Tuesday 18 December 2018
[Mr Philip Hollobone in the Chair]
Traidcraft and Fair Trade
I beg to move,
That this House has considered Traidcraft and the future of fair trade.
It is a pleasure to open this debate under your chairmanship, Mr Hollobone. I start by thanking my right hon. Friend the Member for East Ham (Stephen Timms) and the hon. Member for Colchester (Will Quince), who chairs the all-party parliamentary group for Fairtrade, for their support in making the application to the Backbench Business Committee.
In one of those strange coincidences, when I was thinking about my Christmas card competition for local primary schools last summer, an officer from Gateshead Council—my local authority—telephoned the office and suggested that this year the theme should be fair trade. That seemed an excellent idea to me. Gateshead prides itself on being a Fairtrade authority. In Traidcraft, a Fairtrade company and charity based on the Team Valley trading estate, we had a real local connection and a topic that would get pupils thinking about just what fair trade means for us here in the UK and for producers who grow, create and supply fair trade goods and products, especially in the lead up to Christmas, when we think of gifts and rich food.
I was shocked to hear in September that Traidcraft was in difficulty, facing potential closure and consulting its 60-plus staff based in its Team Valley warehouse and offices on potential redundancies. Traidcraft has a personal significance to me. Over many years I have been a Traidcraft customer, and its craft products are scattered around my home. Some may even have appeared as raffle prizes over the years. Indeed, I have been a trader, although sadly not a very successful one.
I congratulate my hon. Friend on securing this debate. I could share many happy memories of buying Traidcraft goods from the late 70s. My sister used to run a stall for Traidcraft in her church, St Robert’s in Morpeth. She ran an evening at the place where I worked in North Shields. It is not just about getting gifts and helping people to have nice things from abroad; what was crucial was the raising of awareness for people who otherwise would not be aware of the need for fair trade.
I, too, congratulate my hon. Friend on securing this debate. Last month, I attended an event hosted by Traidcraft in Newcastle entitled, “Who picked my tea?” It is a brilliant campaign that has resulted in Yorkshire Tea, Twinings, Tetley and Clipper all publishing who is picking their tea and their list of suppliers. That should help drive up the standards for those tea plantations in Assam. Does my hon. Friend share my view of the importance of Traidcraft’s work? Will she join me in calling on PG Tips and Typhoo to publish that information as well?
I most certainly do agree with my hon. Friend. Traidcraft and the Fairtrade Foundation have played a huge part in ensuring that producers are accountable and that those principles are applied fairly.
My mother loved to look at the Traidcraft catalogue, find out what was going on from the Traidcraft bulletins and buy products—mostly chocolate, it should be said—from the back of her church. Churches have played a hugely important part in selling Traidcraft goods. She would get me to buy products either from the Traidcraft shop in Team Valley or on the internet.
Apart from my personal reasons for feeling sad at the news of possible closure and the loss of 60 jobs from our local economy in Gateshead, there are much more serious reasons why so many people were sad to hear of Traidcraft’s difficulties. As the company has said, it was
“overwhelmed by the outpouring of public concern and offers of support which demonstrates that the mission of Traidcraft still matters to many, many people”.
That is absolutely right. Next year marks the 40th anniversary of Traidcraft plc. Established as a Fairtrade enterprise, it initially provided a market for handcrafted items from Bangladesh at a time of great political turmoil there. Handicrafts, because they required minimal capital outlay for women in affected communities and could be produced alongside farming activities, provide an additional income source while preserving food security. Those values of supporting women, developing resilience and environmental concern have been recurring themes for Traidcraft over the years.
From its creation in 1979, the company developed into a public limited company with 4,500 individual shareholders and shares traded on the ethical stock exchange. It buys groceries and craft items from more than 70 producer groups in around 30 countries. Goods are sold through community resellers, online and through specialist fair trade shops. Traidcraft has pioneered fair trade products such as wine, charcoal and rubber gloves, alongside more familiar products such as tea, coffee, chocolate and biscuits. It has reached into thousands of homes—including my mum’s—and communities through its community sales force. What is more, it has had a real impact on the lives of countless producers and their families, delivering real social change.
Traidcraft was at the forefront of the Fairtrade movement and was a founder member of the Fairtrade Foundation along with Oxfam, the Catholic Agency for Overseas Development, Christian Aid, the Women’s Institute and the World Development Movement. The Fairtrade movement developed the Fairtrade certification system, which enabled those same fair trade principles to be applied by mainstream businesses. That was a vital tool for those businesses wanting to establish fairer and more just trading relationships and provided an independent guarantee for consumers.
I congratulate the hon. Lady and the others on securing this important debate. I declare an interest, having been a member of the board of Twin, a fair trade organisation. I have been involved in fair trade for well over 20 years. The point that she makes about mainstream organisations is absolutely right. Does she agree that without the work of Traidcraft and others, such as CAFOD and Twin, fair trade would not have been taken up by the mainstream supermarkets, resulting in the enormous boost to fair trade that means that the UK has, I believe, the largest fair trade market in the world?
The hon. Gentleman makes an excellent point. I sincerely believe that without the input of those organisations and Traidcraft, we would not be in the position where we now take it for granted that we can obtain fairly traded goods in mainstream supermarkets and other shops. I most certainly agree with him on that point.
The Fairtrade Foundation has recognised that Traidcraft plc’s approach has been an inspiration to many and that the approach it pioneered in 1979 is now also being taken forward, as the hon. Gentleman said, by other brands and businesses that choose to trade fairly. Traidcraft also established a separate development charity, Traidcraft Exchange—thankfully, it is not under threat—which is supported by individual donations and institutional donors including the Department for International Development, Comic Relief and the Big Lottery Fund. The charity works with farmers and artisans who are not part of fair trade supply chains and campaigns for justice in international trade.
So, what happened to Traidcraft? Just as for many other UK businesses, life has been difficult. The retail environment has been particularly challenging. The success of fair trade products in mainstream suppliers and their availability in supermarkets is welcome, but that challenges fair trade enterprises such as Traidcraft on price and scale.
Much as we might like to escape the B-word, it is simply not possible. Currency fluctuations immediately after the EU referendum and uncertainty about Brexit continue to affect Traidcraft. Traidcraft estimates that the drop in the value of the pound within a week of the referendum cost the company £350,000. With most of the company’s £2.4 million of purchases from suppliers in developing countries paid in dollars, that early 15% currency drop meant that Traidcraft had less to spend, and holding true to its long-held fair trade principles meant that it could not, as others might, exert downward price pressure on its suppliers.
I share my hon. Friend’s concern about the impact on Traidcraft, and its need to reduce operations, because I, too, am proud of the fact that it has such strong roots in the north-east, in our region. Does she share my concern that the implications are not short term? Does she agree that we need to ensure that not only Traidcraft but all businesses that want to trade ethically can do so, and that that is not affected in any way by our departure from the EU?
I congratulate my hon. Friend on securing the debate and emphasise its importance for future world development. Traidcraft appears to have been hit by a perfect storm in so far as Brexit and currency fluctuations have damaged its business model, and uncertainty in world markets and trade agreements, and changes in consumer purchasing behaviour, have conspired to undermine it. Does she agree that, given the importance of Traidcraft’s small businesses in taking people in the most vulnerable countries out of poverty, there is a strong case for the Department for International Trade and DFID to look at developing a model of support that will ensure that such businesses survive in a very difficult international environment?
I thank my hon. Friend for that intervention, and I will touch on some of those points later.
Brexit, as we have said, continues to affect the company’s trading. When I spoke to Traidcraft’s chief executive, Robin Roth, shortly after the announcement of a potential closure, I asked what I could do to help to secure Traidcraft’s future. He told me that the best thing that I could do would be to encourage people to buy from Traidcraft in the run-up to Christmas, as a strong Christmas—the Christmas catalogues were nearly ready—would allow Traidcraft to look to a future for the organisation.
That is what I have tried to do locally, and—with the help of my right hon. Friend the Member for East Ham—in this House. I hope that many hon. Members will have bought at least some of their Christmas gifts from the Traidcraft catalogue, which we sent to all Members some weeks ago. Traidcraft do a fine line in quality socks as well as more decorative crafts, and they have certainly featured on my Christmas list.
I am glad that Traidcraft supporters have, I am told, responded magnificently. That has meant that the company has been able to put together a plan for the future that will see the company refocus and survive. Sadly, many of the jobs in Gateshead will be lost, the warehousing will be outsourced and there will be a focus on food and related goods and a very much narrower range of crafts, together with a new emphasis on consumers buying co-operatively. I look forward to seeing the new “Traidcraft 2” develop and grow, and will continue to support it.
Traidcraft, as part of the fair trade movement, has some asks of the Government. I thank the Minister for inquiring in advance whether there were any particular issues for which he could prepare. I do not believe that any of the asks will come as surprises to the Minister, although I was unable to give him that notice.
First, the Government need to reassure the many producers and farmers in vulnerable developing countries that the UK will put in place measures to preserve market access—if necessary, unilaterally—to avoid disruption. They urge the Government to provide reassurance that the needs of poorer countries and vulnerable stakeholders will be taken into consideration as future trade policy is developed and implemented.
Does the hon. Lady agree that one of the great benefits of the work of Traidcraft, and others, has been that it works on the ground with producers and farmers, and enables them not only to increase their incomes, but to improve their quality and so much else? That engagement on the ground with producers and small-scale farmers, with whom I have worked for 30 years or more, is vital, because it means that money gets to the grassroots. So often, money does not seem to trickle down. This is money, support and agricultural extension work going in at the grassroots.
I thank the hon. Gentleman, and I agree with him on all those points. One of the important things about Traidcraft has been that personal connection through the “meet the producers” tours, and being able to see in the catalogue who produces the goods. We must never forget the impact on individuals of the work of Traidcraft and other fair trade organisations. I hope that the Minister will reassure us that DFID will play its part in continuing that work.
The UK has a strong record of using its aid programme to support business development. The Government should continue their development work in that area and re-emphasise the inclusive approach that we have talked about within that, through a clear gender focus and support for small and medium-sized enterprises, ensuring that the trade and business environment enables them to voice their needs and to thrive.
As Traidcraft goes forward, it will look to offer consumers even greater transparency. As part of the review of the Modern Slavery Act 2015, the Government should update the official guidance to encourage companies to publish where they buy their goods from and the wages of their supply chain workers. The Government should consider legislation to make human rights due diligence mandatory, so that we can have that transparency and see exactly what is being done.
Finally, Parliament is considering the Agriculture Bill, which is perhaps not in the Minister’s immediate purview, although I am sure that he can have some input.
I have a lot of farming constituents—trust me.
Yes. As Parliament considers the Agriculture Bill, the Government could table amendments that establish more comprehensive regulation, supporting fairer purchasing practices all the way along agricultural supply chains.
Earlier this month, I went to the Traidcraft warehouse sale in Team Valley and, yes, picked up some bargains, although it feels wrong to do that knowing the difficulties that the company has faced. While there, I spoke to a member of staff who was tidying up the shelves and said how sad I found it. He surprised me by saying that it was not sad; Traidcraft plc has a plan and a future to look forward to, although there will not be the same range of crafts.
Although I was surprised, I am sure that his was the right attitude, and it will ensure that the company has a long and sustainable future—different from what it has been, but still upholding and strengthening the fair trade principles that it has been instrumental in developing, and continuing to work with like-minded organisations in the Fairtrade Foundation. I wish it every success.
Order. The debate can last until 11 o’clock. I have to call the Front-Bench spokespeople no later than 10.28 am, and the guideline limits for the Front Benchers are 10 minutes for the Scottish National party, 10 minutes for Her Majesty’s Opposition, 10 minutes for the Minister, and then we will hear again from Liz Twist to wind up. Until 10.28 am, it is Back-Bench time. Our first contributor will be Jim Shannon.
I congratulate the hon. Member for Blaydon (Liz Twist) on securing this debate and on succinctly setting the scene. We are here because we have an interest in fair trade and Traidcraft and the good that they bring to those who produce the products that we use in the United Kingdom of Great Britain and Northern Ireland. I pay special tribute to the hon. Member for Stafford (Jeremy Lefroy), who has a deep interest in this matter—a practical, physical interest—from his past work. He has hands-on knowledge of how it can benefit people.
We live in a dog-eat-dog world, to use terminology that we have in Northern Ireland. I frown upon it, but it is sought after by some. There seems to be no shame in doing someone over as long as you come out on top. To succeed, people are expected to trample on other people, instead of working with them. Traidcraft and Fairtrade are essential, because they bring us back to where we should be. All of us in this Chamber are people of faith and understand what it means, and therefore we have an interest in people. That is one of the reasons why we are here to participate in this debate. We also have an interest in people across the world.
I think it was Margaret Thatcher who referred to us as a nation of shopkeepers. Well, my family were shopkeepers. My dad was a shopkeeper—he was one of the first to go into the grocery trade. At that time it was VG—it is now Spar—and it was one of the first grocery groups in Northern Ireland. He had a wee shop in Ballywalter. I call it a wee shop—it was a big shop in those days, but it is probably a wee shop today. He was known as a man who operated with fair pricing. I want to make this illustration, because it is important. There was always the ability to take advantage by putting the prices up, as we lived in a rural community and not many people had their own cars, so they could not get to the big towns easily. That is how it was in the ’60s and early ’70s. My dad could have hiked the prices, but he chose not to. I remember him saying, “James”—everybody else calls me Jim, but my dad christened me James—“we may never be rich, but we will always have enough. We will never put someone in need as a sacrifice to our greed.” He had a very clear message as a shopkeeper. It was not about excessive profits, his grandeur or his lifestyle; it was about producing things for other people.
My dad ran another business that I remember very well. He probably supplied furniture, carpets, lino and blinds to every house in the villages of Ballywalter, Greyabbey, Carrowdore, Kircubbin, Ballyhalbert and Portavogie. He did what we called “cuff” in those days—a form of borrowing, with so much paid back per week. He was a very generous person. His ethic of fairness to people is one that Fairtrade and Traidcraft share. It is so important.
Does the hon. Gentleman agree that one of the great supporters and promoters of fair trade in retail over the past 30 years is the co-operative movement? Alongside Traidcraft and others, it has really taken forward fair trade and made it a household name in the United Kingdom.
I wholeheartedly agree. The hon. Gentleman brings wisdom and knowledge to this type of debate—to every debate, but to this one in particular. I thank him for that.
Unfortunately, that school of thinking has been somewhat lost, as some of the big companies look to the dividends of their shareholders and do not concern themselves with how suppliers lower the bottom line to meet their profit margin need. It is good that some companies have realised that they have to adhere to a moral compass. That is why Fairtrade and Traidcraft exist. I thank everyone who works in those wonderful organisations and takes part in what they do.
I am given to understand that there has to be a cut in staff numbers. That is unfortunate, and I encourage the venture to hold fast and keep doing good. There is a verse in scripture that always encouraged me: it says that we should not be weary in doing good, for we shall reap what we diligently sow. It is my belief that there are countless families in communities throughout the world who are reaping the benefits of what these organisations sow in fairness, respect, hard work and honesty.
Before making this contribution, I was thinking of the advert on TV for Fairtrade coffee, which tells the story of the young boys in the fields. If they were not doing that farming and that work, the alternative would be to go into criminal activity. By buying Fairtrade and Traidcraft goods, we enable people in other parts of the world to gain a wage, to have families and to grow, and we also keep them away from criminality.
My hon. Friend is taking about the short-term difficulties that Traidcraft faces. The decline in the pound has hit Traidcraft for obvious reasons, but does he agree that, beyond the next 12 to 18 months, there should be more stability in the economy and the financial markets? It is essential that, in the interim, we keep supporting organisations such as Traidcraft through this type of debate and our physical support on the ground, as we buy their products?
My hon. Friend is absolutely right. We should not be inhibited in supporting Fairtrade and Traidcraft. I was going to say at the end of my speech —he may have gone through my notes—that even if it means paying an extra 50p or £1 for a product just to keep it all going while the pound strengthens again, we should do that. I thank him for that comment. As always, he brings knowledge and wisdom to the debate.
I read a briefing by Traidcraft that said that, as Traidcraft plc goes forward, it will be striving to offer consumers ever greater levels of transparency about where its products come from and where its money goes. Hon. Members in this Chamber probably know where the products come from and the benefits of them, but it is important that others see that too. Fair trade is increasingly seen as the norm for all businesses. Traidcraft Exchange is also encouraging mainstream businesses, through its “Who picked my tea?” campaign, to know and make public information about their suppliers. There are small things we can do to assist that. I believe that that is vital in providing workers and community groups in supplier companies with the information and opportunity to hold companies to account for the standards that are expected in their supply chains—for example, with reference to working conditions and vulnerability to modern slavery.
There is a real need to ensure that workers’ conditions are at a good standard. Traidcraft has said:
“We urge Government as part of the review of the Modern Slavery Act to update the official guidance to encourage companies, as part of their reporting, to publish where they buy their goods from and the wages of their supply chain workers. We also encourage Government to consider legislation that would make Human Rights Due Diligence mandatory.”
I am my party’s human rights spokesperson, so like all hon. Members in this Chamber and others outside it, I have a deep interest in this issue. Therefore, the issue of fair wages and good working conditions are important to me.
I am pleased that, in this debate, we have a shadow Minister who has a deep interest in this issue and a Minister who understands it better than most. I know that both their contributions will be worth listening to, and that they will respond to our concerns. I have no doubt that they will both reply very positively and supportively.
I support Traidcraft in what it is asking the Government to do. There is an onus on us to ensure that we do not support the trafficking and ill-treatment of children or adults throughout the world. I sincerely believe that we must do more and be more for those who have no voices and no one willing to stand up for them. As often happens in this House, we are the voice of the voiceless. This debate gives us the opportunity to do just that.
I say well done to all in Traidcraft and Fairtrade for how far they have brought us. It heartens me that my own grandchildren—those who have children and grandchildren have probably found the same—already know what the Fairtrade symbol is. It is encouraging that grandchildren remind people of what the Fairtrade symbol is and what it means. Perhaps their parents or grandparents do not know, but it is good to know that the children of today—in both primary school and secondary school—know about the Fairtrade symbol. That encourages us to buy things with the symbol. That needs to continue. We need to teach a generation to be cognisant of the fact that an extra 50p or £1 on an item could make the difference between a child slave and a paid wage. That is the importance of what we are doing. We encourage people to purchase Traidcraft and Fairtrade items.
I offer my full support to those who wish simply to do the right thing, and to do all in their power to ensure that the people they buy from also do the right thing. We need to make people aware legislatively that “see no evil, hear no evil, speak no evil” in the process of their purchases will no longer be possible or, indeed, acceptable.
I again apologise, Mr Hollobone. I have asked your permission to leave early, because I have a meeting with a Minister. I apologise that I will not be here at the end of the debate for the contributions of the shadow Minister, the Minister and the mover of the debate.
I am delighted to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on the initiative to secure this debate and on what she said. I also very much agree with what the hon. Member for Strangford (Jim Shannon) said.
I draw attention to my entry in the Register of Members’ Financial Interests, where it is recorded that I am the unpaid chair of the Traidcraft Foundation trustees. I will say a little more about the work of that body later in my remarks.
In 2007, Sainsbury’s announced that it would in future sell only Fairtrade bananas, a commitment that it has maintained to the present day, with 100 million a year of those bananas coming from St Lucia. At the time, a press article described the impact of that decision, under the headline, “Saving St Lucia: UK supermarket sweeps up 100m bananas”:
“Just seven years ago the banana farmers of the Caribbean island of St Lucia were hanging up their machetes and ready to turn their steep hillsides back to forest. UK subsidies for their fruit were doomed, they couldn’t compete with giant ‘dollar’ bananas from South American plantations, and a dying industry seemed to provide only back-breaking work for scant reward.
Today, the island where bananas are not so much a crop but a way of life is celebrating. Just about every St Lucian banana sold for export now commands a premium price and European supermarkets are queuing for more. Money is going into run-down schools, the banana sheds are being repaired and the farmers can scarcely believe the turn round in their fortunes.”
A remarkable change had taken place. The article went on:
“In a reversal of the situation nine years ago where only the Co-op was prepared to stock fair trade products”—
I join the hon. Member for Stafford (Jeremy Lefroy) in paying tribute to its role—
“the big supermarkets now openly compete with each other to be socially conscious.”
How did that turnabout occur? What was it that changed the retail market in the UK to deliver such huge benefits to struggling farmers in the developing world growing bananas, coffee, tea, cocoa and other products? In a word, it was Traidcraft.
Traidcraft, as my hon. Friend the Member for Blaydon said, was established 40 years ago. It described itself as a “Christian response to poverty”. It started with hand-crafted items from Bangladesh, and still sells those. Together with the chair of Traidcraft, Ram Gidoomal, my wife and I visited some of those producers in Bangladesh in 2012. Traidcraft has always had a focus on support for women producers as the most effective way to raise family incomes.
Traidcraft started with those craft products. In the 1980s, the idea of fair trade was pioneered in the Netherlands with coffee, and Traidcraft brought the idea to the UK. What happened, in effect, was that people who ran church bookstalls were persuaded to offer some crafts and fair trade items for sale on the edge of their collections of books. You might be forgiven, Mr Hollobone, for thinking that a few bookstalls in draughty church halls around the country were never going to change anything much but, ultimately, they brought about that change of fortune for the banana farmers of St Lucia, even though neither they nor Traidcraft ever sold any bananas.
Voluntary, community-based support, initially in churches and then increasingly elsewhere—for example, Fairtrade schools—enabled the fair trade movement to get a toehold to start with, to survive and to go on to flourish. Today, fair trade has a large niche in the UK retail market—Fairtrade sales volumes rose 7% last year.
Traidcraft established itself as a plc. As my hon. Friend pointed out, it has 4,500 individual shareholders, buys groceries and craft items from more than 70 producer groups in some 30 countries, and sells them through community fair traders online, dedicated fair trade shops and mainstream retailers. To secure Traidcraft’s focus on its core mission, as a Christian response to poverty, it established the Traidcraft Foundation, which I chair. It has a golden share in the plc to ensure that the initial focus is maintained.
Traidcraft Exchange, the sister charity which does a lot of the producer support work that the hon. Member for Stafford rightly highlighted in his intervention, was established in 1986. It continues to thrive, to support low-income producers in Africa and Asia to grow their business, and to campaign in the UK. For example, a few years ago it played a key role in the campaign to establish the Groceries Code Adjudicator to secure fairer access to the retail market. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) in her intervention mentioned the “Who picked my tea?” campaign that it led, drawing the attention of consumers to questions about the working conditions and circumstances of those who pick the tea that we all enjoy.
Traidcraft played a key role in the establishment of the Fairtrade Foundation in 1992. It also developed the Geobar, which proved to be a phenomenally successful product, I am pleased to say. The Geobar generated substantial commercial success for the company and underpinned its activities for a long time. In recent years, however, as my hon. Friend the Member for Blaydon pointed out, Traidcraft has struggled to make a profit for the reasons that she set out: the wider challenges in the UK market, Brexit and the fall in the value of the pound.
Traidcraft had quite a specific role as a pioneer in fair trade and, with fair trade being taken up widely by retailers—supermarkets have lots of their own-brand fair trade products these days—the position of Traidcraft in establishing its own niche and commercially viable market has been a difficult one. It struggled to make profits. Last summer, Traidcraft under its then recently appointed chief executive, Robin Roth, after some disappointing sales figures, took the view that things could not carry on. It was decided to rethink the business model, to downsize radically—losing more than 60 jobs, as my hon. Friend pointed out—and in the new year to go forward with only 12 staff, outsourced warehousing and a focus on the grocery business. I am pleased to say that Traidcraft has had a good autumn of sales. There has been tremendous support from the community in my hon. Friend’s constituency and in the north-east more generally, which has helped to buoy it as well.
Fairtrade continues to do well in the UK. I have referred to the fact that its sales volumes rose by 7% last year. It is important to recognise that, notwithstanding the difficulties that Traidcraft has been through, fair trade continues to enjoy strong consumer support.
Traidcraft has a remarkable story. Its pioneering role helped to create fair trade as an enduring segment of the retail market. Committed volunteers in churches led the way, but the support for fair trade is now very widely based, placing it squarely in the mainstream of today’s retail marketplace. Polling shows that awareness of and trust in the Fairtrade mark are at the highest level they have ever been since the Fairtrade Foundation was established in 1992 and started polling on the views of the Fairtrade mark a couple of years later.
Traidcraft has been through a difficult phase—hopefully, it will emerge leaner and stronger with new investment in the new year—but the values that Traidcraft has championed enjoy greater support than ever in the UK. I hope that in his remarks, the Minister—I am pleased to see him in particular in his place for this debate—will confirm that the Department for International Trade will want to uphold those values as it develops future trade policy. Such decisions are crucial for farmers and producers in the least developed countries and in other developing countries around the world.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Blaydon (Liz Twist) on securing this important debate on a subject that I am sure we all have a great level of agreement about. She talked about the personal significance of Traidcraft to her as a customer, the future of fair trade and the importance that Traidcraft has had for women in affected communities. The lives that have been changed in those communities show how important it has been.
The hon. Lady also talked about the ability of the products to reach thousands of homes and communities, and the sense of the overarching campaign for justice that is included in fair trade. Very importantly given the situation at Traidcraft, she talked about encouraging people to buy from Traidcraft in the run-up to Christmas, and the fact that it need not be a time of real darkness because there are hopes that, through restructuring, it can look to a brighter future.
The hon. Member for Strangford (Jim Shannon), who is no longer in his place—he explained that he had to leave—talked about companies such as Traidcraft bringing some light into a highly competitive, sometimes uncaring market. He spoke about his father and the need to think about the needs of others—the importance of an ethical approach to retail that sometimes becomes a bit lost in society these days. The hon. Gentleman mentioned the importance of fair wages and working conditions, wherever those people may be—something we should all keep working together on. He talked about the need to challenge the “see no evil, hear no evil, speak no evil” approach to retail that can sometimes pervade.
The hon. Member for Stafford (Jeremy Lefroy) talked about fair trade being brought to supermarkets and the role—repeated by others—of the co-operative movement in facilitating that. The right hon. Member for East Ham (Stephen Timms) made an interesting speech about the fact that St Lucia’s economy was, in effect, saved by Sainsbury’s decision to sell only its bananas. He also paid tribute to the co-operative movement for leading the way and talked about the gradual expansion of fair trade and Traidcraft’s role in that expansion throughout the nations of the UK. He asked the Minister to uphold the values that have been set for the future in his work. I am sure we will hear about that.
Scotland is a fair trade nation. I proudly represent a fair trade city in a region with a fair trade local authority. Inverness became a fair trade city in 2006 and is proudly joined by the highland fair trade communities of Skye, Broadford, Ullapool, Strathpeffer, Dornoch and Dunvegan. As a good global citizen, Scotland has always been committed to playing its part in addressing poverty and fair trade at home and afar, and was one of the first countries in the world to be named a fair trade nation. However, I must give a special mention for Wales, which was the first ever fair trade nation, gaining its accreditation in 2008.
In Scotland, the Scottish Fair Trade Forum has been particularly instrumental in driving forward our fair trade nation agenda. We believe in encouraging business to play its part in promoting and respecting human rights, working with partner countries to support development through trade. Transparency is vital to ensure that our trade policy is carried out in a way that is beneficial to all nations of the UK and consistent with international development goals.
It takes serious commitment for a nation to achieve fair trade nation status. In Scotland, those commitments included all seven Scottish cities and at least 55% of local authority areas having fair trade status; all 32 local authority areas and at least 55% of towns with a population of 5,000 or more must have active fair trade groups working towards fair trade status. The percentage of those with fair trade status is now at 80%. Similarly, at least 60% of higher education institutions must have active fair trade groups working towards fair trade status.
In addition, the Scottish Parliament and Government must use, promote and make available Fairtrade products internally, and actively promote Fairtrade fortnight each year. Fair trade has to be promoted in schools through the curriculum, procurement and other possible means. Schools, further education institutions, faith groups, trade unions, business networks and voluntary and youth organisations must pledge to use and promote fair trade; finally, 75% of people must buy a Fairtrade product every year, and 40% of people must regularly buy Fairtrade products.
A commitment to fair trade is not about just qualifying for a status; it is an ongoing commitment to tackling poverty across the world and support those worse off than ourselves through the promotion of Fairtrade products. In Scotland, the drive to become a fair trade nation took commitment from people, Government, businesses, public bodies and community, and cross-party work from politicians across Scotland to promote fair trade. It is organisations such as Traidcraft, as we have heard, that have led the way to allow that to happen, which is why we are all deeply saddened by the difficulties it has been going through.
In a briefing for this debate, the Fairtrade Foundation described the Traidcraft plc. approach to fair trade as:
“an inspiration to many and the approach that it pioneered in 1979 is now also being taken forward by other brands and businesses that choose to trade fairly. The wider Fairtrade sector, owes a great debt to Traidcraft and their many volunteers, especially within the faith communities, and the Fairtrade Foundation wishes them every success with the plan proposed last month for a slimmed-down Traidcraft with fair trade, community buying, transparency and ‘market disruption’ at its heart”.
I am sure we all share those sentiments. Traidcraft’s contribution to fair trade has been wide reaching and felt across the world. As we have heard, it was one of the founding members of the Fairtrade Foundation, which was established in 1992 with a vision to make trade fair and to secure a better deal for farmers and workers. It has educated us, enabled us and ensured that fair trade has remained on the political agenda in all the nations of the UK.
Others have mentioned that Traidcraft, which is based in Gateshead’s Team Valley, put 67 of its 68 staff on notice of redundancy in September after a series of factors caused it to lurch into a financial crisis. In early November, it announced a rescue plan in which the company will slash its product lines and keep just 12 employees to stay afloat. I wish, as I am sure everyone here does, the management all the success with the recovery plan. I hope—and believe—that this iconic organisation can have better times ahead. I also hope that in his response, the Minister will share the action that his Government are taking to support Traidcraft through these extremely trying times, especially given that the chief executive officer cited Brexit as one of the main factors in its recent difficulties.
It is a pleasure to serve under your chairmanship, Mr Hollobone, in this important and timely debate. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on securing it, and I associate myself with her comments and concerns. I thank the other Members who spoke. The hon. Member for Strangford (Jim Shannon) mentioned having derived his fair trade values from his father, who was a shopkeeper, and urged us to do more to be a voice for the voiceless. My right hon. Friend the Member for East Ham (Stephen Timms) spoke of retailers committing to sell Fairtrade items in the UK and Traidcraft’s role in making that happen. I also thank him and the hon. Member for Colchester (Will Quince) for the work they do through the APPG for Fairtrade. It was a pleasure to hear the strength of support among all Members for just and fair trade in which workers and countries are not exploited.
Let me start by welcoming the work that Traidcraft—and, indeed, everyone who buys Fairtrade—does to ensure justice in the consumer-producer relationship. Fair trading initiatives have led the way in ensuring that the true costs of produce are not paid by people living in poverty and insecurity through exploitative and dangerous working conditions, being ripped off by powerful global agribusinesses, or environmental destruction and degradation. However, fair trade must be just the start of a broader move towards more just global trading relationships, so it is deeply disappointing to learn that many social businesses and smaller fair trade companies are struggling as they absorb the hit of the pound’s depreciation as a result of the Brexit negotiations. They have been unable and unwilling to pass those costs down the supply chain as many larger companies have done.
A bad deal for Traidcraft would not only be damaging for its workers in the UK but contribute to worsening the position of vulnerable people around the world. If the Government continue to flounder in their attempt to finalise a Brexit deal, developing countries will face an estimated £1 billion in additional taxes on imports. That will foster poverty and inequality, burden already struggling countries with further debts, and deny workers their rightful access to living wages and robust labour rights. Will the Minister say what steps the Government are taking to ensure that those social businesses are able to continue to produce and sell Fairtrade products? Why did the Government see fit to reduce funding to promote and encourage ethical and fair trading?
The Fairtrade market in the UK is worth more than £1.6 billion, so it is clear that it is not a niche movement. Rather, it is a powerful example of the British public’s support for the benefits of trade being shared with workers around the globe, not funnelled into a narrow pool of corporations. That is further emphasised by the breadth of support for fair trade across the United Kingdom. Hundreds of individual businesses across the UK help to empower fair trade farmers and workers in developing countries. There are more than 10,000 local campaigning groups, including more than 600 towns and 1,000 schools as well as universities and faith groups, boosting awareness and understanding of international trade issues up and down the country.
Fair trade and its supporters in the UK are part of a global fair trade system that supports 1.66 million fair trade workers in 73 countries around the world. The UK should be proud of its role in the formation of that movement, which has become truly global. We need to uphold that legacy, and we should use those groups and the practical and real successes of the fair trade movement to drive wider reform of international trade conventions so they are built on equality and justice.
It is important to remember that what we are talking about goes beyond what can be achieved by the fair trade movement alone. Trade relationships between the richest and poorest countries are at the heart of uneven global economic development. We in the Labour party want to introduce long-term structural change to the global economy to eradicate poverty and inequality. We want to work hand in hand with the world’s poorest countries to ensure that trade works for them and us, rather than forcing them to be beholden to corporate interests or always to give British companies an advantage regardless of whether that is good for domestic development strategies.
We know that, when done justly, economic development initiatives can lift people out of poverty, tackle inequalities and help to change lives. However, the Department for International Development’s economic development strategy fails to do that, instead falling back on old, discredited tropes about free trade alone succeeding in addressing those problems. Will the Minister explain why DFID’s economic development strategy does not recognise fair and ethical trade as a cornerstone of economic policy?
The Government know full well that when the UK and other countries industrialised, they used the kinds of industrial development strategies that are now withheld from the poorest countries. Will the Minister tell us what impact assessments are done on trade deals, and will be done on any future deals, to ensure that they support development targets, the national development strategies of southern countries and poverty reduction?
Rather than having trade deals that require Governments to cut corporate taxes, increase privatisation and promote deregulation of our social and environmental protections—all policies that increase inequalities and push already vulnerable people into more precarious situations—why do we not ensure that our trade deals act as positive incentives to foster equality, in particular gender equality? We must end the model whereby the UK dominates economically weaker nations and insists on policies and agreements that weaken workers’ rights and protections, remove or undermine environmental standards and reinforce a world of “winners” and “losers”. We know from the example of the fair trade movement that trade can have a positive impact for the world’s poorest nations, but only when it is done right.
The Taxation (Cross-border Trade) Act 2018 outlines the Government’s plan to roll over the EU’s existing “Everything but Arms” scheme, ignoring calls from the Labour party, the Fairtrade Foundation, Global Justice Now and the Trade Justice Movement to introduce a UK preferential treatment scheme that covers a greater number of vulnerable economies. Considering the transformative potential of fair trade for people’s lives, will the Government commit to developing unilateral UK preferential access schemes for developing countries?
People in the UK want to be paid a fair wage for the work they do, to be protected from malicious or irresponsible employers and to live secure lives. Everyone the world over should have those rights, and trade that is ethically and fairly driven is vital to achieving them.
It is a pleasure to serve under your chairmanship, Mr Hollobone. As we have heard, there is a huge amount of common ground on this topic. I congratulate the hon. Member for Blaydon (Liz Twist) on securing this debate on both Traidcraft and the future of fair trade generally, and I thank other colleagues for their contributions. I congratulate her in particular on the way she set out the relationship between Traidcraft and her constituency and those around it, and how Traidcraft’s values have infused people in her constituency and beyond. That shone out from the debate generally.
I suspect very few Members have not had a connection with Traidcraft and fair trade over the years we have been engaged in public life. I am sure many of us have been in draughty church halls and seen the work that is done. The right hon. Member for East Ham (Stephen Timms) illustrated vividly how we can turn those draughty church halls and book stalls into policy change in relation to fair trade. What he said about Sainsbury’s in St Lucia is a dramatic demonstration of what can be done when people set their minds to something. A thousand different opportunities picked up around the country can make a significant change. It was wonderful to hear that example. I think some people still feel as though all the big decisions in the world are made by remote organisations and worry about whether they can influence things. That is at the heart of queries about democratic practices, not only in this country but throughout the western developed world. That is an example of something good that can happen very much at grassroots level.
I am pleased also that tribute was paid to my good friend, Ram Gidoomal, who has been an influence on a variety of positive issues in this country for many years. I am delighted that such a friend of many decades is able to listen attentively to this debate. We certainly appreciate his relationship with Traidcraft and all he has done with it over the years. In my constituency, I have been to St Andrew’s Church many times with the Fairtrade group in Biggleswade, and churches throughout north Bedfordshire—particularly North Bedfordshire Methodist Circuit—have been very involved. We can pay tribute to those who have acted locally and nationally on this.
Let me proceed with my remarks, into which I will incorporate some of the comments made by colleagues. When Traidcraft was created in 1979, we undoubtedly lived in a very different time. Today’s hyper-interconnected world was just emerging, and more business was carried out using locally sourced products. Now companies operate through a complex and sophisticated web of supply chains that span the planet. Products are created and assembled across multiple jurisdictions, and delivered to our front doors within hours of us purchasing them online. We have much more understanding of who is creating the things we buy, and about the lives they live and the challenges they face. At the sharpest end, that leads to images of children working in sweatshops, or the appalling Rana Plaza tragedy in Bangladesh.
Today, ethically minded consumers shop in line with their values in numerous ways, for example by following a vegan diet, buying organic cotton or using social enterprises. The ethical market in the UK is now worth £81.3 billion per annum. Millennials, in particular, are spearheading the idea that companies should operate in a responsible way, and 66% say that they would pay more for sustainable brands—that paragraph was undoubtedly written by one of my millennials, but those of us who are older also recognise that we played our part in the past by supporting Traidcraft and Fairtrade, and the way they got going. There is no doubt, however, that that pioneering work by the previous generation has been well picked up by the millennials of today, and we congratulate them on taking it forward. In the late ’70s, Traidcraft was one of the first organisations to shine a light on the working conditions of those who made our products. That is a vital legacy, and a theme that continues through the work of commerce today.
I am enjoying the points the Minister is making. Will he also pay tribute to the role of Traidcraft in establishing standards for corporate reporting? I think Traidcraft was the first plc to publish a proper social impact report, which was very influential across the entire plc sector.
I will indeed. Such reporting has increased the sense of responsibility not only of companies, but of consumers who ask the right questions and ensure that those delivering products recognise the need to respond to their concerns. Those reporting changes were fundamental.
The influence of Traidcraft and Fairtrade is felt not just in hundreds of churches and community centres across the country where their products are a mainstay, or in the growth of the wider fair trade market, but across millions of consumer decisions in the UK that are made with sustainability in mind. The hon. Member for Strangford (Jim Shannon) spoke about values, and it is no surprise to those of us who have had contact with him to learn where his values come from. I cannot think of a better fit between an individual Member talking about his upbringing and the values he incorporates into his life, and what he does constantly in this House through his remarks and determination to secure the best of human rights, tolerance and fairness. It is a great mix, and I am not surprised at his connection with Fairtrade.
As the hon. Member for Blaydon said, Traidcraft has reached a crossroads in its journey, and with so many ways for consumers to express their values, it is rightly looking to explore new ways to improve the lives of poor people across the world. We wish Traidcraft well. The hon. Lady concluded her remarks by speaking of the ray of hope mentioned by the worker who also spoke of a new challenge, and undoubtedly that challenge will be faced with the same degree of determination that was possessed by those who set off on this course in the first place. I therefore hope we can have confidence for Traidcraft in future.
Wherever this challenge leads the organisation, it is important that the rest of us continue to strive for the principles that shine through its work—to ensure that trade is inclusive and sustainable, that any jobs created are quality ones, and that developing countries can truly grasp the opportunities of trade to reduce poverty and build a safer, healthier, and more prosperous world. In that, the work of the Department for International Development, alongside the Department for International Trade, is key, particularly at this critical moment in our history. DFID initiatives, such as the responsible, accountable and transparent enterprise programme—I will say more about that later in my remarks—work to promote responsible and sustainable business standards, and to identify and tackle modern slavery and child labour in global supply chains. With more than 40 million men, women and children trapped in modern slavery around the world, that is vital work. We must continue to tackle permissive environments that enable the criminality of modern slavery to thrive, which includes supporting businesses to clean up supply chains in key sectors where slavery persists.
Let me turn to some of the questions raised during the debate. The hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) and other colleagues spoke about the impact on this issue of our leaving the EU. As we leave the EU, the UK has a unique opportunity to shape our trade and development work for the benefit of developing countries, and I am proud of the work taking place across the whole of Government to ensure that development and global prosperity are at the heart of future UK trade .
I am grateful. The Minister may well have been about to answer this point, but the Government have confirmed that they will continue to provide the poorest and least developed countries with quota-free, duty-free access to the UK market, which I welcome. Can he give any reassurance to producers in other countries—not the least developed, but poorer countries— that EU-negotiated economic partnerships and free trade agreements will be rolled over so that after Brexit, producers in those countries will continue to have the access to the UK market that they currently enjoy?
Clearly the right hon. Gentleman has had prior sight of my remarks if he is asking such a perceptive question at this time. I will come to that issue in a moment.
Our immediate priority on leaving the EU is to deliver continuity in our trading arrangements, so that developing-country firms exporting to the UK do not face new and damaging trade barriers—that is one benefit of securing a deal on leaving the EU, rather than no deal, and the Government will determinedly strive for that, as will all Ministers. To that end, we will put in place a UK trade preferences scheme that will, as a minimum, provide the same level of access as the current EU scheme by granting duty-free, quota-free access to 48 least developed countries, and generous tariff reductions to around 25 other developing countries. We will also seek to replicate the effects of the EU’s economic partnership agreements, which are development-focused trade deals with African, Caribbean and Pacific countries. We aim to maintain the preferential access to UK services markets for least developed countries that is guaranteed through the LDC services waiver—that, I was pleased to note, is a better deal than the one currently offered through the World Trade Organisation, which is an important consideration.
As well as maintaining preferential trade access for around 100 developing countries, those trade arrangements also embed the principles of inclusive and sustainable trade that Traidcraft and others have long argued for. For example, the UK’s trade preferences scheme will include an enhanced tier similar to that of the EU, which grants special tariff reductions to developing countries in return for progress against ratifying and implementing international conventions on human rights, labour rights, the environment and good governance.
More trade does not have to come at the expense of workers, the environment, human rights or the growth of least developed countries, and the Government firmly believe that it is in everyone’s interest to avoid any kind of race to the bottom on standards. That point was at the heart of the remarks by the hon. Member for Birmingham, Edgbaston when she asked what more might be included in deals, and my sense is that as these opportunities evolve, we should all press for the highest standards. As I said earlier, we have a minimum baseline, but that is not where the United Kingdom should be. We should be able to operate to higher standards, and we should work through them. My sense is that DFID and the Department for International Trade recognise that and wish to ensure it is the case. There is much work to do for these new agreements, and the House would not be fair if it took the bottom line minimum standard that we “must” have in place as our intention or ambition, because I am sure we will be keen for it to be developed.
The hon. Member for Strangford asked about modern slavery, and I shall say a little more about that. At last year’s UN General Assembly the Prime Minister launched the “Call to Action” to end forced labour, modern slavery and human trafficking, in which specific commitments are set out, to address modern slavery at the national and international level. It has been endorsed by 43 countries[Official Report, 7 January 2019, Vol. 652, c. 2MC.] so far. On the International Day for the Abolition of Slavery, my right hon. Friend the Secretary of State for International Development announced a £40 million package of new funding, forming part of the overall £150 million spend that the Prime Minister committed the Government to at the UN. That package of support will help more than 500,000 vulnerable men, women and children, and includes £13 million for the second phase of the work in freedom programme, the UK’s £20 million contribution to the global fund to end modern slavery, and the £7 million of DFID support to Nigeria.
That is all in addition to existing DFID programmes such as the £8 million regional women and girls protection programme operating in Greece and the Balkans, protecting girl and women refugees by providing shelters and strengthening national counter-trafficking mechanisms, and the £22 million1 responsible business programme, which is spreading responsible business approaches. That international strategy, overseen by the Prime Minister’s taskforce, has the aim of driving down slavery in source countries to the UK, and others of high prevalence, and effecting change through multilateral channels.
A specific request to the Government was to update the official guidance to encourage companies to publish where they buy their goods from and the wages of their supply chain workers, and to consider legislation to make human rights due diligence mandatory. Are the Government prepared to make that commitment?
My remarks have gone even wider than the copy that was obviously supplied to the right hon. Member for East Ham. DFID has recently updated its supplier code of conduct to require companies to sign up to the UN global compact, thereby promoting responsible businesses and committing companies to take action to address such issues. Responsible business is about more than just small or one-off projects that create win-win outcomes for business and society; it is the expansion of firms’ core business in developing markets, embracing socially and environmentally positive conduct through supply chains. That is why we have updated the code. We are encouraging businesses to contribute to economic development in ways that are socially responsible and environmentally sound, and that help to defeat modern slavery.
Hon. Members raised the question of gender focus, and all DFID private sector work goes through a gender lens. We recognise the changes that have taken place, as well as the particular pressures on women when working through these issues. The Commonwealth Development Corporation has a gender strategy, and DFID has its Work and Opportunities for Women programme. As I have explained, there are specific programmes directed at supporting women.
The hon. Member for Blaydon asked us to consider legislation to make human rights due diligence mandatory. That is a matter on which we must encourage, rather than legislate. We are encouraging better reporting on human rights, through grants to Shift and the Ethical Trading Initiative. We also rank human rights performance through corporate human rights benchmarking. We do not have plans at present to make that mandatory through legislation. It would be difficult to enforce. However, the question of how to promote that and to work with others on it is much on our minds. I think that is important.
There is more we must do to ensure that the benefits of trade are spread widely, levelling the playing field for those on the margins. That is important between countries, which is why the Government have a range of programmes to support the least developed countries to benefit from global trade, including our flagship trade facilitation programme TradeMark East Africa, and the recently launched Commonwealth Standards Network.
The Minister is being generous in giving way. May I press him a little further on the question of access to the UK market for developing countries other than the least developed? I think what he has said to us is that the Government’s aim is to make sure that after Brexit, access will be available to other developing countries at least at the level provided by EU-negotiated economic partnership and free trade agreements. Can he confirm that that is their intention?
Will the Minister also tell us a little more about what the Government are doing to ensure that that aim can be delivered? For example, why can they not simply announce, “Yes, everyone is going to carry on with the access they have at the moment”? Perhaps he can tell us a little more about the mechanics of what needs to be done to deliver on the aim he set out, which I very much welcome.
What we have been able to say publicly is what I stated just now about the bottom line and the roll-over of existing agreements. As to the aspiration, plainly that must come through the work that will be done to develop individual arrangements with states post Brexit. I am not sure there is any more detail that I can provide at this stage. If there is on reflection, I will write to the right hon. Gentleman and make it clear.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and the hon. Member for Birmingham, Edgbaston asked what DFID already does, why we do what we do and whether we could do more. Perhaps I may take colleagues through the responsible, accountable and transparent enterprise programme that I mentioned earlier. RATE is our primary mechanism for promoting responsible and sustainable business standards. It works through providing accountable grants to organisations such as Fairtrade, the Ethical Trading Initiative and the ISEAL Alliance to work with businesses to improve their performance on the relevant issues. RATE also delivers DFID’s main offer on identifying and tackling modern slavery and child labour in global supply chains.
To go into some of the details, through Humanity United’s Working Capital fund we are providing seed funding to early-stage technology initiatives aimed at increased transparency in supply chains, including Provenance, an app that tracks the journey of a product from the source to the shelf. We are also partnering with ShareAction on the Workforce Disclosure Initiative, a global coalition of investors with more than $13 trillion of assets under management, which is demanding better data from its portfolio companies on workforce practices. DFID is also a founding donor of the World Benchmarking Alliance, the world’s first publicly available set of corporate benchmarks—to reinforce a point made by the right hon. Member for East Ham—that will rank multinational companies on their contribution to the sustainable development goals. Through our grant to the Ethical Trading Initiative, we are helping companies such as Tesco and ASOS to uphold the ETI base code to eradicate modern slavery in their supply chains and ensure that purchasing practices are fair. We are ensuring that workers at the bottom of the supply chain know their rights and can exercise their voice through worker participation mechanisms.
In all those ways, DFID is working to deliver what has been called for in this debate, and we intend to continue to do so. New opportunities are coming in the future. As the House will know, I am very much in favour of a deal—an agreement—that means that if we are to leave the EU, we leave it on good terms that are beneficial to us and to those we work with, and that maintain the highest standards. It should not be impossible to do that. The United Kingdom, both within the EU and outside it, will not get involved in a race to the bottom—or certainly not with the support of the Government and the vast majority of Members. Fair trade, and the work that is done on it, will be a good test of how the UK of the future moves forward and meets the challenges.
A thought has come to me about the question raised by the right hon. Member for East Ham. I assure him that we are maintaining access and considering opportunities to make improvements once we have left the EU. As I mentioned, I may write to him and clarify the matter further.
More trade on fair terms is a key engine of poverty reduction. The Government will build on their track record on trade for development, we will continue to be a champion of free and inclusive trade when others may have turned their backs on it, and we will not shy away from issues of injustice or exploitation where they arise in the system. We cannot do that alone, however. Real progress will be based on partnership between Government, business, and, of course, movements such as fair trade that focus public attention where it is needed. We must all work together to create a trade system that works for everyone, including the poorest, and that eliminates poverty through inclusive economic growth.
It seems to me that there has been a good deal of agreement on the issue of fair trade from all sides in this debate. All hon. Members who have taken part, whom I thank, have recognised the social impact and significance of fair trade standards and the use, as the Minister said, of fair trade as a key tool in poverty reduction.
It is amazing that, as many hon. Members have said, those fair trade volunteers standing in draughty church halls up and down the nation should have produced a real blast that has changed things for the better, leading to big business adopting fair trade standards and affecting producers in faraway countries, such as those banana producers in St Lucia mentioned by my right hon. Friend the Member for East Ham (Stephen Timms). It has been a real turnaround.
Another issue that was picked up widely in the debate is the importance of inclusivity, of helping women and recognising their importance in trading and eradicating poverty. That is a key message that we must not forget: enabling women to trade and to support their families for a fair reward, and pursuing, as the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said, the overarching campaign for justice. We have heard about the importance of the co-operative movement and its role in fair trade, which we must certainly recognise; the impact that not only Traidcraft—although most definitely Traidcraft—but many other members of the Fairtrade Foundation have had on big business; and consumers’ enthusiasm to follow fair trade, with a 7% increase in Fairtrade sales last year.
I welcome the Minister’s comments in response to the specific queries from Traidcraft. While his comments are very welcome, I am sure that Traidcraft and other fair trade producers will continue to push the Government to go one step further to ensure that we really can pursue fair trade, with an emphasis on gender focus and poverty reduction. Traidcraft has had a difficult time, but it has a plan and it will survive. It is not too late, by the way, to order for Christmas: we have until the 21st, so I encourage everyone to look out their catalogues and order. I wish Traidcraft well in its new role.
Question put and agreed to.
That this House has considered Traidcraft and the future of fair trade.
Govia: Moorgate to Welwyn Garden City Railway
I beg to move,
That this House has considered the performance of Govia on the Moorgate to Welwyn Garden City railway line.
It is a pleasure to start this debate under your chairmanship, Mr Hollobone. I am pleased to have the opportunity to discuss an issue that, although I suspect it will not fill this second Chamber, is none the less of enormous concern to my constituents and thousands, perhaps even millions, of people along the line from Moorgate to Welwyn Garden City. I should say that, although the title of the debate is the train service from Moorgate to Welwyn Garden City, there is also an impact from other services that run along the same line, specifically and in particular the King’s Cross service toward Cambridge and through my constituency.
Unfortunately, although the problems are in no small part to do with changes that were made, rather infamously, to the timetabling in May this year, that is not the whole story. I see that I first raised my concerns about the quality of this service all the way back in December 2016, when I called for a much improved service from Govia. It is most certainly the case, however, that since the May timetable change services have gone from pretty bad to disastrously awful. I will take a few moments to highlight some of the things that have gone wrong.
It cannot be right, in a timetable change intended to add 6,000 additional carriages to the train network and the services enjoyed by everybody, that in my constituency the service provided went backwards, in terms of not just the number of trains, but the speed of those trains. In a café that I am sure is frequented by many of my constituents, I came across a poster from the 1930s about coming to live in Welwyn Garden City—the second and, I should say, the best garden city in the country—boasting that people can get from Welwyn Garden City to King’s Cross in just 23 minutes. Here we are in 2018, about to go into 2019, and we can no longer make the journey at that kind of speed. It now takes seven minutes longer to get into London from that station, Welwyn Garden City. The speed of service is certainly a problem, but the problem is not just the speed of service.
We also now have fewer trains, particularly off peak, such that some stations—for example Welham Green and Brookmans Park, stations that I use regularly—have gone from having three trains an hour off peak to only two. The service has become less frequent. In other places in my constituency, particularly Welwyn North and particularly at the weekend, that drops back to one train an hour—a completely unacceptable level of service.
The problem is not only slower trains and those missing trains, but a poorer service all round, particularly from the larger stations, Hatfield and Welwyn Garden City, which are suffering. I have been inundated—and I mean inundated—with correspondence from my constituents, who are upset and concerned. At the height of the timetabling problems in the summer, some even had to give up their jobs as a result of this appalling level of service. While I accept that the Minister— who by the way I consider entirely blameless in all this, since he has only been in the job for a few weeks—will get to his feet and reassure me that things are improving, I must say that my patience has already given way and I have been looking for a suitable alternative.
Fortunately, there is an example of an alternative that could be put in place to resolve many of the problems. I have been in continuous discussion with Transport for London, which is keen to take over the service. I know that TfL has been in contact with the Minister’s predecessor, if not the Minister as yet, and certainly with the Secretary of State for discussion, and has written a detailed note in which it points out that if it were to run the service from Moorgate to Welwyn Garden City as a London Overground service, it could offer us better integration into the railway network, faster trains, more trains, cleaner platforms and a service integrated across the entire information system—in other words, when we are looking at information for the reliability of services, we are looking at the entire TfL system in one go.
I think that would make a significant impact on the quality and level of services to my constituency. It is of course the case that to get to my constituency, those services must run through several other stations along the line that are outside my patch, so I have been in active conversation with and writing to Members of Parliament across parties and right down the track from Moorgate to Welwyn Garden City, to seek their opinions. It is probably true to say that the concerns that have been raised in the past have been about where the Transport for London services would run outside London boroughs. That actually occurs in only two constituencies—that of my hon. Friend the Member for Hertsmere (Oliver Dowden) and mine. The concern is effectively that TfL would be in charge of services over which our constituents would have no democratic control.
Would it be the case that TfL running that line would somehow remove from my constituents the ability to hold both the franchiser and the franchisee—the organising department, in the case of TfL—to account? Not in my view. We are more than happy to take on the small risk that, because we are not Greater London taxpayers, the Mayor’s office might attempt to totally ignore our views. I simply do not accept that that would be the case, and I bring evidence.
London Overground lines run by TfL and Arriva Rail London already go into my county of Hertfordshire and elsewhere. I have taken the time and trouble to speak to Members for and residents of those areas, and none have said that they somehow feel ignored because they happen to be just outside London. Many report a quite dramatic increase in service quality as a result of the lines switching to TfL. I have some figures that back that up.
The lines that TfL has taken over and changed to London Overground lines have seen an increased frequency of trains, from 400 per day in 2007 to 1,500 per day 10 years later. Ridership has increased by 650%, delays have decreased by 30% and customer satisfaction has increased by 18%. In other words, I am more than convinced that switching the distinct Moorgate to Welwyn Garden City line to London Overground would increase customer satisfaction, improve the quality of our services and make our services far more integrated.
However, there is yet another reason why I believe that the Moorgate to Welwyn Garden City line should be run by London Overground—the heritage of the line itself. As I am sure only railway geeks will be aware, a section of the line actually operated as part of the London Underground until the 1970s. That section was from Moorgate to, I think, Drayton Park, where observers will find that the lights on the Govia Great Northern trains still flicker as they switch from the different electrics that were used on the London Underground. We already have the heritage of being a London Underground line. I argue that it is high time to convert the whole line to a London Overground line, which has only been available since the 2007 innovation.
The case is convincing indeed, but the question is how we get to that situation. I have met the deputy Mayor, the Secretary of State and the former Rail Minister; indeed, I have met every former Rail Minister from before the former Rail Minister. The Secretary of State has already said that this part of the Govia franchise needs splitting out, which, as hon. Members will imagine, I am very keen to see happen. In any case, the franchise is up for renewal in 2021.
I do not think that there is any principled objection to TfL managing that line, which I argue should be along the same basis as the other London Overground lines, with TfL procuring a service from Arriva Rail London. However, in order for that to happen, I need ministerial action almost immediately, and it is for that reason in particular that I secured the debate. As the Minister will know from his limited time in the job, these things do not happen overnight; the procurement process takes a couple of years.
Specifically, TfL now needs research and data that only Govia can provide in order to fully model this replacement service, with a deadline of February 2019. In other words, we have only a couple of months for that information to be passed across. How does that happen, in practical terms? It is straightforward: the Secretary of State needs to request that Govia shares that information.
At the risk of boring the Minister with details of woe and appalling service and the heartbreak of the problems over the summer, I put on the record my thanks to the Department for Transport for responding to my calls for additional compensation for commuters who were unable to travel during that period of enormous disruption. It was always the case, particularly for Southern, that compensation was offered if services completely fell apart, and in this case I think a month’s free travel was offered to season ticket holders.
However, the problem for my constituents was that many travel slightly less frequently. They do not know what time of day they might travel—perhaps after dropping the kids at school—and some days they might work at home. I came to a deal, after being very insistent with the Secretary of State in a meeting very early during the disruption post May, that additional compensation should apply not only to those who had season tickets but to everybody else who used the line on a regular basis. We agreed in the end that commuters who could demonstrate that they travelled on three days or more per week should be compensated.
I have to say that there was a bit of an internal, behind-the-scenes battle involving the Treasury. A couple of times it said it could not do it, which I said was unacceptable. I am pleased and grateful that the Minister’s Department ensured that compensation was offered. Constituents now regularly come up to me and tell me that they have had back £200 or £300 of compensation in addition to the delay repay scheme, which is far too fiddly to use and which I know the Minister has plans for.
The right hon. Gentleman makes a compelling case on behalf of his constituents for looking at the management of the service. Does he agree with the Transport Committee that season ticket holders and others who were so badly affected by the timetable changes on Great Northern should receive a discount on their 2019 season tickets, in order to protect them from the fare increase due in January? That might provide some more immediate relief than the longer term changes that he seeks.
Yes, I agree. Commuters on our line from Moorgate to Welwyn Garden City have suffered unbelievable disruption. It would be right for the Minister and the Department to look at how they could compensate those commuters, which could perhaps be with a discount on the fare increase that has been mentioned for the new year.
I support that call, although I accept at the same time that, while being given £200 or £300 does not in any way compensate for the appalling disruption, it is at least a recognition of it, since it comes on top of the delay repay scheme. I put on the record that commuters should not be put off if they have already gone online and claimed their £3 back for a late train using the delay repay scheme. I am assured by Govia that they can now also claim compensation, whether they are a season ticket holder or not, using whatever means of proof they can provide. That can be a bank or credit card statement or tickets. I know some people will have bought carnets rather than tickets. Govia is prepared to be very flexible.
I will mention one other matter before I sit down. I have for a long time called for Oyster cards to be accepted along the distance of the line. I think it is currently accepted only from Moorgate to Hadley Wood, which means that ticketing is a complicated business. A person has to get an overground ticket. Then, at some point when they come off the train—at Finsbury Park or Highbury & Islington—they have to switch to paying by Oyster. The position at the moment is very unsatisfactory, so I am really delighted, on behalf of my constituents, that the Government and the Minister have announced that Oyster will come into play next year—I understand that that will be at some point in the autumn—meaning that the Oyster network will extend right out to Welwyn Garden City, along the length of that line. I would like to push it further—of course everyone will say that—because Welwyn North is also in my constituency and I must make reference to that. However, I will be very pleased to see this innovation. It will help tremendously: it will speed up ticketing times at the station dramatically. The innovation of not just Oyster but contactless payment—the ability to use phones and credit cards—makes travelling a lot easier.
Therefore I really have two specific requests: one simple and one on which I hope that the Minister will equally be able to reassure me, either today or very soon—ideally before Christmas. It will be his Christmas present to my commuters and, I suspect, commuters right the way along the line if he can provide clarification on the first point, and a yes on the second. The clarification is on the date on which the Oyster card will actually be introduced in our area. I very much hope that the Minister has available the date of its introduction next year. If not, I just seek clarification that it will certainly be introduced next year.
If my second point is not resolved as we go into the new year, the Minister will find me, rather annoyingly, on his shoulders about it. I am talking about the provision of data from Govia to TfL so that we can start the process of matching a London Qverground service to the line and not miss the 2021 deadline. I am reliably informed that that must be done by the end of February next year to meet the deadline. I invite the Minister to make my constituents’ Christmas.
It is always a pleasure to serve under your chairmanship, Mr Hollobone. I thank my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps) and congratulate him on securing the debate. I recognise that he is a very long-standing campaigner on rail for his constituents; he detailed some of the things that he has achieved. I think that his constituents are incredibly well represented and I hope that they fully show their appreciation of that to him, because he has delivered improvements for them.
My right hon. Friend has focused today on the quality and quantity of the rail service and particularly how that has faltered in the course of this year. The timetable change on 20 May caused an unacceptable level of delays and cancellations on Great Northern services through the Welwyn Hatfield constituency. That was not the only constituency affected; the May timetable change was a very major fail from the industry as a whole, and there were multiple causes of it. I hope that the amount of investigation and change to procedure that we have seen from that—people trying to learn the lessons—will have been noted as well.
First, Mr Hollobone, I apologise for being a minute or two late. Given the debate’s very prompt early start, I missed the first part of the speech from my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps). Does my hon. Friend the Minister agree that it is vital that both Govia Thameslink Railway and Network Rail learn lessons from what went wrong in May and ensure that they very significantly improve the quality of service that constituents receive on this rail line? I say that because what commuters have had to put up with over the last few months has been totally unacceptable, and the responsibility lies with both GTR and Network Rail. They both have to do a great deal better in the future if they are to provide an acceptable service for my constituents.
My right hon. Friend is as wise and experienced in this matter as we would expect, and she is right to say that there was not a single cause of the failure from the timetable change in May. Everybody should be taking some responsibility for that, and my right hon. Friend is correct to highlight the franchise operator and Network Rail.
We have of course had the Glaister review, which looked at the underlying causes. I will come on to some of the things that have changed as a result of that. The key point was to ensure that lessons were learned and that we do not have a repetition of what was a complete failure. It was very frustrating because across the country as a whole, some really impressive things have been delivered—things that were started and taken forward, indeed, by my right hon. Friend. I am thinking of such things as, in the north, the Ordsall Chord and work at Liverpool Lime Street. The timetable change was to bring some of the new interventions and upgrades into service for passengers, but that has not happened yet, so it did not just cause disruption; it was a real missed opportunity as well. I will come on to that in a moment.
Since the interim timetable was introduced on 15 July, we have seen improved performance on the Great Northern line. In the most recent figures, the public performance measure for these services was around 83%. I completely understand that that is not good enough; we are obviously aiming for vast improvement, but it is still an improvement compared with 74%, which was the equivalent last year. Yes, there clearly remains room for improvement, and we continue to push GTR to improve reliability across its network.
I just caution the Minister on quoting statistics, because the trouble is that it is 80-whatever per cent. of fewer trains. The timetable has left my constituents with fewer options, and that means that the percentages, even if the timetable runs perfectly, are actually rather meaningless.
I will come on to that point. I would not go so far as to say that the statistics are meaningless, because they are part of the measures that we use to measure the performance of train operating companies. They are regularly scrutinised; indeed, I have found myself looking daily at the PPM by individual franchise, which is a habit I must get out of. This is monitored by the regulator and by officials in the Department. I will come on to the quantity of trains, but it does matter. We want to ensure that train operating companies and Network Rail are held to account for a failure to improve.
GTR is working on a range of ongoing schemes designed to improve the underlying performance. There are more fully trained drivers on this route than ever before, and service performance is improving as a result of revised operational plans that make best use of those additional resources. Network Rail continues to deliver improvements designed to combat some of the underlying infrastructure issues on this part of the network. GTR and Network Rail are collaborating more closely to reduce the frequency and impact of trespass, which has been a type of incident affecting this route. The rail industry is implementing new solutions to reduce that risk, including by focusing, through social media channels, on the target demographic.
One question raised repeatedly by colleagues across the House has been this: what is being done to hold the operators to account? We have seen some improvement in performance. We have always been clear that GTR would be held to account for its role in the disruption earlier this year. It will make no profit in this financial year, and we have capped the profit that the operator can make for the remaining years of the franchise. It will contribute £15 million towards tangible improvements for passengers and work with local rail user groups representing the passengers most affected by the disruption in determining where the money is spent. That is in addition to the £15 million that the operator has already contributed towards compensation for passengers since the May timetable disruption. I am pleased that those steps will hold GTR to account appropriately and will directly benefit the passengers who were most affected during the disruption.
There was a timetable change last week. The December 2018 timetable change was a scaled-back one, but it was nevertheless significant because it was implemented using changed procedures, in the light of the learnings from May. Compared with the 15 July interim timetable, this new timetable, which has landed well, brings an increase in services for Welwyn Hatfield, focused mainly on the off-peak periods. Compared with before May ’18, passengers in my right hon. Friend’s constituency now see an extra service in each off-peak hour from Welwyn Garden City and Hatfield to Moorgate, additional peak services between Welwyn North and King’s Cross, and additional peak services between Brookmans Park, Welham Green and Moorgate.
Briefly, I do not want the House to be misled in any way by those numbers. It is certainly true and very welcome that the additional service is being laid on. The Minister mentions Welwyn Garden and Hatfield. It would be unreasonable to expect the Minister and others to know the full layout of stations, but there are other stations along this line in my constituency. Curiously, two of the smaller stations have been removed from the daytime off-peak stops entirely, whereas nearly everywhere else along the line to Moorgate is included. That is an unacceptable position.
I have been working with some of the rail user groups, which point out that it is possible to stop those trains at those stations and—particularly using the new 717 trains with the faster speed-up and slow-down times—still meet the timetable, without preventing other trains from running along the line. I would be grateful if the Minister would check back on that with his Department, to see whether we can get those other stations included.
Of course, I will take a number of points back from this debate, as I do with any debate, and take action to help colleagues to improve their services. I undertake right away to do just that.
We now have a timetable that appears robust and has landed well. We are continuing to monitor performance on a daily basis. My right hon. Friend has expressed concerns that Brookmans Park and Welham Green stations are seeing a reduction in services compared with the level of performance pre the May ’18 timetable, from three trains per hour during off peak to two trains per hour. Officials in the Department have discussed the issue with the operator. GTR has been using loading data and passenger count data to check whether that decision was correct. It found that very few passengers boarded at those stations during the day, and there was not the level of demand to justify three trains per hour.
The operator has to provide the timetable that most effectively balances the often competing demands of different passengers at different stations. In the latest station usage figures published only last week by the Office of Rail and Road, Welwyn Garden City and Hatfield both have more than 10 times as many entries and exits than Brookmans Park and Welham Green. In that context, it seems reasonable for GTR to provide a half-hourly off-peak service at Brookmans Park and Welham Green, and a service every 15 minutes at Welwyn Garden City and Hatfield.
I know the Minister has several remarks to make, but I need to challenge him on those figures. At Brookmans Park and Welham Green, passenger numbers have been increasing over a period of time. I have the numbers here, and I will leave them with the Minister. I do not accept that we should accept a worse service than pre May, when the overall purpose of the timetable is to improve the service across the network. I have now spoken to Govia, subsequent to the data that the Minister has, and suggested a system to allow trains to stop there without disrupting the rest of the timetable. If that can be done, I would appreciate the Minister taking a close interest in achieving it, as long as it does not destroy any of the rest of the network.
I have been looking through the usage data, so I will look at his data with some interest, because it is not entirely consistent with the picture that I have been considering. Perhaps we are looking at different timescales, but I would be grateful if he would give me the data, so that I can compare and contrast. As it stands, I know that GTR has been in discussion with local rail users and has made some changes. Previously, the two services were at 19 and 37 minutes past the hour. That meant that if a passenger missed the train at 37 minutes past, they had a long wait of 40 minutes for the next train. Now the services are at 19 and 49 minutes past the hour. Therefore, it is a half-hourly service.
My right hon. Friend mentioned weekend services, and I recognise that they remain a significant issue. I understand that the situation will be much improved as part of the next timetable change in May. That is still being worked on, but I will ensure that my right hon. Friend and colleagues along the line are kept informed of the change. In May, when there will be a bigger timetable change, more services will come online and more of the planned enhancements will become available for passengers.
Bringing Transport for London services to Welwyn Garden City was a key part of my right hon. Friend’s speech, and I know that he has campaigned for services between Welwyn and Moorgate to be transferred to TfL. I am very glad that the announcement of the Oyster and contactless extension has landed well. I am afraid I cannot give him exactly the Christmas present he asked for—the date when it will land—but I can confirm that it will happen next year. At the moment, our target date is no more specific than the autumn. If it can be brought forward, I will do that, because I recognise that it is of benefit, but it has taken a significant amount of work to get to this point. Again, I will keep him posted on progress. I know that this has been a long piece of work that he has focused on, but it is coming good for his constituents. It will allow commuters and other passengers to have seamless journeys into the capital. It is an early step in the Department’s commitment to expanding the availability of pay-as-you-go ticketing. Customers like it, it boosts usage and it makes it easier to manage peak-time flows through busy stations, so this is an important positive.
On the transfer of services to TfL, the Department is actively considering the future of the Thameslink, Southern and Great Northern franchises. We are working closely with the Williams Rail Review, which is examining the most appropriate organisational and commercial models for the future of the rail industry. This work is at an early stage, but it is fair to say that nothing is off the table. It is a very wide-ranging review. It is an important review, because although our current system of privatisation has led to a fantastic burst of investment and passenger growth across our network, and has taken us from A to B with 1 billion more passenger journeys per year, are we really set up to take the rail industry from B to the future? How do we cater for future growth, and what is the right kind of structure for achieving that? That is what Keith Williams’s review is about, and nothing is off the table. It is a very big piece of work, and I will ensure that my right hon. Friend’s concerns and questions are fed into it.
I must mention that we will see some new trains on this route—brand new trains will enter passenger service on the Moorgate route. The class 313s that currently operate on the Great Northern line were built in the 1970s, but passenger numbers have increased substantially in the decades since, so there is a need for new trains that can meet current capacity demands. The new trains have been designed to provide much more capacity to meet the demand on the busy suburban Moorgate line. The new trains carry 943 passengers, compared with 640 for the old trains. That is automatically a significant increase in capacity.
However, it is a question not just of capacity, but of quality—a point made by my right hon. Friend. The quality of the new trains is much higher. They come with air conditioning, plug sockets, wi-fi and real-time passenger information screens. They are also designed for the improved modern safety and accessibility standards. I believe these trains will substantially improve the quality of service on the line, while addressing the core underlying need to put more capacity into the network, to serve his constituents.
I will follow up with the Department on my right hon. Friend’s point about data, and I will keep him posted. I am aware of the pressing nature of it, which he has highlighted. I thank my right hon. Friend for securing this debate.
I notice that the Minister is wrapping up a minute early, so I just want to press him on this point. I did not hear a commitment there, but I heard about a long, wide-ranging review with nothing off the table. However, as I pointed out, we need a decision on data provided by Govia to TfL by the end of February next year. Therefore, a long and wide-ranging review does not sound entirely hopeful. I would like to press him, if I may, a little bit harder on that. Is he saying that a long-winded review would miss that timetable?
The Williams review is a bigger piece of work, but I also said that I would take back the points about Govia and TfL and keep my right hon. Friend informed. That is what I was referring to, so I have not missed it. Let me just finish by saying that the performance on Great Northern after May was unacceptable. Action has been taken against GTR in respect of that, and we continue to monitor performance closely. Additional Moorgate services were introduced last week, providing additional capacity in Welwyn Hatfield. I hope that 2019 will see further improvements, including the very popular introduction of pay-as-you-go ticketing. I will follow up all the points raised by my right hon. Friend and keep him posted.
I am pleased to say that this debate does not qualify for delay and repay, and we have arrived at our destination on time.
Question put and agreed to.
That this House has considered the performance of Govia on the Moorgate to Welwyn Garden City railway line.
Firefighters: Mental Health Support
[Sir Roger Gale in the Chair]
I beg to move,
That this House has considered mental health support for firefighters.
I am grateful for the opportunity to speak out on behalf of members of the fire service. In so doing, I do not wish for a moment to minimise the effect of shock and trauma on our other emergency services, or on the victims, the bereaved and survivors, for whom I hope to speak out at a future date.
We must never underestimate the potential danger of untreated or poorly treated mental health issues. Nearly half the 39 people who died in an accidental fire in 2017, excluding Grenfell, had mental health issues. I am personally devastated to have to report that very recently, a member of our community in north Kensington has sadly taken their life. We have all failed that person, their family and their friends.
I was acquainted with several firefighters before the terrible events of 14 June last year, and since then I have spoken to many others. As a councillor in Kensington and Chelsea, I was active during a cross-party campaign in 2012-13 against the fire service cuts of the previous Mayor of London. I visited our fire stations and spoke to their teams. I analysed breakdowns of response times to specific fires from specific fire stations. I looked in detail at fire deaths statistics, which, though diminishing, reflected a new method of calculation that meant that only those poor souls who died on the scene of a fire were counted, not those who died subsequently in hospital.
In submissions to the then Mayor, we demanded that particular stations under pressure were not closed and that staff budgets were not cut. Most of our demands fell on deaf ears, although it seems that our campaign to save north Kensington fire station from closure was heard, as it was saved. The red watch from that station was first on the ground at the Grenfell Tower fire.
Following the cross-party work I carried out in the Royal Borough of Kensington and Chelsea, I was appointed by the current Mayor of London to the London Fire and Emergency Planning Authority. During my time there, we monitored pilot schemes on co-responding, whereby firefighters respond to medical emergencies, particularly cardiac arrests, when an ambulance is not available. Co-responding is unpopular among firefighters, not only because their responsibilities increased as their pay was frozen, but because they were concerned about a lack of training to deal with some of the issues that they were called to deal with.
Some felt it was inefficient to send a fire engine worth half a million pounds to a medical emergency purely because it was equipped with a defibrillator. Many told me that they were emotionally unprepared for some of the things they had to deal with, such as suicides. One told me of an incident where, for 40 minutes, while waiting for an ambulance, they carried out resuscitation on a child who had clearly already died. That officer told me that they had been put on light duties for a long period while they struggled to process what had happened.
I have talked to many of the firefighters who attended Grenfell Tower, many of whom are still struggling emotionally and some of whom may choose to leave active duty altogether. I have had a full briefing from the London fire brigade and I am aware of the new focus on mental health awareness, which is fully supported by the commissioner.
I congratulate the hon. Lady on securing the debate. She raises a pertinent point, which we should all pay attention to. She mentions the appointment of counsellors, which is absolutely crucial. The way to help someone to avoid mental health problems is for them to have somebody to talk to when they are experiencing the problems. There is no point in them just sitting there and experiencing the problems on their own; they need somebody to share them with and to help them.
I concur absolutely with the hon. Gentleman.
I hear that firefighters who came from fire stations near the fire are getting a higher standard of care than those from further afield. Call centre staff—many of whom spoke to people trapped by the fire, as we heard during the inquiry—are also traumatised, and some are not getting the support they need.
Let us remember that more than 300 firefighters were involved in the rescue attempt at Grenfell, and that it was not one single, terrible, catastrophic event. The fire raged for more than 12 hours, in which firefighters continually risked their lives in their attempt to save the lives of others. Some of the scenes they saw, and the choices they had to make, are with them every day.
Despite that, the psychological help that those brave men and women, including the call centre and support staff, so clearly need is very uneven. Some have received talking therapy. I have previously told the House that I have received that treatment myself, and it did not help me at all, although I accept it may help others. That treatment is available within the fire service.
Some people have been fortunate enough to receive eye movement desensitisation and reprocessing therapy, which I am told has been helpful, but it is usually available only from the Fire Fighters Charity, so capacity is limited—we are dependent on charity. Some have had very little treatment. I am told that many firefighters from stations across London who attended the fire have not had the support they need, and certainly not the emotional support from the community that many local officers have benefited from.
Three days after the fire, I dropped into one of our fire stations late at night. I drank tea and heard their stories. The team, who had fought back-to-back shifts on Tuesday and Wednesday, had had no time off. All leave had been cancelled. They were emotionally drained and physically exhausted. All I could think was, “Where is the back-up they’d need if there was another Ladbroke Grove train crash now?”. The terrible answer is that there is none.
Cuts to frontline staff mean that, even after a disaster such as Grenfell, there may be no capacity for compassionate leave. While nearly 20% of staff have been lost since 2010, incidents have decreased by just 12%, so fewer operational firefighting staff are attending more incidents each.
I concur absolutely with my hon. Friend; thank you.
Pay restraint and a squeeze on pensions mean that many firefighters have to work second jobs on their days off to pay their household bills. My specific experience relates to the London fire brigade, but I am aware that those issues affect fire services across the country.
I know my hon. Friend is talking about her own experiences, but when I was first elected in 1997, I visited the fire station in Stroud. Then, their appliances were always staffed by eight members, but they would go out with seven. When I talked to them recently, they were talking about going out with four on an appliance, and sometimes three. That is the result of cuts; they have an immense impact. Does she agree that they really affect the stress that firefighters are under?
I agree absolutely with my hon. Friend. The cuts and the shortage of staff are huge issues.
Mental health support is still often seen as an afterthought or an add-on and its provision is expected to be funded from the ever-diminishing funding that services receive. The mental health charity Mind tells us that an incredible 85% of fire and rescue personnel have experienced stress and poor mental health at work. That figure has risen by one third in the last six years. Although fire and rescue personnel are more at risk from mental health problems because of the nature of their work, they are less likely to take time off, which can affect their home life as well as their physical health.
Mind also tells us that repeated exposure to traumatic events, physical injuries, increased workload and financial pressures are affecting fire and rescue services personnel more and more. For the first time, the most common cause of absence in the London fire brigade is stress, anxiety and depression. That cannot continue. Surely, we have a duty of care to support those who risk their lives to save ours. It is not enough to expect each service across the country to tackle this growing problem individually with no additional financial support. Firefighters should be able to rely on us to protect their mental health, so they can be at their best when we need them.
We have seen how firefighters as well as call centre staff have had to relive those hours in painful detail under relentless questioning at the inquiry, and we have heard how that has retraumatised them. We have also heard how retired firefighters watching footage of the Grenfell Tower fire on television or online have also been retraumatised, demonstrating that trauma follows people into retirement unless it is properly dealt with by qualified psychologists.
We depend on firefighters to save and protect the public from flooding, building collapse, road traffic accidents, train crashes, passengers under trains and terrorist attacks, as well as fire. I therefore ask the Minister to increase funding of the fire and rescue services that we depend on, so that support for their mental health can be delivered fairly across the country. We rely on fire and rescue personnel to save and protect us from danger. It is time for them to be able to rely on us, to ensure that they have the help and support they need.
It is a pleasure to serve under your chairmanship this afternoon, Sir Roger.
I thank the hon. Member for Kensington (Emma Dent Coad) for raising this very important issue. I do not have a confession, but from the outset I have to declare an interest—that would be the best phrase—as I served for 31 years with Strathclyde Fire and Rescue Service, and it was a proud journey through my working life. In retirement, I became a local councillor who sat on the fire board, so I continue to have a great fondness and a great respect for the firefighters of today, although I am—quite clearly, for those who can see me—a firefighter from yesterday. I joined in 1974 and served until 2005.
Frontline firefighters—whether they are whole-time, retained or volunteer firefighters—who respond to emergencies, and those with specialist roles within the fire service such as fire investigators, frequently encounter seriously injured or even fatally injured persons in their day-to-day work. Preservation of the scene, particularly if it is a potential crime scene, may mean that anyone who is declared medically deceased must remain in situ, with firefighters having to work in close proximity to them.
Some incidents result in multiple fatalities. I will touch on some in the west of Scotland, but there are many others that I could cite between John O’Groats and Land’s End. For example, there was the Chinook disaster on the Mull of Kintyre, in which 29 individuals died. The first responding appliances to that incident were carrying retained personnel; they were not full-time professionals, but men and women who held down everyday jobs. There was the Lockerbie air disaster, in which 270 persons lost their life, 11 of whom were in the town of Lockerbie, particularly but not exclusively in Sherwood Crescent. Again, the first responding appliances to that disaster were carrying retained personnel, and I absolutely applaud the work that retained personnel do. There was the Rosepark care home fire in Uddingston not so very long ago, in which 14 residents died, and that was a modern facility, and there was the Stockline plastics factory explosion in Glasgow, which was attended by whole-time personnel; nine people died in that fire. That is to name but a few incidents, none of which I personally attended. However, having been part of the fire service, I have followed the stories about them with great interest.
There are also incidents that firefighters endure in which our colleagues are injured, or even fatally injured, in fires. It does not happen that often, but when it does, what a sad and dark day it is. We can even go way back to the Cheapside disaster in Glasgow in the late 1960s, in which I think 15 firefighters and four salvage personnel lost their life. That was an exceptionally horrific incident, but we have improved safety a lot since then.
Such repeated experiences without appropriate ongoing support from external counsellors or medical professionals may result in some firefighters and other emergency responders—I do not exclude other emergency responders who suffer similar pressures—succumbing to stress-related illness, leading to absence from work and, in the worst cases, to their being medically retired; indeed, as the hon. Member for Kensington said, they may even lead to firefighters taking their own life, which in itself is an absolute tragedy.
Believe me: firefighters give their all at incidents, both physically and mentally. They have to be constantly alert at an ongoing incident—alert for their own safety; for the safety of their colleagues; and for the safety of the general public. If the outcome of an incident is not what firefighters would wish for, their initial adrenalin rush turns to what I would describe as a devastating disappointment that they have not achieved their goal or what they had hoped for. Their bodies and minds must cope with sudden emotional changes.
There are also occasions when the judicial process exacerbates firefighters’ exposure to potential stressors, in that the police and, in Scotland, the Crown Office and Procurator Fiscal Service may be reluctant for immediate debriefs of crews to take place until they have met with individuals and taken their statements, to ensure that their evidence is not compromised. It is an added stress when firefighters have to speak to people in authority about what has taken place. We have seen on our televisions the grilling of some of the officers at the Grenfell fire. Those individuals did their very best that night, yet they are being grilled through the courts service and various inquiries.
Debriefs have immense value, not simply so that crews can learn lessons in relation to how an incident went—what they could have done better, and so on—but to provide individuals with the opportunity to express their feelings to their peers. They may not wish to burden—or may not be able to burden—their family and friends with those feelings, or confidentiality might prevent them from offloading those concerns on those outwith the service. All of these things may be worse for retained or volunteer firefighters, who live in the very communities that they serve; on many occasions, they may know the victims of an incident.
I will touch on two poignant road traffic crashes that illustrate that. In one incident, a firefighter said hello to four young individuals at a shopping centre in a small town. He knew the four individuals and their parents. An hour after a courteous conversation with the four individuals, his pager was activated and he responded to a road traffic crash in which two of those young individuals had died. As one would expect, he conducted himself professionally, but weeks, if not months, later that incident came back to haunt him. I am pleased to say that he received assistance from Strathclyde Fire and Rescue Service, and he made a full recovery.
There was another incident that had a good outcome. The driver of a retained appliance approached a road traffic crash and spotted his wife’s car; it was his wife who was trapped. As I say, there was a good outcome, as she made a full recovery. I attended that incident and it was quite a tense situation. I give credit again to those who serve their own community.
What my hon. Friend is saying is very powerful. Does he believe that there is more that the fire service can do—I encourage my own local fire stations to do this—to have public exhibitions of what they do and show how they go about their work, because once the public understand that, there is a tremendous amount of additional support for the fire service and for the actions that they take? It would help if we gave firefighters a lot more encouragement to do that.
I thank my hon. Friend for that intervention. Yes, a lot is already being done to encourage people and to raise awareness. The fire service in Scotland used to have an annual event at the old Strathclyde regional station, with the slogan, “Reckless driving wrecks lives”, where we brought along fifth and sixth-year schoolchildren. All the emergency services took part. We also make home safety visits now and we are very much part of the team that tries to prevent these events before they happen, through accident and fire reduction. Also, let us not forget the introduction of a very simple thing in people’s homes, which is the smoke detector. In Scotland, we fit them free of charge for anyone who approaches us, and they are worth their weight in gold; they are very effective. A lot has been done on the preventive side. It is a failure if the fire engine goes out; we should prevent all the fires and reduce the number of accidents.
Recently, while out driving in my constituency with a staff member, I turned to them and told them that we had just passed the site of a fatal road accident. The accident had happened 30 to 35 years ago, but decades later I could still vividly envisage the two deceased persons in that vehicle. What triggered that, I really do not know. For some people, there will be no trigger; regrettably, an incident will live with them and haunt them for the rest of their lives constantly. I am able to put such an experience back in the box and reflect on it; perhaps I am very fortunate in that way.
It is so important that rescuers themselves do not become later in life the people who have to be rescued from extensive mental trauma. Let us be proactive and protect, to the best of our abilities, our firefighters from mental trauma or mental harm. The Health and Safety Executive defines stress as
“the adverse reaction people have to excessive pressure or other types of demand placed upon them.”
That can apply to a lot of emergency responders, including the police, but it applies to firefighters in particular.
Most people, including most firefighters, can cope with the challenge of work demands, but when other life pressures are added accumulatively—for example, debt problems or marital problems—sometimes it just gets too much to bear and a tipping point is reached. Many workplaces offer stress management courses. In my time in the service, we introduced welfare officers as far back as the 1990s, along with external counselling. I am sure that continues today, probably in an improved way. Many workplaces also have in-house occupational health staff. The hon. Member for Kensington mentioned the fire service benevolent fund, which has been going for more than 100 years and is now called the Fire Fighters Charity. It offers invaluable support through its psychological rehabilitation service for serving and retired firefighters.
While people may be screened and tested for underlying illnesses, susceptibility to stress, as I understand it, may not be immediately apparent and the individual themselves may not know or wish to admit—that is one of the very sad things, and it was a very male-dominated service when I was in it, although I am pleased to report that that was changing for the better when I left—that their illness may be stress-related, given the previous stigma around mental health issues. To some degree that stigma remains.
When we see someone with an injury to their leg or a broken arm, we can see the physical injury, but we cannot see or feel a mental injury. Firefighters may wrongly perceive such an admission as a weakness on their part. It certainly is not. According to the mental health charity Mind, 37% of firefighters think colleagues would treat them differently in a negative way if they conceded or admitted that they had a mental health issue. The black humour and banter of my days—days gone by, fortunately; it is no longer politically correct, and that is quite right—was once a release valve and coping mechanism behind closed doors for firefighters, but they still have the camaraderie and they still work as a team. That is a form of therapy in itself, and it has immense value. When a whole-time firefighter returns to the station, they have that group. It is different for retained and volunteer firefighters. They return to their partners and wives individually, and that gives a different dimension to the situation.
According to Mind, 85% of people in the fire and rescue services—it is an inordinately high number—experiences stress and poor health at work. They are twice as likely as the wider workforce to identify problems at work as the main cause for their stress. Statistics obtained by Members of the Scottish Parliament through a freedom of information request indicated that in 2016, 137 employees of the Scottish Fire and Rescue Service—firefighters, control room staff and support staff—were recorded as taking sick leave due to stress. Regrettably, those figures appear to be on the rise, as the figure for those recording stress as a reason for absence was 77 in 2015 and only 27 employees in 2014. That is despite an apparent fall in the number of fires and incidents. We are doing well on fires, but we have got road accidents, factory accidents and farming accidents—there is a whole range of special services. We need to discover what has changed since 2014. What are the root causes and contributing factors? Most importantly, we need to address them.
An article in a recent Fire Brigades Union magazine, Firefighter—I am an out-of-trade member and I still receive it—highlighted a need for ring-fencing moneys within NHS budgets for mental health. That is a prudent thing to request. The Prime Minister said last year:
“I want to use the power of the government as a force for good to transform the way we deal with mental health problems right across society, and at every stage of life. Tackling the injustice and reducing the stigma associated with mental health conditions is a priority for me, which is why today I set the goal of providing 1 million members of the public with basic mental health awareness and first aid.”
That goal has to be welcomed. I understand that NHS England got a top-up of £50 million over five years, which is most welcome, but I do not know whether that will be enough to address the issues and the incident of Grenfell, the consequences of which will be felt for years to come, sadly.
When we consider how much it costs to train and equip a firefighter, together with the potential costs of their ill-health, such as absence or early retirement—they may even go to the extreme of taking their life—surely it makes economic sense to invest in appropriate support measures. Firefighters are the finest example of an asset to society. They serve it on a daily basis, and they must be properly supported. Should they stretch out their hand for help, we must grasp it and give that help. Better still, let us prevent them from needing to do that in the first place.
It is a pleasure to serve under your chairmanship, Sir Roger. I thank the hon. Member for Kensington (Emma Dent Coad) for securing this debate, thereby giving us all an opportunity to participate in it. It is always a pleasure to follow the hon. Member for Ayr, Carrick and Cumnock (Bill Grant). He has vast knowledge from his life as a firefighter over the years, and we all appreciate the wealth of experience he brings to these debates.
I want to focus on where we are with mental health support for firefighters and give some examples of what we are doing in Northern Ireland. When we have debates such as this on issues that cross the whole United Kingdom, there is an opportunity to contribute to the wealth of the regions of the United Kingdom of Great Britain and Northern Ireland.
During the worst of the troubles, which went on for 30 years, firefighters worked alongside soldiers, sifting through rubble and making bomb sites safe. They saw sights that they never thought they would have to deal with. Like our soldiers, the sights they have seen and the work they have done can never be rightly understood by anyone who has not done it. The hon. Gentleman has done it. Friends I speak to have done it, too. Like our soldiers, firefighters deserve the utmost respect and support. The terrible danger that they willingly face to save others is incredible. Their efforts, courage and sacrifice deserve the utmost honour to be given to them.
I take this opportunity to think of all the firefighters who have paid the ultimate price for their heroism—some have—and to remind their families that we have not forgotten their sacrifice. I have a very good friend who is a wee bit older than me who was a firefighter during the worst of the troubles. Even today in our discussions he will often tell me stories of what took place. Sometimes he tells the stories because he wants to just talk about them. Some of those memories are from 30 or perhaps 40 years ago, but they are very real to him on the day he tells them and reminds people of what took place. Often, he will just shake his head when he is asked about his work. Sometimes he cannot talk about it, but the fact is that it is good for people to talk about things. For mental health, it is vital to have an accessible support network in place.
I read a media report recently that stated that the number of firefighters taking long-term sick leave because of mental health problems has soared by almost a third in the last six years. The hon. Gentleman referred to that. The study was carried out in the light of the Grenfell tragedy, which the hon. Member for Kensington referred to, but it is comparable to the situation UK-wide. Indeed, in 2016-17—the hon. Member for Ayr, Carrick and Cumnock had a different figure, but this excludes the back room—97 Scottish fire staff took long-term mental health sick leave. In Northern Ireland, that figure was 111 for active firemen on the frontline.
I always remember another good friend of mine telling me a story. The hon. Members for Ayr, Carrick and Cumnock and for Kensington referred to some of the horrors that firefighters see. The troubles are one part of that, but road traffic accidents are another. The ones that probably leave a lasting mental scar are those that involve children. When my friends tell me their stories, it is heart-rending how the incidents have affected them. Another friend said, “You know, Jim, so-and-so”—I will not mention his name—“just had a total breakdown.” These things affect people in different ways, but what we are really saying is that road traffic accidents, whether it is children, women or men who are killed, can and do leave lasting effects.
There have been many traffic accidents over the years. I remember one very well, where a young boy from my neighbouring village died and another young fellow had life-changing health issues as a result, and still has them today. Whenever it involves local people, we can understand what they are thinking, and we can think about the firemen who have seen horrible things in that road traffic accident and about how it affects them.
There is a feeling within the fire brigades that more must be done to raise awareness of the fact that it is good to talk. One such action is firefighters from Northern Ireland aiming for a Christmas No. 1, after teaming up with colleagues from across the United Kingdom to release a charity single. I am not sure whether hon. Members are aware of that. The group is known as the Fire Tones—what other name could they call themselves? The group has released its version of Band Aid’s “Do They Know It’s Christmas?” to raise money for the Fire Fighters Charity and the Band Aid Charitable Trust. The charity provides physical rehabilitation for firefighters recovering from injury or illness, as well as mental health support for those who have experienced psychological trauma, as many have. The single has been released on iTunes, Spotify and Amazon Music, and can also be purchased from Tesco. I will buy a copy this year, and would urge other Members to get one as well and, by doing so, to help the charity.
In 2017, the Government provided an additional £1.5 million to pay for mental health support through Mind’s blue light programme, to ensure that our emergency services and workers have the counselling and the emotional support that they require. However, the fact that firefighters are fundraising suggests that they are not seeing the benefits of that and so, as is becoming normal, they are teaming up with other charities to fill the gap. It is good to do something physically, and it is important to do so.
The Northern Ireland Fire and Rescue Service has teamed up with two other local charities, Northern Ireland Chest Heart and Stroke and MindWise, on a new initiative called “Healthy Body, Healthy Mind”, to raise awareness of the importance, which we know well, of people keeping both their mental and physical health in good shape. On the Northern Ireland Fire and Rescue Service website, Group Commander Keith Black, occupational health and wellbeing, explains:
“As Firefighters, we know the importance of maintaining physical fitness throughout our careers. What is equally important, however, is our mental fitness”.
Someone can run a mile or 10 miles, but they need to have the mental capacity as well. Keith Black continued that
“through this new initiative we hope to remove some of the fear people may have about talking about their mental health, both amongst our own staff and in the wider public.”
Part of that initiative was the station-to-station cycle, the brainchild of firefighter Noel McKee, who is also a trained counsellor. Noel and three other firefighters cycled to every fire station, and together with the charity partners delivered a talk at two secondary schools each day of the 10-day cycle.
It is wonderful that people are attempting to fill the breach and to fill the gap through voluntary, charitable work to raise money and awareness. However, I believe that more should be done by this place to see dedicated support as a matter of right for the 111 long-term sick firefighters in Northern Ireland, and for the hundreds of others who are struggling to process the job that we called on them to do. I always look to the Minister for a constructive response, which I know I will get. I sincerely urge him to look at how we can step up to the mark in this House in the way that we are asking our firefighters to step up to the mark in real life.
I congratulate the hon. Member for Kensington (Emma Dent Coad) on securing the debate, and in particular on the way in which she dealt with this very sensitive subject. She shocked us all when she told us about the individual who has subsequently taken their own life; our thoughts go out to their family and friends.
I also congratulate my hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant) on 31 years in the fire service. He has some particular expertise that I could not possibly cope with and it gave me something further to think about. I am the chairman of the all-party parliamentary fire safety and rescue group, and the hon. Member for Kensington, who probably never sought such high office, is co-vice chair of the group. We are absolutely delighted that she has joined our group, and in a short time has demonstrated, by today’s debate, that she is making a real contribution.
I remember hearing the hon. Lady’s maiden speech last year, when she was a newly elected Member. Maiden speeches can be challenging for all those who have to make them, but the way she coped with the situation that she was in with her constituents was very telling. She has done a first-class job since in raising the whole range of concerns resulting from that horrendous disaster. We all witnessed the repeated efforts of firefighters entering and re-entering the tower to undertake rescues of people trapped by the fire. We can only begin to imagine, as my hon. Friend the Member for Ayr, Carrick and Cumnock said, how the firefighters must have felt when they returned home after attending those events.
It is acknowledged that firefighters have a stressful and traumatic job, and when they undertake the job they are advised that that is the way it is. However, I still think that we owe them a huge debt of gratitude for everything that they do, and we must do even more to support them than we are already. I remember three terrible incidents that firefighters attended in Basildon, when I was the Member of Parliament for that constituency.
I say gently to hon. Members, “Never take your children canvassing.” I took my eldest daughter canvassing. She was not asking anyone to vote for me, but she happened to come along—I think my wife and I had an issue; someone had to look after her. We knocked, but no one came to the door. It was in a tiny, rural part of the constituency. We knocked next door, and all of a sudden there was smoke. We went to the original door that we had knocked on, and we saw a human being alight. The fire service was absolutely fantastic. My daughter and I were in a state of shock, but they dealt with the situation and were absolutely brilliant.
There were two other incidents, both involving children. Firefighters found four children in a hut in a playground. They had lit a match and lost their lives. I remember another traumatic one, which was unbelievable. A gentleman had had some sort of breakdown. His wife had gone out and she came back to find that he had smothered their five children. It was not the police, but firefighters who attended. However tough a person is, I do not think that those experiences can be got over easily. That is why this subject is so important.
The Minister will probably correct me, but my understanding is that individual fire service authorities are responsible for ensuring that they have appropriate health and wellbeing support for their staff. The Fire Brigades Union has advocated for all fire authorities to have specific mental health policies. I do not know whether the Minister can enlarge on that and give us a report.
I am also advised that support is available to firefighters from various charities and professional bodies, including the Fire Fighters Charity and Mind. My hon. Friend the Member for Ayr, Carrick and Cumnock touched on the fact that research from Mind has found that 85% of people in the fire and rescue services have experienced stress and poor mental health at work. That is a truly shocking figure, which is totally unacceptable.
Her Majesty’s inspectorate of constabulary and fire & rescue services has committed to assessing how the fire authorities meet the wellbeing needs of their staff as part of the inspection question set for the year 2018-19. As my hon. Friend also touched on, NHS England announced on 9 October that up to £50 million would be made available over five years to provide ongoing physical and mental health services for those affected by the Grenfell fire, including long-term screening.
This is the season of good will when we all go round our constituencies and hypothetically appear as Father Christmas for one day. Last week, I visited our local fire station in Leigh-on-Sea twice—once to see the staff stage a community event at which they built the best Santa’s grotto ever, and then formally in a suit to thank them for all that they do. The best Christmas present they could have would be for my hon. Friend the Minister, as a result of this debate, to pledge that our Government will do whatever they can to ensure that our firefighters receive the best possible help for their mental health needs. They do a wonderful job on our behalf and risk everything. We have to bear in mind that they have their own lives and their own families to go back to, who know the scars that they bear.
It is an absolute pleasure to serve under your chairmanship once again, Sir Roger, and to speak in this important and timely debate. I thank the hon. Member for Kensington (Emma Dent Coad) and congratulate her on bringing it to Westminster Hall. She detailed the background thoroughly, set out what needs to be done and spoke poignantly about the traumatic impact of the Grenfell tragedy on her constituency and on the firefighters who attended the scene. I thank her for doing that. I am sure they are watching the debate and will note how seriously we take this issue. We are working collaboratively to take these issues forward and ensure that we get the best practice to support them.
My father-in-law was a firefighter in Edinburgh for almost 30 years, and he is extremely pleased that we are having this debate. Firefighters go out and do their job every day, and do not ask for much from us. They put their lives on the line, and never know what they are going out to each day. It is important that we recognise that they put themselves on the frontline and never know what they will come across. Their work can not only traumatise but retraumatise them, as they repeatedly go out to incidents. It is incumbent on Members of Parliament to recognise the traumatic impact of their role and that of the other emergency services. We must therefore provide adequate services in a timely manner to ensure that firefighters are supported.
I apologise for arriving a little late, Sir Roger. Does the hon. Lady agree that part of the problem is that we have 11,000 fewer firefighters in the service because of cuts, and that 40,000 days have been lost due to mental health? That puts extra pressure on the firefighters who are still in the service. Perhaps it would be a good idea for the Government to issue a minimum ratio of counselling services to firefighters so they know that they can access a counsellor whenever they need one.
I thank the hon. Gentleman for that important intervention. It is extremely important that firefighters and all emergency service personnel can access timely treatment when they need it. My experience from working in the NHS and my father-in-law’s experience is that shortages put additional stress and strain on those who do the job every day. Days lost due to physical or mental ill health put additional pressure on those who continue to keep the service going. Like all emergency services, the fire service is a vocation as well as a job. People in the emergency services always do much more than we expect them to do every day of their working lives. It is therefore incumbent on us to support them to the best of our ability right across the United Kingdom.
I worked as a psychologist, including with key emergency services and at the high-security State Hospital in Scotland. I know that, right across the emergency services, people put themselves on the frontline to protect the public. We must recognise that some of the issues that they have to deal with are out of the ordinary for most people. The images that they see and their experiences can stay with them for decades—right into retirement. When they are in the workplace, they may not want or feel able to seek help, but support should be available at any time, including in retirement. These symptoms may come to the fore in the form of post-traumatic stress, and individuals may feel ready to access treatment at any time.
Mental health services are a priority for the Scottish National party Government in Scotland. The Scottish Budget this month reflected that: it included more than £1 billion of funding for mental health, and funding for 800 additional mental health workers. That is a recognition of the fact that the public have become more aware of mental health. Today, we are speaking about mental health services for a specific group of workers. I would be interested to hear from the Minister whether there are examples of best practice that we can roll out throughout the United Kingdom. I am also interested in hearing about his collaboration with the Scottish Government and the Minister for Mental Health in Scotland on emergency service workers.
Cognitive behavioural therapy and EMDR, which the hon. Member for Kensington mentioned, are treatments recommended for trauma, and other forms of counselling are helpful in tackling symptoms of anxiety and depression and other presentations that come from trauma. What kinds of specialist treatments are being made available to firefighters and other frontline emergency service personnel? We must ensure that they access the treatment that is recommended for the conditions that they present with.
I always enjoy listening to the contributions of the hon. Member for Strangford (Jim Shannon). He said that the experiences of firefighters are similar to those of veterans; they may live with those experiences for a long time. Firefighters may work alongside soldiers and other service personnel who work together in this realm and have experiences that most of us do not have. Will the Minister comment on whether there are any peer support mechanisms that might be helpful? My husband served in the armed forces, and I am aware that veterans often find it extremely helpful to speak to others who have had similar experiences. Professionals do not always advocate such treatments, but it can be extremely helpful to speak to other people and have peer-to-peer support groups that are supported financially and resourced so that they can speak to others who have had similar experiences. I think that could be helpful.
When I was reading about the background to this debate, I found that stigma is an issue. With mental health issues in general, there is stigma attached to coming forward. We think of firefighters as being strong, working on the frontline and dealing with whatever happens—we have that stereotype. Added to that are the west of Scotland stereotypes that men should not come forward and speak about emotions and feelings. We are breaking that down, slowly but surely, but I think it is still there, so I can understand that the research is saying that 37% or so of firefighters feel unable to come forward to discuss their emotions, and the impact. We need to do more to break down the stereotypes and attitudes, and to increase mental health awareness—and actually mental health is on a continuum, with an impact on everyone. Then we will all feel able to come forward, but particularly those who are exposed, and re-exposed, to trauma.
I have been reading about the blue light programme, which I understand was funded from March 2015 until 2018. Will the Minister comment on the funding for that programme moving forward into 2019 and on whether, once again, there is any best practice implementation guidance from it that could perhaps be rolled out across the rest of the United Kingdom?
I thank the hon. Member for Ayr, Carrick and Cumnock (Bill Grant), who served for decades as a firefighter, and who brought his experience into the debate, for his service and dedication in that role—and subsequently in his role as an MP. He spoke about retained firefighters, which is important. Retained firefighters perhaps do not have the same level of training or support as other firefighters, and I should like to be assured that services—mental health support, but also other support—are available to them at the same level.
I also thank the hon. Member for Strangford, who paid a special tribute to those who have given their lives in the service. That is an extremely important point. He spoke about the tragedy of firefighters having to deal with the deaths of children, and the lasting impact on them, which we can all understand.
The hon. Member for Southend West (Sir David Amess) chairs the important all-party parliamentary fire safety and rescue group, which is considering the issues in question, and I thank him for that work. I am sure that it will be extremely important for us to work collaboratively across the House to take matters forward, and to continue to work on improving services for all and getting the best practice that people deserve.
I thank everyone who contributed to the debate. I am keen to work with the Minister and to take part in a collaboration between the Department and the Scottish Government, to make sure that across the United Kingdom best practice is followed on service access, treatment and research.
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Kensington (Emma Dent Coad) on securing the debate. I am pleased that she was successful in applying for it. In view of her expertise, given that the Grenfell disaster happened in her constituency, no Member is better placed to lead the debate.
When I took the shadow fire and emergency services post, I wanted to visit as many fire services as possible to learn at first hand what firefighters’ main concerns are. I expected to hear about problems with funding, staffing, pay and pensions, but I was taken aback by the deep concern about mental health. Firefighters are on the frontline. It is their job to deal with life-threatening situations. I acknowledge that it is highly demanding and stressful work, but it is also invaluable for our communities. Mind, the mental health charity, has done some great work in supporting firefighters through its blue light programme. Its workplace criteria for identifying the potential for mental illness correspond to the risks that are posed to firefighters daily: the repeated exposure to traumatic events, the potential for physical injuries, workload pressures, suffering loss, and worries about money. Invoking those criteria helps to explain why the potential for mental illness in the fire service is extremely high. The distinct lack of direct central Government action and focus, when the evidence is clear, is astonishing.
I acknowledge that the responsibility for ensuring the health and safety of firefighters rests with individual fire and rescue authorities, and the Chief Fire Officers Association supports them in that work through its lead on fire and rescue occupational health matters. I am sure the Government will point to the commitment of £7 million to pay for mental health support through Mind’s blue light programme. That is positive, but in 2017 the number of fire and rescue staff taking long-term sick leave because of mental illness had risen by nearly a third over the previous six years. Mind has found that 85% of fire and rescue personnel have experienced stress and poor mental health at work, and firefighters are twice as likely to identify problems at work as the main cause of their mental health problems. However, that does not only affect the firefighters; there is a big impact on their families.
Fire services work hard to ensure that the support infrastructure is available. I have heard of brilliant examples of that happening, including in the London Fire Brigade and Tyne and Wear Fire and Rescue Service, but the evidence shows that more has to be done to provide support to fire services. I do not doubt that the Government have acted, but any action cannot be separated from their wider attack on the service. Their ideologically-based austerity agenda has put more pressure on emergency services, and firefighters are bearing the burden. I am told time and again by the Minister that the number of fire incidents is decreasing but, as we know, that is not the full story. The overall number of incidents that the fire service responds to has decreased by 12.6% between 2010 and 2018. However, 11,854 firefighters have been cut in the same period, which equates to 20% of frontline staff. Therefore, on average we have fewer staff responding to more incidents, and incidents have risen every year since 2014. Workload pressures have increased over the past eight years, and if the Government want to be effective they must consider a staffing review as part of their policy to address mental health issues.
The effects of sustained cuts have put a considerable amount of pressure on the workforce, but that pressure is also changing. National discussions are being held regarding the expansion of the role of the firefighter to include emergency medical response. That may be a positive step if it is properly funded and if training is made readily available. However, I am not optimistic that central Government will ensure that that happens. I am not opposed on principle to EMR, but it must be properly funded. It will increase firefighters’ exposure to traumatic events and potential of losses of life. If they are not prepared for that change, it could be catastrophic for their mental health.
As a nurse, I saw such events at first hand. I assure Members that if someone is not prepared to deal with such incidents, the consequences for their wellbeing could be devastating. I was a cardiac nurse for 12 years and had an advanced life support qualification. I used to carry a cardiac arrest bleeper, and we used to run across the hospital to arrests. At that time—this is going back five to 10 years—the success rate was about 20% of resuscitations. That was in hospital, so we were getting there quickly. When a firefighter arrives at a cardiac arrest more time will have gone between what we used to call down time and the start of resuscitation, so the chances of success will be lower. At least we were successful a proportion of the time. By virtue of the way their work will happen in the community, the firefighters will see more fatalities; they will have to deal with that regularly, so it is an even more important factor in their mental health.
I thank the hon. Lady for her good work in cardiac services. That was in a controlled, measured environment, but the challenge for firefighters and ambulance personnel is that they operate in a quite unnatural environment, whether they are attending an accident at a farm or factory, or a car accident. They are exposed to the weather and elements, and there are other road users, and so on. That is an added dimension; it is not a controlled environment, although we would do our best to control it on arrival.
Absolutely. I completely agree with the hon. Gentleman. After someone has attended an arrest situation unsuccessfully, they go through an algorithm and they know they have done everything properly, but they still feel bad about losing that person. My point is that going to more arrests with a lower likelihood of success—because of all the things that the hon. Gentleman mentioned—involves much greater pressure. When I was a nurse we had occupational health, and there has to be something like that for firefighters—proper support.
I have been told numerous times during visits that firefighters have less time to train because of their workload. That is another thing that is very important. People going to an arrest must feel they know what they are doing. I am very concerned at the possibility that if outstanding issues are not fully addressed and firefighters are not effectively prepared for a sustained change in their role and responsibilities, their wellbeing could be damaged.
Our firefighters are heroes, and their pay must be properly addressed. As I have said time and again, they cannot spend a pat on the back. Mind has identified money worries as a contributing factor to mental illness, and considering the sacrifices made by our firefighters, the last worry they should have should be about their pay packet at the end of the month—my hon. Friend the Member for Kensington made a good point about some firefighters needing a second job, which is utterly disgraceful.
The Grenfell disaster and its consequences for our firefighters are terrible. The work that the Fire Brigades Union and the London Fire Brigade are doing to support firefighters is outstanding, and includes support for the 80 fire officers giving oral statements at the Grenfell inquiry. As the “Journey of Recovery” report highlighted, alongside all those affected, firefighters who were at the scene may be at risk of PTSD. The consequences are clear: stress and depression have been identified as the main source of LFB sick leave post Grenfell. I commend the Government’s commitment of £50 million to tackle mental health post Grenfell, but what proportion of that money will specifically be invested in support for LFB firefighters? Eighteen months after Grenfell, those firefighters still line the route every month for the silent vigil, and they are to be commended.
I do not accuse the Government of not caring, but I believe that more could be done, and they must recognise that cuts to central Government funding and staffing levels have a subsequent effect on a workforce. Let us not get into the old argument about allocated and unallocated resources, or who is responsible for austerity—the fire service must be properly resourced. I recognise that the Minister has asked Her Majesty’s inspectorate of constabulary and fire and rescue services to assess how well services understand and meet the wellbeing needs of their workforce, and how that can be improved. Will he provide an update on that and say when we can expect additional investment or support? How much of the £7 million committed to Mind’s blue light programme is included in existing fire service resources, and how much is new money? I look forward to hearing his response.
It is a pleasure to serve under your chairmanship, Sir Roger, and may I say to the hon. Member for Kensington (Emma Dent Coad) how sorry I am to hear about the recent death of her constituent?
I congratulate the hon. Lady on securing an extremely important debate. As she made clear—this was corroborated by my hon. Friend the Member for Southend West (Sir David Amess)—her long-standing interest in the fire service predates her arrival in this place, although it has continued here, and I know from our conversations that she has a genuine interest in issues of mental health. This debate has highlighted an important and growing issue, which, as she rightly said, is not restricted to firefighters. All our emergency services face similar challenges as a result of increasing pressure on wellbeing, and there is a greater recognition across those services about the need for the Government to step up and fulfil, in the words of the hon. Lady, their duty of care. She is right: we do have a duty of care, which I will now speak about.
I also pay tribute to the firefighter of yesterday, my hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant). He entered the fire service on the same day that my dad entered Parliament, and his contribution was extraordinarily valuable. Many contributors to this debate spoke not from notes but from personal experience, whether as a nurse or someone with a father-in-law in the service. This was a particularly good debate, despite the terrible experiences behind it, and my hon. Friend’s contribution was extraordinarily valuable since he provided insights into the strain on body and mind that comes from seeing and hearing things that no one wants to see or hear. He also mentioned the surges and changes in emotional state that firefighters have to cope with, and he made the point—as did others—that the trauma remains and comes back.
Anyone listening to the testimony from firefighters at the Grenfell public inquiry will have heard not just about those who performed so admirably under the most unbelievable conditions when going up and down those stairs, but about those who sat in the call room taking terrible calls under unimaginably difficult circumstances. Anyone who has spoken to some of those firefighters will know that that experience will stay with them for the rest of their lives. Some of them will need support, and some will need to be told they need support—many Members mentioned the continued stigma that is attached to our emergency services, where the tradition can still be one of taking pride in coping and being fine, with the best therapy being more work. I think we recognise as a society, and certainly as a Government, that our heroic emergency service workers need more practical support that is relevant to their state.
The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) made an important point about the need not only to make services available, but to make available services that are right for each individual, and I am sure the hon. Member for Kensington will agree. Certainly, in my work with Grenfell victims, I have been disappointed at times to discover cases of individuals receiving treatment that is not right for them in that situation. That point was well made, as was the point raised by my hon. Friend the Member for Ayr, Carrick and Cumnock about the landscape and nature of the workforce in the fire service, which is changing slowly and becoming increasingly diverse, and we must think hard about those changing needs.
My hon. Friend, and others, welcomed the Prime Minister’s statement of ambition and resource regarding more money for local mental health issues, which I think has cross-party support. I observe from my time in this place since 2005 that one of the great sea changes in this House has been a growing acceptance of the need for mental health to have parity with physical health, and decisive steps have been taken on that journey. Those steps have not gone as far as many of us would like, but they are decisive none the less. Again, that is part of a greater national societal awareness about the importance of mental health and the growing risk, and the demand for mental health support, not least for our emergency service workers.
Let me try to provide reassurance that the Government recognise the importance of this issue and stand ready to support and challenge the leadership in the fire service regarding the exercise of its duty of care. First, I confirm the point made by my hon. Friend the Member for Southend West, because there is now a requirement in the recently revised fire and rescue national framework for England, which sets out the Government’s expectations for a fire and rescue authority. It contains a new section on what should be considered part of the workforce strategy, and it states explicitly that each fire authority should have in place a people’s strategy that includes information on the availability of wellbeing and support services. I understand that most fire and rescue authorities, including the LFB, have workforce strategies in place, which is a good step forward.
My second observation is that although our fire service is widely recognised around the world as being among the best, we have an insufficient understanding of what good looks like. The creation of the Fire Standards Board, and the intention to create a more comprehensive and coherent set of professional standards—including in the area under discussion—is an important development. As the hon. Member for East Kilbride, Strathaven and Lesmahagow said, we need to know what good looks like in this context.
The third element is extremely important. Indeed, arguably the most important reform that we are introducing in our desire to seek continuous improvement in the performance of our fire service is independent inspection. That is similar to what we have introduced and strengthened for the police service, and with independent inspection and an increasingly clear framework of agreed standards, we will get a better picture of what is going on out there, and we will be able to compare and contrast the performance of fire services. With independent inspection comes greater transparency and greater accountability to the inspectorate, to the local fire authority, to the police and crime commissioner—where appropriate—to the Home Office and to Parliament. In our experience with the police, that framework of transparency and accountability is what really drives change. That is exactly the framework that we are setting up.
Various contributors to the debate talked about Mind’s blue light programme, and they were right to do so. I pay tribute to those who are working to deliver it. Since 2014 we have provided £7 million to pay for mental health support through the blue light programme, which was topped up after Grenfell. It provides advice through a network on mental wellbeing, stress and anxiety, seeking help for a mental health problem, supporting a colleague with a mental health problem, post-traumatic stress disorder and supporting someone as a friend or family member.
In addition—to speak to the point on the need for proper information about what works—every fire and rescue service in England now has access to a toolkit or framework called Oscar Kilo, which is also available to the police. It provides support and guidance for those who are responsible for wellbeing in each service, to assist them in developing and building robust, efficient and effective wellbeing support. As well as a framework of accountability and transparency, there is one of specific tailored support through the blue light programme and the Oscar Kilo toolkit. Those who are responsible for wellbeing and the local strategies have access to good information about what works, and that will grow.
Another entirely valid point was made about the need to ensure that the fire service has adequate resources to do its job. If we have insufficient capacity, or that capacity is too stretched, that will have an impact on wellbeing and people’s sense of confidence and professionalism in the job that they do.
I therefore confirm that fire and rescue authorities overall will receive around £2.3 billion in 2019-20. Single-purpose fire and rescue authorities will see an increase in core spending power of 2.3%, in cash terms, and an overall increase of 0.3% since 2015-16. Bearing in mind that the debate is sponsored by the hon. Member for Kensington, in the Greater London Authority core spending power increased by 6.3% in 2019-20 compared with 2018-19, with an overall increase of 11% between 2015-16 and 2019-20. Reserves stood at £57.8 million in March 2018.
Although we have a healthy disagreement with the Labour Front-Bench team, we maintain that our fire services are adequately resourced for the demand that is placed on them. However, I have always made it very clear, and I continue to do so today, that as we move towards the next stage of fire funding—the comprehensive spending review next year—we are updating our understanding of demand, because the past is not necessarily a guide to the future. We will approach the Treasury with our bid for police and fire funding on an informed basis, to be absolutely sure that over the next three or five years—whatever the time of the CSR—our fire services have the resources they need to do the incredibly difficult job that they do, which includes ensuring provision for adequate support of wellbeing and the welfare of the most important assets in the system, which are our people.
On that note, I will close. I put on record the Government’s thanks to our firefighters for their work. At this time of year, when most of us are out there eating, drinking and making merry, our emergency services are working extremely hard to keep us safe. Our firefighters and police are the ones who run towards danger when most of us run away from it. As we have seen at Grenfell, at the terrible fire recently in Nottingham and on motorways up and down the country, they are often called to events that are absolutely terrible—in particular when they involve children—and will probably stay with them for all their lives. It is right that we as a Government are challenged to answer for what we are doing about our duty of care, but it is also right for us to take the opportunity to place on record our thanks.
I thank all my hon. Friends and other hon. Members for their contributions, especially on a day when so little is happening elsewhere.
I want to reflect on some of the very helpful contributions, in particular with reference to fire investigators and retained firefighters—of course, in London we do not have any, but they give fantastic service in other parts of the country, at huge expense to themselves. We heard a lot about stigma. Although the situation is better than it was, people still expect firefighters to be Hollywood superheroes, when we know they are flesh and blood, like us. We heard a lot about mental scars, such as flashbacks, which can be with people forever, and about the difficulties of dealing with that kind of thing in the long term.
Different kinds of mental health support are available. I have heard a lot about peer support. A local psychiatry officer said that what the firefighters went through at Grenfell was due more than anything to the longevity of the incident—it was not just one incident; it went on for the best part of a day—and that the effect on them was more akin to the experience of torture victims, rather than of people who went through something else traumatic. Things like peer support are hugely helpful in such cases, but she did not feel that it had been explored in that context. I hope that that will be taken into account.
I thank the Minister for his contributions on people strategies and what good looks like. I am afraid, however, that setting standards and targets will not really hack it in this case. Without the funding to support it, independent inspection and monitoring of what is already in place is not enough, because we know that enough support is not there at the moment. People are struggling.
I will buy the firefighters’ record, but the idea that they have to fundraise for the charity that they will then rely on—they have to support it—is gutting, actually. I feel very strongly that we should aim for a world without charity, and where we do not need charity. In the interim, however, charity should be backing up the statutory services and certainly not replacing them. We are in a very bad state when we have to rely on charities to do things that Government should provide.
To summarise, existing services are clearly inadequate. We hear that from community members and firefighters. Today, we have heard lots of comments to back that up. We must indeed honour the brave men and women who keep us safe, but we cannot do that with words of praise alone; we have to act to take better care of them. Will the Minister please review and increase the funding, or work towards ways of doing so, rather than only setting standards and targets that are unobtainable under the existing funding regime? We need to tackle the issues that have been laid out today, and I hope he will reflect on that.
Question put and agreed to.
That this House has considered mental health support for firefighters.
Harrow Council Funding
[Sir Christopher Chope in the Chair]
I beg to move,
That this House has considered the future funding of Harrow council.
I have lived in Harrow all my life and I feel immensely proud of my community. Although I have disagreed a number of times with decisions Harrow Council has taken, I have always been grateful for the hugely important job that it and its staff do for my constituents and the wider borough. Harrow Council should be better funded, and I look to the Minister and his Department to begin to make a significant difference in that regard.
The council faces a number of distinctive challenges in the delivery of public services, which the lack of central Government funding is exacerbating. Harrow is the second most religiously diverse and the fourth most ethnically diverse borough nationally, with 61% from a black and minority ethnic background. Some 157 different languages are spoken in Harrow schools, and 28.5% of residents do not have English as their first language. That is significantly higher than the London average of 20% and the national average of 8%.
The number of Harrow residents aged over 85 is predicted to increase by more than 60% by 2029, and 15% are already aged over 65, compared with the London-wide average of 12.5%. We have the fourth largest EU population in London—it is estimated that around 50,000 EU nationals are resident in the borough. Low wages and in-work poverty are particular problems in Harrow. Wages paid in Harrow workplaces average £575 per week for full-time workers compared with the London-wide average of some £692.
Those challenges mean there is huge pressure on Harrow Council to deliver effective public services. Earlier this month, the council published its draft budget for next year, which spells out both the important work the council is doing and the dire situation it has been put in by Government cuts. After seven years of constant cutbacks, Harrow Council has had to find a further £17 million for the upcoming financial year. Harrow will have seen its main source of central Government funding—revenue support grant—fall by some 97% by 2019-20. It is estimated that over the four-year period from 2015-16 to 2018-19 the council needed to fund an £83 million budget gap to achieve balanced budgets. If we extend that period, it is estimated that by 2020-21 the council will have had to find £125 million to balance its budgets.
In addition to the cuts in revenue support grant, further money has been required to fund growth as a result of demand pressures, including rising homelessness, increased special needs placements and rising social care costs. Moneys have also been needed to fund the impact of inflation, capital financing costs and other reductions in specific grants, such as those to support schools. Under the new methodology for calculating revenue support grant, Harrow was the sixth hardest hit of the London boroughs in 2015-16 and 2016-17, losing some £10 million annually.
Harrow Council is one of the lowest funded councils in London. In 2015-16, its revenue spending power per head was £159, 17% lower than the London average, ranking it 26th out of the 32 London boroughs. A similar comparison with the England average shows Harrow’s revenue spending power per head was £127, 14% below the average, ranking it 105th out of 120 local authorities. Quite how the Prime Minister can claim that austerity is over is beyond me. In Harrow, as nationally, it feels unrelenting—frankly, it is getting worse.
In July, Harrow began the full transition to universal credit. More than 17,000 residents are expected to be on it by the time the transition is completed. Our housing market is under intense pressure—for many, rents are very difficult to afford—and in some parts of the borough 40% of children live in poverty. As in other parts of the country, demand for adult social care outstrips savings, as councils are asked to provide ever more with ever-diminishing resources.
Other public services in the borough with a significant interface with the council are also under severe pressure. Harrow is having to cope with a significant increase in violent crime at a time when police numbers are set to decrease further and funding for youth services has been cut by more than 75% in cash terms since 2010. The clinical commissioning group faces a deficit of approximately £50 million and has already cut popular healthcare services such as the Alexandra Avenue walk-in service in my constituency. With the highest proportion of over-85s in London, the absence of a local NHS service that might absorb with less fight some of the financial pressures arising from having proportionately more vulnerable older adults exacerbates the pressure on the council.
Schools, too, face ever-increasing financial pressures, making it harder for them to accommodate as many requests to help children with special needs as they might want to. As I mentioned, Harrow is having to cope with a significant increase in violent crime. We have already lost just short of 200 police officers, and the fear is that we will have to lose even more.
I thank the hon. Gentleman, who is my constituency neighbour, for giving way. He is painting a bleak picture of the funding position. May I put two points to him? First, if the council were more business friendly and encouraged businesses to invest in Harrow, more business rates would come in. Business rates income in Harrow has been declining for many years, and it is forecast to reduce further.
Secondly, I believe I am correct in saying that at the moment the budget is balanced for next year, but the forecasts for future years are very challenging indeed. Has the hon. Gentleman seen any documentation from Harrow Council that sets out that dire picture? That may lead to a lobbying strategy in which he and I go to see Ministers together, with the aim of securing more money not just for the council but for specific issues such as those he describes—it may lead to our supporting each other to get more money for the services that all our residents depend on.
I say gently to my neighbour that I will come on to Harrow’s excellent reputation among businesses and the recognition it has received for its performance in that area. The figures I quote are figures that I sought from the council—I am sure it would be willing to provide him with them were he to approach it. There is one specific issue on which the Minister would be able to assist if he wanted to, and I intend to come to that in due course.
Harrow has always been a prudent borough. Despite its challenges, the council has not overspent for 11 years. Its leadership and supporting councillors have been determined to shield frontline services from the axe as far as they can, but the cuts are now so deep that the council is unable to balance the books without reducing those vital services to the bare bones. Local residents are understandably concerned about the impact of funding cuts on the council’s ability to keep the streets clean and to help to deal with antisocial behaviour, among other things. By continuing to make cuts of such scale, the Government are leaving councils such as Harrow in an impossible situation and leaving our most vulnerable people at risk.
To be fair, the council has already made large efficiency savings and taken great strides to increase revenue. It has led the way in digitalising many services—87% of customer transactions are carried out online, leaving extra resources to look at the most complex and difficult cases. Council tax has been increased year on year—sadly, it is now the third highest in London, but the collection rate is above 97%. The council has commercialised services and looked at innovative ways to supply residents with additional quality services that generate new income while not endangering existing businesses and the private sector. From offering services such as training, a cookery school and gardening services to MOT testing and dealing with food and trade waste, the council has been very innovative. It has also marketed itself successfully for major film locations and for commercial events in our parks. It is a leader in shared services and is working with a number of councils to make significant efficiencies for frontline and back office services together.
As I indicated, Harrow is blessed with very dedicated and hardworking staff; in 2017, its children’s services attained a “good” rating from Ofsted, putting Harrow in the top 25% of councils across the country for performance in that fundamental service—a remarkable achievement in the circumstances. However, the council cannot be expected to deliver first-rate services with a third-rate budget level of funding, and local people know that.
Cuts are already having a big impact. Harrow has closed four libraries and significantly scaled back its work in public health. Drug, alcohol and smoking cessation services have been reduced, and all discretionary grants to the charity sector have been ended. The council has also been forced to reduce taxi card provision for the disabled to the lowest level in London. There has been a significant reduction in the number of children and families that the borough’s children’s centres are able to support. Lack of funding is holding back any ability the council might have to respond appropriately to other identified local needs, such as meeting the needs of young people.
The Young Harrow Foundation, in partnership with the council, conducted a survey of school-aged children between 10 and 19, which received an astonishing 4,500 responses. The results are very worrying. Mental health and violent crime were serious concerns for Harrow’s young people; 10% said they have suicidal thoughts and 15% said they need support relating to self-harm. We all know that lives are blighted when vulnerable members of society cannot access the help they need, and when people are unable to achieve their potential, everyone loses out.
In response to some of the acute issues facing councils, the Government have offered occasional one-off payments to, at best, paper over the cracks. For important services, that means councils are unsure of whether they will have the funding for key provision, and residents do not know whether vital services will continue to exist, from one year to the next. In short, it leaves local authorities unable to make long-term spending commitments to deliver some of the preventative work that would really benefit residents.
Harrow has had success in bidding for some such external funding to tackle some of those challenges. It secured £500,000-worth of investment from the Home Office to help fund early intervention services for young people at risk of joining gangs and becoming involved in youth violence. It also secured £760,000 to help support economic growth locally and was recently granted some £32 million by City Hall to build just over 600 new council homes. While this type of funding is of course welcome, these too are one-off payments for specific activities, offering no guarantees of continued funding, and the council may find itself having to cancel successful programmes if funding is not renewed. I gently suggest that that is not a grown-up, sensible way of funding local government.
The hon. Gentleman points out, rightly, that the budget in Harrow is balanced this year by one-off payments, I believe, as opposed to long-term arrangements. That is one of the things leading to future problems. Can he also answer this? Harrow is one of a very small minority of councils across the whole of England that failed to sign up for the multi-year settlement, which, although it is not always easy, gives certainty about funding over a number of years. Where councils have done that, they have known and been able to forecast what their income level will be. Harrow refused to do so, and has never answered my question why it refused. That brings the uncertainty of not knowing how much money will come in each year.
With all due respect to the hon. Gentleman, he will recognise that even councils that have signed up to the arrangement with the Government that he describes have still faced significant additional pressures from all sorts of sources, be it social care or homelessness, as I have already outlined, exacerbating the difficulties in setting sensible long-term budgets that meet needs. It would certainly be extremely welcome to hear him putting pressure on his ministerial colleagues to allocate additional funding for the London Borough of Harrow.
Despite the difficulties I have set out, the council has continued to play its part in trying to foster economic growth, supporting the regional and sub-regional objectives for business, employment and skills set out by the West London Economic Prosperity Board. The investment pot of £1.1 million from business rates retention is going into supporting businesses in accessing online services. Furthermore, Harrow Council is supporting that by investing £480,000 to try to help to develop the skills of low-paid, low-skilled and self-employed residents in the borough. Indeed, the council has been recognised for its work in this area, winning the Best Small Business Friendly Borough award. The council is also building new housing, making use of the new homes bonus, and has set out a major regeneration programme to maximise use of council-owned sites to support sustainable housing growth, as a result of which it will get some additional income from council tax.
I recognise that Harrow Council is not alone in facing challenges of the scale that I have set out. Surrey, Torbay, Lancashire and many other councils are already in serious financial problems. Commissioners were called in to Northamptonshire council after it ran out of money. Other councils are privately warning of similar difficulties soon. Many councils are having to prop up their budgets with funding from reserves, something that Harrow has not been able to do. I gently ask how many more signs the Government need before they wake up to the crisis in local government.
One area where the Minister could help immediately is financial assistance to help the council to cover the cost of subsidence arising from the sinkhole discovered under Pinner Wood School, which has cost the council some £5.2 million and has obviously exacerbated its already very difficult financial position. We urgently need fairer funding for local government. It is not good enough for the Government to preside over the managed decline of local services. I know that in Harrow and elsewhere councils are doing some great work, but on a shoestring, and the time has come for the Government to reverse the cuts and give councils, particularly my council, Harrow, the proper levels of investment they need.
It is a pleasure to serve under your chairmanship, Sir Christopher. I start by congratulating the hon. Member for Harrow West (Gareth Thomas) on securing this debate. His pride in his home is evident to all, and I pay tribute to that. It is good to see my hon. Friend the Member for Harrow East (Bob Blackman) here; he is also a champion of his constituency, particularly when it comes to matters of local government. We are grateful for and appreciate his particular experience and insights in our debates.
I welcome the opportunity to respond to the important points that the hon. Member for Harrow West raised. In doing so, I thought it would be helpful to use a framework that I like to use—my vision of the role of local government, which consists of three main areas. The first is to drive economic growth, the second to help the most vulnerable in our society and the third to build strong communities. If hon. Members will allow me, I would like to take those areas in turn, specifically in relation to Harrow, and address the points raised.
The draft local government finance settlement, which was published last week, confirms that core spending power across the nation is forecast to increase from £45 billion this year to £46.4 billion next year, representing a cash increase of 2.8% and a real-terms increase in resources available to local authorities. In the next financial year, Harrow Council’s core spending power will rise to £180 million, representing a 3.7% cash increase, which is substantially above the average for England and, indeed, other London local authorities. Core spending power is the standard measure of a local council’s financial resources, and it includes money from central Government grant, council tax, business rates baseline and further specific grants for adult social care and the new homes bonus.
Beyond grants, as my hon. Friend the Member for Harrow East said, driving economic growth is the only way to ensure the vibrancy of our local communities and to raise the vital funds we need to sustain our public services. Business rates retention is one such opportunity. Under the current business rates retention system, local authorities estimate that they will retain around £2.5 billion in business rates growth this year, which is a significant revenue stream on top of the core settlement funding.
This year, all London boroughs, the Greater London Authority and the City of London are jointly piloting 100% business rates retention. Based on their forecasts, the London pilot pool would retain an additional £348 million compared with the current system. This vital incremental income supports a number of strategic investment projects in London, including investment in high-speed broadband in Harrow and other west London boroughs.
As we confirmed in the provisional settlement, all London authorities, including Harrow, will continue to pilot increased business rates retention at the level of 75% in forthcoming year. I am confident that, when it comes to supporting growth and financial sustainability, Harrow is getting what it needs.
Beyond growth, one of the most undeniably crucial roles that local government continues to play is in helping the most vulnerable in society. It is local authorities that support the elderly, the disabled and our children in need. I am in no doubt about how challenging it has been for councils to drive efficiencies, particularly in the face of growing pressures on social care, as they contribute to rebuilding our economy and tackling the deficit we inherited from the last Labour Government.
I pay tribute to the work of councillors up and down the country, which is why I was delighted that the Budget committed another £1 billion of extra funding for local services, with a strong focus on supporting some of our most vulnerable groups, including £650 million for adult and children’s social care in the next financial year. Of that, £240 million will go towards easing winter pressures, with the flexibility, as requested by councils, to use the remaining £410 million for either adult or children’s services and, where necessary, to relieve demands on the NHS. I am pleased to confirm that, as a result of these payments, Harrow Council will receive an additional £2.63 million in the next financial year. That is on top of the £240 million announced in October to address winter pressures this year, of which Harrow Council received a further £1 million.
I am pleased to say that the focus on this area and the better joined-up collaboration between the NHS and local authorities, through the Government’s better care fund, is paying dividends. Social care across the country has freed up 949 beds a day since the February 2017 peak—a 39% reduction in social care-related delayed transfers of care. I am also pleased that Harrow performed well, achieving a 58% reduction in social care-related delayed transfers of care since August last year, and now has delayed transfers of care levels significantly below the England average.
The Government’s troubled families programme is also making amazing strides in supporting our society’s most vulnerable families. I am proud to say that £920 million has been committed to the programme during this spending period. As of September this year, nearly 130,000 families have achieved significant and sustained progress against the problems identified when they first entered the programme. Some 1,400 families have been working with the programme in Harrow alone during this period, and the council is forecast to have benefited from more than £3 million over the course of the scheme.
We all see that local authorities’ vital work in building strong communities that thrive is beneficial not only to them, but to wider society. Strong communities are cohesive, and it was with that in mind that the Government announced a £100 million fund to help to ease pressures on local services resulting from recent migration. The fund has so far committed a total of £832,000 to Harrow to contribute to better public services and a more cohesive society.
I am grateful to the Minister for acknowledging some of the council’s very good work on social care and working with troubled families. Will he acknowledge that managing the sinkhole underneath Pinner Wood School—a significant and important primary school that had to be moved—is costing the council considerable sums of money? Will he be willing to meet me and a deputation from the council to discuss whether the Government could provide any further funding to help the council manage some of those costs?
With all the will in the world, there is little I can do to help on that particular matter. As the local government Minister, I have no authority or control over the schools budget. The issue he raises relates specifically to a school.
I know that council officials have been in conversation with officials from the Department for Education, but I am obviously not privy to those conversations. I am of course happy to meet him and his deputation, but I think he may be better directing that conversation toward the Department for Education. I know that close to £10 million has been invested in maintained and voluntary-aided schools in Harrow over the last few years, and that the Department for Education is refurbishing or rebuilding about 10 different schools in Harrow through the priority schools rebuilding programme, although not the particular school that he mentions.
Beyond schools, £434,000 has been committed to support Harrow in caring for unaccompanied asylum-seeking children, further helping to strengthen community cohesion. However, strong communities need to be connected. The roads that our constituents travel on daily form a key part of their lives, which is why at the Budget the Chancellor announced that an extra £420 million will be made available for local authorities such as Harrow to fix potholes and carry out other road repairs, ensuring safer and better roads across our communities.
Strong communities also need well-built, affordable homes, which is why, through the Budget, the Government are supporting local authorities such as Harrow to get much-needed homes built, including through the widely welcomed lifting of the housing revenue account borrowing cap. I am pleased that we were able to maintain the new homes bonus baseline for the forthcoming year. Harrow will receive more than £4 million in new homes bonus funding in the forthcoming financial year. I am also pleased that Harrow is in conversations with the Department to receive a housing infrastructure fund grant worth almost £10 million to help with the delivery of more than 600 homes at the Grange Farm site.
Strong communities also need vibrant high streets to bring us together and ensure our towns have a beating heart. The Budget provided a boost for our high streets and a new future high streets fund. I strongly urge the local authority, in conjunction with its MPs, to bid for that fund and see what it can do to drive growth along the high streets in its community.
The hon. Member for Harrow West was right to highlight the funding formula. The current funding formula needs to be updated and replaced with a robust, straightforward approach that involves a strong link between local circumstances and the way that we allocate resources. The latest round of that consultation was issued alongside the provisional settlement last week. I know that Harrow Council has contributed to our consultations in the past, and I will be delighted to hear from it again on the particular pressures that it feels it suffers from and that should be captured within a new formula. I am sure that it will be happy to see that some things it talked about in its previous submission are covered, such as the rapidly changing population dynamics that councils such as Harrow experience on the ground. Those are absolutely things that the new formula should accurately capture, to make sure that it is sustainable not only for this year but for years into the future.
I thank the hon. Member for Harrow West for calling the debate and my hon. Friend the Member for Harrow East for contributing. It is my privilege to have this job and to champion local government here in Westminster. Whether it is driving economic growth, caring for the most vulnerable in our society or building those strong, cohesive communities that we cherish, local authorities in London and across the country do an amazing job.
I gently remind my hon. Friend that Harrow suffers a particular problem of businesses moving out of the area, and it therefore has a declining income from business rates. What will the Government do to help local authorities such as Harrow that suffer this problem?
The business rates retention pilots and the extra incentive to retain more business rates, combined with the infrastructure investment that comes through the housing infrastructure fund and the growth funds, give councils the exact powers they need to drive growth and then rewards them with the retained business rates. I will be delighted to meet my hon. Friend to talk through any other ideas that he has. The high street fund will be an excellent place to start.
I am grateful for the dedication of hon. Members and councils. I will continue to ensure that their voices are heard in this place and that they get the support that they need.
Question put and agreed to.
HBOS Reading: Independent Review
I beg to move,
That this House has considered the independent review of HBOS Reading.
It is a pleasure to serve under your chairmanship, Sir Christopher. There are some fundamental business principles that underpin any free market economy: we compete on a fair and level playing field; we all have a fair, fighting chance of success; we all play by the same rules; and our regulations and the rule of law ensure, where injustices occur, that justice is done and is seen to be done.
Many people in the Public Gallery today no longer believe in those principles. They have been subject to scandalous, criminal fraud perpetrated by senior bank managers at Lloyds and HBOS. They have had to suffer further scandal at the hands of those at the highest level in the bank who, when made aware of the fraud, instead of holding their hands up to what had gone wrong, denied any wrongdoing for 10 years. Indeed, there is clear and compelling evidence that the most senior management sought to cover up the fraud, suppressed evidence, and used the HBOS review process, which is supposedly there to compensate the victims, to minimise payments and perpetuate the cover-up. Incredibly, our system—our regulators—stood by and allowed the fraud against the victims to continue.
The hon. Gentleman knows my view of him. He does an enormous amount of work on these issues, and I pay tribute to him for all that work. He will be aware of my constituent, Mr Alun Richards, whose business went under through the Lloyds Banking Group. He has mentioned public bodies, including the Royal Institution of Chartered Surveyors, the Solicitors Regulation Authority and the Serious Fraud Office, turning a blind eye. He and I have been working for a number of years to try to get those organisations to deal with these complaints. Millions and millions of pounds have gone missing. Does the hon. Gentleman agree that there is a need for a fundamental review, led by the Treasury, of how we can get a better banking system that works for customers and is a lot more ethical about how it conducts its business practices?
I congratulate the hon. Gentleman on securing the debate. One of my constituents, Michael Field, has been a victim of the banks as well. He borrowed from Lloyds to finance the building of several houses. He maintained his payments and fulfilled the terms and conditions of the loan agreement, yet Lloyds seized his assets and foreclosed on him. He then discovered that his assets had been sold on to another organisation within the bank. Does the hon. Gentleman agree that the Government need to have parallel and very specific inquiries about the operation of Lloyds in relation to these and similar matters?
The hon. Gentleman makes his case very well. The difficulty goes back to my point about justice being seen to be done. There is no mechanism currently. I cannot judge the guilt or innocence in the business relationship between his constituent and his bank. The key is to allow mechanisms for these people to take their complaints forward, without having to be subject to the one-sided, partial process that they are subject to today. That is what the Griggs review is.
I will now make a little progress, if I may.
I just want to make the point that my constituent fulfilled all the terms and conditions and maintained his payments, yet he has no recourse. I take the point about being able to make a complaint, but what happened should never have been allowed to happen.
I agree, and there are many cases like that. I will talk about the redress processes shortly.
There are three elements to what we are discussing: the fraud itself, the potential cover-up of the fraud, and the review that supposedly provides justice for the victims of the fraud. There were finally convictions for the fraud in January 2017. Six people, including three former HBOS employees, were convicted of defrauding business customers over 10 years earlier. More than £250 million in total was defrauded, and the people who were guilty of the crimes got 47 years in jail.
Many people lost millions of pounds—in some cases, it was tens of millions—yet these issues did not come to light because of the regulators. They came to light because of individuals who were so persistent and determined; I am thinking particularly of Paul and Nikki Turner, journalists such as Ian Fraser, and Sally Masterton, who worked for Lloyds. Had it not been for them, the issues would never have come to light. Of course, their efforts have taken a great toll on them and come at great cost to them.
I am sorry to interrupt the flow of the hon. Gentleman’s speech. He has referred to the people who are in jail at the moment. One of my constituents was working for a company called Carringworth. Through its dealings with those people who are in jail now, her company was forced into administration. Now, after 10 years of hell, the administrators are putting huge pressure on her to settle. Is it not wrong that she should be forced to settle before the establishment of an independent set of organisations that can adjudicate and ensure that she gets the justice that she deserves?
Yes. The hon. Gentleman is absolutely right, and he touches on the human cost of these issues as well as the financial cost, which is critical. What we want to see, which I will come on to, is an opening up of all the cases that have been through the Griggs review by means of examination through a completely impartial arbitration process that will fairly adjudicate and arbitrate the claims.
As if the fraud were not bad enough, there was a cover-up. HBOS and Lloyds became aware of the issue from 2006 onwards. The current chief executive, António Horta-Osório, was made aware of the fraud as soon as he took up his post in 2011 by the Turners and many others. Famously, in September 2013, Sally Masterton, a senior risk officer at Lloyds Banking Group, on the instructions of her line manager, produced a report called the Project Lord Turnbull report. Its findings were shocking. There was a corporate strategy within Lloyds and HBOS to conceal the fraud, which caused substantial loss to shareholders and investors.
At that point, there was another opportunity for the bank to hold its hands up and say, “Right, enough is enough. Let’s get all of this out in the open and get to the bottom of these issues.” Did that happen? No, that is not what happened. Sally Masterton was suspended from her job and discredited to the Financial Conduct Authority. Scandalously, she was prevented from working with the police, despite being told that she was vital to the investigation, and then she was fired. The senior management did not make the report available to non-executive directors or the chair of the board for three years. Finally, last month, the bank reversed its position and confirmed that Sally had
“acted with integrity and in good faith at all times”.
There were other elements of cover-up. Thames Valley police said that Lloyds had led them a “merry dance” in their £7-million investigation of these issues. There is evidence of a wider fraud, certainly from victims going through the Griggs review to whom I have spoken. They talk about other senior managers, including Paul Burnett, high risk managing director at HBOS Edinburgh, personally having involvement with HBOS Reading. HBOS compliance officers were embedded in the fraudsters’ operations, and of course gagging orders are used across the board to prevent more disclosures from coming to light.
Let me move on to the review. It was supposed to be an independent review and was headed by Professor Griggs—that is why we call it the Griggs review. It was supposed to provide swift and fair compensation to the victims. However, the SME Alliance, which has done so much work for so many of the victims, instructed Jonathan Laidlaw, QC, who names among his clients the Bank of England, to review the review itself. He determined, in a short report, that the review is “procedurally defective”, and its principles are “flawed and appear partial” to the bank’s interests. That description is consistent with the experiences and stories of the victims. They have described the review to us as corrupt, disgraceful, one-sided and evincing an absence of due diligence, with manipulated documents and lies about evidence. Agreed payments are not met, and the process makes life as difficult and unpleasant as possible. These are victims of fraud.
I totally agree with that. I will come on to the disclosure of evidence shortly, but the hon. Gentleman is absolutely right: the bank could have dealt with this summarily many years ago, as soon as it came to light, but it chose not to. Why it chose not to is an open question.
The basic assumption of this review was laid out by Professor Griggs himself, who was quoted as saying that when he deals with these businesses, he is
“invariably dealing with the financial equivalent of a car crash.”
How can that be the basis for any judgment that these businesses were viable? The judge in the case stated that some “were capable of rescue” and that there was
“deliberate mismanagement of these companies”
by the advisers—by the fraudsters. He added that there were “plunderings made from them”, and that
“fees and any useful assets”
were taken from them. Why would the review ignore a High Court judge? Only four of the 76 cases have been dealt with by means of a consequential loss. All the rest have been dealt with through distress and inconvenience—in other words, all those businesses were dud businesses. That is simply not statistically possible.
My hon. Friend is making a very forceful speech. This subject is close to many business people’s hearts. Does he agree that because the bank has refused to pay for forensic accounting, victims are left powerless, even if the bank was willing to look at this? As he has just said, the bank simply labelled most of the businesses as failures. It is deliberately making it impossible for the victims to be heard properly with forensic accounting.
My hon. Friend is absolutely right. It is completely one-sided. It means there is a complete imbalance of power in what is supposed to be an independent review, because the bank itself has phalanxes of advisers, whereas the victims clearly cannot afford to provide for the same number or calibre of advisers.
Offers are not made on an open basis; it is a take-it-or-leave-it offer. Imagine, Sir Christopher, that you have been stripped of all your assets over a period of 10 years. You are desperately trying to seek justice, and finally somebody offers you a cheque. Your only other option is to go to the court. What do you do? It is a take-it-or-leave-it offer. If you say, “Actually, I don’t think that is enough,” you get a secondary meeting, but there is no interrogation of the facts; it is simply take it or leave it. That is the nature of the review.
I am grateful to my hon. Friend for calling this debate. In fact, I called a debate on this very subject 10 years ago, when my constituents Justin Riggs and Karl Capp told me how they were being treated by their bank. This is one of the biggest frauds to hit many hard-working small business people in this country. The simple point is that the bank, rather than hiding behind regulations and technicalities, should be giving generous and quick compensation to many people who have lost their businesses, because of a fraud that was covered up and hidden for years by senior members of that bank.
My right hon. Friend is absolutely right. The levels of compensation should be determined by an independent third party, not by the bank itself, because there is no methodology. Nobody can contest the findings of Professor Griggs. There is no way of interrogating how he has arrived at a number. They simply say—I have heard this so many times from Lloyds directors—“Well, we settled most of the claims,” as if that is somehow an endorsement of the process. The fact is that the victims had no other option—no appeal process—other than going to court, which would have cost millions of pounds.
Victims cannot even get access to the evidence. In a normal court process there would be disclosure of evidence, so that they could see the evidence they are being judged against. There was no disclosure of evidence. Lloyds has found a better way, according to a letter it sent me on 20 September. It said it had “created an alternative approach” to disclosure, “to protect customers interests”. That is its approach. It is complete obfuscation.
Eligibility is determined by the bank itself. It decides who is eligible for the review and who is not by invitation only. Only directors get to decide, not shareholders or suppliers, nor Her Majesty’s Treasury, which must have lost a lot of money through this process in respect of tax. It only dealt directly with the individuals who were convicted, not their deputies or other people who may well have been involved in the fraud. This is not an independent review. Professor Griggs is paid by the bank. His remit is determined by the bank. I have seen evidence that determinations he has made have been overruled by the bank.
This is in no way an independent process. Of course, everybody who goes to it is subject to a gagging order. The bank provided us with confirmation that clause 4 in its settlement agreements does not prevent victims talking to it or to the press. However, I have seen another agreement, completely different from the one the bank provided to the Treasury Committee, which contains extra clauses that do prevent these victims speaking to the press or to the authorities. Justice must be seen to be done. Lloyds bank is the judge, jury and executioner. The all-party parliamentary group on fair business banking and finance, of which I am now co-chair, said right from the start that this is the wrong way to deal with the process, but Lloyds pushed on anyway.
Moving on to a solution to these problems, the APPG believes that all cases—anybody who has been subject to the Griggs review—should be re-examined through a completely independent process. The APPG has recommended a financial services tribunal, which would judge cases based on a fair and reasonable test, with one-way cost shifting, so the banks cannot simply keep people out of court by writing huge cheques out to their own lawyer. That would mean that people would get an independent examination of their case. Victims can then get compensation and move on.
We believe that a tribunal is required, with an arbitration process for past claims. There have been four different reviews this year of how we can fill this gap, make this process fairer and get back to a more balanced situation, with restitution and redress. Three of those reviews recommended a financial services tribunal, as we do. The one report that did not was sponsored by the banking industry itself and it simply says that we should increase the powers, remit and jurisdiction of the ombudsman schemes. While that is a good step forward, we do not feel that it is enough.
That addresses compensation, but we need to go further. We need to change the culture in the whole sector, as the hon. Member for Ogmore (Chris Elmore) said. In terms of the Lloyds management, I do not see how the position of the chief executive, António Horta-Osório, is tenable. Given the way that the effective whistleblower has been treated, the way this has been covered up and the way that the process has been deliberately partial, I do not see how the Lloyds management have been consistent with the behaviour required under the senior managers regime. I think António Horta-Osório should resign. I also think he should face investigation under the senior managers regime.
Finally, the Financial Conduct Authority itself—our regulator—has many questions to answer. Why did it approve the scheme? Did it approve the scheme? We have heard conflicting evidence on that. It is a national disgrace that Lloyds has been allowed to operate this sham of a review process. Andrew Bailey himself has questions to answer. Why did he allow the process to continue? Why was he not aware of the patent defects in the process? Nevertheless, the FCA should take charge and undertake an investigation of the senior management under the senior managers regime.
We in this place are defenders of free markets. For me, this is the most important issue that any of us will ever deal with. Certainly, as far as I am concerned, I cannot rest until the matter is settled. My life has been transformed through the opportunities of free markets. In the main, the bankers I have dealt with over 25 years have done a tremendous job—a fair job—to help my business to thrive through some difficulties. I was one of the lucky ones. Not all bankers are the same. Most people in the industry are decent people trying to do the right thing, so it is even more important to hold those who are not to account. We have to make sure that everyone has the opportunities that I have had—that we have had—including all our children and grandchildren. We must all demand, for the sake of the victims, that justice is done and is seen to be done.
It is a pleasure to serve under your chairmanship, Sir Christopher. I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) for securing the debate. I echo his concerns about the failure of the Griggs review and whether it really provides an outcome for the victims of this terrible fraud, many of whom have suffered far more losses than just financial ones.
The Griggs review was established to offer fast and fair compensation to the victims, but its reality is very different. The all-party parliamentary group on fair business banking and finance has received many representations, as have I, that have described it as a farce, a cynical whitewash and, above all, not fit for purpose, because it is an internal scheme with complete control held by the bank.
We have seen that tactic time and time again in the financial industry. It establishes an internal compensation scheme and conducts an internal investigation to give an illusion of accountability, when the reality is that it can maintain significant control with minimal independent oversight. That is evident from the Dobbs review, which was intended to establish whether issues relating to the HBOS Reading fraud were properly investigated and appropriately reported to the authorities, and whether individuals in the Lloyds Banking Group deliberately tried to conceal or cover up information relating to the fraud. Although we are not questioning the integrity of Dame Linda and her team, the fact remains that they operate within the scope and parameters set by the bank, and they do not have the statutory powers required for a robust and thorough investigation of the matters.
Worryingly, as has been mentioned, the review will consider events only between 2009 and 2017, thereby ignoring the damning conclusions of the Turnbull report, which states that the cover-up of the fraud commenced as early as 2005. There will also be no interim report and the findings might not even be published. Lloyds bank must ensure that the findings are made public, otherwise the public and Parliament will simply not have confidence in the review.
That still leaves some important questions. Where are the regulators and the investigative agencies in that? The Financial Conduct Authority, the Serious Fraud Office and others seem comfortable to simply outsource their regulatory responsibilities to the organisations being investigated. In a recent letter to the hon. Member for Thirsk and Malton, the director of the SFO, Lisa Osofsky, stated that it would not be appropriate for the SFO to comment on those matters, given the work that is currently being undertaken by the National Crime Agency and the Dobbs review. It cannot be acceptable that the organisations responsible for investigating fraud at the highest level are content to allow the bank that is under investigation to set the parameters and scope of their investigations. That cannot be right.
UK Finance has recently announced that the industry has agreed to establish a new ombudsman scheme for larger small and medium-sized enterprises with a turnover between £6.5 million and £10 million and a balance sheet up to £10 million. The APPG has written to the Minister with several concerns about the proposals. Crucially, there will still be a gap in accessing justice for those businesses with larger claims above £600,000. The FCA’s consultation on SME access to the Financial Ombudsman Service clearly shows that an award limit of £600,000 would exclude 41% of complainants because their claims would be above that level. The activities of the Global Restructuring Group were upwards of £1.7 million, so the limit would mean that a lot of people would not gain access to justice. Other people watching and experiencing that are questioning the responsibility of our banking system.
We require an independent mechanism for resolving such disputes that can decide cases on a fair and reasonable basis, capture unregulated entities, force the disclosure of information and the attendance of witnesses, and make those decisions in the public domain. That is what a financial services tribunal could do. I am afraid that I believe that is the only mechanism that would give businesses the confidence they require to borrow, that would give justice to those people who have come here today and who are watching outside this place, and that would put the banks back where they belong—as cornerstones of our communities.
I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on securing the debate. He has been really engaging on the subject and he has been thorough in his investigation. We all appreciate his efforts. It is also a pleasure to follow the hon. Member for East Lothian (Martin Whitfield), who made a valuable contribution to the debate. The hon. Members who are present are the ones who are usually present when there is a debate to do with banking. It is also good to see the Minister in his place. We have met and discussed these matters on many occasions. We have had copious correspondence—maybe enough to destroy a rainforest in Brazil or something, the letters have been so numerous. It is important that we discuss these matters and bring them forward.
I am conscious of the time, so my comments will be brief. I want to talk about the key point of the debate, which, for me, is in the final substantive paragraphs of the Minister’s letter of 3 December to the hon. Member for Thirsk and Malton. The letter states:
“From conversations, meetings, and debates over the course of my tenure, I have seen that there are a number of businesses who feel that they have not already had access to a process which can address their complaints. This is why I am glad that the banking industry propose to put in place a method of addressing unresolved historic cases. Established independently of the banking industry, and overseen by a former senior judge, the scheme to consider these cases will make decisions on a ‘fair and reasonable’ basis, be adequately resourced to deal with more complex disputes, and operate in a transparent manner. The industry have also committed to producing proposals on the implementation of the voluntary scheme for future complaints from larger businesses, and I look forward to the next steps in this work. I trust that you welcome these developments, and will continue to work constructively with UK Finance on the delivery of these schemes by September 2019.”
I have two observations on that letter, which I hope the Minister will take note of. My first observation was expressed in part of my published statement that went to The Times’ journalist James Hurley last week, on Monday 3 December, following the publication of the UK Finance report. The article states:
“The Democratic Unionist Party”—
which I am privileged to be a member of, and which has been clear about where it stands—
“is among those who still believe a tribunal is needed.”
I was quoted as saying that my concerns about UK Finance’s exclusion of the tribunal were
“compounded by the legitimate concerns of many SMEs about the independence of past bank-led redress processes”.
This debate is founded on exactly that concern about the Griggs review. Many right hon. and hon. Members have already spoken, and probably will speak, here and elsewhere about the substantive evidence on that matter, including legal opinion, as referenced in The Times. I will return to that shortly.
My second observation is that the Minister clearly believes that the APPG on fair business banking and finance is being actively involved in the process of the development of these schemes with UK Finance. Page 4 of the UK Finance report states:
“UK Finance has been working with member firms, the Government and regulatory authorities to consider the proposals set out in the Walker Review and to consider how the industry can address the important issues raised.”
There seems to be an undertaking and a willingness from the Minister to do that. UK Finance refers to working with the Government, but, respectfully, that comment does not seem to underpin any active recognition or involvement of the APPG and parliamentarians in the development of the process. The hon. Member for Thirsk and Malton has put that forward clearly in his correspondence. It is my view and that of the Democratic Unionist party that it is a fundamental error to exclude parliamentarians and that it will not help the development of a sound, independent solution. So we look to the Minister to address that issue. He appears to share my view and that of many others that the APPG and other parliamentarians should be actively engaged with UK Finance in compelling a fair solution. When he responds today in this debate, I urge him to reinforce his position for the public record in Hansard.
Finally, I come to my key point. Let me put it to the Minister today that we need a decision in his response to this debate on independent redress. Will the Government fully support the involvement of a truly independent public body—the Chartered Institute of Arbitrators—as central in these voluntary redress schemes? For the DUP and—I believe—the public interest, that makes considerable sense, and should both allay SME victims’ legitimate concerns and receive public support from UK Finance, as the institute will be truly independent and competent in considering this subject matter.
The institute would be available for all the historical cases and would be an available choice for complainants in the future, where they prefer not to proceed to an ombudsman for cases below the £600,000 limit, inclusive of the maximum claim limit of £100,000 in consequential damages. So a three-person tribunal is what we are seeking. It could hear cases with an upper compensation limit of the £10 million set out in the APPG’s position statement on 14 November. That is what I would like to see and I believe that is what the hon. Members for Thirsk and Malton and for East Lothian want to see. Indeed, I believe that it is what all of us in this Chamber want to see.
I look forward to hearing the Minister’s affirmative response in support of the Chartered Institute of Arbitrators today, so that we can all—please—move forward with confidence and belief that we can actually get somewhere, and so that this particular subject of truly independent redress is finally behind all of us.
I am very conscious of some of the headlines that we have seen recently, such as “Lloyds’ compensation scheme ‘defective’”. The article continued:
“A compensation scheme set up by Lloyds Banking Group for small business owners ruined by a banking fraud has been labelled ‘defective’, based on a ‘flawed’ methodology and ‘partial’ to the bank’s interests.”
It went on to say:
“Legal advice prepared…says that…the level of compensation being paid out ‘gives rise to a real sense of injustice’.”
I will finish with a last comment. The ombudsman-led approach would ensure that small businesses were able to challenge the banks for their past mistakes, while also protecting them in the future, and without the added costs of a tribunal. That is why I believe that it would be the best approach to rebuild trust between business owners and their bankers.
I support what the hon. Member for Thirsk and Malton has put forward and I seek a positive response from the Minister; I am sure that it will be forthcoming. However, after all these years of ill-doing—for want of a better word, and I am trying to be very careful with my words—or wrongdoing against people, almost putting them to the wall in banking deals, what I want to see, and what I think our constituents want to see, is a compensation scheme that fully enables people to seek full redress for what they have lost. Those who carried out these despicable acts also deserve to be made accountable for their indiscretions and criminal behaviour.
Thank you very much for chairing this debate, Sir Christopher, and I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) for securing it.
As the hon. Member for Strangford (Jim Shannon) suggested, this is a debate that we have had a few different times on a few different but related topics. I also thank the hon. Member for Thirsk and Malton for his diligence and for continuing to raise these issues. I hope that he continues to do so until we get a suitable resolution, preferably from the Government taking action in relation to this issue.
I will just say a few things from the point of view of the Scottish National party and explain our position on this issue. However, I will start by saying that it is absolutely necessary for the economy that banks lend to small and medium-sized enterprises, and it is absolutely necessary for the economy that SMEs can have a good relationship with banks, but that is never going to happen if banks are not trustworthy and are not proving themselves to be trustworthy. If there are issues such as the one that we are considering, the best thing that banks can do is to be as transparent as possible about past issues, to make it clear that they cannot possibly happen again in the future. And if banks such as HBOS-Lloyds were to do that, it would be less likely that other banks would do similar things in the future and make the same mistakes. So, the transparency issue is important on many levels, not least for gaining the support of the public and SMEs for banking institutions.
The way that the cover-up has happened, and the lack of transparency, has meant that the pain has been elongated for those people who have gone through this process. Instead of the banks holding their hands up and saying, “Yep, we made a number of mistakes; here they are and here is the redress that you deserve”, they are trying, at almost every opportunity, to hide things. I do not think that is a very sensible way forward for the banks.
The hon. Member for Thirsk and Malton mentioned some of the people who had come forward and who had to work incredibly hard, in order to have their voices heard and their problems raised. I will just take this opportunity to thank those people, too, for the hard work that they put in to make sure that these issues saw the light of day, albeit not yet in the way that we would have liked them to see the light of day. Nevertheless, those people have worked incredibly hard to bring that about and I thank them for it.
The SNP has been clear that we want to see as much transparency as possible in the internal review documents that have been produced, which means ensuring that they are published so that we can see the full position. I know that there are issues about the positions taken in the internal review, but the more of those documents that are published, the better the access to justice there can be for those people who are campaigning.
I will also highlight the fact that the decisions that were taken around a lack of transparency have meant that the public purse has had to pay a disproportionately high cost in relation to this issue. It has meant that any investigations that have taken place have cost more money than they should, because the evidence that was requested has not been provided to them. That is a pretty damning indictment.
The other major issue that I will highlight is the pressurising of people to settle and to sign non-disclosure agreements, which is an abhorrent practice; it just should not happen. To ensure transparency in the future, it is really important that people are able to talk about what happened to them, so that it cannot happen again to anybody else and so that people are not allowed to get away with committing fraud such as this again.
The SNP has called for several policies that would help in the future on this issue. We have repeatedly called for the reinstatement of the reverse burden of proof; the SNP has been incredibly strong on that. Our manifesto also talked about strengthening whistleblowing legislation for those people working in banking organisations, and I will continue to make the case to the Minister that the existing legislation needs to be strengthened.
Lastly, we have pushed hard for a permanent commercial financial dispute resolution platform, an argument not dissimilar to the cases that have been made today. It is so important that SMEs and those individuals whose lives have been ruined do not have to go through an immoral and financially unviable court process to get the redress they should receive, and the Government can take action on that today.
Thank you, Sir Christopher, for calling me to respond to this debate for the Opposition.
I also thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) for securing the debate and for his work in chairing the all-party parliamentary group on fair business banking and finance, as well as for all the APPG’s continued efforts on this matter; its commitment to securing justice for victims of banking fraud is commendable and important.
The hon. Gentleman, along with some other Members—especially my hon. Friend the Member for East Lothian (Martin Whitfield) and the hon. Member for Strangford (Jim Shannon)—outlined clearly the challenges that people face in making sure that the victims of this scandal receive the redress they deserve through the current compensation scheme.
The actions of HBOS Reading and the then head of the impaired assets division and its corrupt partners were absolutely disgusting. I have read the accounts several times, but each time I reread the testimonies of the victims in advance of a debate such as this one it gives me a sense of rage. I find the injustices and the cynical destruction of other people’s lives unconscionable.
At a minimum, we must offer proper redress to those affected. It should not have been down to those victims to force action to be taken, but unfortunately that is not what we have heard today. Instead, we have heard about the difficulty in appealing against compensation decisions; about the lack of clarity and transparency over decisions; about documents that underpin judgments being hidden from victims; and about a fundamental lack of accountability and independence. Lloyds must explain how it plans to address those ongoing and legitimate concerns. I would like that response to be sent to the hon. Member for Thirsk and Malton and for Members present today to be copied in.
The number of contributions today, as well as their depth and detail, shows how pertinent and urgent the matter continues to be. It is important that it does not fall off the agenda, given the political situation, but I do not think it will, looking at the Members present today. We all have a responsibility to keep up the pressure to ensure that victims’ voices are heard. We are talking about much more than financial losses. Victims lost entire livelihoods, their health and, in some cases, their relationships on the basis of what happened to them.
Ten years on from the financial crisis, it is widely agreed that too many people were able to walk away from the serious damage they caused without any form of personal censure. It is clearly a good thing that the perpetrators of the fraud were brought to justice, and Thames Valley police deserves quite a lot of credit for that, as do Paul and Nikki Turner. Without securing a fair outcome for the victims, however, we have no hope of properly rebuilding trust between businesses and their banks in the long term.
Research shows that frighteningly low numbers of small businesses trust their banks to do the right thing by them, and we have to look at how we can improve that trust. We need to restore confidence that there is a level playing field for businesses when they find themselves in conflict with their banks, especially if those working at the bank have committed fraud, as was true in this case. All that makes it even more important that we agree a comprehensive package to properly address the legacy banking scandals that this country faces.
We can rebuild trust in business banking. We need a full public inquiry into all the scandals. We need an independent tribunal system for SMEs. Lastly, we need a much better and more robust system to protect and enable whistleblowing. I will briefly reiterate the case for each of those.
The first step has to be securing proper redress for SMEs that have been mistreated by their banks. Scandals such as this and RBS GRG, which we have all been present to debate in the past, have seriously dented confidence in our banking sector. That is why we have always called for a full public inquiry so that victims can get proper redress. Many colleagues in this room have argued for the same. It is not just about getting to the bottom of who was responsible for such scandals; it is about examining the wider systemic issues that allowed these events to take place. I was struck by the right hon. Member for Wantage (Mr Vaizey) making the point that he raised these issues 10 years ago. It is simply too important for us to sweep them under the carpet without securing the ability to say to people, “This will never happen again.”
In terms of disputes, part of the problem is definitely that the gap is too big between the Financial Ombudsman Service for individuals and the full legal process for very big firms. We have all seen the recent report from Simon Walker, alongside the response from UK Finance, arguing that an expanded Financial Ombudsman Service would be sufficient to meet that need. As the Opposition, we believe that, given the severity of the damage done in such cases, we need to go further.
We support the proposals from the all-party group on fair business banking and finance to establish an independent tribunal to help create that level playing field between businesses and their banks. That is also supported by the Treasury Committee, as outlined in its report on SME finance published on 26 October. We share the Committee’s ultimate conclusion that an independent financial services tribunal is needed to handle more complex disputes, complementing the expansion of the ombudsman’s remit. In our experience so far with voluntary redress schemes, they have been beset by issues. We would not be here today if such schemes were sufficient to meet the need. Ultimately, I do not believe we can convince our constituents that the industry is in a position to self-regulate. That is why an independent tribunal system is necessary.
Lastly, a potential answer could lie in exploring our approach to whistleblowing in financial services in this country. We have to look at why the fraud took so long to uncover and how we can improve internal systems and processes to stop such things ever happening again. The hon. Member for Thirsk and Malton raised a specific example of how a whistleblower was treated in this case. In the US, the Dodd-Frank Act, introduced as a central piece of post-financial crisis legislation in 2010, is a demonstration of how much more robust the whistleblower protection framework could be. Whistleblowers are entitled to awards if their information leads to enforcement action. It is structured in such a way as to disincentivise false reports and to provide protection in the event of dismissal. The UK legislation, on the other hand, is much thinner. While the Financial Conduct Authority can assist whistleblowers under the Public Interest Disclosure Act 1998, that has not been enshrined in financial regulation in the way Dodd-Frank has been used in the US. There is a case for examining whether specific financial services whistleblower protection could be a starting point in seriously improving conduct in banking from the inside out.
In conclusion, if we are to restore trust in UK business banking, two outcomes must be achieved. First, we must ensure that the victims of the HBOS scandal get proper redress for the damage done to their businesses and livelihoods as a result of the appalling conduct by individuals who worked in the bank. The same is obviously true for victims of the RBS GRG scandal. The second responsibility we all share is to ensure that such a flagrant abuse of the bank and business relationship can never happen again on such a scale. The combination of a full, comprehensive public inquiry with a broad enough scope to capture the full breadth of victims, the establishment of an independent financial services tribunal and a radical rethink of how we treat whistleblowers could begin that process. The victims of this scandal were badly let down. I want to be able to stand here and say that they will all get justice and that this can never happen again.
It is a pleasure to serve under your chairmanship, Sir Christopher. I acknowledge the work of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) in securing this debate and making an excellent speech, as he has done on several occasions this year in this place, and setting out a case that was well reasoned in many elements. I also pay tribute to the hon. Members for Strangford (Jim Shannon) and for East Lothian (Martin Whitfield), who made fine contributions to the debate.
As we have heard today and in previous debates this year, incidents of banking misconduct and fraud have had a severe impact on some small and medium-sized enterprises. It has been and remains a top priority of mine in office to face up to the issues that have been generated by the cases that have been raised. I am conscious that many of the eight Back-Bench Members who have taken part in this debate will have heard sad and unfortunate stories from their constituents about how the actions of banks have affected them and their businesses. That includes not only the events at HBOS Reading, but the actions of the RBS Global Restructuring Group and the mis-selling of interest rate hedging products.
I begin by reminding Members that we expect the highest standards of behaviour across the financial sector. That is why the Government have introduced a number of necessary changes to restore public trust in financial services, such as the senior managers and certification regime. Before I address the substance of today’s debate, it is important that we pause for a moment to recognise the contribution that banks make to both the UK economy and our society. As the hon. Member for Aberdeen North (Kirsty Blackman) rightly said, it is necessary for banks to lend to SMEs. Lloyds Banking Group has, for example, increased its net lending to SMEs by £3 billion since 2014 and plans to triple that by 2020. Lloyds is the market leader in providing basic bank accounts, which help vulnerable customers, and its “Helping Britain Prosper” plan sets out a number of commitments on behaviour, diversity and charitable support.
However, I recognise that there has been a great deal of justified anger, within Parliament and beyond, regarding the fraud that was perpetrated against small businesses through the actions of individuals at the HBOS Reading branch. It is important to remember that the events at HBOS Reading constituted criminal activity. As such, it was right that those responsible were brought to justice, as my hon. Friend the Member for Thirsk and Malton pointed out. The FCA continues to conduct an enforcement investigation into the events surrounding the discovery of misconduct at HBOS Reading, resuming an investigation placed on hold at the request of Thames Valley police. I will be keenly following the progress and outcome of the investigation.
In addition, Lloyds Banking Group has appointed Dame Linda Dobbs, a retired High Court judge, as an independent legal expert to consider whether issues relating to HBOS Reading were investigated and appropriately reported to authorities at the time by Lloyds Banking Group, following its acquisition of HBOS. It will consider issues raised by the Project Lord Turnbull report referred to by my hon. Friend. Dame Linda’s findings will then be shared with the FCA.
It is right that Lloyds set up a compensation scheme for businesses affected by the events at HBOS Reading, overseen by Professor Russel Griggs. That scheme has seen offers made to all customers within its scope, with 90% of customers accepting the offer. However, I acknowledge the concerns that Members have raised about the Griggs scheme. Those concerns have certainly been heard, and I am pleased to announce that Lloyds has agreed with the FCA that Lloyds will commission a post-completion review to quality-assure the methodology and process of the Griggs scheme. [Interruption.]
Overseen by an independent person, that review will go above and beyond a normal lessons-learned exercise. The independence of the person appointed to lead the review is vital. In particular, I would expect that person not to have been employed by Lloyds in any way, and to be able to demonstrate complete operational independence from Lloyds. I am pleased that Lloyds has committed to publishing the review once it has concluded, and I welcome Lloyds’ commitment to implementing any recommendations it produces. I have been consistently clear that it is vital that we get the right processes and procedures in place, to ensure that SMEs can obtain fair redress and resolve disputes with their banks.
I know that my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) will wind up the debate, so I feel a bit premature intervening on the Minister, who is a good friend. However, he will have heard the reaction in the Gallery to his announcement. It seems to me that it is just a re-wrapping of the current problem. Perhaps he will meet some of the Members in the Chamber, and some of the business owners affected, to hear and see what has actually been going on.
I will happily meet my right hon. Friend—a distinguished former Minister who has been fighting on these matters for many years—and my hon. Friend the Member for Thirsk and Malton. Of course I acknowledge the cynicism and concern of those present about the independence of this mechanism, but, as I said, Lloyds has committed to publishing the independent review once it is concluded and implementing any recommendations that it produces. My officials have been working with the FCA to ensure that that comes to pass. I take the concerns about how it progresses very seriously, and will happily meet Members to discuss them.
In the recent Budget, the Chancellor stated the Government’s support for the FCA’s plans to expand eligibility to complain to the Financial Ombudsman Service to small businesses as well as micro-enterprises. Expanding the remit of the FOS will ensure that from 1 April 2019 well over 99% of all UK businesses will have access to fast, free and fair dispute resolution. I am aware that concerns have been raised about the capability of the FOS to adjudicate effectively in such cases, and I discussed those concerns with the Chair of the Treasury Committee just last week.
The FOS has announced its plans to create a ring-fenced, specialist unit to take on the additional cases, and for that unit to be supported by a panel of external SME experts. I welcome those plans, and I will visit the FOS early in the new year to check on how they are progressing. The FCA has also committed to reviewing the expansion of the FOS remit within two years of its coming into force, in addition to its usual oversight processes. I trust that that will reassure some hon. Members who have voiced concerns about the capability of the FOS.
I have also been clear that banks need to work hard to restore businesses’ trust in their institutions. That is why I welcome the banking industry’s recent commitment to establishing two independent voluntary ombudsman schemes, in response to Simon Walker’s review of dispute resolution for SMEs. One of those schemes will address complaints from SMEs with a turnover of £6.5 million to £10 million. The other will address unresolved historical complaints from SMEs that have not already been through a formal process.
I am pleased that the banking industry has set out the key principles for the operation of the scheme to address unresolved historical complaints. Independence, expertise, transparency and the right to an appeal are all hallmarks of a fair and robust process, and it is right that they underpin any approach to dispute resolution. I welcome the banking industry’s commitment to having those schemes up and running by September 2019. I look forward to seeing progress on establishing the implementation steering group very soon, and I am pleased that representatives from the all-party parliamentary group will have a role in that process.
The benefits of an ombudsman-style approach are clear, but I recognise that some hon. Members have advocated again today for the establishment of a tribunal to resolve disputes between banks and SMEs. An ombudsman-style approach can deliver fast, free and fair dispute resolution for SMEs, making decisions based on what is fair and reasonable. I believe that a tribunal, on the other hand, would need the regulation of SME lending, potentially restricting SMEs’ access to credit. It would still require SMEs to pay for expensive legal expertise, and it could make decisions only on a strict legal basis. That is why I believe that an expanded FOS remit, alongside the establishment of further independent ombudsman schemes as announced by UK Finance, will ensure the best outcomes for SMEs.
I highlight again that the Government, financial regulators and industry have done considerable work to tackle bad practice and to ensure that SMEs have access to appropriate dispute resolution and redress mechanisms. The all-party group on fair business banking and finance has been a key part of that work, and I sincerely commend its determination in the work that it has undertaken to ensure that SMEs are fairly treated.
The events at HBOS Reading constituted criminal activity. As such, it was right that those responsible were brought to justice. However, more clearly needs to be done to restore SMEs’ trust in the financial services industry. From the numerous meetings that I have had this year with a wide range of stakeholders, it is clear that we are all determined to deliver the best outcomes for SMEs.
I will closely follow the review of the Griggs scheme. I understand the concerns, but it is a significant step forward that that review will take place, and I will monitor the implementation of both the expanded FOS remit and the industry’s independent voluntary ombudsman schemes. I am confident that we have the right regulatory regime and dispute resolution mechanisms in place for the future. Events similar to those at HBOS Reading should not occur again, and I will do everything in my power in office to ensure that we learn the lessons from those appalling incidents years ago.
I thank the Minister for his comments. I hope the people watching the debate, either in the Gallery or at home, understand that they have many friends in Parliament who want this issue to be dealt with. I know that he does as well. There is such universality of support for dealing with it properly that we will get there in the end, although we are not yet where we need to be.
I appreciate that the Minister is going further than others have gone in the past. Nevertheless, people will be sceptical about the ability of a bank or an independent reviewer, as he called it, to look at the issues and to provide proper redress and a proper method of investigating the complaints. I tried to illustrate in my speech that it was not just about fraud, but about how the corporation itself sought to suppress evidence and a proper investigation of the issues. People are simply not going to accept that anything done voluntarily is fit for purpose.
The Minister is right that I think that a tribunal is the right way forward, rather than simply expanding the ombudsman scheme. For historical cases, it sets a limit of £350,000 as compensation, but every case we deal with is over that figure, so that does not go anywhere near addressing our concerns. It is not the compensation scheme that we need.
I also do not accept that small business lending will suffer if we have more regulation. We simply need a fair and reasonable test for deciding the claims. Ireland introduced regulation for small business lending a few years ago, and its lending has increased significantly since then, so the Minister’s fears are misplaced. We need to ensure that small and medium-sized business interests, which are the most critical interests to our economy, are protected and supported through the process.
Question put and agreed to.
That this House has considered the independent review of HBOS Reading.