by the Scottish Government and the UK Government. However, in Ochil and South Perthshire I have two Scottish Government Secretaries, and yet my constituency is still in the worst 4% of broadband coverage in the whole of the UK. So, if the Scottish Government are so good, where were their national issues being applied in my constituency? Where are they for my constituents in Glendevon, in Cleish and in St Fillans? Two Cabinet Secretaries—Scottish National party Cabinet Secretaries—are not delivering, just as they are not delivering for the rest of Scotland.
Although I welcome a lot of the initiatives that have been brought forward—
Will the hon. Gentleman give way?
No. If the hon. Gentleman had come in on time for the debate, I would take an intervention from him, but otherwise he can stay quiet.
Neither Cabinet Secretary has changed the 69% broadband coverage in Ochil and South Perthshire—[Interruption.]
Order. It is not acceptable for Members to shout across the Chamber. Carry on, Mr Graham.
Thank you, Mr Howarth. In Prime Minister’s questions a few weeks ago, I called on the UK Government and Holyrood to work together to address the slow roll-out of broadband in Scotland and in my constituency, and to reflect on some of the challenges my constituents face on a daily basis. I was shouted down. I hope that this time, instead of howling me down, SNP Members here and in Holyrood might heed my words and work together to deliver for the people of Ochil and South Perthshire.
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) on securing this important debate on broadband roll-out in Scotland. As the debate title mentions Scotland, I am sure all right hon. and hon. Members will join me in congratulating Forres in my constituency, which has been named as having the most beautiful high street in Scotland just this week.
Broadband connections are a hugely important issue to me as a constituency MP. It is the issue I have the most correspondence on, whether that is by letter, email or visits to my constituency surgeries. The mainstay of many rural communities, such as the one I represent, is our small businesses. They are often single-person operations, and they provide the glue that keeps rural communities such as those in Moray sustainable. That sustainability is being undermined by the lack of adequate broadband, without which it is simply not possible to trade in this day and age. It is not just small businesses; a significant and successful asset management company operates in my constituency. It has customers scattered across the globe and offices based in London, the United States and Asia. It is a home-grown company and proud of it, but the continued lack of adequate broadband is understandably causing it anxiety. The financial services industry in the UK is not just restricted to London and Edinburgh. It generates employment and revenue across the country, and our broadband coverage should reflect that.
The complaints come from all parts of Moray, with notable notspots including communities such as Rafford and Glenlivet and coastal communities such as Spey Bay. People watching in those communities will be puzzled by the SNP’s objections that local authorities should have more control over the roll-out of broadband in their areas. I was confused to see the glee—I wrote that word down—of SNP Members when my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk said that the Scottish Government should be stripped of these powers. It is almost as though they do not believe in true devolution from this Parliament to the Scottish Parliament and onwards. [Interruption.] Excuse me: I tell SNP Members that devolution does not stop in Edinburgh. Edinburgh is as far away from Moray as London often seems to be. We want more powers going down to our local authorities, rather than being held by a centralised SNP Government.
Like me and other hon. Friends, my hon. Friend served as a local councillor. Does he agree that there has been a tendency in the recent past for the Scottish Government to take powers away from our communities? Whether it is decisions about council tax, fire and police or planning, all the tendencies of the Scottish Government are to take powers to the centre and never to give them back.
I fully agree with my hon. Friend. The SNP Government are only interested in the central belt of Scotland. They are only interested in holding powers in Edinburgh and not in further devolution. I am proud that the Scottish Conservative party and the UK Government are keen to see further devolution.
Will the hon. Gentleman give way?
I am afraid I have to make progress to allow the hon. Gentleman adequate time to sum up the debate.
The Library briefing for this debate shows that the urban and rural parts of Moray are being let down by the Scottish Government. In Speyside Glenlivet, 52% of connections receive speeds of less than 10 megabits per second. That is an extremely rural ward, yet in Elgin City North, 51% of connections are less than 10 megabits per second. That is not acceptable. In Heldon and Laich, almost 7% of connections receive speeds of less than 2 megabits per second. The SNP should be stripped of the powers because it is not delivering for Scotland. It is time to go direct to the local authorities and deliver true devolution.
I will quickly mention alternatives to the broadband roll-out. I recently met WiFi Scotland, an extremely successful small start-up company based in Elgin and run by Rob Cowan and Angus Munro. It provides wireless broadband services to the Orton and Rothes valley and is looking to expand into Mulben and Boharm. I recently facilitated a meeting for those two gentleman with Moray Council to ensure that we can streamline the planning process to allow them to develop the technology further.
I know that you would like me to conclude, Mr Howarth, so I will simply say that Moray is a great place to live and work—we even have award-winning high streets—but much of that work is in spite of, rather than because of our connectivity. Moray and Scotland deserve better than we are currently getting from the SNP Government. I welcome the announcements from the UK Government to give more power to local authorities.
Before I call the next speaker, I remind him that I will call the first Front-Bench spokesman at 10.30 am.
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) on securing this important debate. He and I share a passion for ensuring that rural communities such as his, mine in Banff and Buchan and those represented in the Chamber are not left behind in the roll-out of superfast broadband. I welcome the comments from the hon. Member for East Lothian (Martin Whitfield) on the increasingly essential nature of broadband access. It is no longer a “nice to have”; it is becoming a more and more essential part of everyday life.
Rural broadband is a major priority for the Scottish Conservatives, as it should be. As of 2016, only 83% of Scottish premises had access to superfast broadband. Admittedly that was an increase from 73% the previous year, but it compared with the UK average of 89%. Only one Scottish constituency is in the top 100 for access to superfast broadband speeds, while 23, including my own constituency, are in the bottom 100. What makes the situation particularly frustrating for Scottish Conservative Members of Parliament is that despite the SNP’s claims to the contrary, improving the situation is the responsibility of the Scottish Government in Holyrood. While broadband is a reserved matter and broadband roll-out is a UK-wide policy funded by the UK Government, in Scotland the Scottish Government are responsible for leading the delivery of the roll-out. The House of Commons briefing paper—it is number CBP06643, if anyone is interested—of 9 March 2017 makes that very clear. It states unambiguously:
“Broadband Delivery UK (BDUK) is responsible for managing the Government’s broadband funding. Individual projects are the responsibility of local authorities in England and the devolved Administrations in Scotland, Wales and Northern Ireland, as set out in BDUK’s delivery model.”
Incidentally, I found it interesting that, as far as I could tell, nobody from the SNP appeared to be present at yesterday’s Parliament and internet conference—I apologise if they were and I did not notice—which was hosted in part by the Minister. It had a significant session in the afternoon, specifically on connectivity. With their constant grievance that the internet is reserved, I would have thought that SNP Members would have been all over it, putting pressure on the Minister. The First Minister, Nicola Sturgeon, certainly did not seem to think that the matter was reserved last year when she pledged that the Scottish Government would
“ensure that 100 per cent of homes and businesses across Scotland have access to superfast (30Mbps) broadband by 2021.”
That is an interesting promise to make if the matter is indeed reserved and thus out of her hands.
I am told that Banff and Buchan has an average download speed of about 6 megabits per second. Having conducted similar surveys to some of my colleagues, I have never heard of anyone who actually has anything like 6 megabits per second. They either have reasonably good coverage if they are reasonably close to a cabinet, with a speed somewhere between 10 and 24 megabits, or they have next to nothing. If I understand the arithmetic, it suggests that far more people have less than 2 megabits per second than have more than 10 megabits.
Many of my constituents can only dream of speeds as high as 6 megabits, never mind the USO of 10 megabits. My hometown of Turriff, which is the third largest town in the constituency, only recently got fibre to cabinet. In my case, being less than a kilometre from the cabinet brings me up to 10 megabits per second on average, but most of my constituents in the rural areas struggle to get speeds of even close to 2 megabits per second, assuming that they can get online at all. It is also worth noting that while the Scottish Government expect 95% of premises to have access to superfast broadband by the end of 2017, in Aberdeenshire, which takes in my constituency, Gordon and West Aberdeenshire and Kincardine, it is predicted that around 11% will still not have access to superfast by that time.
The world is becoming more and more connected. If our communities and premises are not adequately connected, communities will fall further and further behind the rest of the country—indeed, the world, as has already been mentioned. An increasing number of important services, including Government and local government services, are moving online, sometimes exclusively, and with each such service the situation for my constituents gets worse.
Relatively recently, we talked about something called the internet of things. That is rapidly becoming more like the internet of everyone and everything, but sadly not for everyone: only for those with a decent connection. There is simply too much acceptance of the problem.
As always, it is a pleasure to serve under your chairmanship, Mr Howarth. I cannot imagine you expected such a feisty start to your morning.
What we have seen this morning is probably best described as a missed opportunity to discuss sensibly and rationally what is happening across Scotland, particularly in our rural communities, as Conservative Members from Scotland decided they would rather score cheap political points. Every one of us has localised problems around broadband roll-out; when they let the cat out of the bag, what came out loud and clear this morning, from the hon. Members for Berwickshire, Roxburgh and Selkirk (John Lamont) and for Moray (Douglas Ross), is that the issue is actually about power stripping and taking powers away from the democratically elected Scottish Government.
I am not saying the Tories are predictable—although perhaps I am. We heard so much about the SNP’s evil centralisation that is taking place, so I took a quick look at the reality and what the figures actually say. By December 2018, access to fibre broadband in Aberdeen city will be 97.5%, in Aberdeenshire it will be 91%, in Angus 94%, in Dumfries and Galloway 97%, in the Scottish Borders 95%, and in Fife 99%.
Will the hon. Gentleman give way?
I will make some progress and come back to the hon. Gentleman.
If Scottish Conservatives want to talk about grievance and pick an issue with which to bash the Scottish Government, one would think they might find a far better way to deliver it.
I will take an intervention from my hon. Friend first.
Is it not quite something to hear about centralisation from the party that abstained on the Community Empowerment and Renewal Bill, the biggest shift of power from the Government in Edinburgh to ordinary people?
My hon. Friend makes an absolutely excellent point, which goes to the contradiction at the heart of the Scottish Conservatives.
The hon. Gentleman says we are building up grievances. Will he explain that to my constituents who come to my surgeries explaining their frustrations with broadband roll-out? Will he also clarify for Hansard and for this House that the SNP does not want to give powers to local authorities in Scotland? That, too, is devolution, and I am surprised that SNP Members are so opposed to it.
I advise the hon. Gentleman to look at the Community Empowerment (Scotland) Act 2015. If that is not about devolving power to local communities, I do not know what is. We all have a mailbag full of broadband connection problems, but the fashion in which the Scottish Conservatives have behaved is unhelpful and unconstructive and does not reflect the reality.
In many ways I am delighted that digital communication is being debated here today, because it gives me the opportunity to enlighten the House as to exactly what is happening in Scotland and what the Scottish Government are doing in their Digital Scotland Superfast Broadband programme, which will have extended fibre access to 800,000 premises by March 2018, meaning that 95% of Scottish homes and businesses will be connected to superfast broadband. I am sure the whole House, with some honourable exceptions, will welcome that and applaud what the Scottish Government are doing.
This debate allows me to inform hon. Members of the enormously ambitious plans that the Scottish Government have—the R100 plans—that will see every home and business connected to superfast broadband with a USO of 30 megabits per second by 2021.
Can the hon. Gentleman clarify whether the Scottish Government have been empowered to deliver the devolution of powers that he seeks?
In terms of devolving to local authorities?
The hon. Gentleman seeks devolution of power from the Scottish Government to local councils. My understanding is that central Government still have to legislate on that. Is that his understanding?
That is precisely my understanding. It is not in the Scottish Government’s power. I absolutely agree with the right hon. Gentleman.
Unlike the United Kingdom Government, the Scottish Government are absolutely committed to a universal service obligation of 30 megabits per second. Compare that with the 10 megabit per second USO currently on offer from the UK Government.
As I say, we all have problems. My mailbag is absolutely full almost on a daily basis with problems with broadband. That does not mean that we are getting it wrong; it means, as my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) said, that we cannot keep up with demand. People rightly demand to be connected. In my constituency of Argyll and Bute, we are losing population. I have said from day one in my two and a half years in this House that digital connectivity is the key to regenerating rural Scotland. I applaud the Scottish Government’s ambition in rolling out superfast broadband at 30 megabits per second throughout rural Scotland.
I believe a bright digital future awaits those not only in Argyll and Bute, but across rural Scotland. Opposition naysayers will have humble pie to eat in a couple of years’ time when it arrives.
The hon. Member for East Lothian (Martin Whitfield) made a useful and thoughtful contribution highlighting the problems and challenges that exist in his constituency. It is a tale I am not unfamiliar with. I echo his call, as I have in the past, to end the silo thinking. There must be a joined-up approach, because digital exclusion will be a serious problem if we do not get this right.
The hon. Member for Angus (Kirstene Hair) made a remarkable contribution and blamed the SNP for the historical copper wiring in the BT network. What can one say? My hon. Friend the Member for Kilmarnock and Loudoun rightly highlighted the historical failure of the UK Government to sufficiently invest in Scotland. He also highlighted the problems facing roll-out in rural Scotland.
The hon. Member for Moray repeated the power- stripping narrative of the hon. Member for Berwickshire, Roxburgh and Selkirk. If he thinks the Scottish Government should be stripped of their powers, does he think the UK Government should be stripped of their powers and that those powers should be devolved to English local authorities?
Unbelievable. The spokesperson for the third biggest party does not even realise that in England it is local authorities that deliver. It is because of their failure in Scotland that we should replicate what is happening in England and devolve further to local authorities. I cannot believe the SNP would object to that.
I absolutely do object to it. The Scottish Government, as we have seen, are doing an excellent job in rolling out across Scotland. The Scottish Government are delivering for Scotland.
I have less than two minutes left, so I will be quick and sum up. I firmly believe the Scottish Government are doing their best for Scotland. If the Tories would have us believe that they are the saviours of Scottish rural broadband, can the Minister explain why, since 2014, the UK Government have contributed only a derisory £21 million to support the expansion of Scottish fibre broadband—a figure that is less than that awarded to the counties of Devon and Somerset. Knowing full well that the Scottish Government were planning a USO of 30 megabits roll-out programme, why did the UK Government not even have the courtesy to inform the Scottish Government of their own plans to roll out 10 megabits per second, leaving the Scottish Government to find out from the pages of the press? And why did it take 10 letters over 18 months from the Scottish Government to the DDCMS before the Minister finally met Minister Fergus Ewing, a meeting that took place just two weeks ago?
Finally, when GigaPlus Argyll, the community broadband company on Mull in my constituency, was left high and dry when its contractors went into administration, why were my emails and phone calls totally ignored? They were not even acknowledged by BDUK when I was trying to secure an urgent meeting to salvage something from the wreckage to try to save that project. Why, when I made an appointment to see the Minister himself about the crisis in GigaPlus Argyll, did he not turn up, with not so much as an apology or an offer to reschedule? Scotland is doing a great job in rolling out digital broadband, and I commend the work that the Scottish Government are doing.
It is a great pleasure to serve under your chairmanship, Mr Howarth; thank you for preserving a modicum of order this morning as tempers rose. I congratulate the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) on securing the debate. He is right that in the 21st century, broadband is not a luxury but an economic necessity. He eloquently argued that it is integral not simply to the way that we live, but to the way that we want to work. His timing is well chosen, because of course later this afternoon the Chancellor will have to stand up in the Chamber and try to explain to us all why a Conservative Government, and previously a Conservative-led coalition, have presided over a slower recovery after the financial crash than that following the great Wall Street crash of 1929.
As we rally behind a better future, growing the digital economy is clearly one of our most important opportunities. There are about 1.6 million people working in the digital economy today, but on average they are paid about 40% more than the national average. If we want to raise productivity growth rates and give our country a pay rise, we have to accelerate the roll-out of the digital infrastructure. I am sure he will not tell us this, but I very much hope that the Minister has been massively successful with his right hon. Friend the Chancellor and that there will be plenty of good news about broadband this afternoon.
Although the Government are pushing for flexible working time for parents of young children, the lack of decent broadband is grossly affecting people’s ability to work from home. Does the right hon. Gentleman agree that we need a UK-wide project—in other words, across Scotland, Wales, Northern Ireland and all of England—to end the isolation of rural communities and to increase jobs among small and medium-sized businesses and enterprises that need that rural broadband connection?
I completely agree, and some hon. Members are luckier than others in the resources that they have been given to deliver that vision. Over the coming years, we will be extremely interested to see what Northern Ireland has secured and delivered with the £1 billion that it was offered to prop the Government up and keep them in power.
We have heard a shocking litany of complaints today from the hon. Members for Angus (Kirstene Hair), for Kilmarnock and Loudoun (Alan Brown), for Ochil and South Perthshire (Luke Graham), for Moray (Douglas Ross) and for Banff and Buchan (David Duguid) about the very high levels of dissatisfaction among their constituents and the very poor levels of service. I know that those complaints will have made a big impression on the Minister. The call made by the hon. Member for Berwickshire, Roxburgh and Selkirk for devolution of further power to councils raises an interesting point. My understanding is that the Scottish Government are not empowered to deliver that at the moment; it requires central Government to legislate. Perhaps the Minister will have more to say on that when he winds up; he may correct me, if I have grasped the wrong end of the stick. The challenge was brilliantly summarised by my hon. Friend the Member for East Lothian (Martin Whitfield), who described not only how superfast broadband is essential to the way that we want to live today, but how people are now scurrying between the wi-fi of various cafés to run their businesses. That is surely not the basis of the economic rebound that we want to see in the years to come.
I want to touch on three points in the debate, and they are about infrastructure, take-up and the way that we approach this policy problem. The bad tempers that we have heard this morning really illustrate that a new approach will be needed if we are to deliver for the people of Scotland over the coming years. On infrastructure, the state of affairs was well summarised. It is quite clear that broadband access is worse in Scotland than anywhere else in the United Kingdom. Earlier this year, Which? found that the worst three local authorities for broadband access are all in rural Scotland. The present consensus that a lack of broadband access is harming economic growth is particularly troubling. Last week, the National Housing Federation reported:
“Rural connectivity to broadband...limits the number of people willing to start and run businesses from rural areas.”
That was at the heart of the argument presented by the hon. Member for Berwickshire, Roxburgh and Selkirk today. It is a real worry, and I hope that the Minister will explain to us what the Government are going to do about it.
The poor state of infrastructure, though, is only half the story. Often, these debates centre on theoretical access, which is quite different from the access that people actually receive. The headlines that I saw said that 83% of properties in Scotland can access superfast broadband, but it is much poorer in rural areas, where 46% can access superfast broadband. Furthermore, when people are asked, as they have been by Which?, about the kind of service that they actually receive, the estimates are that two thirds of rural connections receive an average speed of below 10 megabits per second, which is of course much lower than the Government’s universal service obligation. I understand the presentational issues that all Governments have to conjure with, but we have to ask ourselves whether we are doing the debate any service by continuing to talk about theoretical access speeds when we know that problems between the cabinet and the home mean that the rates actually received are far less effective than those advertised.
My second point is on the take-up of broadband services, which is much lower in Scotland than elsewhere in the country. There is a question about whether that is something to do with awareness and can be remedied by Government here in Westminster or, indeed, in Scotland. The broad point that should emerge from today’s debate is that there is no single actor in this policy environment that will make all the difference; a very different kind of collaboration will be required in the years to come. We need to create a policy environment in which, as my hon. Friend the Member for East Lothian said, players can join in delivering these kinds of services. In some parts of Scotland, it will be much more effective for co-operative organisations to get stuck in and deliver the service in completely new ways. Many say to us that there is just not an encouraging policy environment for that at the moment.
My final point is about the poor level of collaboration between the Conservative Government here in Westminster and the Scottish National party Government in Scotland. We saw something of the character of that relationship this morning. It is not good for delivering progress and an awful lot more energy needs to be put into collaborating. It is just not appropriate for the Scottish Cabinet Secretary for the Rural Economy and Connectivity, Mr Ewing, to have to take the extraordinary step of using a Scottish parliamentary answer to demand action on broadband from the UK Government. If that is how relationships are now being conducted, I am afraid that both sides have something to answer for.
Labour has sought to strengthen universal service obligations. Indeed, our amendments for a universal service obligation of 30 megabits per second passed in the Lords; it was unfortunate that the Government overturned them in the Commons. We think that a universal service obligation of 30 megabits per second should be delivered by 2022. That was the position set out in our manifesto, and we hope that the Chancellor has heeded that advice and will deliver something akin to it this afternoon.
Let me conclude by echoing the excellent words of my hon. Friend the Member for East Lothian, who said that new inequalities must not be allowed to emerge in the digital economy. This is an area of economic progress that is simply too important for anyone to be left behind; our country simply cannot afford it. We look forward to what the Minister will tell us about remedying the problems that have been eloquently described and set out by the hon. Member for Berwickshire, Roxburgh and Selkirk this morning.
This has been a robust debate and I want to answer the points that were made very clearly. The debate was initiated by my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont), and I am delighted that he and the other new Scottish Conservative MPs have done so much over the last few months to put Scottish broadband right under the spotlight. It deserves that attention, because it deserves to be better. I look forward to visiting my hon. Friend’s constituency very soon, as he asked. I will address all the questions that he raised.
I also agree with much of what the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said, not least that digital is vital for the future economy, and I agree with my hon. Friend the Member for East Renfrewshire (Paul Masterton) that inequalities must not be allowed to emerge. The right hon. Member for Birmingham, Hodge Hill called for accurate descriptions of speeds actually available, and I look forward to progress on that front coming very soon.
My hon. Friend the Member for Angus (Kirstene Hair) argued very strongly that broadband is no longer a “nice to have” but a modern necessity. She explained why it is so important, and how disappointed she and her constituents are that delivery of superfast broadband in Scotland has not been good enough. We need to see an improvement. I wanted to set that out today.
In Scotland, around two-thirds of premises have access to superfast broadband through commercial roll-out by BT, Virgin and others, but one third cannot get it through that commercial roll-out, so after 2010 we introduced a subsidised superfast broadband programme in Scotland, as we did across the rest of the UK. We gave £100 million of UK taxpayers’ money to the Scottish Government to deliver that programme. Today, more than 92% of premises in Scotland now have access. That is good news, but it is well short of the Scottish Government’s target of 95% by the end of the year. Unfortunately, Scotland’s roll-out of superfast broadband is behind the pace of the rest of the UK, where access is now more than 94% and on track to hit 95% by the end of the year. It is also behind Wales, where we also gave funding after 2010, and where the Welsh Government have not bungled the delivery like the SNP Government have in Scotland.
Will the Minister explain how the allocation of £100 million came about? That £100 million is roughly one third of what is needed to achieve the 95% target, whereas the £520 million allocation to England is half. How did that funding formula come about?
The Scottish Government got more than their fair share because they had a higher proportion needing supported rather than commercial access.
Until now, the Scottish Government have been happy to take the credit when things have gone right, but pass the buck when things have gone wrong—we saw more attempts at that this morning—so I am going to set out what has been going on. In 2014, we gave the Scottish Government more than £20 million for phase 2 of their superfast roll-out. Three years later, they have not only failed to sign that contract, but have not even opened the procurement yet. The Scottish Government are three years behind the fastest English local authorities in contracting for their roll-out.
In fact, Scotland is behind every single English local authority, behind the Welsh Government, behind Northern Ireland in getting going on phase 2 of its broadband roll-out. My own county of Suffolk, for example, has not only contracted phase 2; it has already contracted phase 3. There is a similar story in most other parts of the country—but not in Scotland. Worse, the Scottish Government project will not have contracts signed until the end of next year, which will be after the roll-out of phase 1 has finished, so they risk broadband delivery companies downing tools after completing phase 1 of the project, before phase 2 is ready to go. Elsewhere in the country, they got phase 2 going before the end of phase 1.
It is a great cause for regret that the Scottish Government have for more than three years sat on £20 million of UK taxpayers’ money, which could have been used to deliver broadband for the people of Scotland. The hon. Member for Argyll and Bute (Brendan O'Hara) raised the question of that £20 million. We offered it in 2014. A further £60 million is being returned from the first contract because of the level of take-up in phase 1, and another £14.5 million from underspending on that contract, and £30 million from city deals. In total, there is £125 million of UK taxpayers’ money waiting to be spent in Scotland—waiting for the Scottish Government to get on with it. So you can see why we and the people of Scotland are rightly frustrated at the Scottish Government dragging their feet.
Throughout the process, BDUK has offered technical support and assistance to Digital Scotland to try to get things going, but it seems that the Scottish Government’s fixation with pipe dreams of independence has distracted them from the job of delivering to the people they are meant to serve. It is part of a pattern.
As a result of our experience of delivering superfast broadband through the Scottish Government thus far, we have decided that for the next generation of broadband technology—full fibre—we will instead deal directly with local authorities across Scotland, as we do in England. We have already had a fantastic response, and I am looking forward to going to Aberdeenshire next week to see their pilot of a local full-fibre network project and to see progress on a test bed for 5G. I look forward to working constructively with Digital Scotland to deliver on the next steps of the superfast project and with local authorities across Scotland to deliver the next generation of technology that is coming rapidly.
The Minister said a moment ago that BDUK is on hand to offer technical solutions. Perhaps he is coming to my direct question on the problems of GigaPlus Argyll. BDUK offered no solutions; it absolutely abandoned GigaPlus Argyll and ignored me, as the Member of Parliament, on numerous occasions.
The hon. Gentleman should have been talking to Digital Scotland, because we gave the money to Digital Scotland to deliver, and for three years it has sat on that money and done nothing with it. What we need from the Scottish Government is not noise, but action for the thousands of people who have seen nothing but buffering while the Scottish Government have sat on their hands and sat on the money.
So, for clarity, is the Minister saying that BDUK has no role to play in the position of GigaPlus Argyll, despite it having been set up through BDUK? Is he saying that BDUK has no role to play for an elected MP to contact?
In future, BDUK and the UK Government will be delivering our full-fibre, next generation technology directly to local authorities in Scotland, instead of through the Scottish Government, because we have been so disappointed with the failure of the Scottish Government to deliver on money that has already been allocated.
Aberdeen has suffered from poor digital connectivity for too long. UK Government grants of up to £3,000 to get gigabit broadband are very welcome. Does the Minister agree with me that that investment will help support Aberdeen to continue to compete on the international stage in areas such as oil and gas, food and drink and life sciences? Does he share my belief that Aberdeen City Council would do a much better job of delivering that locally than the SNP Government in Edinburgh?
I wholeheartedly support that and I look forward to working with local authorities right across Scotland, of whatever political persuasion, as we have with local authorities across England whatever their political persuasion, and as we have successfully with the Labour Welsh Government, who have delivered better for Wales than the Scottish Government have delivered for the people of Scotland. This is not about party politics; it is about how to best get decent broadband to the people. That is what I care about. We have had failures from the SNP Government, so we are going to go direct to local authorities, and I look forward to working with Members right across Scotland to make sure we can get that delivery.
In the meantime, of course I look forward to working with Digital Scotland on the contracts that are already in place to get to the end of that roll-out. I plead with the Scottish Government to get a move on. We stand ready to help get broadband to the people of Scotland. We will do everything we can to make that happen, but our patience with the Scottish Government when it comes to the next generation of delivery has simply run out.
I am very grateful to all Members who have contributed to today’s debate and am particularly pleased to hear the Minister’s comments about involving local councils in the delivery of broadband in Scotland, after the huge failure of the Scottish Government.
It is notable that most of the Members who contributed to the debate all agreed that the SNP Scottish Government have failed miserably in the delivery of superfast broadband in Scotland. We had the pleasure of the company of three SNP Members for most of the debate. I think it is always telling that when the SNP are under pressure, the call goes out for troops to come and help them, and they fill up their Benches to give them some support—but they have all gone off again. As I said, I am very grateful to have had this opportunity to raise such an important issue for my constituents.
Question put and agreed to.
That this House has considered the roll-out of broadband to rural communities in Scotland.
Durham Tees Valley Airport
I beg to move,
That this House has considered the future of Durham Tees Valley airport.
I applied for this debate to give support to Durham Tees Valley airport and the Peel Group, which plans to grow the airport. In the last decade or so, Durham Tees Valley has faced major difficulties, as have many other regional airports across the country. It has had to face the fact that the aviation industry has radically changed.
Durham Tees Valley airport started life in 1941 as an RAF base originally called Goosepool. In 1964, it became Teesside International airport, and it was renamed Durham Tees Valley airport in 2004. In 2003, the Peel Group purchased a 75% share in the airport, with the six local authorities sharing a 25% stake; today, it owns 89%. The Peel Group is a private sector investment group with a strong presence throughout the north of England.
In 2006, passenger numbers peaked at 910,000, with BMI flying a regular service to Heathrow. In 2007, the global recession hit the airport, as it did everywhere else. A year later, Flyglobespan, an airline using the airport, went into administration, which caused passenger numbers to fall by thousands. In 2009, BMI withdrew its Heathrow service, and passenger numbers fell from 645,000 to 288,000 in just 12 months. Durham Tees Valley was not the only regional airport to lose such a connection, as airlines sought to concentrate their remaining slots at Heathrow on more lucrative international routes. Passenger numbers today are between 130,000 and 140,000—almost a tenth of what they were a decade ago.
KLM’s flights to Schiphol three times a day and Eastern Airways’ flights to Aberdeen now account for the bulk of passenger numbers. The airport is currently making a loss of between £2 million and £3 million a year.
My hon. Friend mentions the airport’s losses. The Tees Valley Mayor’s pledge to buy the airport has captured voters’ imagination. He told me he can do that without involving taxpayers’ money. Does my hon. Friend agree that it is now time for the Tees Valley Mayor to publish his business plan to buy the airport, complete with numbers and sources of funding, or just be honest about it and admit that he cannot deliver that promise?
The Tees Valley Mayor has a few questions to answer on this issue. I will come to that matter later in my speech, but I am pleased that my hon. Friend raised it.
Despite the losses and the low passenger numbers, there is still a strategic role for regional airports. There is a strong correlation between regional GDP, employment in air-intensive industries and aviation connectivity. Regional airports provide a major gateway for visitors to the region.
Does my hon. Friend acknowledge that the workers at the airport have sacrificed pay and conditions and will soon sacrifice their pensions as part of the efficiencies to keep the airport going?
My hon. Friend raises a significant issue. About 600 people work at the airport, and we all want to ensure that they continue to have a job.
My hon. Friend and I have worked together closely on this issue. I represent Newcastle International airport, which is also a big employer in my constituency and the region. Does he agree that the links to Heathrow from our region are vital, so the Government must get a move on? We look forward to hearing a proper announcement that this will go ahead in the near future.
That is another valid point that I will come to later in my speech.
My hon. Friend is being very generous in giving way. I recently met a team from the Great North Air Ambulance Service, which is based at the airport. So far this year, it has responded to 400 calls in an area covering 8,000 square miles in the north of England. Will my hon. Friend join me in commending the vital work that it does in serving our communities? Does he agree that we should continue to do what we can to support that great charity?
The air ambulance service, which is based at the airport, provides a great service for the area. Where I live, I can sometimes see it flying over to get to an incident. It is a great charity, and I want to see it grow and prosper there.
Regional airports support the business community, whose key needs from regional air services are an increase in destinations and the frequency of flights to major travel hubs such as Schiphol, access to major markets, and links to London and the south-east, especially Heathrow. A third runway at Heathrow airport is key for regional airports such as Durham Tees Valley, which has been listed as one of the regional airports that will have access to it.
Durham Tees Valley airport plays a much wider strategic role in the region. It has been consistently recognised as a key asset for the region in regional strategic plans and national reports such as Lord Heseltine’s independent report, “Tees Valley: opportunity unlimited”. The report also highlighted the importance for the Tees Valley economy of having international connectivity with its global trading partners, and highlighted the opportunities that the airport brings for logistics, freight and wider aviation-related services.
Durham Tees Valley can drive a major employment cluster of both aviation and non-aviation businesses in and around the airport. Regional airports typically have the space, capacity and environment to host such businesses in a way that larger passenger-focused airports cannot. Durham Tees Valley’s 800-acre site, known as Aero Centre Tees Valley, is a prime example of that. To unlock those investments, the airport needs the support of local and national leaders and public sector partners to create the right conditions for investment in public infrastructure. I would love to hear from the Minister what more the Government can do to help.
As part of that connectivity, the airport needs a proper rail service. The railway line actually skips the airport, and there is no proper service serving it. Does my hon. Friend agree that the Minister can turn his attention to that as we look at rail infrastructure across the piece?
Again, my hon. Friend pre-empts something I am going to say in my speech. I will mention the rail link, because it is very important.
The airport can attract investment while taking into consideration trends in the UK regional airport sector. In the eight years between 2007 and 2015, the north-east of England was badly impacted by the global financial crisis, which affected the region’s economy and subsequently its demand for air travel. The north-east of England was the worst hit of all UK regions. Air traffic in 2015 was almost 1.7 million passengers per annum lower than in 2007 —a 26% reduction. The airport lost 592,000 passengers, representing about 80% of its traffic, and Newcastle airport lost about 20% of its traffic. The same trend was seen across the UK, particularly at smaller regional airports, as capacity was reduced or redeployed to major airports. However, no region was affected as much as the north-east.
This is not just about the north-east and Durham Tees Valley. This issue affects other regional airports throughout the country, but to a lesser extent. Passenger numbers have fallen dramatically in several regional airports. Prestwick airport lost more than 1.1 million passengers between 2009 and 2016—a 63% loss. Cardiff airport lost more than 280,000 passengers, and Bournemouth lost more than 200,000 passengers. The notable exception is Leeds Bradford, which saw significant growth over the period, achieved by heavy incentivisation, which resulted in ongoing losses. The last set of accounts, published in March 2016, showed a loss of £3.8 million.
In addition to suffering reductions in the passenger and freight tonnage numbers, a number of regional airports have encountered more fundamental problems over the period. In 2007, loss-making Plymouth closed. In 2013, the Scottish Government took loss-making Prestwick into public ownership. Since then, £40 million of public money has been invested in the past four years, but that has done nothing to stop the reduction in passenger traffic and continuing losses of about £9 million. Loss-making Cardiff was also taken into public ownership by the Welsh Assembly that year. Between 2009 and 2016 passenger numbers at the airport fell by 280,000, or 18%. In 2014, loss-making Manston closed, as did loss-making Blackpool as a full-service airport. For me, therefore—this is a key point—regional airports must seek a diversification strategy to ensure financial sustainability and to continue their wider role as economic catalysts, supported by public sector investment and infrastructure. That is the approach that the Peel Group is taking.
Besides KLM, Eastern Airways and Loganair, other users of the airport include Cobham Aviation Services, which has a training and testing contract with the Ministry of Defence; the Serco International Fire Training Centre, which is one of the leading aviation fire training centres in the world and has a 20-acre dedicated training site with simulators and the largest confined-space rigs in the UK; TNT, which operates a logistics operation out of a dedicated hangar; Thales, which is on site to operate delivery contracts related to air traffic provision for the armed forces; and Sycamore Aviation, which provides aircraft end-of-life services. Larger ad hoc passenger flights occur sometimes in the form of military charter flights, carrying troops based at nearby garrisons. A number of general aviation flying schools operate from Durham Tees Valley, using two or four-seat light aircraft. The number of business aviation flights is growing steadily, operating aircraft types that range from single-engine private to large transatlantic business jets. More than 80% of the operating costs of an airport are fixed, meaning that regardless of the passenger numbers the airport operation has a significant cost base.
The Airports Council International reports that in Europe 73% of airports handling fewer than 1 million passengers and 59% of those handling fewer than 3 million passengers are loss making. Recognition of challenging times and the need to prevent Durham Tees Valley from becoming yet another casualty led to the development of the airport master-plan by Peel. Published in 2014, it is designed to chart a path for the airport to 2020 and beyond.
Securing the future of aviation services is dependent on accepting the realism and rationale set out in the master-plan. In the plan, Peel understands that DTVA needs to concentrate on those aviation services in which it has strength, including building on those services that are important to the business community, such as flights to Schiphol and Aberdeen. A well-established general aviation centre provides scope for growth and, since the launch of the new master-plan, new companies have been attracted.
In 2015 Peel launched the Aero Centre Tees Valley, which is the umbrella brand showcasing the development opportunities available throughout the airport site. The Aero Centre offers a wide range of land and property opportunities and markets opportunities for aircraft hangarage of 290,000 square feet and general employment space of 3.5 million square feet. The Aero Centre is connected by rail and by the UK’s largest exporting port and its fastest moving commuter road network, which is on our doorstep.
Central to the strategy for aviation operations is the need to look at all possible means of generating other income streams by exploiting the potential of one of DTVA’s main strengths, which is its extensive land holdings. Airports that have succumbed to closure have not had that option and, without it, closure would almost certainly have become a necessity for Durham Tees Valley. To help finance the master-plan, provision was made for housing development on land north of the airport. The sale of the land for more than 300 houses will generate millions of pounds for Peel, 100% of which will be reinvested in the future of the airport.
Will my hon. Friend give way?
I would love to get on, because I want to hear from the Minister.
The focus is on the north side of the airport, but the south side has great potential too. Peel believes that its master-plan has the potential, over time, to generate about 6,000 jobs. I believe that Peel has a plan, and it has shown commitment to the airport, which is proved by the investment of £38 million over the past 14 years or so. Peel has shouldered the airport’s losses while investing in capital infrastructure. The fact that it is prepared to invest 100% of the money raised from the land sale for housing proves its commitment for the long term. It is being realistic when it says that the focus of its air passenger strategy is those routes that provide for the business community, because that is where the strength is now, but at the same time it is doing what it can in a difficult market to attract leisure flights to the airport.
I believe that, for all the frustration the local community feels about the airport, there is a route out of the problems that it has faced. The master-plan is robust, and the airport supports 600 jobs, contributes £37 million gross value added to the Teesside and Durham economy and is a catalyst for economic prosperity.
Some have said that DTVA has been allowed to decline. As I have shown in my speech, however, it is not alone in the problems it has faced. Some say that fresh thinking is needed, but I believe that Peel’s master-plan is evidence of that. Some say that a practical and pragmatic approach is needed, but Peel is showing that too. I do not agree with those who say that the answer to all of the airport’s problems is to take it back into public ownership but, apparently, that is the view of the newly elected Conservative Mayor for Tees Valley.
First, the airport is not for sale. Secondly, Peel has invested and covered the airport’s losses of £38 million since 2003. The airport loses between £2 million and £3 million a year so, if a private sector company is willing to carry that financial burden while remaining committed to securing a sustainable future for the airport, why transfer the burden to the taxpayers of Tees Valley and Durham? I have no idea how much the airport would cost to buy, but I imagine that Peel would want some compensation for the millions of pounds it has already invested in the site. As the local MP, I have worked with Peel for the past 10 years, and they have not been easy times for the airport or regional aviation in general.
I am sick of the airport being used as a political football. It is time for grown-up politics. I want to see the airport work with the public sector, but I think we should support the owner in its plan and not seek to undermine it. I would say to the Mayor for Tees Valley: draw a line under any idea of nationalising the airport—as I have said, public ownership is not a panacea—and instead work with the Peel Group, become an ambassador for the airport and help us to secure its future. What I have learned in this job, if we really want to do something big for the local area, is not to grandstand, not to promise what cannot be delivered, and not to take the people of Tees Valley and Durham for granted.
I will work with anyone, including the Mayor, to secure the future of Durham Tees Valley airport, but the idea of public ownership is fanciful and I think that the Mayor knows it. He should work with me to help the airport succeed, because I believe that Durham Tees Valley is “flying for the future” and I want the people of Durham and Tees Valley to be a part of that.
It is a great pleasure to serve under your chairmanship, Mr Howarth, and to reply to this important debate. I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing it.
The hon. Gentleman’s enthusiasm for Tees Valley airport and the region as a whole is noted and is worthy. It is an enthusiasm shared, as he said, by the Mayor, who has been a great champion of the economic interests of Tees Valley and in particular of the airport. I will speak more about that in a moment, but I pay great tribute to the Mayor and to his work in that respect. I know that he will work with colleagues, as the hon. Gentleman suggested, of all political persuasions. Such matters extend well beyond a party political divide; they are about doing our best by the local people and continuing to support the local economy.
My own interest in Tees Valley, although I do not come from or represent that part of the world, I suppose began when I was in a previous ministerial job.
The airport is known as Durham Tees Valley.
Yes, I know; that was not lost on me. As I said, my own interest in Tees Valley began when I was in an earlier ministerial role and met some of the employers that the hon. Gentleman speaks about, in order to discuss their needs; I think I was the Minister responsible for skills at the time. I am well aware of the contribution that that part of our country makes to the economy as a whole, as well as to the locality. I understand the dynamism present there and the connections to other places and other countries—the international aspect that he reprised in his speech. Of course, central to all that are good communications and good infrastructure, the ability of both people and goods to travel to and from that place.
The hon. Gentleman is right to say that in that context the decline in services at Durham Tees Valley airport in recent years is a matter of regret. There is no doubt about that, as he said. I have the opportunity, therefore, to respond on the Government’s behalf to the wider points that the hon. Gentleman made about regional airports, because he mentioned that the issue is not wholly about Durham Tees Valley airport but about regional airports and their relationship to our aviation strategy. I want to say a few words about that at the outset and come back to the specifics that he mentioned.
Will the Minister give way?
I will; I am about to begin my exciting account of our views on regional airports, but perhaps the hon. Gentleman will contribute to that.
I am most certainly looking forward to that. Does the Minister agree that Heathrow, with all its ambitions for the third runway, could actually help regional airports, particularly Durham Tees Valley, by saying now that it will ensure that we have slots from Durham Tees Valley into Heathrow?
Yes; connectivity matters and I will speak about that in a moment. The hon. Gentleman made his point forcefully and put it on the record, which I am sure he wanted to do.
My view is clear: airports across the UK, including those in north-east England, make a vital contribution to the growth of regional local economies, as well as providing convenient means by which passengers can travel to other locations in the United Kingdom and other airports, as the hon. Gentleman suggests. They encourage investment, potential for trade and, as he and others have said, valuable local jobs, a base for the development of skills—many skills related to aviation are provided in those local airports—and they provide a means by which we can balance our economy. They can allow the growth of localities that are distant from south-east England but are none the less vital to our economic wellbeing, so they play many roles.
We have 40 commercial airports across the country, which ensure that 80% of the UK’s population are within 90 minutes of at least two airports. The UK has direct flights to over 370 destinations in more than 100 countries across the world. Those connections—this is the point that the hon. Gentleman made emphatically—provide huge benefits for the cities and regions of the airports that they serve. The hon. Gentleman will know, because he is interested in the subject, that the Government continue to recognise that importance. A priority for the aviation strategy that we are developing will be to ensure that the aviation sector continues to provide and improve connectivity across the regions and nations of the UK.
The hon. Gentleman will also know that this summer we published a call for evidence on the development of that strategy. We sought views on those very issues and we want to develop a strategy that takes full account of the role of airports across the country. Of course, it is true that there are major international airports in our kingdom, but they are not all that matters. The other airports matter, too—for all the reasons that the hon. Member for Sedgefield gave, and that I have amplified. We received a large number of responses to the call for evidence, which we are currently analysing, and we will consult further on the issues raised—including how to encourage connectivity—for exactly the reasons that have been argued. It is very important that an aviation strategy thinks strategically about the effect of connectivity not only to local economies but to our economy more broadly.
In those terms, I welcome this debate as a further contribution to that consideration. I invite hon. Members in Westminster Hall and others, more widely across the House, to contribute to that consultative process. It is really important that we base what we do on the understanding by different Members across the House of the effect of connectivity—particularly access to airports—in their localities and their regions. I recognise and value that.
Tees Valley airport, as the hon. Gentleman said, has enjoyed a level of investment, notwithstanding the challenges that it faces. Only this month, as he knows, a £250,000 terminal improvement programme was completed. That followed the announcement of the new services by Loganair, which will run weekly flights between Durham Tees Valley and Aberdeen, as well as non-stop flights six days a week linking Durham Tees Valley with Norwich. I am pleased to note that the airport’s public initiative, flying for the future, which highlights the airport’s key role in the Tees Valley area, shares some of the ambitions that the hon. Gentleman set out.
There is an interesting history of the particularity of the arrangements prevailing in respect of the governance of Tees Valley airport—Durham Tees Valley airport: I do not want to undersell Durham, as Durham is etched on my heart, as the hon. Gentleman probably knows. The airport was sold by the local authorities, for £500,000 I think, back in 2003 if my memory serves me right. The five local authorities concerned are still represented on the board, are they not? I suppose that they must be as distressed by the loss being made annually as anyone else, given that they are board members and share some responsibility for the airport’s governance—although they are minority shareholders, in the way that he described.
At the end of the day, what is currently happening at Durham Tees Valley airport clearly is not working. The airport is making a loss and it is not fulfilling some of the potential that the hon. Gentleman wishes for it—as does the whole Chamber, I guess. The Mayor has been in discussions with the current owners, Peel Airports. In the end, it is a commercial matter. Being mindful of the debate, I took the trouble to ring the Mayor yesterday to take his view on the issue and to ask what he felt was the Government’s role in it. He made it very clear, as I anticipated that he might, that it is not a matter for the Government, but very much a local matter, and it has to be settled locally. The Government have no competence in it. Of course, it is right to assume that they take an active interest in it, because it relates to the development of the strategy that I have described. As we care about regional airports, we would be bound to have an interest in it, but it is not for us to give power to local people to make decisions and then for me to impose what I think on local people. That would be quite wrong and no one in Westminster Hall today would want me to do that.
Perhaps the Minister has answered my question before I have posed it. The local authority owns about 12% of the airport, but in the Minister’s discussions with the Mayor, did he offer the Mayor any advice on his grand plan to buy the airport, at the cost of tens of millions of pounds? Assuming—judging by his speech a few seconds ago—that the Minister did not offer him advice, what advice would he offer him now?
I am not sure that it would be appropriate for me to advise the Mayor on a local commercial matter. He did not seek my advice and I think that it would have been impertinent of me to offer it. I recognise that the Mayor has already made an outstanding contribution to the life, health and wellbeing of local people in Tees Valley, and I have every confidence that he will continue to do so. Indeed, we have already said that the airport matters—that is the essence of this debate. It is great that both local Members of Parliament, regardless of political party, and the Mayor are united, not only in their determination to do right by local people, but in their clear view that the airport is critical to local wellbeing.
Will the Minister give way?
I do not normally take interventions from Members who are not dressed properly, but on this occasion—because I am feeling particularly generous—although the hon. Gentleman clearly is sartorially challenged, I will hear from him.
I thank the Minister for his generous comments. Does he therefore agree that it is time, as the hon. Member for Sedgefield (Phil Wilson) suggested, to draw a line under the idea that anyone will buy back Durham Tees Valley airport, and that we should all work together with the Mayor to get behind Peel’s plan for the future?
It would be vital that any deal done worked for all parties. I am sure the Mayor is very conscious of that—clearly, that has to be the case. In the discussions that he is having with the owners, with the Tees Valley Combined Authority and with other interested parties, I have no doubt that the interests of the locality will be at his heart; they always have been and I guess that they always will be. The Government are determined to ensure that regional airports thrive, and Durham Tees Valley has to be very high on that list because, as I have said, I am a great admirer of the local people and the local economy, and I know that we made the right decision on their behalf in that cause.
Question put and agreed to.
[Mike Gapes in the Chair]
I beg to move,
That this House has considered the human and financial costs of drug addiction.
This is an expansive subject, with a huge number of facets, and is covered by a huge amount of UK and international data. Pleasingly, two Members raised drugs issues at Prime Minister’s questions today. They probably sought to steer us towards their views about liberalisation and legalisation, which I must say are somewhat the opposite of mine.
I thank the Minister for being here to respond to the debate. This issue cuts across many Departments. It is not just a health issue; it cuts across policing, justice and home affairs, health, border matters and education, and it is even an issue for the Treasury. I thank the many organisations that supplied data and their interpretations in advance of this wide-ranging debate, including the Royal College of Psychiatrists, Release and the House of Commons Library, which has considered data from a huge variety of sources.
I congratulate the hon. Gentleman on securing this debate. He talks about data. Does he agree that the information from the Library about the increase in male mortality from drug misuse, particularly in the past five years, is alarming and demonstrates the urgent need not only for this debate but for action to be taken after it?
The hon. Gentleman highlights one of the key tenets of my speech. I am most concerned about death rates.
I thank the Library for its diligent service; it is an invaluable source of information. I also received information from Smart Approaches to Marijuana, or SAM, a US agency that has done a lot of work on how decriminalisation of cannabis in particular has affected various states in the United States. I consulted papers by the National Treatment Agency for Substance Misuse and by the Advisory Council on the Misuse of Drugs, and the National Audit Office evaluation of the Government’s 2010 drugs strategy, which is a seven-yearly document. I also consulted the Government’s July 2017 drugs strategy.
The real trigger for me calling this debate was the rising death toll in the USA due to the use of opioids and their derivatives—notably fentanyl, with which I am sure many hon. Members are familiar—whether they are legally obtained or illicitly produced. Some 64,000 drug-related deaths were recorded in the US in 2016, an increase of just over 21% from the year before. There was a 33% rise in one year in the state of Ohio alone. There were 4,050 deaths in Ohio, which has a population of just 12 million. To give Members an idea of scale, the entire US military losses over the 20 years of the Vietnam war were a fraction under 60,000. Scaled up to the UK population, Ohio’s current death rate would represent 22,000 deaths in the UK each year. Thankfully, the figure here is lower; according to the last reported data, there were 2,677 deaths in 2015.
Does the hon. Gentleman share my concern that Wales is disproportionately represented? Wales’s population is 5% of the United Kingdom’s, but 10% of those drugs deaths took place in Wales. Will he join me in asking the Minister whether changes to UK legislation are needed to allow devolved Governments to introduce harm-reducing measures, such as safe injecting facilities, in areas with a high concentration of injecting drug users, such as Wrexham?
I thank the hon. Lady for that intervention. She has put that issue on the record, and I am sure the Minister will address it later. I will provide some data for Wales that may assist her.
My concerns are somewhat summed up by that old adage, which is usually used in relation to financial markets: when the US sneezes, the UK catches a cold. I am concerned that we may be on the brink of a fentanyl epidemic here in the UK. I want to highlight both the human costs and the financial costs of drug addiction to the UK economy and to the people of this country.
The human costs are fairly obvious. Everyone will have their own points to add to this list, but they include: physical and mental health issues; disruption to families; the effects on children and their life chances, including the increasingly clear link between drug use during pregnancy and various autism spectrum conditions and physical deformities in children; the obvious spread of disease; the often desperate measures that people take to try to raise cash, resulting in prostitution and all manner of human degradation; forgone opportunities and the essence of all that someone could be in life being extinguished; and, of course, premature death.
The hon. Gentleman is right to highlight the fact that our drugs policy in this country is failing. Does he not think that now might be the time for a shift in drugs policy and for us to focus not on criminalisation but on care and health? Should that not be the focus of our drugs policy?
The hon. Gentleman is right. I have an expansive speech to make, which I think will cover all the issues well. Perhaps he would like to come back in with those points later.
I chair the all-party parliamentary group on the harmful effects of cannabis on developing brains and have a long interest in that topic. The APPG’s principal aim is to raise awareness of the continued and growing danger to children, teenagers and their families of cannabis use in particular but also of wider drug use. I will publish a detailed paper on that subject later. The effects of the early use of skunk cannabis on youngsters’ mental health are increasingly recognised, as is the additional human cost of the significant rise in other effects, such as traffic-related deaths, in some of the US states that have gone down the route of decriminalisation.
I do not just take an abstract, desk-based approach to this topic. I have been a magistrate in Kent for 12 years. For too long, I have seen people go through the same revolving door of committing crimes, coming to court and going to prison. The same drug-related issues come up time and again. On one occasion, someone’s appearance in court arose from offences committed on the day of their release from a custodial sentence. That revolving door has to stop. Too often, I have seen youngsters in their late teens or early 20s who are on employment and support allowance or similar disability benefits and are incapable of holding down work brought to court after bouts of acquisitive crime. Nearly all of them are on long-term anti-psychotic drugs to deal with schizophrenia and bipolar disorders. In my experience, practically every one of those people gives the same mitigation in court: “I’ve had a long-term addiction to cannabis from an early age”—often from the age of 13.
The 2014 NHS National Treatment Agency for Substance Misuse paper was particularly useful in advance of this debate. It highlights that there are 306,000 heroin and crack users in England, with disproportionate heroin and crack use in lower-income areas compared with wealthier parts of the country. Drug use and poverty are linked. More than 1 million people are affected by family members’ or friends’ links to drug addiction. The Advisory Council on the Misuse of Drugs found a substantial increase in the number of people dying from drugs in the UK in recent years. That is mainly down to opioid substances, which, as I mentioned, caused 2,677 deaths in 2015. Opioid-related deaths have increased year on year. A massive increase in the 1990s followed a marked increase in heroin use. Thankfully, the number of deaths flattened and declined in the late 1990s and early 2000s—that was often put down to lower grade and more highly cut heroin being sold—but it has risen markedly since 2004.
Let me move on to fentanyl and various synthetic opioids, which are cited as the reason for the increase in deaths in the US. Fentanyl is a fairly normal pharmaceutical product. It is widely used, often in operations. It was first created in the early 1960s as a pain management drug, and it is very effective at that. It has a fairly easy formulation, but illicit supply increasingly comes from China, hence its street name of China white.
The epidemic of drug overdoses in America is killing people at almost double the rate of both firearm and motor vehicle-related deaths. Between 1999 and 2015, it is estimated that fentanyl and derivatives killed about 300,000 people in the US—the numbers are of virtually biblical proportions.
We regularly hear the argument for legalisation of cannabis, with those demands often coming from our Liberal Democrat friends—I see the right hon. Member for North Norfolk (Norman Lamb) in his place. Let us examine a real case study. In November 2012, Colorado and Washington states voted to legalise the private use of marijuana. In those two states, marijuana use exceeds the US national average and has risen significantly post-legalisation—more rapidly than in states where it is still illegal. We have also seen increases in teen arrests, accidental ingestion by children, marijuana-related poisoning, teenage admissions to treatment, and crime.
According to the Associated Press:
“In Washington, the black market has exploded since voters legalized marijuana…with scores of legally dubious…dispensaries opening and some pot delivery services brazenly advertising that they sell outside the legal system.”
Rather than putting a lid on matters, legalisation has taken the lid off. Marijuana-related traffic deaths—where a driver tested positive—have more than doubled, from 55 in 2012 to 123 in 2016, and there has been a 72% increase in marijuana-related hospitalisations since legalisation.
With that backdrop, let us look at the UK. The Library suggests that drug misuse in England and Wales has fallen in the past decade. That has got to be good news. However, I view some of those figures with a little scepticism; I will refer to such matters later on. Of course, 95% of heroin on the streets originates from Afghanistan, and cocaine invariably comes from Peru, Colombia and Bolivia; it is not manufactured in the UK. For that reason, I very much hope that as we leave the European Union and exercise more diligent control of our borders, we will be able to implement a more rigorous approach to border security, particularly on the smuggling of drugs.
The number of people in drug addiction treatment in the UK is at just a little under 300,000, with opiate dependency involved in more than 52% of cases. More than 100,000 under-18s are living with people in drug treatment. Those are some of the human costs. What are the financial costs?
I thank my hon. Friend for introducing the debate. Before he moves on to financial costs, will he say something about another side of the human cost—the extent to which prisoners are taking drugs and the efforts being made to try to stop that in prisons?
My hon. Friend makes a good point. We in the judiciary often feel that we put people in prison as a last resort and hope that that is a place where they may seek relief from drugs and get the treatment they need. However, all too often we hear of many examples where that is far from the case.
I want to mention the financial cost, because it is hugely relevant to our economy. Figures I have put together suggest that the financial cost now amounts to a fairly reasonable chunk of our annual deficit. It is very difficult to pull figures together, but one that I have derived from headline data is £20.3 billion a year. That does not include some of the more unknown and abstract costs, such as opportunity costs of lost economic output from a potential workforce who are economically inactive due to drug dependency and the physical and mental effects of drug use.
To break the figure down, drug-related crime is estimated at a fraction under £14 billion a year. The cost to the NHS of ongoing health issues resulting from drug addiction is half a billion. The benefits and treatment cost is estimated at £3.6 billion—£1.7 billion in direct benefits, £1.2 billion in the cost of looked-after children of drug addicts, and £700 million in addiction treatments such as methadone and Subutex. The cost to the courts, the Prison Service and the police in 2014-15 was £1.6 billion. An addicted person not in treatment and committing crime costs on average £26,074 a year. A somewhat dated Daily Telegraph report shows that a problem drug user could cost the state £843,000 over their lifetime—and that was in 2008.
Some of the other human costs are obvious, such as depression, anxiety, psychosis and personality disorders. Some 70% of those in drug treatment suffer from mental health problems. We might ask which follows which, but I think there is a clear link between drug use and psychotic episodes. Cardiovascular disease is also an issue after a lifetime of drug misuse. Muscular and skeletal damage are commonplace among injecting drug users. Lung damage following the smoking of various drugs and derivatives is also prevalent. Poor vein health and deep vein thrombosis is common among injectors. Then there is liver damage, which is expensive to treat, with hepatitis C causing cirrhosis, liver failure, liver cancer and death.
Deaths can come in many forms, including through accidents, suicides, assaults and simple overdose, as well as misadventure from drug poisoning, and drug abuse and drug dependence. Figures from the Office for National Statistics show that 2016 saw the highest number of deaths down to illegal drug use since records began in 1993. That fact is worth bringing to the table. Fewer than 1% of all adults in the UK are using heroin, but about 1% of heroin addicts die each year—10 times the equivalent death rate of the general population—and those deaths are predominantly from heroin and opioid use.
I will give the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) some figures for the UK. Between 2012 and 2015, opioid-related deaths in England rose by 58%. She will be pleased to know that in Wales the rise was only—if that is the right word—23%; in Scotland it was 21% and in Northern Ireland, 47%. We now see an ageing cohort of drug users who began their drug-taking lives in the ’80s and ’90s coming through the system with increasingly complex health and social care needs, which have contributed to a recent spike in deaths.
A typical heroin user is likely to spend £1,400 a month on drugs—two and a half times an average mortgage. More than half of all acquisitive crimes—crimes including shoplifting, burglary, robbery, car crime, fraud and drug dealing, whether at a lower or higher level—are down to those on heroin, cocaine or crack. Those crimes have victims. To bring that down to a micro-level, figures from Kent County Council’s road safety team show there were 59 incidents of known drug-driving on Kent roads in 2016, with 16 resulting in serious injury and three in road accident deaths. Those figures are rising. In the last 10 years, Kent has seen 18 fatal, 70 serious and 142 slight accidents due to drug-driving incidents.
When budgets are stretched nationally and locally, the temptation is to reduce treatment, but that is entirely the wrong approach. NHS figures suggest that for every £1 spent on drug treatment, there is a saving of £2.50 to general society. We have a good record on drug treatment in the UK, far better than many other countries in the world. In England, 60% of heroin users are in treatment, compared with only 45% in Italy and 37% in the Netherlands. We have fewer injectors now than we did some years ago. We have an advanced needle-sharing procedure, and that is improving. As I say, it is far better than other countries: 1.3% of drug injectors suffer from HIV, compared with 3% in Germany and 37% in Russia, so we are doing some things very well.
What can drug treatment do to help outcomes for society? Obviously, it stops emergency admissions, as A&E is often the first call, it prevents suicide, self-harm and accidents, and of course it reduces reoffending. Estimates in the NHS document suggest that a city the size of Bristol could cut 95,000 offences a year through effective treatment. The benefit of that to society is some £18 million a year. It is not just the financial effect, however; there are other societal effects: reduced crime, less drug litter and less street prostitution. The area that I used to represent as a councillor in the Medway towns was plagued by street prostitution in the middle of Chatham. With that came the drug litter and sexual paraphernalia literally dumped in the street, costing the council money and being a potential source of infection to others.
Troubled families can be stabilised through effective drug treatment. We can reduce drug-related deaths and blood-borne viruses. I repeat: £1 spent can represent a saving of £2.50 to society.
The hon. Gentleman is rightly making the case that it is a false economy not to invest in addiction services. Does he share my disappointment that funding for addiction services has fallen by half and that, under this Government, public health budgets are also falling, with councils struggling to fund the addiction services we need?
I could not agree more with the hon. Gentleman: I feel there is a false economy in cutting that type of service. Obviously, they are the sorts of services where we cannot always see what sort of bang we are getting for the pound spent, because the savings come about in a rather disparate way. The hon. Gentleman brings a very powerful case to the table.
The Government have spent vast sums of money over the last few years on the Frank initiative. I do not know whether hon. Members will remember it—“Call Frank”; “Tell Frank”. I have asked many youngsters of late whether they have heard of “Frank”, and they do not have a clue who he is, so I question somewhat the effectiveness of the Frank initiative, which is particularly aimed at teenagers and adolescents. I will be reporting in a detailed paper shortly, so hon. Members should look out for that.
Almost in closing, I want to look at the July 2017 drug strategy. It is a good strategy with recovery at its heart. It looks at the threats and at the actions we can take to reduce homelessness, domestic abuse and mental health issues. The strategies are the usual strategies, which I think are common sense: reducing demand through deterrence and the expansion of education and prevention information, obviously restricting supply through law enforcement responses, supporting recovery and driving international action to reduce the amount of foreign-produced drugs hitting our streets—of course, that does little to stop the ever-increasing rise of cannabis grown in the UK. I believe it is clear that drug misuse destroys lives. It has a devastating effect on families and communities.
The hon. Gentleman is coming to his conclusion. He seems to be saying that we are spending all that money trying to penalise people for drug use and trying to cut off the international supply. He has put horrific figures in front of us today. What will he do to change and affect that outcome?
The hon. Gentleman will hear that in my conclusion.
I was too soon.
I am sure that, as any of these debates progress, there is often a clarion call: “Let’s just liberalise. Let’s just legalise.” I am very pleased that, from what I have heard so far from the Government, they have no intention of doing that, and I massively support them. Drugs are illegal for a reason, because of the clear evidence that they are harmful to human health and associated with the wider societal harms of family breakdown, poverty, crime and antisocial behaviour.
What does the hon. Gentleman say to the Portuguese Government, who decriminalised and legalised and have seen a reduction by half in heroin addiction? What does he say to John Marks, who ran a very successful clinic in Liverpool, where the local crime rate dropped by 90%?
Again, if the hon. Gentleman will hold on for a moment, I will address that point. Where we have big experience areas such as Colorado and Washington, we have not seen just a stabilisation, reduction or more sensible use. We have seen increased rates and an increase in deaths and consequential accidents and results. To address his point, in an operation in Switzerland, which I think was also replicated in London, Brighton and Darlington in 2009, an unresponsive minority of heroin users who seemed not to be affected by normal drug treatment methods were given pharmaceutical-grade heroin under daily clinical conditions. I am not averse to that; it is a way forward for a very hard core of users, to keep their criminality off the street, get them clean drugs at the right time and help them off their addictions.
We often say, “Why should we criminalise the user?” In my experience of the court system, I have never seen somebody go to prison for the use of drugs. They tend to go to prison because of the criminality that results from drugs. There is one country, Sweden, that is very stiff on these things. Sweden has probably one of the most penal criminal codes for even personal use of drugs. It is interesting that it enjoys one of the lowest rates of drug use in Europe.
I have concerns that we are facing a general institutional downgrading of possession, particularly of class B drugs, and for that reason I am not sure that we see the full spectrum of what is happening out there in real drug use, based on the figures we receive from the police. If we were to see those, we would see reductions. Arrests for cannabis possession have apparently dropped by 46% since 2010. Cautions are down by 48% and numbers of people charged are down by 33%.
Is that not symptomatic of the police force taking a different attitude? Many police commissioners have come out and said, “We have to stop arresting people for personal possession.”
The hon. Gentleman is absolutely right. That has been the outcome. I am not particularly keen on seeing youngsters receive a criminal record for the use of drugs. There is perhaps another way, such as a non-recordable early intervention, rather than a criminal record that could be with them for life and weigh seriously against their potential job opportunities for the future. We are seeing police guidelines saying that no arrests should be made for possession. I am worried that we are seeing a normalisation of drug use. If youngsters feel that that is the new norm, there will be very little deterrent and they will feel that taking cannabis is acceptable. Inquiries I have made for my report have shown that youngsters still feel that they are deterred from going into using cannabis by the threat of criminal sanction.
I will come to my conclusion, which I hope will wrap a few things up. I am particularly fearful that this side of the Atlantic will face a potential onslaught of fentanyl and other artificial opioid derivatives, and I feel the Government need to be prepared for that. Action to rehabilitate that current core of class A drug users now will save their lives in the future, should fentanyl become more of a norm on our streets. I feel that we should be upping our game in three strands of work: education in schools, colleges and universities.
I would like to see significantly increased sentences for drug supply. Under current sentencing guidelines, the maximum sentence for the category A offence of suppling 5 kg-plus of class A drugs, which is right at the high end of drug supply, is 16 years, compared with 35 years for attempted murder. As we cope, or potentially have to cope, with fentanyl and similar lethal derivatives, we should perhaps give some thought to creating a new class—class AA—for these truly lethal drugs.
But to me, rehabilitation is the key, and I would not want to see services or that type of expenditure downgraded, because of the £2.50 saving for every £1 of investment. I would like residential rehabilitation to be the norm. We could call them prisons, if hon. Members would like, but they would be prisons or centres with one primary focus, and I think the judiciary would welcome being able to make that choice. They would be abstinence-based rehabilitation centres; people would go in on drugs and come out clean.
I am conscious that we do not have unlimited time, so I would be grateful if hon. Members kept their remarks brief, so that I can allow time at the end for the Minister and the Opposition Front Benchers to speak and, if possible, call everyone who wishes to speak.
It is a pleasure to serve under your chairmanship, Mr Gapes. I congratulate the hon. Member for South Thanet (Craig Mackinlay) on securing a debate on this really important issue.
I will start with where I agree with the hon. Gentleman. As a father myself, I share the horror at the impact of dangerous drug use; in a sense, my starting point is to be hostile to dangerous drug use, whether legal or illegal. That is a really important point, because according to the evidence the most dangerous drug of all is alcohol, which is used very heavily within these buildings. We must remember that, because there is enormous hypocrisy in the debate on this issue.
For me, the most depressing thing said in the Chamber today was the Prime Minister’s reaffirmation of the commitment to the war on drugs—the catastrophically disastrous war on drugs—in response to a question from the hon. Member for Reigate (Crispin Blunt). He raised a totally rational case, which was rejected with what I would say was a rejection of the evidence and an approach based on stigma and an ignorance of the facts of the disastrous impact of the war on drugs.
It was an enormous pleasure just the other day to meet some parents, together with the hon. Member for Inverclyde (Ronnie Cowan), from the Anyone’s Child organisation. Far from what the Prime Minister said about the families of those who have lost their lives through drug use all rallying around to demand ever-tougher sentences, these brave people are powerfully making the case that the criminalisation of drug use has had disastrous consequences for their families and will leave them distraught for the rest of their lives.
In a way, the great irony I found in the contribution from the hon. Member for South Thanet is that he pointed to a whole series of disastrous consequences of drug use—but drug use under a criminal market. That is the extraordinary thing. I am completely with him about identifying and recognising these disasters, but they are happening here and now. There is a false thinking that suggests that, because there are dangers of drug use, the automatically sensible thing to do is to ban drugs, but we should know by now that that does not work. The Home Office’s own study in 2014 confirmed that banning has no impact on the level of drug use in society, so let us start thinking afresh about this issue.
Will the right hon. Gentleman give way?
No; I am conscious that time is really tight.
Far from protecting people, the current framework of our drug laws resulted in 3,744 drug-related deaths in 2016—the highest ever level, and a 44% increase over five years. We are not talking only about the United States; it has arrived in this country with a vengeance. Heroin and morphine deaths rose by 109% under a criminal market. It is not working.
On criminalisation, the hon. Member for South Thanet said he does not see many people ending up in prison, but just last year 45,000 people ended up with criminal convictions for possessing drugs, which has a dreadful blighting effect on their careers; we waste human capital in our country. One of the families that talked to us on Monday talked about their son, who is a really clever scientist but who now cannot work as a scientist because of the effect of his conviction several years ago. That is ludicrous, but it is the effect of criminalisation. The Australian study from a few years ago confirms the negative impact of criminalisation on all those people who end up with a criminal record.
Criminalisation also hits many people who self-medicate because they are experiencing mental ill health. It has a massive impact on people who are already vulnerable, and because they choose to use a substance to perhaps take away the pain of what they are going through, we then give them a criminal conviction. It is the most ludicrous response imaginable. There are also those people who suffer from conditions such as multiple sclerosis, and who use cannabis to ease their pain, who we then give a criminal conviction for their trouble. Again, it is a ludicrous way of responding to a real problem.
We hand vast sums of money—billions of pounds in profits—to organised crime, not only in this country but globally. It is the most extraordinary waste of resources and it promotes extreme violence in our communities. Of course, it is always the poorest communities that suffer the most. In the United States, there is very clear evidence that it is poor black communities that suffer the most. In our country, black people are targeted for stop and search, being nine times more likely to be stopped and searched for drugs than white people.
Instead of those awful consequences of criminalising drug use, let us think about an alternative approach that may be more rational and may be based on evidence, not ignorance and stigma. Let us instead regulate the market for cannabis. The data that the hon. Member for South Thanet raised from the states in the US that have legalised cannabis are highly contested data. Very respected organisations such as the Drug Policy Alliance address some of the misclaims about the impacts of cannabis use in Colorado and Washington. One of its conclusions is that teen marijuana use is unchanged, while its overall conclusion on the impact of legalisation is “So Far, So Good”.
A lot of misclaims are being made about the impact of legalisation in the United States, but a legalised, regulated market has the potential to take the trade away from criminals and instead raise pounds in taxes, which can then be used on health and education and supporting people out of addiction, rather than simply criminalising them. Let us treat it as a health issue, not a criminal justice issue. Let us accept across our country the principle of safer drug consumption rooms. They are already saving lives in eight European countries and in Canada and Australia. The principle is endorsed by the BMA. No one dies of an overdose in a drug consumption room. Let us accept that evidence and apply it in this country before we continue the carnage of loss of life that we are experiencing now. Let us accept heroin-assisted treatment where other treatments have failed. I recognise that the hon. Member for South Thanet acknowledged that that may be appropriate in some cases, but it is a policy based on evidence of what works.
Finally, the attitude of this Government. I have mentioned the 2014 Home Office study that was done while the Prime Minister was Home Secretary. Her own Department concluded that there was no international evidence at all to show that tougher drug laws reduce the use of drugs in society, so why do the Government not follow the evidence? Secondly, the evaluation of the Government’s drugs strategy last year raised some extremely serious concerns. It concluded that enforcement expenditure has
“little impact on availability.”
“Illicit drug markets are resilient and can...adapt to even significant drug and asset seizures.”
Criminalisation does not work. Contact with the criminal justice system for drug offences can
“bring with it potential unintended consequences including unemployment...and harm to families”.
“Incarceration may also negatively impact on the indirect and unemployment harms that...drug-related enforcement activities”
seek to improve. The conclusion of the Government’s own analysis is that it is not working.
Then there is the real hypocrisy. There will be loads of Ministers in this Government who have used cannabis, and probably other drugs as well, in their younger years, and yet they are prepared to see fellow citizens convicted of offences for something that they themselves did in their younger years, and they have gone on to enjoy good careers. Let us stop the hypocrisy. Let us recognise that we should apply the approach of reduction in harm, not criminalisation, because it has not worked and it has led to awful consequences internationally.
It is a pleasure to serve under your chairmanship, Mr Gapes. It is long overdue. It is also a pleasure to follow the right hon. Member for North Norfolk (Norman Lamb). I congratulate him on his speech. I agree with his analysis entirely. I also congratulate my hon. Friend the Member for South Thanet (Craig Mackinlay) on raising this issue. He is right to point out the dramatic risk of fentanyl-associated harm that is perhaps coming our way following what is happening in the United States.
Any examination of the global evidence shows that the costs my hon. Friend pointed to, financial and human, are infinitely higher than they should be owing to the global policy of prohibition and criminalisation of drugs since the 1961 UN single convention on narcotic drugs, which has been an unmitigated global public policy disaster. He rightly drew attention to the dangers of drug-driving and his concern at the increasing number of road deaths caused by drug-driving, as in the United States. That will require strong enforcement action to catch, warn and punish offenders, in the same way as drink-driving here in the UK has met with effective policing and societal attitude changes.
Will the hon. Gentleman give way?
Forgive me; I am short of time.
I come to this debate from the criminal justice perspective, having seen for myself as Minister for Prisons and Criminal Justice the time and costs incurred by the police, courts, prisons and probation service in managing the effects of drug-related crime. My hon. Friend the Member for South Thanet also drew attention to the problems of cannabis, particularly street cannabis, which, with its high levels of tetrahydrocannabinol, or THC, is more potent and liable to cause schizophrenia in long-term users.
However, those looking to use cannabis recreationally often have little to choose from and have no idea what their cannabis, acquired on the street from drug dealers, has in it. Legalisation and regulation would allow consumers to access less harmful forms of cannabis with lower levels of THC and higher levels of cannabidiol, or CBD, giving the desired high, in just the same way as drug users of tobacco and alcohol can be assured of the regulated quality and provenance of their products, together with the health warnings and all the necessary restrictions on advertising and sales that a properly regulated market can deliver.
Licensing and regulation proportionate to the risks of each type of drug and signposting users to services when they get into trouble would be the right place for public policy if we followed the evidence of what works. At a stroke it would deliver the massive good of eliminating the huge costs associated with criminal possession and supply. By permitting a legal but regulated market, we would decouple hundreds of millions of consumers around the world—millions in the UK alone—from funding and facilitating a world of criminality.
Just as prohibition in 1920s America provided a financial basis for organised crime to flourish in American cities, so our policy of prohibition has gifted an industry worth half a trillion dollars a year to serious and organised criminals producing and supplying untested substances. Their interest is hardly the health of their consumers, but far more to produce the addiction that will sustain a vastly lucrative business model.
Alongside the addiction, we then have to deal with the awful consequences of drug market violence as gangs and dealers vie for control of the trade, quite apart from the enormous amount of the lower-level criminality of burglary and other acquisitive crimes as addicts seek to fund their addiction. As well as keeping criminals, many of them young people, out of drug supply, licensing and regulation allows us to tackle the health-related harms associated with drugs and drug addiction that my hon. Friend was right to draw attention to. Criminalisation means that users are hidden from health practitioners, and there is a lack of guidance about how to find and access services. Taxation of sales by licensed retailers would pay for better prevention, treatment and public health education, available at the point of purchase—a dispensing pharmacist, for instance.
Colorado has raised half a billion dollars in state taxes and fees since it licensed recreational cannabis in 2014. The right hon. Member for North Norfolk referred to the the Home Office evaluation of its own drug strategy, which states:
“There is, in general, a lack of robust evidence as to whether capture and punishment serves as a deterrent for drug use”.
If we translate that out of bureaucratese, that means we know current policy does not work. Since we have been fighting the war on drugs for more than half a century, it might now be an idea to examine the evidence. So I say to my hon. Friend the Member for South Thanet, instead of doubling down on a failing policy and demanding yet more higher sentences for particular parts of the supply chain—in the example he gave, the failing policy has led to the highest level of opioid drug deaths since records began—we should learn from decriminalisation and public health approaches in other countries.
In Portugal, for example, where the possession of small amounts of drugs has been decriminalised since 2001, a step well short of licensing and regulation, usage rates are among the lowest in Europe, and drug-related pathologies, such as blood-borne viruses and deaths due to misuse, have decreased dramatically. Compare the drug mortality rate of 5.8 per million in Portugal with Scotland, where it is 247 per million. The Portuguese state offers treatment programmes without dragging users through the criminal justice system, where it becomes harder to manage addiction and abuse. I can tell my hon. Friend, drawing on knowledge of the effort to establish drug-free wings in prisons, that it is not easy to do. I accept that it is a perfectly sound policy objective, but do not think for a minute that there is a magic wand to deliver a part of the prison system that will be proof against drugs getting in.
In the criminal justice system, as I can testify from my own experience, it is hard to manage addiction and abuse. The reshaping of our drugs policies should be informed by the growing body of evidence that will come in from the legalisation of cannabis sales in several US states and, from next July, in Canada. We will be able to learn, too, from the Netherlands, Switzerland, Germany and others with drug consumption rooms, an example of the kind of regulation we could deliver around heroin consumption in supervised, safer environments where, as the right hon. Member for North Norfolk said, no one has ever died of an overdose. So we must listen to the Global Commission on Drug Policy, which seeks a balanced, evidence-based approach. The UK could have a royal commission to make evidence-based policy recommendations free of politicians’ trite response, “Drugs are bad; they must be banned.” That can give us a route to reframing the debate on drugs and finding evidence-based policy approaches that will truly reduce the costs of addiction, both financial and human.
Two hon. Members have indicated a wish to speak and I should like both to get in, but if they are to do so each needs to speak for no more than four and a half minutes.
Thank you, Mr Gapes; I was hoping to have longer on my feet—I am sure you will understand that—but much of what I was going to say was elegantly covered by the right hon. Member for North Norfolk (Norman Lamb) and the hon. Member for Reigate (Crispin Blunt), so I shall skip those parts of my speech.
The important point is that no financial cost that can be attributed to drug addiction comes close to matching the human cost. The deaths of loved ones, the sufferings of addicts, wasted lives and the associated suffering far outweigh any amount of money that has been spent fighting the war on drugs. Yet we continue to pour time, effort and money into a system that emphasises criminal prosecution. Since Mexico intensified its approach to drug law enforcement, more than 100,000 people have died and 20,000 are missing. The personal testimonies from members of Anyone’s Child are heartfelt and painful. It calls on the Government
“to regulate drugs to reduce the risk they pose”.
It says that
“legal regulation doesn’t mean a free-for-all where drugs are widely available—our current laws have already achieved that”.
We need to take control away from the criminal fraternity. Across the world for more than 50 years the war on drugs has killed the innocent and made the guilty rich. It has destroyed communities and compounded the difficulties faced in addressing addiction problems. As we know, the UK Government spend around £1.6 billion a year on drug law enforcement. As was pointed out earlier, even the Government know that their drug policy has failed. Last night I attended an event hosted by Addaction. A gentleman who is in recovery said, “As humans we judge. It keeps us safe. Before you judge try to see the person”.
What can the Government do? Safer drug consumption rooms, which we have talked about, are already saving lives in eight European countries as well as in Canada and Australia. They have been endorsed by the British Medical Association. Those facilities reduce the spread of infectious diseases such as HIV and hepatitis C, and the risks of public drug use. No one has ever died of an overdose in a DCR anywhere in the world. That is the third time that statement has been heard this afternoon, and it will be heard again.
Heroin-assisted treatment is also being successfully implemented in several European countries, and is endorsed by the British Medical Association. In 2016, the Advisory Council on the Misuse of Drugs stated that
“central government funding should be provided to support heroin-assisted treatment”
for patients for whom other forms of opioid substitution treatment have not been effective. I think that there is agreement here about that, but the Government have failed to act on that request.
Specialist drug checking services can allow people at nightclubs and festivals to find out what is in their batch. Data from recent UK trials showed that one in five people found that they did not have the drug that they expected, and 80% of that group then chose to use a smaller quantity, avoid mixing it with other substances, or dispose of their batch altogether.
Perhaps a financial justification is required, rather than a humanitarian one: researchers in the US Office of National Drug Control Policy have confirmed what has already been said about expenditure on treatment being more than paid for elsewhere, as they estimate that $1 spent on substance abuse treatment saves $4 in healthcare costs and $7 in law enforcement costs. Not only does drug abuse treatment save lives—it saves billions of dollars as well.
While drug use continues across society we must note that addiction can and does affect people from all walks of life. Only 10% of drug users will develop an addiction, and addiction does not respect race, creed, colour, religion, gender or financial standing. However, as is often the case, it is the poorest who suffer the most. In 2008, the Scottish Government published the national drugs strategy for Scotland, “The Road to Recovery”. That set out a new strategic direction for tackling problem drug use, based on treatment services promoting recovery. The Scottish Government have invested £689 million to tackle problem drug and alcohol use since 2008, and education has been an important part of the strategy.
Drug-related deaths are a particular problem in Scotland, as the hon. Gentleman has outlined, including in my constituency, where they are rapidly increasing—at a faster rate than in England and Wales. Does the hon. Gentleman agree that the Scottish Government need to get serious about addressing problems in NHS Scotland, such as the staff shortages in Angus, and the problems that Police Scotland faces?
Order. The hon. Lady is making an intervention, not a speech, and I should be grateful if the hon. Member for Inverclyde would respond to it briefly.
I shall cover that point right now: Public Health Minister Aileen Campbell has announced a refreshing of Scotland’s drugs strategy. We will not be complacent about what we have achieved, and we will continue to take an evidence-based approach, and to improve what we are doing in Scotland. We have been working on the seek, keep and treat framework, a joint initiative between the Scottish Government and the Scottish Drugs Forum, which will examine the operational implications of engaging with older drug users and how to encourage them into services and keep them in treatment.
For many people it is heroin, cocaine or cannabis that are classified as drugs; but we must not ignore alcohol. Alcohol addiction is one of the most damaging forms of drug addiction.
Order. Is the hon. Gentleman coming to the end of his remarks? Perhaps he can give his last sentence; otherwise the hon. Member for Henley (John Howell) will not be able to make a speech.
Absolutely, Mr Gapes.
In conclusion, if we spend money to address addiction problems as a health issue, that will not only bring about better results, but will prove to be less expensive than our current strategy, which criminalises and stigmatises people with addiction problems.
Thank you, Mr Gapes, for managing to squeeze me into the debate. I shall use the time wisely, I hope. We have all agreed that drug misuse can destroy lives, that it has a devastating effect on families and communities, and that we can help individuals by preventing drug misuse and through treatment and wider recovery support. That is where I would support the Government’s new strategy—in putting recovery at its heart.
What I am uncomfortable with at the moment is the idea of going straight to a policy of decriminalisation. I should like smarter law enforcement. How to approach that is largely in the hands of police and crime commissioners. If we had a smarter enforcement response, it might produce beneficial results. There is no reason why the enforcement process against those who supply drugs should not be harsh, involving effective action. However, we need to be much more sophisticated in our approach to possession, and in taking account of the number of people using drugs, and who are therefore committing crimes. If it is possible to take a halfway position on the issue, I certainly advocate that.
We need also to ensure better outcomes, and better measurements to capture them, throughout the process. We have bandied figures around today, but there is not a lot of commonality between them, and the figures that I have are slightly different from those that my hon. Friend the Member for South Thanet (Craig Mackinlay) set forth. We need some really tight figures; and I am surprised, given the amount of time that has been spent in combating the drugs problem, to find that we still do not have those figures.
In an intervention on my hon. Friend the Member for South Thanet I mentioned the Prison Service, because I am a member of the Select Committee on Justice and have visited many prisons where the issue has come up. Sophistication is needed in the way we tackle that. There are people in prison who were taking drugs before they went there, and quite a lot who have taken drugs since they came into prison. How we handle that will say a lot about how we tackle the problem for the future.
The thing that has most impressed me is information I was sent by a charity called Release. I know that it argues for ending the criminalisation of drug possession; but it brought out some key points on which we need to concentrate. The first was the necessity to combat the situation by improving public health. We should spend some time on that. It also stresses ways that we can reduce the stigmatisation and marginalisation of vulnerable populations—a number of Members have spoken about that—and allied to that is the need to combat the spread of infectious diseases. Finally, it is also necessary to look at a range of other issues, such as addressing homelessness. Those things are in the Government strategy, but I do not yet see them being joined up in order to take them forward.
Order. The Front-Bench speakers have half an hour between them, and I would be grateful if they would allow the Minister at least 10 minutes in which to make his remarks.
It is a pleasure to see you in the Chair, Mr Gapes, and I congratulate the hon. Member for South Thanet (Craig Mackinlay) on securing this debate. I am mindful that several colleagues have not had the opportunity to say as much as they would have liked, so I am happy to take interventions as much as possible to allow those points to be put on the record.
When summing up a debate such as this, the SNP spokesperson tends to talk about what is happening in Scotland—I know that the hon. Member for Angus (Kirstene Hair) has spoken about that. I will be honest and say that the data from Scotland, particularly on drug deaths, are concerning. Statistics show that there were 867 drug-related deaths in Scotland in 2016, which in my view is 867 too many. I would be doing this House and my constituents a disservice if I glossed over that fact and did not express concern about that serious rise in drug deaths. Alongside my hon. Friend the Member for Inverclyde (Ronnie Cowan) I am happy to welcome the decision by the Scottish Government to refresh the national drugs strategy that was outlaid in 2008, and I hope that that work can be done in conjunction with the Scottish Drugs Forum.
I respect the hon. Gentleman recognising the figures from Scotland, which I find equally concerning. Does he agree that the Scottish Government need to get serious about addressing problems in NHS Scotland, specifically in my constituency, where we have extreme staff shortages? There are also problems facing Police Scotland, because those services must be robust to deliver a successful drugs strategy.
Very deliberately, because this debate is about the human and financial cost of drug addiction, I do not want to make a party political point. I could be tempted down the line of saying that if we followed the Conservative’s tax plans, that would mean £160 million less for public services in Scotland, but I shall not go down that path.
Before I move on to the human cost of drug addiction, let me sum up some of the contributions to the debate. There has been a lot of discussion and a lot of figures have been bandied about, but I want to talk about a couple of personal cases.
I congratulate all those who have spoken on this issue. In Northern Ireland, more people have died from drug addiction than from road traffic accidents, but perhaps there is a way of addressing that issue. Does the hon. Gentleman agree that there must be more links between GPs, so that they can refer people whenever they are aware there is a problem and tackle addiction more successfully? There are methods to do that within the system.
I am grateful to the hon. Gentleman, and I shall come on to the point about support services that are provided in our communities.
The hon. Member for South Thanet mentioned the Frank project, and I was conscious that he was looking over at me and probably trying to work out whether I am here on work experience, or whether I am actually an MP. I am both young enough and old enough to remember “Talk to Frank”, and it is disappointing that we do not see as much of that anymore—I remember that when I was growing up we would see it on a regular basis. The right hon. Member for North Norfolk (Norman Lamb) spoke with huge experience and knowledge on this issue. He was a Health Minister in the coalition Government, and we should spend a lot of time listening to him. I am not sure that I agreed with everything he said, but he is worthy of listening to.
The right hon. Gentleman mentioned safe injecting facilities and heroin-assisted treatment. Prior to becoming a Member of the House last June, I worked for my hon. Friend the Member for Glasgow Central (Alison Thewliss), and there was a proposal to install the UK’s first safe injecting facility in Glasgow. I am disappointed that the Lord Advocate in Scotland has said that he is currently not minded to give that legal cover, and to go down that route we will probably need Home Office Ministers to look at the Misuse of Drugs Act 1971. In Glasgow we are pushing ahead with the heroin-assisted treatment model, which should be welcomed.
The hon. Member for Reigate (Crispin Blunt) spoke about the importance of following the evidence, which I endorse. Before I was an MP, I had the privilege of going to Dublin and visiting the Ana Liffey project, which is moving towards a safe injecting facility. The key message that we took from there was that we should very much follow the evidence. I commend NHS Greater Glasgow and Clyde, which throughout the entire process has built an evidence-based case, and that point is well made. My hon. Friend the Member for Inverclyde had a short amount of time in which to speak. I am conscious that he speaks with a huge amount of passion on this issue, and I hope that he continues to do that in this House. I commend the work done by him and the right hon. Member for North Norfolk this week.
I see my role as an MP as being to speak up for constituents in the east end, and to give ordinary Glaswegians a voice in Parliament. Last week, Michelle Kearney, who is originally from Carmyle in my constituency, spoke bravely in the Evening Times about the death of her daughter, Michelle, who tragically died aged just 16 on 19 October 1999. I am very grateful to Michelle’s mum, who took some time yesterday to speak with me about her own story, which is incredibly moving and deserves to be heard in this House.
The details of numerous failings by the Children’s Panel and social workers is a pain that Michelle still carries to this day. These are her words, and I very much hope that I can do her justice:
“My pain is the same pain as any other mother who has lost a child. Why should my pain be minimised because my daughter made a choice to take drugs that night? That’s a big hurdle for the families…I just had a feeling. I knew she wouldn’t be an adult. I had a sense. She said, ‘mum I’m never going to be a big lady. I’ll never be happy in this world but I know that I will in the next’…I could feel her dying every day. I buried her in my head for four years…She became a prostitute, not to fund anything but because that’s all she thought she was good for. She had met a girl that night and went back to a flat. I believe she was injected by the girl because she was injected into her right arm and she was right handed. It took 12 hours for her to die and she died with strangers…The police came to my door to tell me that she had been found dead. She had only tried drugs twice to my mind. It was just her time to go and came as no surprise, I just didn’t expect it to be drugs…She was the first child to die in those circumstances so her death was very public. There was no justice. It devastated our family.”
Michelle’s courage in talking publicly about her daughter’s death is, in itself, remarkable, but the fact that she has now chosen to dedicate her life to helping others as a counsellor for the Family Addiction Support Service says a lot about her selflessness. I pay tribute to that service in Glasgow. It does tremendous work with families, and throughout this debate we must be mindful of the families of those affected by addiction. I hope that by being able to give Michelle a voice in Parliament today I have managed to do her justice, but it was just by chance that I read her story in Saturday’s Evening Times. By that point I had already informed the Whips Office, and the Chair, that I intended to speak in this debate, based on my own upbringing.
I have spoken before in this House about being brought up in the Cranhill area of Glasgow’s east end—something of which I am fiercely proud. My first involvement in any form of political activism was not delivering leaflets for the SNP; it was going on a Mothers Against Drugs march with my mum on our housing estate. On 3 January 1998, another young Cranhill boy, Allan Harper—just a few years older than me—tragically died of an overdose. Even as a seven-year-old, I still vividly remember walking along Bellrock Street, past the maisonette flats, for the candlelit vigil for Allan. We did that march, with the mammies and the weans in Cranhill, to send a strong powerful message to the drug dealers on our estate that we would no longer tolerate them pushing drugs in our community. Twenty years ago on that march, never in my wildest dreams did I imagine that 20 years later I would be standing here as the MP for Cranhill. It is something of which I am incredibly proud.
As we reflect on the current battle that we have with drugs in our communities and families, I very much hope that in 20 years’ time, the next MP for Cranhill will not be standing here talking about a death rate from drugs of 867. The time for talk is over; the time for action is now, and that is a message for all Governments.
It is a pleasure to serve under your chairmanship, Mr Gapes.
Let me start by thanking the hon. Member for South Thanet (Craig Mackinlay) for securing this important debate, and for his excellent opening speech, which laid out all the human and associated monetary costs that drug addiction costs society and indeed the Exchequer. His figures are even greater than the ones I will be citing in my contribution, which is perhaps because he included all classes of drugs. I will only be citing figures for class A drugs, but that shows the enormity of the costs that we are dealing with today.
While there is a very important debate going on in the main Chamber, it is welcome to see the number of MPs here today to discuss this important issue. We have had many excellent contributions to the debate, including from the right hon. Member for North Norfolk (Norman Lamb), the hon. Members for Reigate (Crispin Blunt), for Inverclyde (Ronnie Cowan) and for Henley (John Howell), and the hon. Member for Glasgow East (David Linden), who is the Scottish National party spokesperson; he made a pertinent and moving speech, and I commend him for that. They all made strong and thought-provoking speeches, and we have had some excellent interventions. I thank all Members for taking the time to set out their positions and thoughts on drug addiction and the costs to society.
As we have heard, drug addiction is one of the most deeply concerning issues we face today. Drug addiction, in its many guises, can blight communities and the lives of so many people, which is why it is vital that policy is developed to significantly reduce the harm that addiction can inflict on individuals and communities. According to Home Office figures, the number of people taking drugs has fallen significantly over the past decade. That is to be welcomed. Reducing the number of people taking drugs is a step in the right direction to not only improve the health of the nation but reduce crime and pressures on our public services.
Sadly, if we scratch the surface, we unveil more uncomfortable truths that the Government must face. In 2016, there were a total of 2,593 drug misuse deaths involving illegal drugs—the highest number since comparable records began in 1993. That trend in avoidable deaths is reflected across both genders. However, for men the drug misuse mortality rate has jumped sharply over the last three years and reached a new peak of 67.1 deaths per million people—another high since records began in 1993. The female rate is less pronounced but is also at an all-time high.
Across Europe, it is estimated that a total of 8,441 deaths occurred due to drug overdose in 2015, mainly from heroin or other opioids. Here in the UK, we come out on top with the highest percentage of those deaths, at 31%. That is absolutely damning, especially when the Advisory Council on the Misuse of Drugs stated in a report last year that England alone saw an increase of 58% in opioid deaths between 2012 and 2015. Much of that is put down to ageing users of heroin and opioids, which gives rise to the question: what are the Government doing to address the often complex social care needs of drug addicts?
It is not only the deaths that occur from drug misuse and addiction that are concerning, but the costs to society in general, as we heard from the hon. Member for South Thanet. In terms of monetary costs, it is estimated that class A drugs such as heroin and crack cocaine cost us £15.4 billion a year, which is £44,231 per problematic user. Broken down, that figure is roughly £13.86 billion on social and economic costs, £535 million on drug arrests and £488 million on the NHS dealing with mortality and morbidity and providing acute treatment and support for mental health and behavioural disorders associated with drug misuse. As I said, that is just for class A drugs. When we include all classes of drugs, the sums increase substantially, as has been set out in detail.
Does my hon. Friend agree with the drugs, alcohol and justice cross-party parliamentary group that, to reduce alcohol and drugs-related deaths and illnesses, a co-ordinated harm reduction strategy needs to be prioritised?
Yes, I do agree.
It is no wonder, when we go off all these figures, that earlier this year the UK was deemed the overdose capital of Europe and is now seen internationally as having serious shortcomings when it comes to addressing addiction and drug misuse. What are the Government going to do to address these problems? I am sure the Minister will cite the recent publication of the drugs strategy in the summer. As he will know, Opposition Members welcomed the strategy, but it left us wanting. There is much to be welcomed in it, but it is clear that what was announced has not moved us on any further from what was happening in 2010 and now works within a seriously reduced financial envelope due to short-sighted cuts to public health budgets.
The Minister knows all too well that public health budgets have been decimated, with an estimated £800 million expected to be siphoned out of local budgets by 2021. That has meant drug rehabilitation services being closed and budgets to tackle drug abuse cut, all against a backdrop of an NHS under significant pressure. Labour’s analysis of figures published by the Department for Communities and Local Government shows that this year we will see 106 councils reduce drug treatment and prevention budgets by a total of £28.4 million; 95 councils reduce alcohol treatment and prevention, at a total of £6.5 million; and 70 local authorities reduce drug and alcohol services for children, at a total of £8.3 million. That works out at a total reduction of £43.3 million imposed by the Minister’s Government on a whole host of services created to prevent and treat addiction problems. Those figures are unavoidable and shameful. We should be putting greater emphasis on the radical upgrade in public health and prevention promised in the “Five Year Forward View” in 2014.
The Minister cannot come before us today and honestly say that his Government are improving services and seriously addressing this issue when they are overseeing such significant cuts that are rolling back provision on addiction services. It is not just me or Labour making that case, but the likes of the chief executive of Collective Voices, Paul Hayes, who said earlier this year:
“The more we disinvest in treatment, as we are doing at the moment, the more we will put increasing numbers of people at risk of early avoidable deaths.”
The Minister has the power to go back to his Department and ensure that these avoidable deaths are avoided and the unnecessary losses of life halted.
The Government’s failure to seriously get to grips with the issue of drug addiction and the sad outcomes associated with it is shaming us across the world. Yasmin Batliwala, chair of the Westminster Drug Project, was recently reported as saying:
“We once had services that led the way.”
She went on:
“We now need to do a lot to catch up with countries in the developing world that are doing a lot more for their service users. The sign of a civilised society is how it cares for its most vulnerable.”
The Minister needs to acknowledge that his Government are overseeing such a negative and backwards approach to prevention, instead of taking radical steps to address and prevent drug addiction.
It is high time this Government seriously came to terms with the actions they have taken over the last few years on public health and rethink their short-sighted approach. Otherwise, we will see the figures that I quoted at the beginning of my speech become ever worse under their watch. The people who struggle and battle with addiction deserve and need our support, not just for them, to improve their lives, but for the rest of society, so that we can finally ensure that no one’s life is blighted by drug addiction.
It is a pleasure to serve under your chairmanship, Mr Gapes. Thank you for protecting my 10 minutes at the end of the debate. I congratulate my hon. Friend the Member for South Thanet (Craig Mackinlay) on securing the debate.
It has been noticeable that there is complete consensus among those who have contributed today about the horror and damage that drug abuse causes for individuals and wider society. Nobody, quite properly, has stood up here to say anything other than that. However, there is a noticeable difference in approach as to how to deal with some of these challenges. It is impressive that we had a consistent line from the right hon. Member for North Norfolk (Norman Lamb), my hon. Friend the Member for Reigate (Crispin Blunt) and the hon. Member for Inverclyde (Ronnie Cowan). They all called for a particular approach that the Government do not support. I shall focus most of my remarks on what the Government are actually doing.
The hon. Member for Washington and Sunderland West (Mrs Hodgson), who speaks for the Opposition, was quick to criticise the support provided to drug abusers and she called for more action, but she did not come up with a single example that I could detect of what more could be done—[Interruption]—to provide any greater action, in response to the drug strategy that we published in July. I appreciate that she expressed some welcome for that strategy, but she did not indicate anything else that she said was missing that we should introduce.
We could always take over in government.
As I said, the Government published what we regard as an ambitious new drug strategy in July. As my right hon. Friend the Home Secretary compellingly set out in her foreword, the harms caused by drug misuse are far-reaching and affect lives at every level. I welcome the support of my hon. Friend the Member for South Thanet for the strategy. My hon. Friend the Member for Henley (John Howell) also made a powerful contribution to the debate, focusing on differentiating enforcement action between the different categories of drug users. Although, of course, some of that is already in force in the sanctions available to our criminal justice system, the point that he makes in relation to identifying those who use criminality to fund their addiction is important.
Crime committed to fuel drug dependence is one of the biggest challenges that society has to contend with as a result of drug abuse. That extends into organised criminality in this country and internationally. From the perspective of the individual, the physical and mental health harms suffered by those who misuse drugs and the irreparable damage and loss to the families and individuals whose lives they destroy were eloquently expressed by the hon. Member for Glasgow East (David Linden), who speaks for the Scottish National party. The constituent’s story that he told was harrowing. I think that we all share those concerns.
The drug strategy highlights the huge financial cost to society from illicit drugs. Each year, drugs cost the UK £10.7 billion in policing, healthcare and crime, with drug-fuelled theft alone costing £6 billion a year.
Will the Minister give way?
I am afraid not, because I have limited time.
As my hon. Friend the Member for South Thanet pointed out, research shows that for every £1 spent on treatment, an estimated £2.50 is saved. It remains essential for us to offer those with a drug dependency the optimal chance of recovery. Since the 2010 strategy was published, we have made significant progress, despite the comments from the hon. Member for Washington and Sunderland West. She did acknowledge that drug use in England and Wales is lower now than it was a decade ago. In 2016-17, 8.5% of adults had used a drug in the previous year, compared with 10.1% of adults back in 2006-07. More adults are leaving treatment successfully now than in 2009-10, and the average waiting time to access treatment is now two days.
The new strategy aims to reduce illicit drug use and to increase the rate at which people recover from their dependence. Action is being taken in four areas: reducing demand to prevent drug use and its escalation; restricting the supply of illegal drugs; building recovery; and a new strand focused on global action. At the centre of the strategy is a core message: no one organisation or group can tackle drug misuse alone. As my hon. Friend pointed out, a partnership approach is required across Government and involving the treatment system, education, employment, housing, mental and physical health and the criminal justice system.
To drive forward the partnership approach, we are setting up a new board, chaired by the Home Secretary, which is due to meet for the first time next month. My right hon. Friend the Secretary of State for Health will attend, along with Ministers from across Government and wider partners, including Public Health England. The aim is to hold all parts of the system to account on specific commitments in the strategy. We are also appointing a new “recovery champion”, who will have a national leadership role with a remit to advise the Home Secretary and the board. That individual will drive collaboration across sectors and give people with drug dependency a voice to address the stigma that can prevent them from accessing the support that they need.
We will also take forward the drug strategy’s approach to prevention, because we know that we stand the best chance of preventing young people from misusing drugs by building their resilience and helping them to make good choices about their lives and their health. To achieve that, we will take forward evidence-based prevention measures, including developing the “Frank” drugs information service, to which my hon. Friend referred, so that it remains a credible and trusted source of information for young people. I note that the young people in the straw poll he did in his constituency had not heard of that service. I will ask officials to look at how we can raise awareness of that tool, but I point out gently to him that it is designed to be an information tool rather than a prevention tool in and of itself.
Other measures are promoting the online resilience-building resource, Rise Above, which helps teenagers to make positive choices for their health, and expanding the alcohol and drug education and prevention information service to give schools the tools and resources that they need to help to prevent drug misuse among teenagers.
The hon. Member for Washington and Sunderland West mentioned funding. Funding decisions on drug and alcohol treatment budgets have been devolved to local authorities, which are best placed to understand the support and treatment needs of their populations because they differ across the country, as we have heard today. We know that there are concerns about funding, and that local authorities are making difficult choices about their spending; we are not shying away from that. That is why we are extending the ring-fenced public health grant until April 2019 and retaining the specific criteria to improve drug and alcohol treatment uptake and outcomes. Although the intention remains to give local authorities more control over the money that they raise—like with business rates—we are actively considering the options for 2019 onwards. We remain committed to protecting and improving the outcomes from core services, including in respect of substance misuse, and will involve stakeholders in discussions about how we achieve that.
We know that drug misuse is both a cause and a result of wider social issues. That is why we are testing ways to improve employment support for people in recovery. We have accepted Dame Carol Black’s recommendation that we trial an “individual placement and support” approach to help people in drug and alcohol treatment to prepare for, find and maintain employment. In that context, I would like to give a quick plug to an outstanding charity in my constituency called Willowdene Farm, which provides very successful residential rehabilitation and training centres, historically for adult men with a history of substance addiction; it has just opened a residential facility for adult women as well. It is leading the way in encouraging those who have been through its programme into employment. Public Health England announced yesterday that the trial will go live in April 2018 in seven areas: Birmingham, Blackpool, Brighton and Hove, Derbyshire, Haringey, Sheffield and Staffordshire.
I shall briefly go through some of the emerging challenges. Since 2012, we have seen sharp increases in drug misuse deaths linked to an ageing group of older heroin users with multiple and complex needs. In response to drug-related deaths, Public Health England is looking at how we protect people from dying of overdoses. It has published updated guidance for mental health and substance misuse treatment services, to help them to work better with people who have co-existing mental health, alcohol and drug problems.
In addition, local authorities must ensure that treatment services respond to the changing patterns of drug use. Treatment has been demonstrated to have a significant protective effect, without which the recent rise in drug-related deaths is likely to have been higher. Drug treatment can also cut crime. Recent analysis by the Ministry of Justice and Public Health England showed that 44% of people in treatment had not offended again two years after starting treatment. In recent months, as we heard from my hon. Friend the Member for South Thanet, there have been deaths linked to fentanyl-contaminated heroin in parts of the UK. He gave us a graphic illustration of the impact in certain parts of the United States. I agree that that is extremely worrying. It underlines the importance of vigilance and strong enforcement action by the police and the National Crime Agency, as well as accessible treatment and the availability of life-saving interventions such as naloxone.
The use of synthetic cannabinoids, often called Spice, among the homeless and prison populations is a real concern for the Government. That was raised by a number of hon. Members. The Government have already taken action to classify third-generation synthetic cannabinoids, such as Spice, as class B drugs under the Misuse of Drugs Act 1971, giving the police the powers that they need to take action, making possession illegal and delivering longer sentences for dealers.
I thank right hon. and hon. Members very much for their contributions this afternoon—obviously, it is a split debate and a split decision. I will put just one thing on the record now, if I may. We tend to make dangerous things illegal. When firearms are used to commit dreadful offences in the US—
Motion lapsed (Standing Order No. 10(6)).
Hydraulic Fracturing: North East Derbyshire
[Mrs Anne Main in the Chair]
I beg to move,
That this House has considered the potential effect of hydraulic fracturing in North East Derbyshire.
It is a pleasure to serve under your chairmanship, Mrs Main. I am grateful for the opportunity to talk about an issue of immense importance to me and to the residents of the constituency that I have the privilege to represent.
North East Derbyshire is part of the petroleum exploration and development licence 300, which was issued by the Department a couple of years ago. About a year ago it became apparent that we would probably see some exploratory drilling in my constituency, close to the picturesque village of Marsh Lane, which is in the stunning Moss Valley in the north part of my constituency. A formal planning application came forward for this exploratory drilling on 8 May. The holder of the PEDL licence, INEOS Upstream has put forward an application for exploratory drilling in Marsh Lane. That planning application is still under way with the minerals authority of Derbyshire County Council and we expect a decision on that application in the new year.
I want to place on record my complete and absolute opposition to exploratory drilling, which may lead to fracking, in the North East Derbyshire constituency and particularly at this particular site near Marsh Lane. I will talk extensively about my reasons for doing so. To be clear, North East Derbyshire does not support or want this application, and it does not want to see drilling on a historical, agricultural area of land, which can clearly be seen for miles around as it is on the brow of a hill in the middle of green belt, next to a conservation area.
I know that fracking is a hugely controversial area of public policy, and I cannot hope to do justice—
This is an important issue in my hon. Friend’s constituency and across the country, but we need to make sure that we continue to look at alternative sources of energy for this country, where energy security is a big concern for domestic users—for their own electronic equipment and devices—but also for businesses as we hope to encourage them to come here. More alternative methods should be looked at, and I am hoping to have tidal lagoon in my constituency to generate energy.
My hon. Friend highlights a point that I will come to in a moment: we have a variety of potential opportunities here, including some we have not necessarily thought about previously, such as tidal lagoons.
Proponents of fracking would argue that the United Kingdom, blessed by large-scale energy resources, should take the opportunities to harvest the energy beneath its sea and soil, to improve our energy security and ensure we are diversifying our energy mix. “Rejoice!” they will say, “The United Kingdom has a long and rich history of mining in this part of the world and across the United Kingdom as a whole, and fracking is just another innovation in a long seam of innovation that helps to heat our homes and allow us to drive our cars.”
The alternative argument is equally clear and concise, if not more so. “Fracking,” say its opponents, “is an energy activity which we do not need and should not support.” For some, that is down to environmental concerns. The continuation of hydrocarbon development in our country is not something we should support, in understanding the challenges we have in the coming decades. For others, such as me, it is the sheer imposition and impact of this kind of activity on areas that have been rural for hundreds of years and never seen anything like the kind of development that is proposed if fracking happens.
Does the hon. Gentleman agree that the problem with the application in his constituency is not just the impact it will have there, but that it could be the tip of the iceberg for applications in surrounding constituencies, such as my own, that are in urban areas? This is not just an issue for rural areas. All the surrounding areas are considered to be high risk by the Coal Authority.
The hon. Lady brings up an important point—one that I will come to later in my speech, because it is vital to understand that specific point before we conclude.
Some will argue from an environmental perspective, some from a perspective on the sheer imposition of activity, and others will be concerned about the uncertainty that fracking brings, for a multitude of reasons, which I cannot hope to go into in this short debate. Others would simply point to the Department for Business, Energy and Industrial Strategy opinion tracker on fracking, which shows that only 16% of people were in favour of fracking in the latest survey in August this year.
I acknowledge that the Government take a different view from me and many of my residents. I accept the place the Government start from—I have no criticism of that—which is that we need to improve our energy security, diversify our energy mix and ensure we can bridge to the future when renewables can take on a greater share of the energy generation that we need in this country, but I do not agree with the Government’s conclusion on this particular issue.
I accept that energy production has fallen by over a half since 2000, that we are back to pre-North sea oil levels of imports and that we are obtaining an increasing volume of gas from Qatar to heat our homes. I accept that renewable energy remains at a smaller level of energy generation than we would all hope, although it has grown massively from negligible levels just a few decades ago. Even as a fracking sceptic, I accept that there is a debate to be had on how we continue to keep our homes warm, our cars moving and our factories working.
City of York Council policy is to not have fracking, yet INEOS Upstream is at its heels. In Kirby Misperton, 99.2% of the community in a survey said they did not want fracking, but fracking is now going ahead. Is it not vital that we listen to the community and also the environmental protectors, who are there night after night and day after day protecting that site at Kirby Misperton, wanting to ensure that those environmental standards are upheld?
I point out that the interventions are incredibly long—they are becoming mini-speeches. I ask that the hon. Member be given the courtesy of being able to continue his speech.
I agree with the hon. Lady in terms of the importance of local communities being taken along with the country as a whole when it comes to fracking. Whatever people’s views are on fracking, there is certainly a job to be done on that.
Notwithstanding all the challenges to national policy I have described, that does not mean that we should automatically default to being in favour of fracking. In the main Chamber today we heard other examples of how we can improve and make better use of energy through new tax breaks and by trying to re-stimulate North sea oil. I welcome such activity, but I do not believe that the United Kingdom is so far having the conversation that it needs about the impact that fracking will have in some areas, such as mine.
In addition, we have not understood properly the issues that will be created for nearby residents, for businesses that need to continue to operate on a daily basis and for communities who will live in the shadow of the kind of proposals put forward for North East Derbyshire. Even if one agrees with the principle of fracking—I respect absolutely those who do, but that is another discussion we do not have time for now—that does not mean that fracking is appropriate in all circumstances or all places, or that it should be supported in all instances. That is the crucial point for me. Fracking is a highly intense, high-impact, large-scale set of activities, often but not always in rural areas, and it will change the nature of our countryside for decades. It cannot be the case even for the most ardent of its supporters that fracking is appropriate everywhere. If it should not be done in some places, I am positing that it should not be done in north Derbyshire because it is inappropriate there.
As the MP for a constituency that is also in Derbyshire, I accept the valid points that the hon. Gentleman is making. Is it not most regrettable that the Government have passed policy meaning that even if county councils reject an application for fracking, that will almost certainly be overturned under the Government’s guidelines and therefore the views of communities are not being taken into account?
I understand the point that the hon. Lady is making, but I am not sure that I necessarily agree with her conclusion. There have obviously been some places where the planning inspector has rejected the rejection of the planning authority, but in others the planning authority accepted the application in the first place or the planning inspector has not yet made an absolute decision. I do not think it is as cut and dried as the hon. Lady suggests.
I have no doubt that I will be labelled a “nimby” for what I am saying in this debate. It might be said that I do not like it just because it happens to be in my part of the world and that I would not be here right now if it were not for the fact that the field that it is being proposed to dig up is in the middle of my constituency. Many of my constituents would have absolutely no time for those sentiments. North East Derbyshire is not full of nimbys. We have spent most of the past four centuries digging up coal, oil and gas in order to support people, to heat their homes, to allow them to drive their cars and to enable them to ensure that their factories still work, and we have lost men, sacrificed health and scarred our landscape as a result. On a personal level, both my grandfathers worked down the pits; one died as a result of the health injuries that he incurred down there, and the other lost his leg. Many of my constituents worked in the production of energy for many years. The last coal mine in my area closed within living memory. I have sat in living rooms that have lamps from 40 years ago, collected when the mines were still open, surrounded by the memorabilia of those coal mining areas, which are now saying that they do not want fracking in their part of the world.
We are not nimbys. We have looked at the proposal in our area and we have concluded that Bramleymoor is a thoroughly inappropriate place to undertake this activity. We have rationalised, for good and honest reasons, why we do not want the kind of industrialisation that this would bring. Some in my area have gone further and turned against fracking as a whole; a number would ban it. Whatever the disparate reasons—I do not concur with all of them—we are stronger together as a group and we stand as one and say in unison: we do not want the Bramleymoor Lane application; we do not need it; and we should not have it.
Does the hon. Gentleman agree that one of the biggest downsides to fracking is the amount of traffic movements involved? While this application does not directly impinge on my constituency, if contractors take a different route through Ridgeway village, it could cause major problems for my constituents as well.
I absolutely concur. I will come to traffic in a moment, but I understand that if this application goes ahead, the traffic management plan is likely to propose that it goes away from the hon. Gentleman’s constituency. However, I cannot imagine the concerns that lorries going round 90° bends and down one-way streets would create in Ridgeway and Ford, were that to happen.
As I said, the location of this proposal is Marsh Lane, which is a small and picturesque village in my constituency with approximately 800 residents, in the stunning Moss Valley just south of Sheffield. Those constituents have been hugely welcoming of me since my election last June. The village has two pubs, a bustling community and a primary school of about 100 children. This proposal would be just a few hundred metres from where those primary schoolchildren play on a daily basis.
Near Marsh Lane, and also substantially affected, would be the villages of Apperknowle and Unstone, the suburb of New Whittington, the towns of Dronfield and Eckington, the hamlet of Troway and the village of Coal Aston where, if this goes ahead, it is expected that thousands of lorry movements will traverse narrow streets, go round the sharp country bends—as the hon. Gentleman talked about—and go past the frontage of hundreds of houses in order to enable the activities taking place down the road. By any measure, Bramleymoor Lane is a thoroughly inappropriate place to frack.
Picture the brow of a gentle hill, which can be seen for miles around. If this application is approved, a 60 metre-high drill rig will go on the brow of that hill for months to enable the initial drilling. Even when that drilling rig is removed—I accept that it will not be there for the entire time—the planning application confirms that up to 17 different bulky and highly visible items would remain there for up to five years: a 2 metre-high fence, 4.8 metre-high bunding and fencing, multiple 3 metre-high cabins, acoustic screening up to 5 metres in height, four lots of security cameras of 5.5 metres high, a 9 metre lighting rig, a 10 metre-high emergency vent, a 4.5 metre-high pressure control and a 4 metre skid and choke manifold. This is not a minor incursion into a landscape with similar features. It is the wholesale industrialisation of the Derbyshire countryside, which has never, at least on public record, seen the kind of changes that are proposed. I have spent time in the Derbyshire Record Office going through and looking at maps, and as far as I can see Bramleymoor Lane has had three centuries of agriculture and nothing like the kind of industrialisation that is proposed.
The effort required to start this process is large, imposing and disruptive. If it happens, there will be 14,000 vehicle movements over the next five years. Various road layouts leading to the site would need to be reconfigured, not because the cars using them every day need that to happen but because the huge lorries that would need to come through to set this up cannot get around the corners and the paraphernalia that is already on the road. There would be the removal or reduction of an undetermined amount, but probably up to half a kilometre, of mature hedgerow that has probably been in that location since 1795, when the enclosure Acts created the aesthetic in that part of the world. There would be the installation of permanent lighting across the site, just a few hundred yards away from families and houses, and many more things I could mention, including the impact on animals, flora and fauna; the loss of land likely to have been in agricultural use for centuries; noise impacts; and the potential for air pollution. Whatever our view on fracking, if there was ever a place for it not to go, it would be here.
When I speak with residents they are often in tears about this issue. They are reasonable people and they understand that the United Kingdom needs to make progress. They understand that the Government have a challenge to ensure that we have the energy we need to heat our houses, and they understand that we need to ensure the safety and security of our energy supply going forward. But, respectfully, they are unconvinced by this proposal. A petition on this specific topic has now reached 88,000 signatures. There are 5,000 objections to the planning application alone.
Yet it is my final point that is of particular concern to me, and it was referenced briefly a moment ago. Everything I have described so far is for a single application for a period of up to five years. I hope it does not go ahead; but if it does, my concern is about the wider impact if that drilling is successful and it is determined that Marsh Lane, Bramleymoor Lane, my constituency as a whole and the neighbouring constituencies are appropriate places to frack.
The drilling companies themselves have indicated that, in such an instance, the kind of impact that I have described would be multiplied many-fold over the near area. Up to 30 wells could be accommodated within a 10 km radius, according to the applicant’s own leaflets, of which I have copies. That equates to a concrete well pad, machinery and rigs for some of the time, and all the impacts every couple of kilometres, which I have just described. In addition, new pipelines and significant traffic movements to bring in water will be necessary—tens of thousands of vehicle movements, multiple fracking sites and myriad pipelines, all primarily in rural areas. Whatever our view on fracking, that is a wholescale change to our landscape and an even more pronounced reindustrialisation of an area. Such a planning application for anything else—housing, business or commercial—would be rejected.
The motion states that the House has considered the potential effect of hydraulic fracturing in North East Derbyshire, so we need to consider the noise, the pollution, the traffic, the disruption, the change, the pipelines, the rigs, the well pads, the security, the fences and the impact on that beautiful part of the world. The residents of my constituency have considered it, I have considered it, the villages around Marsh Lane have considered it, and we do not want it.
As ever, it is a great pleasure to take part in a debate chaired by you, Mrs Main. I thank my hon. Friend the Member for North East Derbyshire (Lee Rowley) for securing the debate and the other hon. Members for their interventions. I am afraid that I do not know his constituency personally, but I say to the Opposition Members from Sheffield that I was brought up in Attercliffe in Sheffield, so I know the area quite well. [Interruption.] It is not the posh bit, it would be fair to say. Apart from my memories of Castle Market in Sheffield, where my father had his market stall for most of my childhood, I have no local knowledge, but I have listened carefully to my hon. Friend.
I accept that this is not really a debate about fracking versus not fracking—a topic that this Chamber and the main Chamber could discuss for several hours, if not several days—but I want to put on record my view that shale gas clearly has the potential to power growth, support thousands of jobs and provide a new energy source. My hon. Friend the Member for Southport (Damien Moore) said that fracking has its plus points and makes us less reliant on imports from abroad, and so on. I felt that point was well made, and it does have to be made.
As my hon. Friend the Member for North East Derbyshire is aware, it is not really for me to comment on the Marsh Lane planning application. That is exactly what our local planning system is for. However, having heard from him in his eloquent remarks about the number of protests in the area against the petition and all the official responses, I feel that while my job has its contentions, I would not like to be one of the local councillors on the evening when that is considered.
It is for me to mention some of the matters that a local planning authority should consider when making its decision. Planning is a quasi-judicial process and any planning decision should be taken in line with due process and a fair hearing. To ensure that the local community has had the opportunity to raise any material considerations, the planning authority will seek views from the local community—as the planning authority presumably has, given what my hon. Friend said. That provides, quite properly in a democratic system, precisely the platform for the kind of process that he mentioned.
Given that 99.2% of people around Kirby Misperton raised serious concerns in the consultation, how can the community have a voice when it was completely ignored and the fracking went ahead?
I am afraid that I do not know about that particular application, but we have been discussing the local planning procedure and I am sure that the officers and councillors of that area would take that into consideration—[Interruption.] Well, in my experience of a lot of planning applications in my constituency, they do in some and in some they do not. I cannot say that we have had anything like fracking, but in the normal system, that is what the democratic process involves.
The cumulative effect of shale developments need to be taken into account. The national policy is clear: when planning permission is granted for shale gas, the cumulative impact of potentially multiple shale sites has to be considered. My hon. Friend the Member for North East Derbyshire made that point towards the end of his speech. Such sites are not just considered in isolation. That is part of the national planning policy. Local authorities have the power to assess and restrict the cumulative effects of shale sites, which include some points that he made about the adverse impact on the natural or historical environment. The Government’s view is that the protections are sufficient.
As with any construction project—my hon. Friend might not want any in his constituency; that is a perfectly reasonable view—there will be some element of disruption. The planning guidance clearly sets out how surface-level considerations—such as noise, dust, air quality, lighting and the visual impact on the local and wider landscape, as well as traffic, which the hon. Member for Sheffield South East (Mr Betts) mentioned—should all be addressed by the local planning authority. That has to be considered. Such authorities, including his own, can refuse the application or impose operational restrictions for that reason or any other that they consider appropriate.
In my understanding, from the research that we did when we found out about this debate, the application at Marsh Lane is not for hydraulic fracturing, but for stratigraphy tests—I hope hon. Members will excuse my lack of a scientific background, but the application is not for hydraulic fracturing.
My constituency also falls under the same local authority. Given that the Minister will ask the local authority to look into all the very valid points raised by the hon. Member for North East Derbyshire (Lee Rowley), if the application is thereby refused by the local authority and is called up before the Secretary of State, will the Secretary of State then give due weighting to exactly the same arguments from the community in contravention of the guidance that has been given?
I am not actually making a point about this case; I am saying that there is a duty to look into all these points.
Should the Secretary of State not do so as well?
The Secretary of State at the Department for Communities and Local Government—not at the Department for Business, Energy and Industrial Strategy, because this is not dealt with commercially, but as a planning application—does, I am sure, know their duties perfectly well, which in this case are quasi-judicial in nature and, I am sure, include those particular things—[Interruption.] Well, they do.
As for the benefits of shale, all our constituents have to consider what the benefits and disadvantages might be, as with anything else. The benefits might include a community benefit fund, for example. In Lancashire, there was an application in which Cuadrilla—another company that does this sort of thing—announced that £100,000 would be given to an independent community benefit fund. Local residents are consulted on this matter. The Treasury recently set out proposals on how the new shale wealth fund will be delivered. I will not go into detail on that, because I know there is very little time left.
Local people are part of the whole system, which could deliver very large sums of money to constituents in these areas. They may decide it is not for them, but they also have the right to decide democratically that it might be. I would not rule that out. That money is in addition to any existing local government funding. It is not there to replace existing projects, but it would improve local jobs and tax revenues, and so on. There are plus points.
The Government will only allow the development of a shale gas industry in a safe way, both for the environment and local people. There are plenty of legal safeguards, through the Infrastructure Act 2015 and other measures. Some environmental issues were mentioned in relation to mining in previous generations, including flooding, all of which the ancestors of my hon. Friend the Member for North East Derbyshire would have suffered from, so those are already in the system. We have banned fracking from many valuable areas such as national parks, the broads and areas of outstanding natural beauty.
I wish I had more time, but I will conclude by saying that, if successful, the shale gas industry could have good points for the country, but as with anything else there is a balance between supporting the industry and protecting the countryside. There is flexibility in the local planning system to ensure that the views of local communities are considered and that local planning authorities take into account the particular characteristics of a proposed site—that is why it is a “local” system. The Government are keen to see shale gas go ahead in the UK, because we want the opportunity for the country to benefit from it, but I fully accept all the points made by my hon. Friend. I congratulate him on making those points—everything he said has been carefully noted.
Question put and agreed to.
Public Country-by-country Reporting
I beg to move,
That this House has considered public country-by-country reporting.
I thank the Minister for being here. Today is a busy day for the Treasury, so I am grateful that he has found the time to respond to the debate. I also thank him for some of the measures that we heard earlier in the Budget, especially on the challenge that the digital economy and large companies pose to our tax system and the further measures to try to ensure that they pay all their VAT. We have been asking for those measures and it is great to see some progress. It shows that we all share the same goal: we want the largest companies to pay their fair share of tax in all the countries in which they operate. Any measures we can bring into force to do that will be greatly welcomed and that is exactly what we are trying to achieve here.
We are pressing the case for the largest companies operating in the UK to publish the country-by-country reporting that they are already required by the Government to do privately for HMRC, so that we can all see exactly where they are making their profits, where they have employees, where they have sales revenues and what tax they are paying on a territory-by-territory basis in all the key territories in which they operate. I strongly believe that the only way we will make real progress on these issues is to make companies publicly accountable so that they have to publish what they are doing and where, so that we can all see it and challenge them. If there are no adequate explanations for why they are reporting large profits in territories with very few employees, very low revenue and very few assets, perhaps we will have to conclude that they are doing that just to avoid paying their fair share of tax. We can all make a sensible buying decision on whether we wish to use those companies at all.
We will not achieve the solution that we want—everyone paying their fair share—by expecting HMRC to do all the compliance work and to challenge every company that is out there operating in the UK. We have to find a way to change the behaviour of the largest companies and to show that we do not believe that the use of aggressive tax avoidance, artificial structures or territories in which they have no substance is an acceptable way to behave. If we can achieve that behaviour shift, it will be far easier for us to collect the taxes that we want. I do not think there is any disagreement on that between hon. Members here who campaign on this subject and the Government; it is what we all want to see. The Government have followed exactly that approach in recent years.
This year, the Government are requiring very large businesses to publish their tax strategy and set out their approach to tax risk, tax compliance and tax planning. The reason for that was not to put an exciting document out there for tax professionals to argue about, but to make the highest levels of management at those companies think through their tax policy and their relationship with HMRC and set those out in a public document that we can all read and challenge. The aim was to improve their behaviour on the basis that the more sunlight we can shine on such issues, the more likely it is that we can change behaviour. We are not asking for a quantum shift from the Government’s existing approach, or for a huge amount of extra work on behalf of those companies, or for companies to put incredibly sensitive commercial data in the public domain. We are asking for an extension of the existing process, so that it includes this most important information: exactly how much money they are making in each territory and how much tax they are paying there.
The hon. Gentleman makes a compelling case. I asked two parliamentary questions last month about the Government’s strategy on country-by-country reporting. In both answers, the Government referred to the fact that they are making deliberations within ECOFIN, which is fine while we are members of the EU. Does he know what the Government’s strategy might be when we are no longer members?
That might be slightly above my pay grade, but I am grateful for the hon. Gentleman’s questioning of that situation. That is the challenge we put to the Minister today.
The Government have already imposed a requirement on the largest companies operating in the UK to give that information to HMRC. Two years ago, they accepted an amendment from the right hon. Member for Don Valley (Caroline Flint) to take the power to make that information public. Today, we ask the Government to set the date by which they will start to require that information to be in the public domain, maybe as a backstop so that if EU discussions on doing it multilaterally have not worked by—I do not know—the middle of 2019, we will require UK companies to start doing it and we will take the lead in that situation. That would be consistent with the timing of our departure from the EU.
I think we all agree that the ideal situation would be multinational and multilateral—preferably an OECD or a G20 requirement—so that most of the developed world was doing it. If we cannot have that, we would like the EU to do it. We would like the EU proposal to do something similar to what we want, but it does not entirely do that because it includes disclosures only for EU countries and countries it prescribes as tax havens. We would like a proper territory-by-territory disclosure of all the countries that are material to a company’s operations. That EU proposal is stuck, however; it is not happening any time soon. We want the UK to set an example and show the EU and the world that we are prepared to lead on this. We are the largest financial centre. We have huge numbers of very large companies listed on our stock exchange. It is right that we set an example and say, “This is the kind of transparency we expect if you want to operate in the UK and be listed on our stock exchange.”
The Minister and his predecessors have argued that public reporting could be a bad thing for the UK for various reasons, such as that it would make us less competitive. I am not convinced by those arguments. I will run through some of the disclosures that we already expect from our largest companies. Under international financial reporting standard 8 on operating segments, large companies must produce in their financial accounts an analysis by the key operating segments of their revenues, profits and all manner of other things. I am sure that before that standard came in they would have argued that that was incredibly sensitive commercial information, which they should not have to produce—but they do. Paragraph 33 of IFRS 8 sets out that companies need to provide
“analyses of revenues and certain non-current assets by geographical area—with an expanded requirement to disclose revenues/assets by individual foreign country (if material), irrespective of the identification of operating segments”.
There is already a rule out there for very large companies, especially those listed on the stock exchanges that use IFRS, that they have to publish that information in some form. We are not expecting them to do something dramatically different, but to publish that in a coherent format where we can see and understand it.
I would go further and say that over the last few years, we have so increased the requirements for what we expect large companies to disclose that that level of information by territory would not be a significant increase. In 2013, statutory instrument No. 1970 introduced a requirement for companies to produce a strategic report that has to include
“a fair review of the company’s business, and…a description of the principal risks and uncertainties facing the company.”
It must be
“a balanced and comprehensive analysis of…the development and performance of the company’s business during the financial year”.
It must also set out
“key performance indicators, including information relating to environmental matters and employee matters.”
To expect companies to come out and say what their KPIs are, how they performed against them, and set out the key risks facing them—they are quite wide-ranging disclosures. It shows that we have moved ever onwards in expecting companies to report on their corporate social responsibility, hence all the requirements that we have imposed on companies such as giving details of their employees and the gender pay gap, commenting on their environmental performance, and the transparency requirements about corruption, bribery and anti-modern slavery. I do not think that most of our constituents regard tax as different from corporate social responsibility; they see paying a fair share of tax as part of a company’s responsibility. If we require companies to report on so many other worthwhile things, why not require them to report how much tax they pay in each territory? If they are paying the right amount, they can show that transparently; if not, they can explain why not.
The concern that requiring public country-by-country reporting would dramatically disadvantage UK companies or scare them off from having head offices here is an overreaction. In fact, it would be a sensible extension of existing requirements, including those for segmental reporting or for a tax note that explains the difference between the rate paid and the statutory rate. The information currently published is so limited, hard to understand, condensed and—some might say—twisted that no one can make any sense of what companies are doing. In cases where a company operates in a jurisdiction with an average effective rate of 25% but pays 3%, that information is not readily available to us.
The advantage of requiring public country-by-country reporting is not only that it would change companies’ behaviour, but that it would restore people’s confidence that our tax system is fair, that companies are paying the right amount of tax, and that we are doing all we can to collect it. If we imposed such a requirement on the large companies that are sheltering their profits in places where they have no real presence, I suspect they would stop doing it. That would boost confidence by allowing us to see from companies’ disclosures whether they have been caught by the rules and required to pay extra tax. It would also show us the exact scale of aggressive tax-abusive behaviour. Most multinational companies are probably not engaging in such behaviour; they probably just want to know the right amount of tax to pay per territory and get on with running and growing their business.
Restoring confidence and belief in our tax system is extremely important, particularly to the UK as an outgoing, exporting, global economy with a lot of intellectual property assets and a commitment to science and research. We do not want the world to move to an aggressive tax that attempts to clobber companies on turnover without looking at their real profits per territory. Our UK businesses will lose if we do not get the level of confidence right. If we cannot find a way of enforcing our rules, changing behaviour and restoring public confidence, Governments around the world will have to take other action to recover revenue. In the long run, it is absolutely in our interests to get this right, which we can achieve only with sunlight and transparency.
I commend the Government for the position paper they published today on the challenge to our tax regime posed by the digital economy. It includes some sensible ideas, such as charging tax on royalties paid offshore. Its second paragraph points out that the Government have taken
“bold unilateral action where needed”
to tackle the issue. That is exactly what we need on transparency: bold unilateral action. If we cannot agree on an EU-wide approach within a sensible timeframe, let us set a date for taking the lead and setting an example. I am not fixated on any particular date—if we need until 2019 or 2020 for negotiations, I accept that—but will the Minister tell us the Government’s backstop date for getting a multilateral deal? If they cannot get such a deal, when will they act, unilaterally if necessary, to impose this policy in the UK?
I am delighted to serve under your chairmanship, Mrs Main. I thank the hon. Member for Amber Valley (Nigel Mills), my colleague and friend, for securing and introducing this debate. I will focus on the case that investors are now making for public country-by-country reporting; an interesting development is that more and more investors are concerned about the behaviour of the companies they invest in, including whether they are paying their fair share of tax on their economic activity around the world.
Principles for Responsible Investment is a United Nations-backed organisation with more than 1,860 signatories —asset owners, investment managers and service providers. It is trying to develop a dialogue with firms about responsible tax strategies. Its website defines its mission as follows:
“Responsible investment is an approach to investing that aims to incorporate environmental, social and governance (ESG) factors into investment decisions, to better manage risk and generate sustainable, long-term returns.”
Its guidance for dialogue with firms includes the following observation:
“An aggressive corporate approach to tax planning should be a concern to investors as it can create earnings risk and lead to governance problems; damage reputation and brand value; cause macroeconomic and societal distortions.”
Under the subheading “Why now?”, it further observes:
“Stronger enforcement around the world and increased media and civil society scrutiny have made multinational companies much more vulnerable to unexpected tax assessments and increases in tax liability and reputational damage.”
In a section headed “Transparency on tax strategies, tax-related risks and country-by-country activities”, PRI’s working group on tax disclosure makes the following recommendation:
“Detailed reporting would provide an overview of…country-by-country reporting details, including a list of all subsidiaries and their business nature…as required by the appropriate OECD-BEPS templates”.
That would be helpful. The welcome dialogue encouraged by PRI is a sign that awareness of the implications of aggressive tax avoidance is growing and that investors want to know more about company tax strategies.
Last night, I was at a dinner organised by Fair Tax Mark and SSE to discuss approaches to tax transparency with other companies, including investment organisations. It was interesting to hear from a number of firms that increased openness about how much tax they pay and why has become an important part of boards’ discussions and has benefited how boards approach the issues. A number of representatives also pointed out how positively their own workforce had responded to increased openness, because it made them feel good about what their employers were doing—not only creating jobs, but putting something back for the wider good of the communities where they work and create wealth.
As MPs, we often receive information from companies in our constituencies and elsewhere about how much they contribute to the public good in the United Kingdom. They should be praised not only for the jobs and wealth they create, but for what they put back into communities. Firms put money into the environment, encourage their employees to be volunteers, and make efforts in many important areas; a number of children’s football teams local to me have benefited from football strips funded by corporate concerns. However, what I want to hear more than anything else from companies in my constituency and multinational companies in London or our big cities is how transparent they are about the tax they pay. That needs to be the headline, because any doubt that they are paying their fair share of tax undermines all their good work for the public and the community.
I believe the world is moving towards greater transparency. I would be interested to hear the Minister explain, when he replies to this debate, why companies in the extractive and financial sectors already have to put this information into the public domain and why they do not see that as a risk in terms of competition. They have accepted that it is something they have to do. Why is it okay for the companies in those sectors to provide this information, but somehow there is a barrier to other companies in other sectors joining forces and providing this information?
When the Minister sums up, I would love to know what level of multilateral co-operation is necessary. How many other countries does it take to form a critical mass and enable the UK to move forward? Should this be through the EU or through the UN? It would be really interesting to know what threshold we are working towards to bring into being the enabling power already contained in the Finance Act 2016—because the Government adopted my amendment, which was a cross-party amendment—to introduce country-by-country reporting.
I really believe that the world is moving towards greater transparency, and the Government have a choice, as my friend the hon. Member for Amber Valley said. Is the UK going to be a leader or will we just follow the pack?
Before I call the next hon. Member, let me say that there are three Members who wish to speak, and I will begin calling the Front Benchers at 5.10 pm.
It is a pleasure, Mrs Main, to serve under your chairmanship—sorry, chairship. Or is stewardship the right phrase? Apologies.
I will try to keep my comments brief. I commend my hon. Friend the Member for Amber Valley (Nigel Mills) for securing this debate. As an accountant—I refer people to my entry in the Register of Members’ Financial Interests––I am genuinely delighted to speak in this debate. In the light of the Paradise papers, it has become increasingly clear that this issue needs to be addressed. Currently, multinational enterprises are not required to publish the details about the amount of tax they pay in each country that they have operations in, as hon. Members have already mentioned.
As we have heard, the Government have a strong record of closing tax gaps, increasing some of the tax revenue and bringing down the tax gap in our country. Proposals put forward in 2016 introduced provisions requiring multinationals to provide Her Majesty’s Revenue and Customs with an annual country-by-country report, showing how much revenue and profit they earn, how much corporate income tax they pay, and their total employment, capital, retained earnings and tangible assets. That will help HMRC, but that information will not be made public, which will not promote the trust and transparency that other hon. Members have called for.
The debate has therefore shifted, quite rightly, to whether we introduce the public country-by-country reports, and whether we should do so unilaterally or on a multilateral basis. Although acting unilaterally would obviously give us some thought leadership, it could put us at a competitive disadvantage, especially going into the era of uncertainty over Brexit movements.
The UK Government have a strong record of leading tax reporting and combatting tax evasion efforts internationally. They have established quite a comprehensive and effective model, and they initiated some of the country-by-country reporting during Britain’s G8 presidency in 2013. The UK was also the first country to commit to implementing the OECD model for country-by-country reporting, with the provisions in the Finance Act 2016, which have already been referred to.
This is not just a British problem. I am sure that hon. Members have read plenty of reports from our cousins in the United States, where it is estimated that $1 trillion in commercial returns is being held overseas rather than being repatriated to America. That money could go towards restoring half the infrastructure across the entire United States, so there are real gains for countries if they sign up and help with some of the thought leadership on this topic.
This is a timely debate, because in our increasingly connected world—both physically and digitally—transparency becomes more and more important. It is important to my constituents, including business owners, in ensuring real trust in who they are doing business with and how they are doing business, not only in the United Kingdom but elsewhere around the world.
In a previous life, I had the pleasure to work with His Royal Highness the Prince’s Accounting for Sustainability Project, which champions increased reporting requirements, mostly on environmental and social measures. It also champions examples of best practice internationally, to ensure that companies are reporting in the most transparent way and to the highest standards of international practice. Its sister organisation, the International Integrated Reporting Council, has led the way in setting international standards and bringing companies, Governments and other public bodies together to champion and share best practice and to show some of the real returns for investors and customers alike.
As we have seen our economy change, intangibles have become increasingly valuable to companies and investors. I was working on a project just two years ago, and it was estimated that around 80% of the value of the Standard & Poor’s 500 was being held as intangibles rather than as tangible assets. When we start to consider the consequence of these intangibles, it becomes increasingly important that around the world companies need to be as transparent as possible, not only about the physical capital they hold but about their human and social capital.
Clearly, the best approach is to continue pursuing this as an international goal. The Government are right to seek international support—I will support my hon. Friends whenever I can to gain that support—to ensure a comprehensive and effective model for public country-by-country reporting. To that end, I was pleased to note that the European Commission has proposed public country-by-country reporting at EU level, which I know the Government support, and I hope that, regardless of the outcome of Brexit, we will continue to work together to achieve that with the EU and other international organisations worldwide.
It is a pleasure to speak before you this afternoon, Mrs Main. I join others in congratulating the hon. Member for Amber Valley (Nigel Mills) on securing this debate. I also congratulate my right hon. Friend the Member for Don Valley (Caroline Flint) on actually getting this practice on to the statute book in 2016.
I will just add, very briefly, to what has been said so far. It is great that there is consensus this afternoon across the parties, and that kind of consensus is what I have encountered in many of the discussions that I have had on these issues. I hope that the Government will listen and act on that consensus in a way that would win support among the vast majority of Members of this House and outside this House. My only quarrel with the hon. Member for Amber Valley is that I do not think that would be taking unilateral action; I think we would be showing bold leadership if we were the first to act in this area.
I want to make three brief points. First, one issue arising from the Paradise papers that has not been raised, and for which country-by-country reporting would be an important part of the answer, is that corporations and companies were revealed to be seeking locations for their business in a way that would create artificial financial structures that existed simply for the purpose of avoiding tax. Apple received some coverage in the papers, but it is utterly awful that all Apple’s activity outside the USA is now housed, I think, in Jersey and is worth, according to what we can uncover, £252 billion. It is very difficult to find what Apple’s rate of tax is, but one of its companies—according to the European Union, I think; no doubt my hon. Friend the Member for Oxford East (Anneliese Dodds) will make this clear from the Front Bench—ended up paying a rate of tax of 0.005% on its earnings here.
It is clear from the Paradise papers that Apple sought to find a financial structure that would allow it to avoid paying tax in those jurisdictions outside America where it carried out its economic activity and secured its profits. One of the purposes of transparency in country-by-country reporting would be to see where Apple was undertaking its economic activity and therefore where it should be taxed. Over half of Apple’s business is outside the USA; it is simply not getting taxed in the places that it should be.
The other company is Nike. Anyone who buys a pair of Nike trainers in any UK shop would think that the tax was paid here, but it is not. It used to go to Holland and it then ended up, in a complicated way, in Bermuda. Since then, a new structure has been invented: Nike Innovate C.V. It is a virtual entity; it does not have a location. It is not based anywhere. That structure enables Nike to avoid paying the tax that it should in the jurisdictions where it carries out its business and makes its profits. The big corporations would not be able to carry out their business in the way they currently do, as revealed most recently through the Paradise papers, if we had transparent, open, public country-by-country reporting.
The second thing I want to talk about is collecting money from tax avoidance. I hope the Minister will give us a bit of information in his response, as I am rather tired of hearing from the Prime Minister, the Chancellor and the Minister about how brilliantly this Government are doing at collecting that money.
The Minister is nodding his head, but the Government should be honest with us. The figure of £160 billion that is currently used—I have heard it used time and time again—is simply an HMRC estimate of the money due from tax avoidance that it has uncovered. It does not tell us how much has been collected or how much has been added to the coffers.
Since the Minister used the figure in a debate last week, I have tried to identify how much we have actually got in. I have asked everybody. I have asked the National Audit Office and the Library. I have tabled questions to the Minister, to which he has yet to reply—perhaps he will reply this afternoon. No one actually tells one how much has been collected in tax avoidance. My guess is that it is a tiny, minute amount of that £160 billion that the Government claim they have got in. Please be honest with us. A little bit of honesty will enable us to have a proper debate.
The final point I want to make, adding to what others have said, is that if the Minister showed the bold leadership we want him to show by having public registers of beneficial ownership, he would be incredibly popular. I would have thought that there could not be a better time than now for Conservative Members to try to gain some popularity. I will give three examples of what has happened recently. After the release of the Paradise papers, the Tax Justice Network launched a petition that gained more than 200,000 signatures. It has now presented that petition to Downing Street. Oxfam did some polling that showed that eight out of 10 members of the public think that multinationals with UK headquarters should publish information publicly about the size of their profits, where they are made, what taxes are paid and the countries in which they operate. Some 70% of Conservative voters believe that the Government should be more active in tackling tax avoidance by companies. Some 80% of Conservative voters are in favour of tougher transparency rules for companies.
The final survey I wanted to refer to was of the FTSE 100. Four out of every five of the top 100 FTSE companies would not oppose the introduction of a legal requirement to make their country-by-country reports public. In fact, a large number would support it. The hon. Member for Amber Valley eloquently made the point that the reporting requirements in other legislation to date are pretty open. Why not put this requirement into the mix? It is supported by the analysis.
This is the fourth debate on these issues in the past month that I have participated in, and I will carry on holding such debates time and time again. I am sorry if the Minister feels it is not the best use of his time, but we will carry on doing this. This is a campaign we are absolutely determined to win, and part of that campaign is public country-by-country reporting.
I remind Members that I will call the Front-Bench spokesman for the Scottish National party at 5.10 pm.
I congratulate the hon. Member for Amber Valley (Nigel Mills), my trusty co-chair on the all-party parliamentary group on anti-corruption, on securing this highly relevant and timely debate, given that it is Budget day. I also congratulate him on his thoughtful opening speech.
With last year’s Panama papers and then the Paradise papers the other week, there is a sense that systems of international finance and taxation seem to be working for the benefit of individuals with access to vast wealth and an army of lawyers, rather than—to coin a phrase—for the many, not the few. We are in the grip of a culture of secrecy and silence in our overseas territories and Crown dependencies, enabling tax avoidance and evasion on an industrial scale. It looks suspiciously like there is one rule for the super-rich and another for the rest of us.
Lord Sugar has blamed “bad advice” for the fact that these sitcom celebrities, sports stars, pop stars, the Duchy of Lancaster and all those other people have been caught up in the latest whirlwind. Lord Sugar said that tax avoidance is un-British and that we are blessed to be
“in a country that has a police force, a National Health Service, an army…and all the good things we get here.”
To the delight of Transparency International, Christian Aid and Global Witness, we were promised Government action by David Cameron in the flurry of the 2016 anti-corruption summit, but the Government seem to have fallen disappointingly short. Country-by-country reporting, which we are addressing in particular today, is an issue that I first came across as a candidate in 2015. Before I was elected, I experienced my first mass email petition from potential constituents. It was called, “What will you do to crack down on tax dodging?” I assured them I would insist that multinational companies are required to publish details of the amounts of tax they pay in their countries of operation.
As soon as I was elected, I was happy to back the “show us the money” amendment tabled by my right hon. Friend the Member for Don Valley (Caroline Flint). When the Criminal Finances Bill came before the House, I spoke from the Opposition Front Bench on the need for public registers of beneficial ownership. Then we had the snap election and the legislative provisions were swirled into the vortex of wash-up. For this Government, “could do better” is perhaps an understatement. In 2012, David Cameron declared that organisations investing in complicated schemes
“to just minimise their tax rates is not morally acceptable. Some of these schemes…are quite frankly morally wrong.”
Even if he acted within the letter of the law, the behaviour of Bono of U2 was close to the edge.
Financial secrecy feeds into legal and illegal approaches to not paying a fair share. Last year the Conservative Government said that all countries needed to reach a gold standard of public registers of beneficial ownership, yet there has been a palpable rowing back. Now the Foreign Office only expects UK tax havens to go down that road when it becomes a global standard. Montserrat has already committed to put in place a public register. We have a duty to justify our claims to be a global leader on transparency and anti-corruption by facilitating that, rather than ducking the challenge in a dereliction of duty. The tax abuse in the Paradise papers and the corruption in the Panama papers are two sides of the same coin of financial secrecy. In both cases the Government’s stated intentions are undermined by their willingness to tolerate offshore financial secrecy.
The Cameron Government at least made the right noises. I have to see the detail of what was announced in the Budget statement, but I am cheered by the idea of extending offshore time limits. Until now, however, the Prime Minister—who is often responding to events rather than mastering them, being in office but not in power, and all that stuff—seems to have had a comparatively lackadaisical attitude.
Will the hon. Lady give way?
I will not, because I only have a couple of seconds left and I have more to say.
We were promised an anti-corruption strategy by 2016, and now we are hearing it will be 2018. The other day, in one of the many debates of my right hon. Friend the Member for Barking (Dame Margaret Hodge), a question was asked about the anti-corruption tsar. It used to be Eric Pickles, but the Government seem to have forgotten that the post even exists.
As a London MP, I am acutely aware of the housing crisis in our capital. The UK property market seems to be skewed by the apparently uncontrolled flow of anonymous and potentially laundered money from those secrecy jurisdictions. I know a stamp duty exemption has been announced, but the Office for Budget Responsibility is already saying that it will only inflate prices rather than address the real problem.
Mandatory disclosure of payments and operations on a country-by-country basis mitigates political, legal and reputational risks and generates timely, disaggregated and easily comparable data. Companies should ensure high levels of corporate transparency since that also allows citizens to hold them accountable for the impact that they have on communities. One international tax avoidance scandal might look careless; two starts to look like something of a habit.
Rather than hiding behind the jargon of the written answers we have had up to now, the Minister must tell us today what is being done concretely by the international community to reach agreements on multinational firms filing public reports on their dealings, country by country. When does he expect to reach a multilateral agreement under which the UK may adopt public country-by-country reporting? I thank the media for exposing this stuff by shining a light into murky corners—not necessarily leaking, but turning on the tap in this instance. Warm words are not enough; we need action now.
It is a pleasure to serve under your chairship, Mrs Main. I commend my former colleague on the Public Accounts Committee, the hon. Member for Amber Valley (Nigel Mills), for securing this debate and adding his voice to calls for—I think this was his phrase—the clear sunlight of transparency, for territory-by-territory reporting, and for the UK to show the world that it leads on this issue by example. I particularly noted his comments on how companies already have significantly greater requirements nowadays to comply with duties such as corporate social responsibility, and his questioning of how those responsibilities differ from their responsibilities to pay tax.
It is also important to recognise the contribution made by the right hon. Member for Don Valley (Caroline Flint) over the past few years. She, too, has done much to make sure that the issue has stayed front and centre. I particularly note the concessions that she squeezed out of the Treasury last year, including the amendment to the Finance Bill that paved the way for more transparency. I also recognise the right hon. Member for Barking (Dame Margaret Hodge) and all the work that she did in her time as Chair of the Public Accounts Committee.
The right hon. Member for Don Valley spoke of the increasing number of investors calling for companies to come clean over the amounts of tax they pay, and of the significant reputational damage that they can suffer if found wanting. That is a really important point. She also asked how many countries need to sign up to greater transparency before the crest of the wave is high enough to force real action. The right hon. Member for Barking noted and welcomed the cross-party nature of the support for these proposals that has been a distinguishing feature of all the debates around this issue. She called for leadership and a real willingness to step up as the first country to really take on these measures.
Does the hon. Lady agree that it is essential that multinational companies simply do the right thing and pay what they owe for the benefit of the nation—something that small and medium-sized businesses do throughout this nation every day of the week? Such payments allow them to have the freedom to trade and make money. There is a moral obligation to deliver those payments, and they should.
I echo the hon. Gentleman’s call, and agree that there is a moral obligation. We clearly need rigorous regulation, to create a tax system that is fair and works for everyone. The hon. Member for Ealing Central and Acton (Dr Huq) spoke of offshore financial transparency, or lack thereof. She referenced the Paradise and Panama papers, and called for the long-awaited anti-corruption strategy to be instated as soon as possible. It will be interesting to hear the Minister respond to that point.
It is also appropriate to note the action—small, but welcome—announced by the Chancellor today about assessing the activities of firms trading here. It is not enough, but it is a start. Profit-shifters—the shape-shifters of the corporate world—seem only too glad to accept the benefits that come from operating in our communities, such as policing, road maintenance, street lighting, and so on, but seem far more reluctant to pay their share of the costs. I appreciate that there are people—some of whom are, or have been, legislators in this Parliament—who also stash cash offshore or use interesting, tortuous schemes to avoid paying tax. Successive Governments have not done enough to stop them. However, corporations that routinely play the three-card trick with their profits are truly appalling. As the right hon. Member for Barking mentioned, the excuses that are routinely offered by Apple, Starbucks, Google, Amazon, and the rest—that they abide by the letter of the law and pay what is demanded of them—stink. Legal or not, the behaviours that they exhibit are immoral; they should be willing to pay for the services they receive.
Paying taxes is the price of getting society’s benefits. Companies should be willing to pay, and Governments should be forcing them to pay. Enforcement has to get harder, and investigations have to be tougher. Instead of having so many civil servants chasing down benefits claimants, for example, the Government really must invest more time in the pursuit of tax-dodgers. It is just not good enough that there only 522 officers in Her Majesty’s Revenue and Customs’ high net-worth unit, and only 518 in the affluent unit. That, of course, measures up against the more than 4,000 officers that the Department for Work and Pensions has, chasing those on benefits for a few pennies here and there. That is not only immoral, but not even good value for money.
Individuals and corporations that dodge tax need to be brought to book, and Governments need to be hunting them. We need international co-operation to get better results—we could have done with staying in the EU for that, of course—but Governments can and should act now, by starting to force the issue and taxing them properly. Billions of pounds in lost revenue is a huge gap that needs to be closed.
Thank you, Mrs Main, for your stewardship of this debate. I welcome the debate, and congratulate the hon. Member for Amber Valley (Nigel Mills) on securing it, and thank him for his considerable work promoting tax transparency, building on his experience professionally before entering this place. Of course, I also want to hail the work of others in promoting public country-by-country reporting, not least that of my right hon. Friend the Member for Don Valley (Caroline Flint), who has strenuously promoted it many times, and that of my right hon. Friend the Member for Barking (Dame Margaret Hodge), who has ensured that this matter has been promoted consistently by the all-party parliamentary group on responsible tax and many others. I also commend my hon. Friend the Member for Ealing Central and Acton (Dr Huq), who importantly drew our attention to the fact that this is about not only tax transparency, but trying to deal with corruption and money laundering.
I will try to keep my remarks succinct, but I want to first say how pleased I am that we are having this debate, because of the huge amount of public concern around tax matters, as highlighted by other hon. Members. My right hon. Friend the Member for Barking has already referred to public opinion polling that shows that there is enormous support for more transparency around taxation matters, particularly for multinational enterprises. That is particularly important, because public country-by-country reporting enables us to focus on profit-shifting activities. Often when we talk about aggressive tax-avoidance in this place we hear the Government claim that the tax gap is reducing—of course, there is a debate and discussion around that—but their own figures for the tax gap do not cover profit-shifting by multinational enterprises. That is becoming an increasingly large problem, especially with issues around digitisation, which my right hon. Friend rightly referred to.
I remember having a discussion with representatives of Facebook when I was in the European Parliament, before I joined this place. Information about the amount of tax it was paying and how much it paid its staff had been leaked—Facebook had not made it public—and it appeared to be paying incredibly low levels of tax. A representative of Facebook said to me, “Oh, you just don’t understand.” I said, “No, I do understand; I have the figures. I just don’t agree with them—that’s where the difference lies.” I think everyone should be able to have those figures, so they can properly assess them.
As has already been mentioned, in February 2016 the Government required multinational companies to provide their tax details, as well as other details relating to revenue, total employment and so on, to the Exchequer, which was obviously a good first step. Then, in the Budget, the Chancellor maintained that he had introduced new measures to improve large business compliance, including the publication of tax strategies. On that point, we have not seen the level of publication of tax strategies that some of us might have hoped for—I hope that will be coming soon.
None the less, that hook at least enabled my right hon. Friend the Member for Don Valley to table an amendment to the Finance Bill to include public country-by-country reporting. I remind Members of what she said of her amendment, which was passed by this House. She said that it
“will enshrine in law support for the principle of public country-by-country reporting with the power for the Government to introduce when the time is most appropriate.”—[Official Report, 5 September 2016; Vol. 614, c. 136.]
That statement includes no qualification that it should happen only when there is multinational agreement on that principle. Rather, my right hon. Friend stated that it should be introduced when the time is most appropriate. I believe that the time is appropriate now, and other hon. Members have articulated very strongly why that is the case.
It is right for the Government to aim to take a lead on this issue. As was mentioned, there is a blockage at EU level at the moment. The European Parliament supports public country-by-country reporting, but there is disagreement in the Council. That is partly because this issue is now bundled in with debates at EU level about having a blacklist of tax havens run by the EU, which is a contentious issue. As a result, we have an opportunity to make a clear statement and push other countries in the right direction by setting an example. In fact, I know the UK has been arguing for disaggregation of figures at EU level. I am pleased to see that, but we now need to show an example. Above all, we need to show how this kind of activity need not lead to comparative disadvantages for our nation—quite the opposite. There is a good deal of existing evidence about the impact of public—
Order. I ask the hon. Lady to bring her remarks to a close.
I beg your pardon, Mrs Main; I certainly will do. There is lots of evidence already about country-by-country reporting in extractive industries and in banking. Reports from PwC, for example, have shown it to be very successful for companies; it has not been negative for them. We have the examples of SSE, Pearson and others. It has made business sense, and it would make business sense for the UK as well.
It is a pleasure to serve under your chairmanship, Mrs Main, and I thank my hon. Friend the Member for Amber Valley (Nigel Mills) for having secured what I think we all accept is an extremely important debate. I also thank him for the advice he has been able to give me over the months and years on matters as exciting as corporate taxation.
I also welcome my hon. Friend’s support for some of the measures in today’s Budget—this is not an area of Government policy that we are going to be neglecting anytime soon; we are going to be all over this space in a very significant manner. He specifically raised measures relating to VAT and the collection of VAT from those who use digital platforms. We are indeed introducing joint and several liability to make sure that we step up the clampdown on, in that instance, VAT fraud.
The right hon. Member for Barking (Dame Margaret Hodge) suggested that our figures were not durable and questioned the veracity of our numbers. We have secured £160 billion through clamping down on tax evasion and non-compliance, and that figure appears in HMRC’s annual report and accounts, which are of course audited by the National Audit Office.
That is not secured money; it is money to which HMRC feels it is entitled but has yet to secure. My experience from the Falciani Swiss leak suggests that intentions do not become reality.
I do not think the right hon. Lady and I are going to agree on that particular point. One point we might agree on is the tax gap, which is 6%—the lowest in our history. That is the difference between that which we should be collecting and that which we are collecting. It is a world-beating figure, also audited by the NAO. According to the International Monetary Fund, it sets a world standard in terms of robustness.
As you will know, Mrs Main, we have done a great deal over the years in clamping down on tax avoidance and evasion. In the Finance (No. 2) Act 2017, which has just gone through Parliament, we introduced corporate interest restrictions to stop companies shifting profits around by the ingenious use of intra-company loans. We had the diverted profits tax in 2015, which addresses a number of the examples we heard in the debate today. We have been in the vanguard of the base erosion and profit shifting project at the OECD. We are benefiting now from the common reporting standards across 50 countries—rising to 100—so account information is available to HMRC in real time. We are engaged with the EU on mandatory disclosure rules to make sure that we can clamp down on schemes, through those who are party to them.
The right hon. Member for Don Valley (Caroline Flint) raised the issue of the information required from the extraction sector and the financial sector in comparison with the ask on country-by-country reporting. Those are of course different sets of information. In the case of the extraction sector and the financial sector, the information required is significantly less exhaustive than would be the case in country-by-country reporting.
The right hon. Lady also asked a very important and pertinent question about how many countries would need to say yes for us to feel that we could go ahead on a multilateral basis. I suppose that gives rise to other questions, such as which countries and what mix of countries. She can rest assured that as and when, as we hope, we reach the point when sufficient countries say they will sign up, we will be pleased to do so. I add my congratulations to her for the hard work that she did, particularly on the Finance Act 2016, to ensure that her amendment reached the statute book.
My hon. Friend the Member for Ochil and South Perthshire (Luke Graham) spoke about the importance of international standards. He also raised the issue of intangible assets, which is one of the common threads running through the issues of companies shifting profits around. If there is clearly economic activity in a particular place, it is much easier to pin the profits to where that activity is occurring than if there are, for example, digital companies that are selling substantially into the United Kingdom but basing their operations elsewhere. That can be through royalty payments on intellectual property charges between companies; it is quite possible to avoid tax as a consequence. That is why we announced in the Budget today that we will be looking at introducing the withholding of taxes in respect of royalty payments for IP, where they relate to movements of income between ourselves and very low-tax jurisdictions. We will be looking into that whole area by way of consultation.
I was tickled by the suggestion from the right hon. Member for Barking that she could feed me ideas that would make me more popular within my own party. I look forward to hearing as many of those as she cares to pass my way, because I am very interested in being so popular.
The hon. Member for Ealing Central and Acton (Dr Huq) raised the issue of registers of beneficial ownership across, particularly, Crown dependencies and overseas territories. We have those; they are not public, but they are accessible in real time by HMRC and we have a good record in tracking down people who try to stash money away in, for example, overseas trusts. We have raised £2.8 billion in that respect since 2010. I was pleased that the hon. Lady welcomed the measures in today’s Budget that extend to 12 years the time period in which we can go after individuals who have been involved in just that kind of activity.
In my final couple of minutes, I want to focus on the principal arguments. We are not against country-by-country reporting. We welcome the opportunity to move to exactly that situation, but to do so unilaterally will not work, for at least three reasons. It would certainly make the UK less competitive than other tax jurisdictions. I see no reason why any particular business should want to go to a country with that in place as strongly as they would want to go where it is not in place. If it were just us alone, we would also be in the position of not being able to get public disclosure if a UK company had associated non-UK companies in other jurisdictions and not under that company’s control. The big advantage of going multilaterally is the standardisation of the standards that we set and the rules and regulations around each particular step.
The Government will continue to work towards bringing in not just country-by-country reporting as we have at the moment, but public country-by-country reporting. I am grateful to my hon. Friend the Member for Amber Valley and all those who have contributed to the debate for helping to inform that discussion.
I thank you, Mrs Main, and all those who have participated in another interesting debate on this issue. Yes, we are all disappointed that we have not managed to move the Government to at least set a backstop date; I suspect that is something that we will have to come back to. Until somebody takes the lead, I suspect this will never happen. We have set an example—we have taken unilateral action on this issue in various other areas. It could be asked, why would a company come and operate in this country if it had to pay a whole new tax that did not apply anywhere else? Well, we have set that example. We probably have a bit of a case to make. We hear the Minister’s arguments and we will keep making our counter-arguments, and I suspect we will be talking about this again sometime soon.
Question put and agreed to.
That this House has considered public country-by-country reporting.