Wednesday 19 April 2017
[Mr Christopher Chope in the Chair]
Diesel Vehicle Scrappage Scheme
I beg to move,
That this House has considered a diesel vehicle scrappage scheme.
It is a great pleasure to serve under your chairmanship, Mr Chope. I also have great pleasure in leading this debate. The good attendance shows the strength of feeling for implementing a diesel vehicle scrappage scheme and tackling air pollution problems. In my speech, I shall touch on why we need a scrappage scheme, outline how such a scheme would complement the Government’s new air quality plan, and suggest how systems could be designed and targeted at the dirtiest diesel engines.
Why do we need a diesel vehicle scrappage scheme? I think that everyone here knows how we got to this point. The previous Government said that diesel cars should attract less vehicle tax than petrol equivalents because of their better carbon dioxide performance, and the present Government carried on in very much the same vein.
I thank the hon. Gentleman for saying that, because there is a narrative that this was a perverse act by the previous Government. Can he confirm that in fact it was supported by all the other parties at the time—as he has rightly conceded, the policy was continued by the present Government—because CO2 reduction was seen as the overriding imperative?
Heaven forbid that I should say the last Government were perverse. It was the acquired wisdom of the day that we should reduce CO2, and diesel produced more per litre than petrol, so encouraging diesel was the obvious way to go. There were some rumblings at the time, if I remember rightly, but I have to accept that we did not change the policy when we came to power. Of course, we have now seen the new science and seen the light, and therefore need to take action on particulates and on nitrogen oxides in particular.
I apologise to the hon. Gentleman for intervening again, but he says that we have seen the evidence. Can he tell us the breakdown of emissions of particulates and NOx from various modes of transport, whether buses, trucks or private vehicles, and particularly as compared with other sources? I will mention a number of them—
I think that the right hon. Gentleman has started his speech already. The figure I can give him is that in the hotspots in our inner cities, some 60% of the nitric oxide comes from transport. It is quite difficult to break that down and say how much comes from buses, taxes, lorries, delivery vans and cars, but there is no doubt that tackling the private car, particularly in those spots, will help to make a real difference in reducing NOx emissions. Transport is a particular issue, as is the older diesel engine. We cannot ignore what is going on; we need to take action.
Motorists were encouraged to switch to diesel through changes to the vehicle taxation system. We now know that that was a policy mistake. The uptake of diesel cars rocketed. The proportion of diesel vehicles on British roads increased from 20% in 2005 to 37.8% in 2015. That was a deliberate Government policy. Between 2005 and 2015, we did see cleaner diesel vehicles, but naturally they still give off particulates and NOx.
In turn, the number of extra diesel vehicles has caused a host of air quality problems. Diesel engines emit a higher level of nitrogen oxides. Those gases cause or worsen health conditions such as asthma and bronchitis and even increase the risk of heart attacks and strokes. They are linked to tens of thousands of premature deaths in Britain every year.
As a result, the Select Committee on Environment, Food and Rural Affairs, which I chair, branded poor air quality a “public health emergency” in our recent report to the Government. Four in 10 local authorities breached legal nitrogen dioxide limits last year. That shocking statistic shows the scale of the problem.
My hon. Friend is right to highlight the fact that many diesel vehicles give off six to eight times or even more nitrogen oxide compared with petrol equivalents, but in that context does he agree that although it is commendable that Governments have focused on carbon reduction targets, and that may be the driver behind this policy, good environmental policy is also about looking at the other pollutant effects of cars and particularly diesel, and that the push towards electric cars may well be an important part of the long-term solution?
I very much agree, because I think that any scrappage scheme must be very much linked to electric vehicles and certainly hybrid vehicles. I see little point in converting people from diesel back to petrol, especially if we use taxpayers’ money to do that.
I support everything that the hon. Gentleman is saying. He knows that today I am publishing my Clean Air Bill, which deals with wider mapping to provide infrastructure for electric and hydrogen, more powers for local authorities and a broader fiscal strategy to confront the escalating number of people dying because of diesel emissions. Will he lend that Bill his support—I know he has put his name to it—today?
The hon. Gentleman’s Bill is a good idea, because we all have to work together on air quality to lengthen the lives of many of our constituents and certainly of many people in the hotspots. That is where electric vehicles, the charging points, taxis, buses and all those things come in. We need to look at hydrogen cars; we need to look at a whole range of vehicles, and perhaps sometimes we need to take people out of vehicles altogether. Norman Tebbit’s “On your bike” may have a whole new meaning. If people go to work on a bike, that is good for the environment as well as for getting to work.
I thank our esteemed Chairman of the EFRA Committee for giving way. Let us say that a diesel vehicle scrappage scheme is implemented. Does he envisage that it will be rolled out across the whole United Kingdom, or will it be left to the devolved nations to sort it out themselves?
That is probably a decision for my right hon. Friend the Minister and the Government. We have such an esteemed Minister here this morning. As I was his Parliamentary Private Secretary at one stage, I especially know what an esteemed Minister he is and I expect to hear some very good and detailed policy from him in our debate this morning, so I look forward to his response. I suspect that it will be down to the devolved nations to roll out such a scheme, but I also suspect that devolved nations will be looking for a little cash to do that.
I congratulate my hon. Friend on securing this important debate. Does he agree that many drivers of diesel cars will feel that they were encouraged to buy those cars, but now they face the prospect of local authorities seeking to fleece them for taxes in order to raise money to plug their own funding gaps, and that they will feel that that is deeply unfair?
Yes. My hon. Friend makes a very good point. The idea behind the scrappage scheme is that it will not only help with air quality but provide some recompense for people, in that those who were moved towards diesel will get a carrot as well as a stick. A stick, in the form of a £12.50 charge, will be applied here in London in 2019. I do not necessarily disagree with it, but a poorer family, who may not be able to afford another car, do need some help. A scheme such as the one under discussion is part of the balance that must be struck. As I said, people were encouraged down the route of diesel. We also have to get over a certain amount of scepticism among the public. They will be saying, “For years you were saying, ‘Drive diesels.’ Now you say, ‘Don’t drive diesels; drive hybrids and electric cars.’” That is absolutely right, but we have to explain exactly why we are going down that route, and a scrappage scheme would help to ease the pain.
My hon. Friend is being unbelievably generous to us, and we must not carry on trespassing on his generosity. So far he has not mentioned gas. Like him I am a huge fan of electric vehicles, but does he accept that for heavy goods vehicles, refuse collection vehicles and so on, gas-powered vehicles could provide an important interim stepping stone, given that at the moment electric cannot shift that weight of vehicle in an economic fashion?
My hon. Friend is absolutely right. The conversion to gas can reduce the particulates back to about 60% to 70% of what they were previously, so a big gain is to be had there. I also understand that most lorries would have to carry their full capacity load weight in batteries in order to drive themselves, so at the moment the electric lorry is not an option. We will probably build towards some hybrids in the future. We also have to look at taxis; we want electric taxis, but for those that cannot become electric in the first instance we should perhaps convert them to gas and then to electric. It is the same with delivery vans and other vehicles. Part of our lifestyle these days is that we order a lot online and find a lot of vans going round. This is about a whole combination of those things.
I actually converted one of my own vehicles to gas. Usually, converting a vehicle is something like between £1,500 and £2,000, so it is not ridiculous money to convert to gas. All the bus companies and taxi firms will do all the costings and will know firmly how much it is. As I said, a certain amount of help is therefore needed to help the commercial sector to convert to the new world. Otherwise they will not do it because of the economics.
The Government have twice lost in court over their failure to tackle poor air quality. In November, the High Court forced the Government to come up with a new, better air quality plan. The draft will be published imminently—by 24 April at the latest—so we may hear something on that matter from the Minister this morning. Already, from this October, pre-2006 diesels and petrol vehicles will face a £10 charge when they enter London at peak periods. It is expected that diesel drivers will be hit hard. Separately, the Budget Red Book stated that the Government would consider appropriate tax treatment for diesel vehicles ahead of the 2017 Budget. Diesel owners who bought their vehicles in good faith are expected to be hit with higher bills.
Of course, I understand the need for tough action. These new measures are the stick to reduce diesel vehicle numbers, but what about the carrot? Where are the incentives to encourage drivers to move away from diesel? The Prime Minister recently said,
“I’m very conscious of the fact that past governments have encouraged people to buy diesel cars and we need to take that into account”.
That is where the case for a targeted diesel scrappage scheme comes in; it perfectly complements the Government’s clean air zone plans.
I am grateful to the hon. Gentleman, who is being extremely generous with his time. Given that most of the concentration of nitrous oxide, nitrogen dioxide and particulates is in urban areas, does he think that in any scrappage scheme a priority should be given to people living in urban areas? It seems slightly generous and pointless to support people who own diesels in the middle of North Yorkshire, say.
The hon. Gentleman raises an interesting point. Yes, priority does need to be given to the inner city, because that is where we are particularly trying to improve the quality—in the hotspots of poor air quality. There is perhaps also a need to help beyond the inner city, because—this is the point I have been making—people bought their diesels in good faith. Certainly, there should be a targeted approach. One of the problems with the previous scrappage scheme was that it was to boost car sales at that time—it is a lovely position for middle England to decide, “Let’s change our car.” In some ways, there may be a need to target partly by income as well. If we are not careful, a lot of the people who we most want to trade in their older diesels may be those who can least afford a new car. That is perhaps beyond my pay grade, but it is not beyond the pay grade of the Minister, who will reply in a minute.
Good; I look forward to the Minister’s words of wisdom. The hon. Member for Blackley and Broughton (Graham Stringer) raises an interesting point—it is the hotspots in particular that we need to sort.
Road transport still counted for 34% of the UK’s NOx emissions in 2015, and the rate of reduction from the sector has slowed down because of the increased contribution from diesel vehicles. Turning to the Government’s plans, I was therefore disappointed that a scrappage scheme was not announced at the Budget. Of course, we are a little hopeful that something may be announced very soon. The Transport Secretary stated on “The Andrew Marr Show” in February that the Government were considering a scrappage scheme, but there have been no further announcements. I know that there are concerns about the costs of any scheme, and that is why it should be targeted and proportionate. It can be a key weapon in the Government’s armoury in tackling air pollution problems.
What is more, a scrappage scheme is very popular with the public. A recent survey of over 20,000 AA members showed that seven in 10 backed the policy, rising to three quarters among young people. A separate survey published by the think-tank Bright Blue just two weeks ago showed that 67% of Conservatives backed a scrappage scheme. Ministers, this is a policy with significant public support, especially as we move, dare I say it, towards a general election—that was not in my speech.
What would a scrappage scheme look like? First, it would mean replacement by ultra-low emission vehicles. Any potential scrappage scheme should have a stringent condition on the replacement vehicle. It should mandate users to swap their vehicles for an ultra-low emission vehicle or other forms of transport.
I thank the hon. Gentleman for giving way and congratulate him on securing the debate. He is outlining some of the things that he hopes will happen. At the weekend we saw some publicity regarding the explosion in credit for purchasing new and recently second-hand cars. Does he agree that the last thing we want to see is a further explosion of credit on the back of an issue that has resulted from the expansion of diesel cars over the past 20 years?
That is always the problem. Naturally, in order to buy a new car, people often need credit. I suppose the argument is that if a certain amount of support is available for a new vehicle, people will not need to borrow quite as much credit to get that vehicle. I understand what the hon. Gentleman says, but we have to balance that with the fact that we need to improve air quality dramatically. That is why a scheme should perhaps be particularly targeted towards our inner city.
What I was talking about could include a public transport ticket, a car club membership, a rail season ticket or cleaner transport such as a new bicycle. A scrappage scheme may not necessarily be just about people changing their cars. I could do with a new bicycle to come in from Battersea every morning—it would be ideal. The scheme would work in a similar way to the pollution reduction voucher scheme operating in southern California. The whole idea of this morning’s debate is to think slightly outside the box. The scheme also has a potential to provide a substantial boost to the UK’s emerging electric vehicle market.
Secondly, the scheme would be means-tested. I do not want a scrappage scheme becoming a subsidy entirely for the middle classes. Households should not just be able to trade in multiple diesels for a cash subsidy. Instead, the Government should consider targeting a scrappage scheme at poorer households or those earning less than 60% of the median UK household income in particular.
My hon. Friend is kind to give way again. I congratulate him—as I should have done earlier—on securing this important debate. As he has outlined, one of the challenges is making sure that the incentives support lower-income families. Does he agree that we will need to learn lessons from past incentives that failed to do so, such as the green deal, if we are to make the scheme effective and help people in the poorer parts of our cities?
I am sure that the Government, especially the Treasury, will be looking at this issue particularly closely, first because the best use of taxpayers’ cash is to target those who most need it and secondly because it may be possible to widen the scrappage scheme while ensuring that those on lower incomes receive the most support. There are ways of tailoring the scrappage scheme to do exactly what we want, which is to get older diesels out and to help those, particularly those on lower incomes, who cannot otherwise afford to do so.
I am grateful for the hon. Gentleman’s generosity in giving way. Does he accept that there is a strong case that the motor manufacturers, not just the taxpayer and the consumer, should make a major contribution towards the cost of such a scheme? Volkswagen has had to pay billions of dollars in the United States because of its cheat devices; we know that emissions on the road were at five or six times their supposed laboratory levels, and a lot of cars in France, Germany and elsewhere have been withdrawn for a refit. Is there not a strong case that the Government should go to the manufacturers for a contribution towards the scheme?
I know that the Minister has had some strong discussions with Volkswagen. It is not just Volkswagen; car manuals often give a figure for miles per gallon and then a true figure that is about two-thirds of the ideal figure. They will say that the car does 60 mpg when it really does 45 mpg or 40 mpg, so there has been a certain amount of deception there. I also think that companies such as Volkswagen could buy themselves some public esteem by helping to support a scheme for moving towards electric vehicles. Not only should the Government talk to Volkswagen and other vehicle manufacturers; it would be good for those companies, which have manufactured so many diesels, to say, “We can help to convert people away from diesel.” The hon. Gentleman makes a good point.
Further to the point about Volkswagen, does my hon. Friend agree that there has also been a loss of tax revenue and that the Government should seek to get it back from Volkswagen and others? We taxed these vehicles believing that they were much lower-emission than they really were.
My hon. Friend raises a good point. It is not just that people have paid less tax because they and the Government believed that their vehicle was emitting less. Those people were also sold vehicles that did not achieve the emissions levels that the manufacturer said they did, which raises the question of whether not only the Government but the individual motorists who bought those cars are entitled to some compensation. I suspect that some cases will end up in the courts, and it will be interesting to see what the courts have to say about them.
The Government should particularly consider targeting a scrappage scheme at poorer households and those that earn less than 60% of the median UK household income. They could taper support, with lower-income households entitled to a higher level of support for exchanging their vehicles.
My third proposal for a new scrappage scheme is that it should be targeted. I would limit it to the 5.6 million diesel cars on British roads that were registered before 2005, which are on Euro standards 1, 2, 3 and 4 and have higher NOx levels of at least 0.25 mg per km. This would complement current clean air zone plans to charge vehicles of Euro 4 standard and below, as well as the London T-Charge that will begin this October. A scrappage scheme would give diesel owners the chance to replace their older, dirtier vehicles before clean air zone charging is implemented, which is quite important.
Another option would be to geographically target the scheme at this country’s pollution hotspots. The think tank IPPR—the Institute for Public Policy Research—has estimated that there are around 900,000 Euro 4 or older diesel vehicles in the 16 top pollution hotspots in the country. By creating a targeted scrappage scheme, the Government could help to remove more than half the dirtiest vehicles from the worst polluting hotspots.
My fourth proposal relates to funding. The previous scrappage scheme in 2009 was targeted at cars that were more than 10 years old. A vehicle could be scrapped in exchange for a £2,000 discount—£1,000 from the Government and £1,000 from car manufacturers. I propose that a new scrappage scheme could follow a similar model. Funding should also be capped and time-limited, like the last scheme, which set deadlines of February 2010 or £400 million, whichever was achieved first. If the Government earmarked £500 million for the scheme, that could take nearly 10% of the 5 million dirtiest diesel vehicles off our roads. Evidence from the previous scheme shows that it was generally the oldest and therefore more polluting cars that were being replaced. Moreover, past schemes have generally brought forward investment decisions.
I know that Ministers have baulked at the costs of a scrappage scheme, but they should not be put off. It need not be an open-ended funding commitment. A targeted scheme capped at £500 million would be a real tonic to get dirty diesels off the road quickly. Even better, they would be replaced with ultra-low emission vehicles or a clean transport option. The Government still have vast air quality problems and the last thing we want is for them to end up having to pay fines. It would be better to go forward with something positive.
I will finish with two thoughts. The Secretary of State for Environment, Food and Rural Affairs has called air quality her Department’s top priority. The Secretary of State for Business, Energy and Industrial Strategy has said that electric vehicles are at the heart of the Government’s new industrial strategy. I cannot think of a policy that would better target both of those aims. A targeted, means-tested scrappage scheme in which diesel vehicles could be swapped for an ultra-low emission vehicle or a cleaner transport option should be a key weapon in the Government’s armoury for tackling air pollution. It would be the perfect complement to the new clean air zones strategy. I look forward to hearing from the Minister and other colleagues.
As I mentioned earlier, I will publish my Clean Air Bill today. I should put on record that I completely agree with the sentiments and words of the Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Tiverton and Honiton (Neil Parish). We all recognise that we have limited resources, so a targeted, capped scheme would send the right signal to consumers and producers about the future and put the focus in the right place. The electric car company Tesla, which produced just 76,000 cars last year, is worth $49 billion—$3 billion more than Ford, which produced 6.6 million cars. In other words, the marketplace is ready for these changes, and the Government need to facilitate them.
My Bill sets out a wider plan to provide a hydrogen infrastructure, an electric infrastructure and new powers for local authorities to get the evidence on localised air pollution, in order to have evidence-based restrictions and charges that protect the elderly, young people and general communities, alongside a fiscal strategy. This is a brave and sensible first step in that endeavour.
My hon. Friend talked about the market deciding. Which market is he talking about? Is it the bubble stock market, maybe reflecting fashionable thought, or is it the actual car market, which shows overwhelmingly that people are buying from the mainstream manufacturers?
Obviously, we can influence the market. More than 50% of new cars are now diesel. Margaret Thatcher knew about the problems of particulates and there was a judgment call on public health versus carbon. Since then, the problems with NOx have grown. The fact is that the amount of particulates and NOx being produced is much, much greater than people previously thought, partly because of the deception of Volkswagen and others. This is a public health catastrophe.
I will present the case for my Bill this afternoon with support from the Royal College of Physicians, the Royal College of General Practitioners and UNICEF. People will know that last year’s report by the Royal College of Physicians found that 40,000 premature deaths were due to these emissions, as well as presenting emerging evidence about foetuses suffering long-term damage and about the damage to the neurology, and general physical and mental health, of young children in urban spaces, particularly in poor areas. Those children are being poisoned, which has a disastrous impact on the rest of their lives. I am not prepared, as my right hon. Friend the Member for Warley (Mr Spellar) appears to be, just to go on with business as normal, backing the poison of the current industry, which seeks to maximise profits.
It is the function of the Government to regulate markets in the interests of the public and it is an outrage that parents are unable to protect their own children, and that—as we speak—hundreds of thousands of children are in playgrounds enjoying themselves but inadvertently inhaling poisonous fumes. We need to take action and I am glad that we are moving forward with this first step; I hope that the Government agree.
I agree with the general thrust of my hon. Friend’s argument, but we should not let off the Government and all the parties in this House who supported the incentives for diesel. The health risks were known more than 25 years ago. A report by the then Environment Department in 1993, a piece in 2001 by the European Respiratory Journal and other sources all pointed out the health problems of NOx and particulates. People got the balance wrong between the perceived threat of carbon dioxide and the real threat of those poisons, but we should not pretend that there was ignorance of this issue in the past; there was not.
That is a point well made. I mentioned in passing that Margaret Thatcher and subsequent Governments were aware all along of these public health issues. Ironically, it is also the case that, with VW and the like, lorries often produce less NOx than cars. The reason for that is that defeat devices were found in lorries in America, but for some reason the authorities there did not realise that they were being deceived on cars on such a colossal scale.
Of course, ClientEarth has taken the Government to court, as we do not even satisfy minimum EU standards, let alone World Health Organisation standards, and I very much hope that as and when Brexit happens we will ensure that air quality standards are legally enforceable and at least at the level of the minimum EU standard, while moving towards the WHO standards.
These are difficult issues. I appreciate that people have bought cars in good faith. They feel that the current Government, which has been in power for seven years, the previous Labour Government and even the Government before that should have alerted them to these problems, and there is a move, alongside what is being said, perhaps to index fuel duties differentially. In the case of diesel, the real cost of diesel may not go up because of upwards inflation and because the cost of other fuels do not go up. Basically, the signals should be given that people would be wise to move forward.
I will ask the Minister a couple of technical questions. I would like him to comment on displacement issues regarding the targeting of the scrappage scheme; obviously, there are various incentives, which will affect different groups. I think we all share the view that many poorer communities will suffer the worst impacts of air pollution on their children. In addition, many poorer people have the worst cars, which they cannot afford to replace. Therefore, I welcome the progressive thrust of this debate, and to allow others to speak I will conclude my remarks there.
I will depart slightly from the prevailing tenor of this discussion. I declare an interest, as one of the 11.7 million drivers of a diesel vehicle—in fact, I am a long-standing driver of a diesel vehicle—and as a Member of Parliament who represents one of the poorest areas of the country, but one that is at the heart of the British motor industry.
One of the things that I found slightly disturbing about the contribution by the hon. Member for Tiverton and Honiton (Neil Parish), who is the Chairman of the Environment, Food and Rural Affairs Committee, who is someone I hold in high regard, was about the cost of this scheme. When I asked him about costs, he just talked about the cost of converting an individual vehicle. There was no mention of what the overall cost to the Exchequer would be, nor about how we would deal with the infrastructure cost. For example, he talked about gas vehicles, but what would be the cost of creating a gas infrastructure across the country? Part of the essence of any scheme must be a national infrastructure to back it up, otherwise it would be exceedingly unattractive to individual motorists, notwithstanding the fact that, for buses and major truck fleets for example, it might make an important contribution.
One thing I found interesting was when the hon. Gentleman talked about fines. I was really surprised that he showed so little confidence in the ability of his Prime Minister to negotiate an effective Brexit that he thinks the EU will still be in a position to fine us.
The right hon. Gentleman is making an important point about cost, but many car manufacturers have a global market, so much of the innovation, particularly in the electric and hybrid car market, has already been achieved, because other countries have different regimes for taxing cars and providing incentives. That will reduce the cost of the roll-out of electric cars in the UK, which will be very helpful to us.
I am not entirely sure I follow that. I will break it down into two areas. One is about infrastructure cost. Whatever contributions have been made by the Toyota car company, for example, in creating a very successful hybrid vehicle, that does not alter the fact that people will need an infrastructure to charge up those vehicles. Although the hon. Member for Tiverton and Honiton, who introduced this debate, may well be able to plug in his vehicle on his country estate, he may have noticed that in urban areas such as mine there is very tight terraced housing and a lot of high-rise flats—and an increasing number, by the way, of apartments in our urban areas. I would be interested if he could tell us how people will be able to charge their vehicles, what the infrastructure cost will be and what Treasury contribution will be required. A decision may have to be made, but at the very least people need to know what the overall cost will be.
If I could just put the right hon. Gentleman right, I do not have a “country estate”; I have a farm. There is a little bit of a difference, and I was also a working farmer before I got here. Let me make that abundantly clear.
To be serious, the Government are already rolling out an infrastructure for charging points; we also want the fast charging points, so that people can charge up their cars quickly. As far as gas is concerned, there is an infrastructure out there already. A lot of garages supply liquid gas. There are probably not as many as we might need, but there is quite an infrastructure for gas out there already, so that does not need to be reinvented.
I think the hon. Gentleman is underplaying the position. I acknowledge the fact that he is a farmer—which is why I threw it in the way I did—but I would ask whether he and his neighbours use red diesel. There was no mention in his contribution as to whether the enormous discount on red diesel should be included in our considerations. Again, I note that there was no figure—no estimate—for how much all of this will cost.
The hon. Member for Tiverton and Honiton (Neil Parish) mentioned the cap of half a billion pounds for the scrappage scheme, but if the signal from the Government to the market is that having points for hydrogen and gas is the direction of travel, the market will accelerate the infrastructure provision. As has been pointed out, there is a gas and an electric infrastructure. We need to pump prime a hydrogen infrastructure and the market will invest. The old-style socialist view that everything has to be paid for by the state is not the case.
But we are talking about dramatic change, with 11.7 million diesel cars, let alone trucks, buses and so on. The idea that the current infrastructure or even a massively ramped-up infrastructure will be able to deal with that without major Government investment seems entirely fanciful.
In a world where there are around 30 million cars in the United Kingdom and 11,000 electric charging points, of which about 800 are fast-charging, does the right hon. Gentleman not agree that there is some way to go and that it is important to have a step change to the electric future?
If that is the case, I have to ask the hon. Gentleman how much that would cost and who would pay for it. One of the problems we have—I know this as a former Transport Minister—is that those who create policy, whether they are in the Department for Transport, Westminster City Council, London City Hall or even Birmingham Council House, overwhelmingly have clerical jobs by definition and travel in on public transport. Certainly in the London region, they travel overwhelmingly on rail. That is their mindset, and the mindset of many of the press lobby as well. Look how fascinated they are every time there are any problems on the railway, as compared with the situation on the roads.
If we go outside London—when I say London, I mean central London, because this applies very much to the London suburbs and the peripheral towns around London—and look at all the Government data, although there is a marginal shift at the moment, people overwhelmingly travel to work by road transport, whether by bus or in cars, which make up a significant proportion. That is how people get to work. People may fancifully say that people can get on their bike to do that, but if they are going 10 miles away to do shift work at a factory or a hospital, or if they are going to a building site carrying their tools, that is not a realistic option.
The problem is that the interests of London and the policies that affect London start to impact on the rest of the country. Even within London, there are all those builders coming in—that steady stream of vehicles travelling in on the motorways bringing in those who are constructing the city—and we are looking at significantly penalising them. That is why I asked the hon. Member for Tiverton and Honiton what actual assessment there has been of the problem, breaking it down. In his contribution, he said that there is no doubt that private vehicles contribute the bulk of the pollution. My council, Sandwell Council, did a study of the Bearwood Road only a couple of years ago. It found that buses formed 8% of the vehicles on Bearwood Road and contributed 57% of the pollutants being emitted there. It may be very sensible for him to say that we should target the problem by providing a subsidy to the bus companies—rather than taking away the subsidies from bus companies, as this Government have been doing, threatening them—and actually having a bus scrappage scheme to take the older buses out of the system. That would be a perfectly realistic way of looking at it.
Just before my right hon. Friend gets too carried away with making Brian Souter even richer than he already is from public subsidy, I would like to bring him back to the very sensible point he was making about infrastructure. I recently asked the Department parliamentary questions about the capacity of the electricity generating board to provide electricity if we moved over to a fully electric motorised fleet. Quite simply, we are nowhere near that capacity. The Department has not thought that through.
That is absolutely right, and I thank my hon. Friend for that. I suspect that the transmission capacity, particularly locally, will be affected in the same way. Equally, we have to look at the availability of petrol if we remove a great chunk of the diesel market, which may or may not also happen in the rest of Europe. What discussions has the Minister had with his European counterparts? The duty levied on diesel there is considerably lower, which is why they have much lower diesel prices in the EU. Reference was made to the European Commission putting the UK Government on notice and our Supreme Court responding to that, but it is interesting to note that the European Commission also mentioned a whole number of other countries, including Germany, France, Spain and Italy. Is there any common factor among those countries, apart from them being the major industrial countries of the EU? I therefore find it rather strange that we are looking at a major upheaval that does not seem to be mirrored by our European counterparts without getting proper figures in an impact assessment, and at a time when we are considering the uncertainties of Brexit. Apart from one or two towns and cities in one or two countries, there seems to be no similar reaction from other countries.
Equally, there seems to be no consideration as to whether, as was rightly said earlier, we could actually have alternative fuels for many heavy goods vehicles. There is a reason why, across the whole world, goods vehicles are overwhelmingly diesel. It has to do with torque, traction and so on, and that applies to many builders’ vehicles, which are for lifting and generate power to do that. That would not be possible with an electric vehicle—certainly not with the current state of technology.
Electric vehicles may have some minor advantage when sitting in traffic, but many of those arguing for this proposal should perhaps be looking at better traffic management. With a number of cities, and particularly London, quite a bit of the congestion has been aided and abetted by the construction of cycle lanes. Boris Johnson’s cycle lanes have generated congestion in central London, as taxi drivers and others will all attest, so we need to be looking at how we can deal with the problem in its various segments. With petroleum, it is true that we can keep cracking the oil in different stages and get more petroleum out, but that adds considerably to the cost—I will come to the cost to the individual in one second, after I give way to the Chairman of the Select Committee.
I am finding the right hon. Gentleman’s contribution very interesting, because he is going into great detail on all the problems we have, but he is then saying that bicycles are causing problems. Surely people on bicycles are not emitting any emissions at all, other than breathing in and out as they are riding along. It is no good coming out with a whole list of things that are wrong with the proposal. I would like to see a bit of a more positive approach to the whole argument.
I may be paraphrasing my right hon. Friend, but he said that the EU did not really care about the issue. My understanding is that there was a move for an EU air quality regulator that was blocked by the British in some sort of dodgy deal related to avoiding a banking regulator. There is movement towards air quality improvement and innovation in Europe. In the Council of Europe, in which I sit, an urban air quality study is going on. Given that 3 million people are dying across the globe, with 400,000 in Europe, there is an imperative to develop sustainable transport technology. The thrust of his argument seems to be—
In that case, I will speed up, Mr Chope. A considerable number die as a result of air quality because of cooking with solid fuel in enclosed spaces, particularly in Africa, which is certainly something we should look at and is certainly something to do with photovoltaic and storage. Also, on the assessments and the figure of 40,000, Roger Harrabin of the BBC has said that it could be anything between a fifth or five times as much as that. It is not about cardiac arrests or even lung cancer, but about the average reduced periods of life. A real study of the data is needed, accepting that there is a problem, but that this is about scoping it.
There is also the issue of sources of generation. In coastal areas, particularly in ports, what is the contribution of shipping to the numbers of particulates? What is the contribution of diesel trains? Perhaps the Minister will explain why the Government are cutting back on some of the electrification, which will mean more diesel trains going into urban areas. What is the contribution of power stations, central heating boilers and the burning of solid fuel? Interestingly, what is the contribution, as I mentioned earlier, of urban incinerators, of which we have a large number to deal with the problems of waste? Also, what is the contribution of tar, which is believed to be considerable, particularly in terms of small particulates?
As for the scrappage question, it is all very well to say we will give somebody £1,000, but £1,000 towards what? Towards buying a new vehicle? What does that say to someone who needs his car to get to work and who has probably already seen a drop in its value of about £2,000? What does it say to people who are asset poor and who need their vehicle to get to work? If we give them £1,000, who will lend them the money to buy new vehicles? Will they buy vehicles from further up the chain? There may be answers, but figures came there none during this debate.
What about taxi drivers? Birmingham City Council is proposing a purge of diesel taxis. Taxi driving is entry-level employment for many in this country in all communities. Are we telling them we will take them off the road and put them on the dole? That is certainly not an attractive proposition for many constituents who are active in the taxi trade.
I have already mentioned the question of where people will charge their cars. Even if we have fast chargers, how many can we put through the average service station on the motorway compared with how many can fill up there? How many can we have at any other service station? What about city centre areas? I accept there is probably a lower percentage of car ownership in some of those areas, but there are still a hell of a lot of cars. How will we have a charging system on the congested urban streetscape of Britain? And what will we do in isolated and rural areas?
Mr Chope, I am aware that we want to hear from the Front-Bench spokespeople, and, as you rightly drew to my attention, one other speaker wishes to participate, so I shall end now. This is a big debate. I do not think we should move forward with disconnected local schemes or without a well-thought-out, well-costed Treasury-backed scheme. We should not rush into this. The matters are serious. They are about international competitiveness, people’s financial welfare, and, as people have rightly said, people’s health and welfare. This is a big issue. We should not go ahead on prime ministerial whim or just on what local government decides. We need a proper national debate and proper national answers.
It is a pleasure to speak under your chairmanship, Mr Chope. I congratulate my hon. Friend the Member for Tiverton and Honiton (Neil Parish) on securing this important debate. It was fascinating to listen to the speech by the right hon. Member for Warley (Mr Spellar), who set out in pithy terms the policy issues concerned with this matter. I draw attention to my declarations in the Register of Members’ Financial Interests. Also, I chair the all-party group for fair fuel.
Pollution is a serious problem, but it is important that we look at the science and the statistics and do not go around the place scaremongering. We must not allow the people who for a long time have not been in favour of cars to find another excuse to attack motorists and to seek to visit extra taxes upon them. So when we look at the serious problem of NOx we need to look at what has happened to pollution over the past decade and beyond, because it is revealing that NOx pollution levels have halved in the past decade. They have gone from 1.6 million tonnes in 2005 to 0.9 million tonnes in 2015.
Particulates are also down. Between 1990 and 2015 the most harmful particulate emissions reduced by 47% in the UK and PM10 fell by 51%. I think we should spend a little less time beating ourselves up and a little more time congratulating ourselves and our nation on the advances we have made. Much has been done, but there is much yet to do, and I want to address what we need to do next.
The hon. Gentleman always looks on the positive side of things. The Department for Environment, Food and Rural Affairs figures show that there has been a levelling off, but they are still hugely down. The hon. Gentleman should try to be more of a glass half full sort of person and look at the progress that has been made. He has promoted the Clean Air Bill, which, from the way he talks about it, will attack motorists, diesels and cars. However, let us look at the scale of the problem in the round. Let us look at the science rather than the rhetoric. Let us look at the numbers. What percentage of nitrogen oxide pollution in London comes from diesel cars? The Labour Mayor of London proposes to try to fleece motorists out of £20 every time they visit the city. According to the London Assembly Environment Committee’s report, the percentage is 11%. Separate figures from Transport for London indicate 12% from the diesel car. Some 750,000 diesel cars in London produce that amount.
Why has there not been any focus on the other 90% of the problem? The risk is that we only attack the motorists who thought they were doing the right thing when they bought the cars, because they were advised to do so. They were advised that it was a clean, environment-friendly thing to do. We are at risk of unfairly targeting and demonising those people, and of ignoring the other 90% of the problem. If we focus on 10% of the problem, we risk not looking at the other 90%. So what is in that 90% that needs to be in the air quality plans? I hope the hon. Gentleman will talk about that when he discusses his Bill and will look at the science and statistics and not just go after the poor motorists, many of whom live in his constituency. Let us look at where the problem comes from.
The answer is that 8% comes from rail: ageing trains chuffing up fumes at Paddington. Some 14% comes from non-road mobile machinery: generators on building sites. The system does not seem to allow plugging them into the main grid, which would be the obvious thing to do, so we have to have diesel generators. Why has action not been taken on that? Why have we not heard about that from the medical and the green lobby who want to target the motorist? We ought to hear about that. We ought to look at the diggers that do not have the filters that they should have, that do not have the same quality. We ought to clean up our building sites. We ought to look to do that, because if it is important, it is important across the board.
We need to look at non-domestic and domestic gas—gas central heating systems produce nitrogen oxide. So do Transport for London’s buses—10% of nitrogen oxide in London comes from buses, which the right hon. Member for Warley mentioned.
It is very important that we do not demonise diesel drivers and that this is not seen as an opportunity for Labour Mayors and Labour councils up and down the land to fleece motorists with more taxes—many have set out such plans. As the right hon. Member for Warley pointed out, in many cases that would hurt the poorest, who have been priced out of cities, and would be unfair. We should make sure that we have an across-the-board plan to deal with a problem that affects everyone; we should focus not on the 10% but on the 100%. It is my plea that we treat motorists fairly—that we treat ourselves fairly. We should treat the whole problem and all of the pollution. That is how we will have the best chance of making sure we have cleaner air, a cleaner country, cleaner cities and a cleaner nation, for our sake, and the sake of our children.
It is a pleasure to serve under your chairmanship, Mr Chope. I congratulate the hon. Member for Tiverton and Honiton (Neil Parish), the Chair of the Select Committee on Environment, Food and Rural Affairs, on securing this debate. I also feel obliged to thank the right hon. Member for Warley (Mr Spellar), who seemed to hold a debate within the debate and spoke at length. I was not sure if he was arguing against the scrappage scheme or the fact that we need to do a lot more, but some good points were raised—there are other serious issues. Personally, I do not think that should negate the arguments for the diesel scrappage scheme. He also touched on emissions from fuel generation, but I am not sure whether he mentioned biomass. Biomass is subsidised as a renewable energy source, yet its emissions are harmful, so that is certainly something in the wider mix that the Government need to look at.
The hon. Member for Dover (Charlie Elphicke) mentioned other things that cause emissions and touched on generators. There is certainly something wrong when the National Grid is procuring diesel generators as back-up for our energy supply, when we know they emit nitrogen oxide.
However, I agree in general with the hon. Member for Tiverton and Honiton that a diesel scrappage scheme has merit. We have got to where we are because of the law of unintended or unknown consequences of previous Government attempts to reduce CO2 emissions by promoting diesel, which he mentioned, although I take on board the point made by the hon. Member for Blackley and Broughton (Graham Stringer), who said that some of the evidence was there and should have been understood and thought about more clearly.
The bottom line is that we now know for a fact that nitrogen oxide emissions are an issue that needs to be tackled. The hon. Member for Swansea West (Geraint Davies) gave us some graphic details of the impact of diesel fumes and nitrogen oxide emissions. We know there are roughly 40,000 premature deaths a year. I congratulate him on continuing to push forward his air pollution Bill and wish him good luck.
A UN rapporteur has said that air pollution is a crisis that
“plagues the UK”—
particularly children—and that there is an
“urgent need for political will by the UK government to make timely, measurable and meaningful interventions”.
In November 2016, for the second time in 18 months, the Government lost a court case on their proposals to tackle air pollution, so they cannot stand back and do nothing. We need to take action.
Electric vehicles have been mentioned. Most hon. Members understand that electric vehicles only account for roughly 1% of the stock of cars on the road right now. On the current trajectory, electric vehicles will not be the solution to tackling air pollution, which is why further action is needed.
The hon. Member for Tiverton and Honiton spoke about carrot and stick. I agree in general, but I would not want to penalise those people who bought diesel cars in good faith because they were told it would be helpful to the environment and reduce CO2 emissions, and did not have the knowledge that it would cause harmful effects. I support the scrappage scheme, but people should not be penalised. They need to be allowed to trade their cars in. I welcome the comments about particularly supporting those who can least afford it, such as those who run older cars and need help to move on.
Other hon. Members have highlighted that HGVs are an issue, as are transport refrigeration units, which I have mentioned before in relation to electric cars. Transport refrigeration units emit more particle emissions than the main diesel engine itself, so the Government need to look at that. I welcome the Government’s proposal to consult on the use of red diesel, because we should not subsidise the owners of transport refrigeration units to emit harmful particles.
The hon. Member for Swansea West mentioned Volkswagen, which has agreed to settle $4.3 billion in the United States. This Government should be doing more to get money out of Volkswagen, which would go a long way to funding a scrappage scheme, and perhaps also to starting to fund some of the wider infrastructure that the right hon. Member for Warley highlighted. The Government managed to negotiate a deal with Nissan in terms of Brexit, but a joined-up approach in terms of scrappage, trading in diesel cars and looking at wider issues would be much better than a behind-closed-doors deal that nobody actually knows what it contains.
The hon. Member for Tiverton and Honiton suggested that the issue might be left to devolved nations, although he did accept that the UK Government would perhaps need to help provide funding. This is purely and squarely a UK Government issue. The original diesel promotion schemes came from the UK Government, so it makes sense that the UK Government should have to rectify the matter. It should not be left to devolved Governments to do that on their own—it needs the support and leadership of the UK Government.
I support the measures. I understand some of the wider points made, and the Government do need to look at air pollution in the wider mix, but a diesel scrappage scheme would be a good start. I would also note that scrappage laws in the European Union are now a green measure, because 95% of cars need to be recycled once scrapped. At least taking cars off the road will not lead to adverse dumping elsewhere, which is good. I caution the Government to make sure we stand by that ethos as we move into the post-Brexit world. We have already heard rumblings from the hard Brexiteers about how we can relax environmental standards. That would certainly be the wrong way to go, especially when tackling air pollution and climate change.
It is a pleasure to serve under your chairmanship, Mr Chope. I thank the hon. Member for Tiverton and Honiton (Neil Parish) for securing this important debate. Having read some of the minutes of his Committee, I can tell that he gives Ministers a hard time—he is exactly the kind of friend any ministerial team needs.
This is a very timely debate, although I have to say that I think it is the first debate in which we have heard only male voices in my short time in this place. I am not quite sure what that tells us, but clearly women and children are among the 40,000 people who, as the Royal College of Physicians tells us, suffer premature death in the UK every year because of these issues. To take one local example, Brixton Road in south London breached its annual air pollution limit for 2017 after just five days. The Government’s continued failure to address the problem meant that they were taken to the Supreme Court.
Labour recognises the need for action. In our view, clean air is a right, not a privilege. I pay tribute to my hon. Friend the Member for Swansea West (Geraint Davies) for the work he is doing on the Clean Air Bill and I note his powerful point about the role that manufacturers should be playing in sorting out some of the problems.
We heard a powerful speech from my right hon. Friend the Member for Warley (Mr Spellar), which was fitting, as he is a former esteemed Transport Minister. He made a wide-ranging set of points. I very much agree about the need to protect hard-working people who need their vehicles to get to work, and his strong plea for robust evidence in the debate.
There is no denying that diesel vehicles account for a large percentage of NOx emissions. A 2016 DEFRA report stated that road transport still accounted for 34% of UK nitrogen oxide emissions in 2015. The European Commission reported in 2016 that around four fifths of road traffic nitrogen oxide levels come from diesel-powered vehicles. Decisions have been taken in the past to incentivise the ownership of diesel-fuelled private cars, which reflected the urgent need at the time to act on the threat of CO2. That worked, because that is now down more than a third since 2000.
This is not just about private cars, as we have heard: buses, coaches, taxis and minicabs are all high-mileage vehicles that operate within our towns and cities. Just looking at diesel private cars in isolation is therefore not the complete answer to the problem we face. It has to be seen in the context of the move to a greener and more efficient public transport system across the UK, which means removing barriers to the uptake of electric vehicles and rethinking vehicle excise duty. Any diesel policy must take clear account of the impact it could have on CO2 emissions, and it must avoid severely penalising the almost 12 million diesel car owners who, as we have heard, bought their vehicles in good faith.
It is clear that scrappage schemes can work. Labour’s scheme, introduced in 2009, shows that they can impact consumer behaviour, but the circumstances now are different. It is not about stimulating the economy following a global downturn, but about taking the most air-polluting vehicles off our roads. Any scrappage scheme must be shown to achieve value for money, and it must be targeted at the right drivers.
A recent Royal Automobile Club Foundation report sounds a warning note about that. It suggests that the cost of implementing a scheme could be expensive and may not automatically achieve the expected benefits. Targeting older diesel vehicles in the bands known as Euro 1, 2, and 3 could take 400,000 cars off UK roads, costing the Government and industry a combined £800 million, but that would cut the total emissions of diesel cars by only 3.2%, and only if all those drivers elected for an electric vehicle replacement. The percentage drops to 1.3% if the drivers opted for the newer Euro 6 models. The findings show that creating a robust scrappage scheme is far from simple. It is not necessarily about how dirty a vehicle is or how many there are, but about how many miles they do and where they do them. My hon. Friend the Member for Blackley and Broughton (Graham Stringer) made a very strong point when he suggested that any such scheme should focus on cities, and I think the hon. Member for Tiverton and Honiton agreed with that point.
Have the Government considered the RAC Foundation findings? Has the Minister considered the Mayor of London’s proposals for a targeted scheme that supports low-income families? Without targeting the right drivers operating in crisis areas, a scrappage scheme risks having a limited impact. It is therefore absolutely essential that the Government publish robust environmental evidence and a cost-benefit analysis for any proposal.
Scrappage schemes are only one of the measures that need to be taken if we are really to tackle the air quality crisis effectively. Not only are we awaiting the Government’s third attempt at producing an air-quality plan following a judicial review, which should happen imminently, but I am afraid that they are more than 1.5 million vehicles short of their 1.6 million 2020 target for electric hybrid and alternative fuel vehicles. They are also going backwards on the 2020 renewable transport fuel targets. In our discussions on the Vehicle Technology and Aviation Bill, Labour pressed for strong action on reviewing the plug-in grant and charging point schemes, both of which were cut by the Government, for licensing and accreditation for technicians—both proposals were backed by the Institute of the Motor Industry—and for a clear review of vehicle excise duty, which was backed by the RAC Foundation, the Society of Motor Manufacturers and Traders and many other motor and active travel organisations.
As someone who has spent much of my time in Parliament talking about buses, I know that there are huge opportunities to improve the environmental performance of our bus fleets. As was pointed out, in some areas they are ageing and very polluting. It was disappointing that the Government did not take up some of the Opposition’s constructive proposals on the Bus Services Bill. I urge them to think about that further. There is an opportunity to create a greener bus network, so I ask the Minister to assure us that analysis will be done to look at how we can make better use of the Bus Services Bill to improve our fleet’s environmental performance.
The Environment, Food and Rural Affairs Committee told us last year that only five of the 12 worst-polluted cities have been given the ability to charge to enter clean-air zones. Will the Government also look at extending the network of clean-air zones, which Labour committed to in 2015?
The Government have some serious questions to answer about air quality. We believe that to breathe clean air is a right, and the health, environmental and economic case for acting is overwhelming. Action on diesel is part of the solution, but measures must be cost-effective and targeted actively enough to affect the high-mileage vehicles that operate in our towns and cities. That means investing in greener buses and public transport, reviewing the plug-in grants and excise duty rates for electric vehicles, reducing other barriers to electric vehicle uptake and extending clean-air zones to more local authorities. One way of rising to these challenges is to back the London Mayor’s call for a new clean air Act that is fit for the 21st century. That would send a powerful message to everyone that clean air is not a privilege but a right. A YouGov survey shows that two thirds of the public support that.
As we eagerly await what must only be an exhaustive and robust air-quality strategy—at the third attempt—I hope the Minister considers his response. The truth is that we can no longer hold our breath while we wait.
It is a pleasure to serve under your chairmanship, Mr Chope, and to speak in this debate. I have just 15 minutes to deal with this important subject —I hope it will be 15 minutes of pure joy.
Disraeli, the greatest Conservative Prime Minister, said:
“The fool wonders, the wise man asks.”
My hon. Friend the Member for Tiverton and Honiton (Neil Parish) has indeed asked a question about what he feels is an important contribution to the developing strategy on air quality, which, as he knows, I have been working on with colleagues at DEFRA and others across Government so as to put it in place in a way that is both practicable and demanding. I say practicable, because I am not in the business of penalising drivers—particularly those on modest incomes who bought their diesel vehicles in good faith. They were badly advised, largely by the previous Labour Government, as we heard from various contributors to the debate. There has been refreshing honesty in that respect today.
I can answer that question directly. The Conservatives took an entirely different approach in opposition. In our 2001 environment manifesto, the then Conservative Opposition called for a vehicle excise duty to be based on air pollution and vehicle emissions rather than just carbon dioxide. None the less, Gordon Brown went ahead with the scheme unaffected by that advice. That is the direct answer to the right hon. Gentleman’s question. Ministers do not give many direct answers, but that is a model example of one.
In the short time available to me, I do not have access to Hansard, and it would absolutely wrong for me to give any information that is not pinpoint accurate. That is not my habit, Mr Chope, and it is certainly not something you would permit in this Chamber. I now need to rush on to deal adequately with the contributions that have been made to this debate.
It is absolutely clear that the prosperity of our nation and, more than that, the common good depend on our wellbeing. Closely associated with wellbeing is the health of our people—urban and rural, young and old. If we are going to promote a better Britain to fuel—if I can put it in these terms—the common good, we need to look at air quality and pollution, as that is critical to health.
I want to deal with a pseudodox before I give way to my hon. Friend.
It is important to recognise that air quality has improved. I do not want there to be any misunderstanding about that. Over time, air quality in this country has improved. That goes right back to the Clean Air Acts of the late 1950s and through the 1960s. Even in recent years, air quality has improved with respect to nitrogen monoxide emissions by something like 20%, so let us not start from a series of misassumptions.
I am very heartened to hear that the Minister estimates that we should look after the rural areas just as we look after the cities. I was a little worried that the Opposition spokesman’s contribution suggested that we should purely focus on cities. In Yeovil, we have an air quality management area, which needs managing. I am a supporter of this potential scrappage scheme as one means of alleviating that. We have a congestion issue. I would love the Minister to come look at a bypass scheme to alleviate that on Sherborne Road. This is an excellent part of what we should be doing to address that issue.
My hon. Friend is right that in implementing any set of policies we need to be clear about the particularities of different localities. The circumstances in rural areas are different in all kinds of ways. The biggest problem with air quality and pollution is obviously in urban areas, and the Government’s approach—of which clean air zones are the exemplification—has, of course, focused on just such areas. It would be inconceivable for us not to be sensitive to different circumstances, which is why we are so determined to work with all agencies and local government in particular to ensure that the specificity of any proposals that we put into place is sufficient to deal with those particularities. He is absolutely right to raise that.
Having said that air quality has improved, let us be clear: we must do more. There is no complacency in making a bald statement about the facts. We have to go further, for, as Disraeli also said:
“The health of the people is really the foundation upon which all their happiness”
depends. It is right that high nitrogen dioxide levels exacerbate the impact of pre-existing health conditions, especially for elderly people and children, as my hon. Friend the Member for Tiverton and Honiton and others made clear; it is right that we protect those most affected by poor air quality. I am absolutely committed to that objective.
People know this already, but I am not afraid or ashamed to restate it: Government can be a force for good. I mentioned the Clean Air Acts, and in those terms Governments were a force for good and can continue to be so if we get the regulatory environment right. Air pollution has reduced, but we need to tackle it with a new vigour and determination. Road transport is at the heart of that, because it is the single biggest contributor to high local concentrations of nitrogen dioxide, and it is nitrogen dioxide that has featured large in the debate.
The Minister mentioned the reduction of pollution, but will he not accept that the aggregate reduction of pollution in Britain is linked to the demise of the coal mines and the exporting of our manufacturing base, as well as the financial disaster in 2008? If he focused his measurements on more recent years and urban environments, there has been a worrying escalation in the NOx and particulates that we are talking about. We should therefore support the scheme.
In recent years emissions have been a problem in particular areas—I acknowledge that clearly—and the Government are particularly keen to deal with the effects on those areas. The air quality plan will of course have a national footprint, as it is a national plan. The particularity I described was about Government setting out an appropriate and deliverable framework, and then working with localities to ensure that in the implementation of that framework all those local circumstances are put in place. That is the point that I was making about urban and rural areas and the different circumstances that apply there.
Clean air zones cover a designated area and involve a range of immediate local actions to support cities to grow while delivering sustained improvements in air quality and transition to a low-emission economy. Measures that could be implemented include the promotion of ultra-low emission vehicles; upgrading buses and taxis; promoting cycling schemes; and, in the worst cases, charging for the most polluting vehicles. In 2015 we named five cities, Birmingham, Leeds, Nottingham, Derby and Southampton, that are required to introduce a clean air zone. The Government are engaging with the relevant local authorities on the schemes’ detailed design.
Clean air zones will support the transition to a low-emission economy, but the Government are considering how to mitigate the zones’ impacts on those worst affected. I am not in the business of disadvantaging those who are already disadvantaged and in exaggerating the circumstances of those who already face tough choices and have a struggle to make their way in the world. That is not we are about and would not be the kind of fair politics that I believe in and to which this Government are committed. A fairer Britain is one that takes account of such disadvantages and we will do so in the construction and delivery of this policy.
My hon. Friend the Member for Tiverton and Honiton suggested that a means-tested scrappage scheme could address some of those issues. He emphasised the fact that his scheme would be means-tested, and he did so with a fair amount of passion. Hegel said:
“Nothing great in the world has ever been accomplished without passion”,
and my hon. Friend has displayed that very passion today. Let me be clear: I note his points and I will ensure that they are considered as part of our consultation and as part of our work. I do not think you get much better than that typically in Westminster Hall.
It is absolutely right that the Government’s clean air zone policy recognises all the challenges that have been set out by various contributors to the debate and it tackles the problems of the most polluted places by acknowledging that low-cost transport is vital to people’s opportunities and wellbeing.
I am happy to give another straight answer to another straight question from the right hon. Gentleman. In February this year we awarded almost £3.7 million of funding to projects, including one in Gateshead to encourage cycling and to upgrade traffic management, and another in Nottingham to trial fuel cell technology and to encourage ultra-low emission vehicles in the local NHS. Alongside that, we are making significant investment in a range of green transport initiatives. Since 2011 the Government have invested more than £2 billion to increase the uptake of ultra-low emission vehicles and to support greener transport schemes, as well as pledging £290 million to support electric vehicles and low-emission buses and taxis in the 2016 autumn statement. More than that, just last week, £109 million of Government funding was awarded to 38 cutting-edge automotive research and development projects focused on greatly reduce automotive emissions and their footprint. Those are the facts.
My hon. Friend the Member for Tiverton and Honiton proposed to put ultra-low emission vehicles at the heart of a scrappage scheme. We are already investing a significant amount of money to support the ultra-low emission vehicle market, because we believe that the transition to a zero-emission economy is both inevitable and desirable. We want almost every car to be low-emission by 2050, as hon. Members know, because they have heard me say it before.
I will not, for the sake of time, but I put on the record that my hon. Friend has been a great champion of his constituents’ interests in this and so many other ways.
We are going further and have introduced a Bill, the Vehicle Technology and Aviation Bill, which has been referred to in our debate and has gone through Committee. It is designed to promote a charging infrastructure for electric vehicles and we also dealt with autonomous vehicles in our consideration of it. The Bill was debated in Committee without amaritude or contumely. There seemed to be a cross-party view that we need to move ahead both with care and with a degree of unprecedented vigour to promote the take-up of electric and other low-emission vehicles. We will therefore put in place appropriate infrastructure, which was a point made in the course of this debate. I said today, in a breakfast meeting with the sector from which I rushed to come to Westminster Hall, that I will be rolling out the competition for the design of electric charging points which I mentioned in that Committee.
In the brief time I have available, I need to draw the whole of the Chamber’s attention to the breakdown of where the emissions emanate from. The question was asked several times: why and where? It is all here, on this list, which is exhaustive. I have not time to deal with it now, but I will make it available to every Member who has contributed to and attended the debate. It breaks down the very points that were made. For example, are emissions coming from shipping? By the way, shipping is important, and I want to do more in that respect, as argued for by the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), the chair of the maritime all-party group, as well as in respect of railways and so on and so forth.
Let me move to my exciting conclusion in the couple of minutes that I have available—
I will give my hon. Friend the Member for Tiverton and Honiton a brief time, if he is happy with that.
One of the other big problems has been Europe, and the failure of the Euro testing regime has come together with increased use of diesel vehicles following tax incentives introduced by the Labour Government. The failure of that EU regime to put in place real tests that made a difference has been a contributory factor that, as in so many other ways, was injurious to the interests of the British people. This Government are determined to put the wellbeing, welfare and health of our people at the heart of all we do. We will bring forward the plan and the policy, and they will be balanced and certainly not penalise those who are worse off. I am grateful to my hon. Friend for giving me the chance to say so.
I thank everyone for their contributions and the Minister very much for his reply. We need a scrappage scheme along with public transport and everything that we have discussed this morning. We need to reduce the amount of pollution in order to get better quality air in our cities and throughout the nation. A diesel scrappage scheme is very much part of that.
Motion lapsed (Standing Order No. 10(6)).
EEC, EC and the EU: UK Financial Contributions
I beg to move,
That this House has considered the UK’s total net financial contribution to the EEC, EC and EU since 1 January 1973.
May I say what a huge pleasure it is to serve under your chairmanship, Mr Chope? I thank Mr Speaker for granting me this important debate. I hope that the debate will do what it says on the tin, because if my hon. Friend the Minister is unable or unwilling to do so, I shall reveal this country’s total net financial contribution to Europe since we joined the Common Market on 1 January 1973. It is a huge figure, which British taxpayers have had to spend over the past 44 years.
Mr Chope, you will recall that we joined what was then called the Common Market with effect from 1 January 1973. Its official title was the European Economic Community. Since that date, it has changed—sometimes with and sometimes without the consent of the British people—into the European Community, or the EC, and from that into the European Union. According to detailed and authoritative research published by the Library, over the past 44 years this country has contributed a net total, in real terms—in today’s money—of £187 billion. That sum has been transferred from British taxpayers to European Union taxpayers. That is up to 2016; it does not include this year, next year or the bit of 2019 before we leave that dreadful organisation. If the real-terms total is something like £187 billion today, it will be well over £200 billion by the time we leave. I estimate that we will have spent £209 billion on being a member of that organisation—that is our membership fee.
It is simply outrageous for any EU negotiator to demand that this country continues to pay to leave when we have contributed all that money, net, since we joined on 1 January 1973. I look to my hon. Friend the Minister, who is an excellent Minister in the Department for Exiting the European Union, to be extremely robust when he negotiates our exit from that institution.
I am grateful. I assume that the figures the hon. Gentleman is giving are cash figures and are not updated to current value. Does he agree that, had that money been put in the country’s wallet, we would now have the largest sovereign wealth fund in the world?
That is an extremely good point. The cash figure—the total of our actual payments each year in the value of money at that time—is £137.4 billion. In real terms—in today’s money—it is £184.571 billion, so £185 billion. I have added £2 billion just for fun. That is the sort of tactic that the EU negotiators will adopt, so we should start playing them at their own game. Of course, they will demand that we pay an exit or divorce bill for leaving. My argument is that we should not pay anything at all.
The European Commission’s chief negotiator, Michel Barnier, has reportedly put the exit bill at close to €60 billion. Estimates of the payment are contingent on what liabilities and assets are included and how those are shared. For example, the Centre for European Reform has produced estimates ranging from €24 billion to €73 billion, while the House of Lords European Union Committee, in its excellent report, “Brexit and the EU budget”, which was published on 4 March, points to evidence suggesting that the EU will demand between €15 billion and €60 billion. That range of estimates highlights the fact that almost every element of the potential payment is subject to interpretation and the Commission has laid out no official bill or rationale. Negotiations will determine which liabilities and assets are shared and how they are shared.
The Lords Committee concluded that if no agreement was reached with the EU,
“the UK would be subject to no enforceable obligation to make any financial contribution at all.”
The Committee received competing interpretations but felt that that interpretation was the most persuasive, although it stressed that there could be political and economic consequences of the UK leaving without reaching an agreement on the payment. I say to my hon. Friend the Minister that there will be political and economic consequences in this country if we have to pay a massive exit bill. That would be unacceptable to my constituents and, I suspect, to most Members of this House.
There are three big sources of potential liabilities as we leave, which I would dismiss almost in their entirety. The first is called—I am sorry to use French in the Chamber—reste à liquider, or RAL. In its annual budgets, the EU commits to some future spending without making payments to recipients at the time. The EU refers to those outstanding commitments as reste à liquider, and it has been suggested that the UK may be asked to contribute to that RAL when we leave.
Again, estimates of the potential size of those payments vary. Evidence to the Lords Committee suggests that the EU will argue that we could be liable for a share of between 5%, based on our share of allocated financing, and 15%, based on our gross contribution to the EU budget. The Commission’s current forecast of total RAL across the whole EU by the end of 2020 is €254 billion. Using that forecast and our maximum potential share of 15%, our liability would amount to some €38 billion. At the other end, were we to pay 5% based on our proportion of allocated pre-financing under the multi-annual financial framework, our liability could be as low as €12.7 billion. Obviously, I say that our liability should be zero, but if it is going to be at the bottom end, it should be no more than €12.7 billion.
There are other potential liabilities under the multi-annual financial framework. I am sorry about all this jargon, Mr Chope, but as you and I know, that is the way the EU has been run for the past 44 years. There is an outrageous suggestion that, because the multi-annual financial framework runs until the end of 2020, were we to leave in April 2019, we might be liable for payments made between that date and the end of 2020. Quite how the EU comes up with that is beyond me, but that is apparently its serious negotiating stance. Again, estimates vary from €14.8 billion on a 5% share to €44.4 billion on a 15% share.
However, even the German Finance Minister, Wolfgang Schäuble—I am sorry to use German in the Chamber, Mr Chope—has suggested that actually a new multi-annual financial framework could be negotiated, which would come in as soon as we leave in April 2019, thus reducing our liability to nil. The Lords Committee said that
“in Germany at least, there is an acknowledgement that the commitments made in the MFF may not be legally or politically due”.
It would seem to me that even the Germans are embarrassed by some aspects of the EU’s early negotiating stance. I argue that our liability should be zero, but the low end of the estimates is just short of €15 billion.
Then there is the thorny issue of potential pension liabilities for British nationals serving in the European Commission. The Commission of course might argue that we are liable to pay some of the pension contributions for the non-British nationals there, on the basis that the nationality of the pension recipients is irrelevant under pension law. Again, the range of estimates for our potential liability for those pensions ranges from something like €1.2 billion to €9.6 billion. If we add up all those potential liabilities, €12.7 billion, €13.2 billion and €1.2 billion at the low end for the three different categories—RAL, MFF and pension liabilities—the potential bill is €27.1 billion.
Against that, however, there is a strong moral case: we will have contributed just short of £210 billion in real terms during the lifetime of our membership. Surely that entitles us to a big slug of the EU assets. That is what would happen in any divorce court if a couple were getting divorced. According to the excellent note from the House of Commons Library, the EU has €154 billion of assets, including property, equipment, loans and investments, cash and other fungible assets. The Lords Committee concluded that the theoretical maximum that the UK could claim would be €23 billion, using 15% as a relevant share.
The UK is a member of the European Investment Bank and has capital invested in it. The Lords Committee expects that if the UK were no longer to be a member of the EU, and was therefore not a member of the EIB, it would have its capital returned, potentially with a share of the bank’s equity. The Committee says:
“The UK might expect its €3.5 billion in called up capital to be returned if it ceased to be a shareholder. Based on the current net worth of the EIB, the UK may be due a share of equity in the region of €10 billion.”
Of course, Baroness Thatcher negotiated a rebate while she served her glorious 11 years as Prime Minister. In one of her finest moments, she secured a far better deal for many years of our membership of the European Union. Without the rebate, our net real-terms contribution would of course have been even higher. I can in fact reveal that since it was introduced in 1985, it has saved British taxpayers in real terms—today’s money— £117 billion. That is a huge saving for the country as a result of what Mrs Thatcher did. We can imagine that our total net financial contribution would not have been £210 billion; it would have been £117 billion higher, had it not been for Maggie’s efforts. Sneakily, however, the EU pays us the rebate a year in arrears, so I urge the Minister in negotiating to make sure it does not try not to pay us the extra years’ payments we require when we leave. That is one of the sneaky tricks that it might try, and it would be worth €6 billion.
If we add up the €6 billion rebate, €10 billion from our share of the European Investment Bank, and €23 billion as our reasonable share of the assets, it comes to €36 billion potential assets coming our way against potential liabilities of €27.1 billion. So I would argue the EU needs to pay us. We have contributed north of £200 billion in real terms over the lifetime of our membership. If we look closely at the negotiating areas, we can see that a robust negotiator such as my hon. Friend the Minister at the table, eyeball to eyeball with Michel Barnier, should be banging the table in defence of this country and insisting that we will pay not a penny piece when we leave, because we have already contributed far more than our fair share.
I am looking to my hon. Friend the Minister, on behalf of my constituents in Kettering, 61% of whom voted to leave in the referendum, as did 52% of the people of the country: let us make sure that we have a sensible, reasonable and fair deal for the country when we leave the European Union. I hope that the Minister will stare it down.
I congratulate my hon. Friend the Member for Kettering (Mr Hollobone) on securing the debate. Like you, Mr Chope, he has been a doughty champion for UK taxpayers and the UK national interest over a number of years.
My hon. Friend asked about the UK’s total net financial contribution to the EEC, EC and EU since 1 January 1973, the year that the UK joined the European Economic Community. Neither the UK nor the European Union publishes an aggregate audited figure representing that contribution. However, details of annual UK public sector contributions to the EU budget are published in a document entitled “European Union Finances”, most recently in February 2017. In the past three years our net contributions to the EU budget were £9.7 billion in 2014, £10.7 billion in 2015, and £8.6 billion in 2016. It is true that UK has been a net contributor every year, with the exception of 1975, since our accession to the European Economic Community. Our status as a net contributor reflects the fact that the UK is one of the largest economies in Europe and, indeed, in recent years has outperformed many of the others. However, there are no aggregate audited figures in the public domain that represent our net contribution over all that time.
The Minister mentioned audited reports. If I were a councillor anywhere in the country I would be sent to prison if I paid money to organisations with unaudited books. Why do we keep making contributions to the EU when it has not had audited books for 20 years?
The hon. Gentleman raises an important point, which was well made during the referendum debate, which determined that we should end the relationship in which vast contributions were made.
Aside from the issue of auditing, to aggregate the figures a range of complexities and variables would need to be addressed, such as differences—as my hon. Friend the Member for Kettering mentioned—between the cash value of our payments and the real-terms 2017 prices, exchange rate fluctuations, and corrections to contributions in future years. Although the House of Commons Library paper includes a list of the UK contributions since 1973, no consolidated figure has been released by either the EU or the UK Government. The net contribution figures that I mentioned earlier are based on the UK definition, which includes the EU revenue generated through traditional own resources, VAT contributions and gross national income share of contributions. That is then netted off against the public receipts received through EU funding and the UK rebate. Private sector receipts do not flow back through the Government, so they are not included in the net contribution calculations.
As my hon. Friend also mentioned, the UK Government led by Margaret Thatcher successfully secured the rebate in 1984, which was introduced in 1985. It sought to correct a particularly pronounced imbalance between the amount the UK had to contribute and the receipts it received. The rebate was designed to reimburse around two thirds of the difference, thereby reducing the UK’s net contribution, although the exact method of calculation—like many things in the European Union—is highly complex, because certain areas of EU spending are excluded. The last Labour Government gave away some of the rebate, which contributes to the higher level of our recent contributions. I assure my hon. Friend that, encouraged by his exhortations, we will pay close attention to the detail of the rebate, including the timing of its payment, in our approach to the coming negotiations.
The European Commission also publishes outturn data on all member states’ contributions to the EU budget and their receipts on a calendar-year basis. The figure that gives for the UK’s net contribution are different from the numbers derived from the Office for Budget Responsibility’s forecasts and UK data. The main reason for that difference is that the European Commission’s numbers take into account all of the UK’s receipts, including those that go directly to UK-based recipients, such as funding for research paid to UK universities.
On 29 March, the Prime Minister confirmed the Government’s decision to invoke article 50 of the treaty of the European Union, acting on the democratic will of the British people. The article 50 process is now under way, but while we remain a member of the EU, the UK will continue to play a full part in EU business, including EU budget negotiations. We will remain committed to budgetary restraint and ensuring that we live within the current deal on the multi-annual financial framework. However, it is important that, once we have left the EU, control over how our money is spent will reside with the UK’s Government and Parliament—something I know that all the hon. Members in their places have campaigned for over many years.
We will also need to discuss how we determine a fair settlement of the UK’s rights and obligations as a departing member state, in accordance with the law and in the spirit of the deep and special relationship that we seek with the EU. I cannot prejudge the outcome of the negotiations. Debate over UK payments according to the rights and obligations of our membership is only speculation at this stage. However, I will address some of the key aspects of our financial settlement with the EU. As the House of Lords EU Committee’s report acknowledged, there are a range of opinions about the legal interpretation of existing obligations between the UK and the EU—both liabilities and assets. There is also significant uncertainty over those potential rights and obligations, and how to calculate the UK share.
Disagreement and uncertainty over the potential assets and liabilities of a member state leaving the EU are to be expected when this process has never been undertaken before. The House of Lords EU Committee’s report, “Brexit and the EU Budget”, which my hon. Friend the Member for Kettering rightly praised, notes that:
“The total UK contributions to and receipts from the EU budget are variable, difficult to calculate, and subject to interpretation. It is therefore difficult to reach an unequivocal figure for the UK’s current commitments.”
It also notes that different approaches can be taken to calculating any UK share of the EU budget as a departing member state. It concluded that the process of disentangling the UK from current financial contributions will be a matter for negotiation and dependent on the political decisions made—which is the point my hon. Friend quoted.
One of the weapons my hon. Friend has at his disposal, as the hon. Member for Blackley and Broughton (Graham Stringer) said, is that Her Majesty’s Government operates audited accounts; our accounts are true. When negotiating with Michel Barnier, my hon. Friend can make the point again and again to him that his accounts are not audited; whereas our figures are verifiable, his are not.
My hon. Friend makes an excellent point, and the Government certainly have confidence in our figures, as we always do. The fact that they are audited adds strength to that confidence.
In addition, as my hon. Friend and the House of Lords report mentioned, the UK is one of the largest shareholders in the European Investment Bank, and we benefit from investment opportunities that that bank supports. As we exit the EU, we will need to address questions over our future relationship with the European Investment Bank. There may be European programmes in which we might want to participate in future. We are an active participant in Horizon 2020, for example—the EU’s main funding instrument for collaboration on research and innovation.
The UK has a proud history of leading and supporting cutting-edge research and innovation within the EU. As we exit the EU, we would welcome agreement to continue to collaborate with our European partners on major science, research and technology initiatives. If so, it is reasonable that we make an appropriate contribution. However, that will be a decision for the UK as we negotiate the new arrangements. There are clearly various ways in which that could be done, and the Government are confident that we can achieve an outcome that works in the interests of both sides. That would form part of a new deep and special relationship between the UK and the EU.
As the European Union considers its future and the UK builds its new role in the world, we will also redefine our relationship with the EU and our neighbours in Europe. The Prime Minister has now set out the Government’s plan to achieve a new positive and constructive partnership between the UK and the European Union. The UK is a country that meets its international obligations. It is in the interests of both the United Kingdom and the European Union to agree a new partnership in a fair and orderly manner, with as little disruption as possible.
We want to play our part in making sure that Europe remains strong and prosperous and able to lead in the world, projecting its values and defending itself from security threats. We want a deep and special partnership that takes in both economic and security co-operation. However, as the Prime Minister set out in her Lancaster House speech on 17 January 2017, having been a net contributor to the European budget since we joined the Common Market in 1973,
“the days of Britain making vast contributions to the European Union every year will end.”
My hon. Friend the Member for Kettering called for us to be extremely robust in our approach. I assure him that, as befits the tough reputation of my Secretary of State, we will be robust in defending the UK’s national interest throughout the process.
Question put and agreed to.
[Geraint Davies in the Chair]
I beg to move,
That this House has considered the roll-out of universal credit.
It is a pleasure to serve under your chairmanship, Mr Davies, not least because I have been attempting to hold a debate on this issue for several weeks, if not months, because of the sheer volume of universal credit-related problems raised with me by constituents. I originally secured the debate for 22 March, but it was understandably cut short following the appalling attack on Westminster that afternoon, so I would like to take this opportunity to place on the record my eternal gratitude for the selfless and incredible bravery of PC Keith Palmer on that day. My thoughts very much remain with his family and with the families of those from around the world who were killed or injured as a result of that sickening incident.
Before I expose the myriad issues that my constituents have faced in dealing with this Government policy, and at the risk of repeating what I said on 22 March, I want to set out the context for this debate. As all hon. Members are aware, universal credit is a new benefit that is being introduced to replace means-tested social security benefits and tax credits for working-age individuals and families, including working tax credit, child tax credit, income-based jobseeker’s allowance, income support, income-related employment and support allowance, and housing benefit. According to the Government, the aim of universal credit, using real-time information on claimants’ circumstances, is
“to simplify and streamline the benefits system for claimants and administrators, to improve work incentives, to tackle poverty among low income families, and to reduce the scope for fraud and error.”
Following years of repeated delays and false starts, the infamous reset in 2013 after the Major Projects Authority told the Government to go back to the drawing board, and concerns expressed by the National Audit Office that delivery of universal credit had been beset by
“weak management, ineffective control and poor governance”,
the new benefit is finally, but very painfully, being rolled out across the country. As the Library briefing note helpfully produced for the debate highlights, since the 2013 reset, the Department for Work and Pensions has been developing and rolling out universal credit using a twin-track approach. The briefing note states:
“This involves rolling out Universal Credit using IT systems developed prior to the 2013 reset (the ‘Live Service’) while, simultaneously, DWP develops the Digital Service (now known as the ‘Full Service’) from which Universal Credit will eventually be operated”—
I hope everyone is still following me. That means that, since spring 2016, universal credit has been available in all jobcentres across the country, but in most areas it is available only for new claims from people with relatively simple circumstances—single unemployed people, or people with very low earnings, who satisfy the gateway conditions. In the small but increasing number of areas that have full service universal credit, all new eligible claimants will receive universal credit, as will existing claimants of legacy benefits who report a change in their circumstances that results in their being “naturally migrated” to universal credit.
Following the “reshaping” of the next phase of universal credit’s roll-out announced in a written statement on 20 July 2016, the Secretary of State confirmed that the DWP intended to continue the roll-out of full service universal credit to five jobcentres a month until June 2017 and expand that to 30 a month from July 2017. There will be a break over the summer of 2017. The Government hope to scale up full service roll-out to 55 jobcentres a month between October and December 2017 and accelerate that to 65 a month by February 2018, with roll-out to the final 57 being completed in September 2018.
As a consequence, under the Government’s current plans, universal credit should be available across the country to all new claimants and existing claimants with changed circumstances by September 2018, and the final stage of the roll-out of universal credit, the “managed migration” of existing benefit claimants with no change in their circumstances, will commence in July 2019 and be completed by March 2022—some five years later than the original target. Quite how that complicated timetable now fits alongside the DWP’s proposals, published in January, to close an estimated one in 10 jobcentres and merge or co-locate many others is something on which it would be helpful to receive confirmation from the Minister when he responds to the debate.
It is clear that the roll-out of universal credit is a hugely complex task and that hard-working jobcentre staff are being placed in an incredibly challenging situation. The Library briefing note states that it involves
“not simply the creation of a new benefit but development of entirely new administrative systems to support it. This includes development of the Digital Service, the online IT system via which claimants and DWP will manage awards, and training staff to administer a new conditionality and sanctions regime that imposes requirements on in-work as well as out-of-work claimants.”
As universal credit requires a broader span of people to look for work than is the case with legacy benefits—for example, by including those in receipt of housing benefit or child tax credits and, indeed, the partners of universal credit claimants—there has been a marked effect on the claimant count in areas that have full service universal credit. In the year to January 2017, there was a 25.5% increase in the claimant count in full service areas, compared with an increase of 0.1% across the UK as a whole.
There are numerous concerns about the impact of universal credit on existing claimants, particularly families with disabled children whose caring responsibilities prevent them from working. The charity Contact a Family estimates that those families could be up to £1,600 a year worse off after being transferred to universal credit. We also still have the disturbing two-child limit for the child element of universal credit for all families making a new claim, regardless of when their third child was born, and the totally unacceptable situation in which women will be forced to prove that any third child was born as a result of rape. Serious concerns remain about the cuts to work allowances introduced from April 2016 for universal credit claimants. The Children’s Society highlights that they mean that
“Universal Credit support for most working families was considerably reduced”.
The Government have pressed ahead with their potentially deeply damaging decision to remove entitlement to the housing benefit element of universal credit for 18 to 21-year-olds, subject to certain exemptions—a move that has been roundly condemned by homelessness charities including Centrepoint and Crisis. Meanwhile, organisations including the Federation of Small Businesses and the Low Incomes Tax Reform Group are pressing the Government to think again about the minimum income floor, given its potential impact on many genuinely self-employed people with incomes that fluctuate from month to month.
There is, of course, the fact that the change in the universal credit taper rate from 65% to 63%, as announced in the 2016 autumn statement, does not come close to outweighing the cuts to work allowances. The general secretary of the Union of Shop, Distributive and Allied Workers recently commented:
“The very modest reduction in the high clawback rate of 65% of net earnings to 63% is a tiny step in the right direction, but is worth less than £300 for most working parents. It goes nowhere near offsetting the enormous £2,000 to £3,000 annual cuts that Universal Credit represents or taking the taper back to the 55% rate that was originally intended. Universal Credit is a ticking time bomb that will plunge far more working families into poverty, when they are transferred on to it. We supported the initial intentions of Universal Credit, to simplify benefits and improve incentives to work. However, severe cost cutting has turned Universal Credit into a real threat to the incomes of low-paid working families.”
I thank my hon. Friend and neighbour for securing this important debate and for ensuring that it took place today. She knows that I have raised the issue of the increase in housing debt for those on universal credit, and that in Newcastle the proportion of tenants in debt has increased greatly. The Minister said that that increase had not actually occurred; however, I have figures showing that the average debt for non-universal credit tenants in council housing is £300, whereas for universal credit tenants it is £636. Does my hon. Friend agree that that is a huge increase for working and non-working families?
I thank my hon. Friend and constituency neighbour for her insightful intervention, which highlights one of the major issues caused by the roll-out of universal credit when combined with the impact of the cuts agenda. This is a ticking time bomb and it is of particular concern to areas such as ours—Newcastle—given recent analysis by the TUC highlighting that while employment in the north-east grew by 60,000 between 2011 and 2016, a staggering 40,000 of those new jobs were without guaranteed hours or baseline employment rights. That means that some 124,000 people in our region—the equivalent of one in nine workers—now work in insecure jobs. Given that the north-east has the highest rate of insecure employment of anywhere in the UK, those people need a universal credit system that functions.
That leads me to the reason I have been trying to secure this debate. I want to focus on the actual experience of people in Newcastle upon Tyne North attempting to claim universal credit, in the hope that the Minister will acknowledge the clear failings in the system, do something to address the situation and commit to putting the failings right before universal credit is rolled out elsewhere.
To put this into context, the universal credit live service was rolled out to three jobcentres in Newcastle in April 2015, following which full service universal credit was introduced to Newcastle’s Cathedral Square city centre jobcentre in May 2016, the Newcastle East Jobcentre Plus in February 2017 and finally the Newcastle West Jobcentre Plus on 15 March. To return to the written ministerial statement of 20 July, the Secretary of State clearly said:
“It is essential that the Universal Credit rollout for all claimant types is delivered in an orderly and successful manner; that claimants receive the support they need in a timely fashion; and that welfare reforms are delivered safely as the roll out continues.”—[Official Report, 20 July 2016; Vol. 613, c. 23WS.]
I welcome that aim, but I have to tell the Minister that it simply is not happening in Newcastle. Indeed, it is fair to say that my office has been deluged with complaints from constituents about a universal credit system that is clearly struggling to cope and failing to deliver the support that claimants need in anything like an orderly or timely fashion.
Those concerns include a universal credit verification process that requires claimants to produce photographic identification such as a passport or driving licence, which many simply do not possess and certainly cannot afford, even though some have been in receipt of benefits for several years. Deciding that universal credit must be digital by default has also created significant difficulties for many, making it extremely difficult to obtain information about their claim from a human being. Constituents face long and expensive telephone queues, and when they do get through, they are told to report any concerns or queries via their online journal, following which they have to wait for increasingly long periods to receive a response. The fact that universal credit is centred on an online journal system assumes that all claimants have access to the internet or are computer literate. That is certainly not the case for many people across Newcastle, and it can make it very hard for people to verify updates on their claims or post information about their work activity, which is necessary to prevent their claims from being suspended.
I also have numerous examples of universal credit claims being shut down before they should be; of documentation being provided to the DWP, at the constituent’s cost, and repeatedly being lost or even destroyed; and of totally conflicting, often incorrect, information being provided to constituents about their claims. That is because of a clear lack of understanding about universal credit by the staff who are trying to administer it, and it also results in incorrect payments being made. Indeed, one of the cases I have been handling involves a constituent who received a £600 universal credit payment, while no one at the DWP is able to explain what it is for. There are significant inconsistencies in payment dates and amounts paid, even for people who work regular hours and have regular incomes, leading to overpayments of universal credit that the introduction of real-time information was supposed to prevent.
Claimants are waiting significantly longer than the commonly advertised six-week period to have their universal credit payments processed. That leads to many finding themselves in very serious financial difficulties as they wait for the DWP to get its act together—hardly surprising when all their benefits are rolled into one payment, which, if delayed, can make just about managing feel like an aspiration.
I am listening with considerable concern to the hon. Lady’s account of what the universal credit roll-out is doing to her constituents. My constituents are due to suffer the same fate in December 2017, which means that, with the six-week non-payment period, a lot of them will face the entire Christmas and new year period with no source of income at all. Does she agree that at the very least the roll-out should be suspended, and that the best result would be to follow the Scottish Government’s request to stop this process immediately, fix the problems and then continue with expanding it or rolling it out, if that is the right thing to do?
I take on board the hon. Gentleman’s serious concerns and, indeed, implore the Government to get this process right before they roll it out across the country.
There are also some fundamental flaws in the system. The fact that payments are made monthly and in arrears effectively embeds debt into the system—as landlords awaiting receipt of the housing benefit element of universal credit know all too well—and requires repeated applications for advance payments from DWP and/or budgeting skills, which many people sadly do not have. Indeed, the Joseph Rowntree Foundation recently commented:
“People risk debt, destitution and eviction while they wait…to receive their first UC payment”—
a description that surely belongs in the world of Charles Dickens, rather than in the modern, fit-for-purpose and efficient social welfare system that we should have in 21st-century Britain.
So what was the DWP’s initial response to the increasing number of complaints about universal credit claims? In a letter dated 20 January 2017 and addressed to
“Colleagues working in the welfare advice sector”,
MPs in full service universal credit areas were informed that they could not receive any information about a constituent’s case unless the constituent in question had provided online explicit consent directly to the DWP. The letter stated that such consent
“must be given freely, unambiguously and in an informed way. The claimant must be clear on the information that they want to be disclosed and who the information can be disclosed to…Consent does not last indefinitely, but covers a particular query or piece of business.”
Even when I had been sent an email by a constituent that provided me with all the details of their case and that specifically asked me to intervene on their behalf—usually because they had reached the end of their tether —that was not deemed sufficient proof for the DWP to provide me with information about the case. I am, of course, pleased that that ridiculous situation has now been reviewed, after complaints by many hon. Members and an intervention by the Leader of the House, but I must emphasise that it caused weeks of additional challenge for my constituents and for my caseworkers in Newcastle, who were deluged with universal credit cases but could not receive any sensible information about them.
The Minister need not take my word for the problems that people face in Newcastle. He can come and visit the Newcastle citizens advice bureau, for which the DWP’s explicit consent edict remains in place. He can hear about the 85 universal credit clients from Newcastle upon Tyne North alone that the bureau has supported in the last year, who have faced severely delayed payments and, in the bureau’s words,
“unnecessary hardship through no fault of their own”.
They face that hardship because of difficulties in finding or accessing a computer, failure of jobcentre staff to provide information about advance payments, incorrect information held on claimants’ records, incorrect advice being provided by jobcentre staff, and incorrect payments being made.
Alternatively, the Minister can come and meet staff from Your Homes Newcastle, the arm’s length management organisation responsible for managing Newcastle’s council housing stock, to discuss the significant level of support that they are having to provide to tenants through the universal credit process. Indeed, Your Homes Newcastle has highlighted that it and Newcastle City Council have so far provided support to 506 people,
“specifically to help those who may be unable to manage monthly payments or don’t understand UC and need explanations at the very start of their claims. The time taken to support customers in personal budgeting varies between 2 and 15 hours of support, although there are some exceptional cases where this can take considerably longer. The average time per case is currently 3.5 hours and this is carried out by staff co-located at Jobcentres. The cost of placing three staff in Newcastle Jobcentres to provide this service is £93,651 annually.”
That support is above and beyond the 25 minutes to two hours that it can take Your Homes Newcastle staff to assist tenants through the initial universal credit claim process. Some of the more complex cases can take significantly longer. Indeed, Your Homes Newcastle staff have highlighted the case of one tenant whose universal credit application has taken them approximately 100 hours to progress. Throughout that time, the woman has seen a significant decline in her health and wellbeing, as well as real financial hardship because of the severe delays and mistakes on the DWP’s part. If this represents a simplification and streamlining of the benefits system, I dread to think what a more complicated system would look like.
Of particular concern to Your Homes Newcastle is the significant impact on rent arrears of the roll-out of universal credit and the associated delays. I know that the Minister has repeatedly claimed—no doubt he will do so again this afternoon—that a large number of cases that enter universal credit have existing rent arrears. However, Your Homes Newcastle has made it clear to me that its current income collection rate is 93.9% of the rent due from tenants who are on universal credit, compared with 99.8% of the rent owed by other tenants. As a result, there was a reduced income collection of £220,000 for customers on universal credit at the end of the financial year. Your Homes Newcastle went on to state that tenants on universal credit owe a total of £784,000 in rent arrears, of which some £381,000—just under 50%—are solely as a result of universal credit. As Newcastle City Council has informed the Select Committee on Work and Pensions, of the 1,380 Your Homes Newcastle tenants claiming universal credit on 10 March, some 1,186—more than 85%—were in rent arrears. The average level of those rent arrears was £686, more than double the average of £300 for YHN tenants in rent arrears. Clearly the situation is completely unsustainable.
Housing-related concerns about universal credit are shared by the homelessness charity Crisis, which clearly states that, as it currently operates, universal credit
“is causing rent arrears, threats of eviction and homelessness for our clients”.
Meanwhile, the Residential Landlords Association has raised concerns that
“as it currently operates, Universal Credit is causing rent arrears problems for a considerable number of tenants. Changes are needed to provide tenants and landlords with greater confidence that rent can be paid on time and in full.”
All three organisations—Your Homes Newcastle, Crisis and the RLA—are pressing the Government to make alternative payment arrangements much easier to set up.
It is clear to me and to many other hon. Members that the roll-out of universal credit is having a significant detrimental impact on far too many of our constituents. These issues are not unique to Newcastle; they are being replicated across the country, as other parliamentary debates—including one recently secured by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—have made all too clear. Indeed, some of the concerns that I have highlighted this afternoon recently caused the Work and Pensions Committee to reopen its inquiry into the impact of universal credit. The Chair of the Committee, my right hon. Friend the Member for Birkenhead (Frank Field), commented:
“Despite a growing body of evidence about the very real hardship the rollout of Universal Credit is creating for some, often the most vulnerable, claimants—and the struggles it is creating for local authorities trying to fulfil their responsibilities—it is flabbergasting that the Government continues to keep its head in the sand.”
On behalf of my constituents, of people in other areas in which universal credit has been fully rolled out, and of people in the rest of the country who will still have to endure this process, I strongly urge the Minister to take his head out of the sand and start addressing the very real issues that the roll-out of universal credit—the Government’s flagship policy—is causing. We must ask ourselves: how many times, from how many people and organisations across how many parts of the country must the Minister hear that universal credit is not working before he finally accepts that it is time to act?
It is an honour to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this important debate and on her thorough and comprehensive speech.
Like the hon. Lady and probably every other hon. Member present, I am contacted daily by constituents who have encountered significant problems with the benefits system. In some parts of my constituency, principally Kirkintilloch and surrounding villages, that situation has been made many times worse by the roll-out of full service universal credit. I know from speaking to local people, advice agencies and landlords that, in short, the roll-out of universal credit there has been a dog’s breakfast. It has had profound implications for the constituents concerned, and I support those who call for it to be halted now.
I was contacted recently by a constituent who is suffering from depression, anxiety and agoraphobia. She described the “living nightmare” of waiting six weeks for her payment, which itself represented a £30 cut to her previous social security payments. She concluded her email to me by relating the
“enormous negative effect on my mental health…I can honestly understand now why so many people struggle and give up and end up taking their own lives. This has to stop”.
The hon. Member for Newcastle upon Tyne North has already pointed out some of the major flaws in universal credit. A key point is that those flaws are not teething problems that can be simply ironed out as we muddle along, which is what the Government seem to think. As the hon. Lady has said, all the evidence suggests that there has been an incredible upsurge in the number of cases of claimants building up rent arrears caused by the huge gaps between applications and payments, the very restricted ability to request direct payments to landlords and significant problems resulting from the system of monthly payments, all of which create huge budgeting problems and personal budget crises.
Most fundamentally, as the hon. Lady has pointed out, many of the changes referred to, combined, are set to punish families with children. We have heard from some organisations that families will be left worse off by up to £1,000 a year by 2020, but single-parent families are particularly hard hit by a massive £2,380 cut on average. We know that overall the Government’s pursuit of cuts looks set to force up to 1 million more children into poverty in the years ahead.
When a social security system acts completely contrary to its original purpose, and when its so-called reforms are substantially increasing rather than reducing poverty, it is surely time to go back to the drawing board and ask what we are seeking to achieve. While people and families suffer, landlords and advice services in my constituency are also finding this situation a nightmare. There are concerns that it is leading private landlords to shy from accepting tenants who are in receipt of universal credit payments.
I want to raise one specific issue that not been touched on yet: what seems to be the shambolic system for processing applications for alternative payment arrangements. The class of people entitled to make such applications is limited, but it will become significant in volume because it includes many of those in arrears. Housing associations in Kirkintilloch tell me that problems arise even from the outset, with applications for APAs not acknowledged or processed. Indeed, multiple application forms are sent out to the organisations involved. Most importantly, payments appear to be utterly erratic. As I understand it, the housing association is supposed to receive one payment for all the tenants on APAs each four weeks.
However, I understand from one housing association that since an initial payment was made in December it has only received payments for perhaps two or three tenants when there are supposed to be around 14 or 15 on APAs. In addition, they are receiving APAs for ex-tenants, despite notifying the DWP that they have moved on. Their concern is that if this is happening in a relatively small area such as Kirkintilloch, roll-out in places such as Glasgow will be an even bigger disaster both for constituents whose arrears are going through the roof and for the housing associations relying on the payments. As Crisis argues, the mechanisms for allowing direct payments must be made simpler and more accessible.
In addition, as with other advice services, advisers working in housing associations highlight the huge logistical problems caused, as the hon. Lady has said, by the abolition of implicit consent. To go beyond that, advisers have also raised the lack of places for them to go now to escalate and resolve issues faced by clients and tenants. For all those reasons, I argue that the roll-out should be stopped now. If the Government insist on carrying on regardless, they should take urgent action to resolve the predicament of too many claimants, just as the Scottish Government are looking to use their limited flexibilities to alleviate the worst features of the system. So, allow tenants to choose to have payments made directly to landlords and to have the option to receive twice-monthly payments. If the Government do not listen, their universal credit promises will have been broken, and a reform that was said to bring simplicity will instead bring complexity and cuts.
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this important debate, as the daily lives of our constituents are being adversely affected by the operation of the universal credit system. I want to highlight for the Minister a couple of examples of West Lancashire constituents who are in receipt of universal credit and what their experience is. The system is far from improving work incentives and tackling poverty among low-incomes families and far from developing a particularly effective new administrative system. Families are not paying only the financial cost of the system failures; there is an emotional cost as well.
As for improving work incentives, a young person in West Lancashire was offered four days’ work. In accepting, he had to get the jobcentre adviser to sign a form confirming that he was in receipt of universal credit. If the forms were not completed by the deadline set by the employer, the job offer was to be withdrawn. Two days before the deadline, he was told that the form would need to be sent to the DWP’s Wolverhampton office to be signed, which was ridiculous. Only through my intervention and the good sense of a senior jobcentre official was the matter resolved in the end.
It strikes me that there is an organisational culture in the DWP in which process trumps outcomes. I have dealt with the case of a single parent with one child going out to work. Their problem was caused by the unintelligent and inflexible assessment system that universal credit operates. Those of us who are paid monthly know there are occasions when our payday is earlier owing to the standard payday falling on a weekend or a bank holiday. In some instances, universal credit assesses a person as having two sets of income in the one month and therefore they do not get any payment. In the case of my constituent, they lost out on £350 for their childcare costs. The following month, the payday was also brought forward.
I suspect that the Minister will say that, in the round, the payments will equalise out, but that fundamentally ignores how household budgets operate and the family’s need for the payments they receive to be consistent and regular. For families whose day-to-day existence is financially balanced, that leads to them asking whether they are really better off in work, if that is the result. A change in one month’s payment can have a ripple effect that lasts considerably longer than one month for a family’s financial position to recover.
Another West Lancashire family, a working couple in receipt of universal credit, experienced problems receiving payments in four consecutive months, which included their claim being incorrectly closed after the information that the claimant provided was not entered in the system. Having not received their payment, they called the Department to seek an explanation and asked for a call back. Owing to the request being processed incorrectly, there was no call back. In months three and four, payments were again not paid. What did the DWP do? It sent a letter apologising for the repeated failures, which it said were due to an “oversight” on the part of the Department for Work and Pensions. Well, that’s okay, then—I think not. Anybody with an ounce of compassion for the people they deal with would not even put such words on a piece of paper.
For their trouble, the family received a £25 consolatory payment, although the DWP could not say when that would be paid because it takes weeks to process. I am sure that, for the Minister and the people operating the universal credit system, such failures seem to be minor administrative mistakes. I raise them in the desperate, perhaps forlorn, hope that the Minister will begin to understand that such mistakes have monumental and disproportionate consequences for the people on the receiving end. It is not only about the financial costs; there is a lasting emotional cost.
I look forward to hearing the Minister’s reply, but I remind him that he will be judged by his actions in making the system better for families, rather than contributing to their daily struggles. He has that responsibility.
It is a pleasure to speak in this debate, Mr Davies. I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on setting the scene so well. The subject is a concern for my constituents. Although there is no roll-out at the moment in Northern Ireland, it is on its way and September will be the witching hour for it coming in, so we have some concerns. I am worried about my constituents who have mental health issues, which are exacerbated by stress. Health issues have been very much in the media over the past few days. Prince Harry and Prince William are examples of those with stress-related issues, and I wish to express concern about such issues. I firmly believe there is a better way of doing things.
We are all aware of the report submitted by Crisis, which I am sure Members have read. It is not easy reading for any parliamentarian. It relates to the most vulnerable in our society. The report suggests that the overwhelming majority—89%—of English local authorities surveyed for “The Homelessness Monitor” in 2017 have expressed concern. New claims for universal credit are typically taking eight to 12 weeks to process—much too long. Delays are being experienced by people with more complicated circumstances, including those who have lost identification documents during a period of homelessness. Those were issues that I did not expect. I certainly did not expect people to be waiting for up to three months to receive the calculation of their benefit entitlement. I will never forget seeing a billboard for the Simon Community homelessness charity, stating that one in three families in the UK are only a month’s pay cheque away from losing their home. That is something that sticks in my head. So one in three could lose their home before universal credit would be processed to pay them. That is almost incredible, and it is totally unacceptable.
What is being done to address the failure in the system? What is in place to help those who may lose their home during the waiting period? The monthly payment to people who are not used to budgeting and, indeed, do not know where to start to budget their finances is not helpful. Crisis clients are struggling to budget over a monthly period, and because many have had their rent paid directly to their landlord for years and simply do not know how much their rent is, it is a massive issue. The same issue is relevant to landlords, 68% of whom say that direct payments of universal credit housing costs to claimants have made them more reluctant to let to people receiving universal credit. If the system disadvantages applicants to start with, and disadvantages them again with the landlords, we must look at it. Sixty-six per cent of landlords say the current situation has made them more reluctant to let to homeless people. That was not the intention behind universal credit, but if it is now a fact of the process, we must address the issue as well.
As well as the planned six-week delay in first payment, waiting days and the maximum backdating period of one month, people are experiencing unforeseen delays as a result of administrative errors: a third penalty—and the administration system lets them down again. Those issues are causing rent arrears, threats of eviction and homelessness. It is clear that the DWP should reduce the waiting time between submitting the online application and being invited to appointments necessary to progress the claim, and that waiting days at the start of a claim should be abolished. At the very least an exemption should be introduced so that people who are homeless do not have to serve waiting days. Where is the compassion and understanding in the system? I have great concerns about what the impact will be on households across the Province and, indeed, in my constituency. There must be a rethink of the scheme, with special reference to circumstances in Northern Ireland. Let us learn for the future from the problems of today. The most vulnerable people are being put into an untenable situation and we must help them, not worsen their living situations. I again urge the Minister and the Department to rethink the whole scheme completely, immediately.
It is a pleasure to serve under your chairmanship, Mr Davies. I pay tribute to the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for obtaining this important debate. All the hon. Members who have spoken have made many constructive and proactive points based on individual experiences and the casework that we all regularly do. I know that in the Minister we have someone who is keen to listen and engage, and to take many of the challenges that have been raised today. I hope that he will further improve what is an important way of dealing with benefits in a modern society.
Universal credit is a vital part of our being able to deliver record employment in every region of the country and, crucially, to help improve people’s future opportunities and not just simply get them into work. The fundamental difference—this helps with many of the challenges that have been raised—is that for the first time the claimant has an individual, named work coach, someone they can turn to throughout the whole process. When opportunities and challenges come up, there is someone to help them to navigate the securing of additional childcare, training and support. Evidence has already shown that those on UC are typically able to spend 50% more time looking for work. For every 100 people who found work under jobseeker’s allowance, 113 found it under universal credit. It has removed the dreadful 16-hour cliff edge that under the old system prevented people from progressing towards full-time work, and it makes sure that work always pays better than benefits, with the support of claimants and taxpayers.
Crucially, the individual support is allowed to be personalised and tailored. I was interested to see what difference that makes, so in the past month I have twice been to visit the Swindon jobcentre to see how claimants are progressing through the system and to meet the staff, who in the past 20 years have navigated a huge amount of change from Governments of different parties and political persuasions. I went to see what was making a big difference. Swindon is an early adopter and we have been rolling out UC for quite some time. I understand that perhaps there is more experience there than in some areas where it is only beginning to come in.
I made notes on my visit. The staff are not people who will always give representatives of Government an easy ride, but they made it clear to me that they saw UC as a cultural change. The morale of the staff had significantly improved, as they were empowered to offer personalised, tailored support for the people who are often those furthest away from the jobs market. As we get close to structural full employment, the people seeking work need additional support, and we have empowered the staff to give it. In conjunction with the introduction of UC, jobcentres are being refreshed. The layout is brighter and less cluttered and the centre is a hive of activity, which is less intimidating for the claimants coming in. It is interactive and vibrant, and the staff felt they were a collective team, working together to help to support the people most in need of it. They felt that the ethos was now about what they could do to help; it was a conversation, and small steps. It was not rigid. It was removing the stigma of the jobcentre and encouraging external organisations to work in partnership to deliver the key improvements.
For me, the final thing was the recognition that the issue is not as simple as getting someone into work, typically on the national living wage. It is about providing support once they are in work and have shown they can turn up, and shown their dedication. It is about their being able to increase their hours, get promotion, become a supervisor and get additional training, so that they can progress up the career ladder that many of us took for granted. I was surprised at how positive the staff were. Yes, there are challenges—that is why there is a debate and why the Minister needs to engage with the issue—but overall UC is making a crucial difference to some of the most vulnerable people.
I do not want to repeat things that have already been said. I want to concentrate on the impact that universal credit is having on homelessness and the potential for the eviction of private tenants. In my experience from my constituents, the delay in assessment of cases has undermined and threatened the tenancies of a considerable number of people. When housing benefit administration was part of the local authority, there was an officer responsible for preventing homelessness. In my case, I am fortunate that Mr Langley has been in charge of the housing department for as long as I have been the MP for Mitcham and Morden. When I had a problem with a constituent being threatened with homelessness, he would go down to housing benefit and say, “You’ve got to get on top of this case and process this claim.”
That intervention is no longer happening. Most of the constituents I see are in work. They all go to work but have no opportunity to earn the sort of money that would pay a private rent, often in the region of £1,200 or £1,500 a month. It does not take many weeks for people to find that they have got behind by hundreds or thousands of pounds, and for it to feel impossible that they will ever get on top of that. Officers of Jobcentre Plus and researchers may tell Ministers all sorts of things, but my experience is that when I recently attended a private landlords forum and asked, “Does universal credit make it more or less likely that you will rent your property to someone dependent on assistance with their rent?”, they said that universal credit made it universally less likely they would do so. The consequence in the housing market, where social housing vacancies are reducing by the week, will be devastating. As a result of poor and slow processing of universal credit, local authorities are, and will be, picking up large families in temporary accommodation—at huge cost to the taxpayer, apart from the misery involved.
It is a pleasure to serve under your chairmanship, Mr Davies. I, too, congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this debate. We always say that debates are important, but this debate is vital for people who are suffering through the universal credit full service roll-out.
My constituency of Inverness, Nairn, Badenoch and Strathspey was one of the pilot areas, so we were ahead of the game in terms of the full service roll-out. We have seen the effects of it on real people and the Minister will be aware that I held an Adjournment debate on those effects, giving many case studies. We do not have the time today to go through many of them, but I will touch on one.
There are still the same problems that there were at the time of that earlier debate, and still the same problems that there were when we were originally scheduled to have this debate. The UK Government should listen and halt this faulty roll-out. People are going months without money; the roll-out is increasing poverty. It is hitting the most vulnerable the hardest, and it is causing real harm. In my constituency, we now have well over a hundred cases of people with universal credit issues, and those are just the people who have reached out to us as an MP and his office. Many more people are going under the radar. Also, there are new people visiting my office every day.
I want to refer to one person, Rachael, who came to see me. She went 16 weeks without payment. At the time she sought our support, she was 22 weeks pregnant and also had a three-year-old daughter to look after. Her pregnancy left her very unwell, but she was still told to travel to Aberdeen, which is 100 miles away, because it was not accepted that she had the correct national insurance number for universal credit purposes. She was fainting and had other symptoms due to the pregnancy. She had virtually no money left, and what little she had she was using for food and warmth as she could.
Rachael could not afford to go to Aberdeen and was scared of going 100 miles without any support, which caused her significant mental distress. She even had a letter from her midwife saying that she was unfit to travel. She was already in receipt of child tax credits and child benefit without any issues arising. Until a couple of weeks prior to contacting us, she had been in work and paying NI, and even though the NI number was never contested for universal credit purposes, she had paid NI and also had a P45 after leaving that employment.
Eventually, and following my intervention, it was agreed that Rachael could attend a face-to-face interview at the jobcentre in Inverness, and she has now started receiving payments. However, her story is symptomatic of the stories of many other people who face making long phone calls to get through to people, causing them high phone bills. Departments are unable to communicate, conflicting information is given, and delivery partners are unable to speak directly with Department for Work and Pensions colleagues.
I have asked the Minister to come to my constituency to speak to the staff at the citizens advice bureau and to the partners that the UK Government have employed to deal with this issue, such as Highland Council. The hon. Member for North Swindon (Justin Tomlinson) should come to the highlands as well to speak to people there, because he will find a very different reception to this roll-out. The DWP staff and jobcentre staff are under enormous pressure; it is not fun to work there.
I do not have much more time today to say what I would like to say. There is much, much more that I could put to the Minister. This roll-out is devastating the lives of people in my constituency, and it is coming to other constituencies. It is a shambolic roll-out, which means hardship and pain; it is simply brutal to people. There has been no sign that the Tory Government are capable of listening or caring, especially on issues such as the rape clause. The Minister could listen to people; he could visit; he could learn; and he could and should stop the roll-out. He can fix it and treat people with dignity. Will he agree to do so today?
Universal credit is often described as a troubled programme, and the problems with it go right back to the initial naivety of Ministers about implementing a programme of this scale. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) pointed out in her excellent opening speech that we were originally told that it was all going to be done and dusted by October 2017. I was the Opposition spokesperson in this area at the time that was said, and I pointed out that that was not a plausible timescale. We are now told that it will be done by 2022, which is five years’ late, and it will be delayed further still.
The most astonishing example of naivety was in “21st Century Welfare”, a document published in July 2010. Paragraph 7 of chapter 5 says:
“The IT changes that would be necessary to deliver a more integrated system would not constitute a major IT project”.
That is the heart of the problem. There was an utter failure at the outset to grasp the scale of what was involved; there has been not just one major IT project but several.
There is an enduring problem, which probably underpins a number of the difficulties that we have heard about today, including the unexplained overpayments that my hon. Friend referred to in her opening speech. That problem is the fact that real-time information does not work properly. RTI is the system through which employers notify Her Majesty’s Revenue and Customs in an automated way about how much they are paying to each of their employees in each month. It appears that there are serious inaccuracies in the data being sent to HMRC. Of course, those data are then sent on to the Department for Work and Pensions, and as a result errors are being made in the calculation of how much universal credit is due. It looks as though that will become an increasingly major problem.
It is well-known that there have been problems with RTI. We were promised that a post-implementation review was going to be published last month. It has not been published and there is no sign of it as yet, which reflects the scale of the problems that HMRC is facing. The Institute of Chartered Accountants in England and Wales submitted evidence to the post-implementation review almost exactly a year ago, saying:
“There is a significant risk to the successful roll-out of universal credit…if immediate steps are not taken to resolve the underlying system issues that lead to data corruption within HMRC systems, which are then passed on to universal credit claimants.”
Can the Minister give us any reassurance that these very serious problems will be fixed by HMRC before we have more problems of the kind that we have heard about today, or can he at least tell us when the post-implementation review of RTI will finally be published?
There are benefits, in principle, from universal credit; the hon. Member for North Swindon (Justin Tomlinson) has a point. Community Links—which works with jobseekers and claimants in my constituency and which has pointed out repeatedly what a grim experience going to the jobcentre has become since 2010 because of the changes that have been made—also says: “At its best, universal credit has transformed client-coach relationships for the better”. There is real potential and the system could be significantly better, but it will not improve and its potential will not be realised unless these major technical problems are resolved. I hope that the Minister will be able to give us some encouragement that they will be resolved.
I want to speak today to try to balance the picture of doom and gloom that some Members have painted about not just universal credit but the entire welfare system and indeed all the welfare reforms of the past seven years.
In early 2009, I received an extremely emotional letter from a constituent who had tried to do the right thing by going back to work. However, she immediately found that by working more than 16 hours a week she was in fact far worse off. She asked me how that could be—why did welfare policy trap her and not help her? I promised then that I would work as hard as I could for a system where work always pays.
When I hear the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) saying that people working through universal credit are only 37p in the pound better off net of reduced benefits, rather than the 45p in the pound that was originally intended, I want to remind her that that same person was not only nought pence better off per pound under the previous Labour system but was significantly worse off as a result of being unable to keep any of the money she was earning and losing significantly as a result of the benefits lost. So universal credit delivers on the “work always pays” approach and I hope that we will never go back to a system where work does not pay.
Equally, when other Members complain about the delayed roll-out of universal credit, I remind them how disastrous the “big bang” approach of the roll-out of tax credits only a decade ago actually was. The gradual process of rolling out universal credit is infinitely preferable.
Let me also give some reassurance to the hon. Member for Strangford (Jim Shannon), who is not currently in his place. He is awaiting the arrival of universal credit, but it is good news for his constituents and, when it arrives in his constituency, he should go and see the people on it, as I have done in my constituency of Gloucester, and hear from them what their own experience is. In fact, earlier today I spoke to the Jobcentre Plus in Gloucester. Its staff are broadly very positive about universal credit. We now have 720 people on it, of whom roughly 220 are working. Many of the others are on training courses, including for things such as forklifts. That is broadly good news, but that does not mean that everything is perfect.
The Work and Pensions Committee started an investigation into universal credit only a few weeks ago. I am afraid we will be unable to finish it before Parliament is prorogued, but it has flagged up two issues that others Members have alluded to and which I hope the Minister will touch on in due course. The first is the delay in payments to individuals, and the second is the inability of some who are claiming universal credit to manage their finances adequately so that they do not get into arrears on their rent payments. Both are real issues. There is a case for saying that some housing associations need to engage with their tenants more effectively than they have in the past. Guaranteed payments are an extremely easy business for any landlord; none the less, there are problems, and most jobcentres and housing associations will confirm that.
In conclusion, universal credit is happening. The slow and arguably delayed roll-out is a good thing in terms of allowing for the problems that occur with any big system to be rectified early, before the system goes nationwide. It is coming on faster now, and there are two specific areas where the Department will need to look closely at whether improvements can be made.
I think a profoundly concerning picture has been painted for us today of how the roll-out of universal credit is proceeding in practice. I warmly congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on focusing her attention on that, and I am glad we have had the opportunity to debate these issues prior to Dissolution. She and the other Members who have spoken have constituencies that have been at the forefront of the full roll-out of universal credit, and they have outlined a litany of problems that are having a severe impact on the people affected—problems that are causing immense hardship, debt and insecurity and are putting huge, unnecessary and wholly avoidable pressure on other public agencies.
Many of those problems were widely predicted. For example, a range of stakeholders—everyone from social landlords to homelessness charities and those working with disadvantaged groups—warned that the full service roll-out was likely to lead to a sharp rise in rent arrears and evictions. Many warned that the move to monthly payments could lead to hardship for people on very low incomes. Unfortunately, from the testimony of MPs this afternoon, those fears were well founded. Some of the other problems highlighted today, such as the unacceptable delays in receiving payments, the exorbitant cost and prolonged call handling problems with the telephone helpline, were not anticipated, in that they are not policy changes, just failures of the system. People claiming universal credit in the full service roll-out areas have been human guinea pigs in the process and are paying a heavy price.
Two key issues have arisen today with the delays in payments. First, even if the system was working perfectly, many claimants would wait six weeks for any money. That is an excessively long wait for new claimants, particularly when we know that people rarely claim as soon as they become entitled to benefits. Usually they exhaust their savings or redundancy package.
Sitting suspended for a Division in the House.
Usually people have exhausted their savings or redundancy money before they claim benefits, but if someone starts a new job, it is normal to be paid at the end of the week or month in which they start. The Government have said consistently that they want universal credit to mimic the world of work, but in that respect it really does not, and they need to look urgently at waiting times.
We all understand that processing a claim will take some days, but the monthly payment and discounted first seven days slows down the process unnecessarily and leaves people in considerable hardship. In reality, many claimants are having to wait a lot longer than six weeks. Eight to 12 weeks is more typical in some full service areas, and often longer. That is just not okay, and we have heard today about how those problems are not just abstract. I know from previous discussions on the subject that people have lost their homes. Many people on universal credit will be in work already so may have some other source of income, but a significant minority of new claimants will be sick and disabled people, assessed as unfit for work, and people who have just lost a job. The advance payments available are simply inadequate and are driving people into food banks, into debt and into trouble with their landlords. The bottom line is that the system is failing. It is in chaos.
Rent arrears are possibly the most far-reaching adverse impact of the full service roll-out. The Highland Council alone has seen rent arrears soar by £1 million, which is entirely and solely attributable to the roll-out of universal credit. My concern is that that is just the tip of the iceberg. We can get accurate figures of the scale and extent of the problem from local authorities, but the impact on other social landlords is likely to be profound. I know that housing associations in Scotland have warned that increases in arrears damage their financial stability, hitting their ability to invest in existing properties and build new ones. Private sector tenants and landlords face significant problems too, given that landlords may be servicing mortgages and may not have the level of solvency needed to wait several months for unpaid rent. We are already witnessing evictions. Just as worrying, we are already seeing evidence that some landlords are simply refusing to consider universal credit tenants.
Evictions and homelessness cause untold upheaval and misery for all involved and have a huge impact on other public services. The homelessness charity Crisis reports that 89% of English local authorities fear that the roll-out of universal credit will exacerbate homelessness. That situation is avoidable. We do not need to go down that road. The Government need to get a grip.
The Government have offered the excuse that the sharp increase we have seen in arrears appears to fall over time, several months down the line, but, frankly, that obfuscates the scale and extent of the increase in arrears. It also obscures the debt and hardship that those tenants, on desperately low incomes, are enduring in order to pay off a level of arrears that they would never have incurred under the previous system. It is yet another way in which the universal credit system fails to mimic the world of work, where most landlords require rent to be paid upfront a month in advance and, certainly in the private sector, expect sizeable deposits. Once again, the systemic pressures of the new system are being borne by people on marginal incomes—those with the fewest assets and means, working in the lowest paid jobs, recently unemployed or unable to work because of ill health or disability.
The other major breakdown in the system is in relation to the online accounts and problems with call handling on the telephone helpline. In many parts of rural Scotland, digital connectivity is well behind that in urban areas, notwithstanding significant recent progress. In my own constituency, 25% of people do not have access to the internet. It also remains substantially more expensive than in urban areas, and because of that, there are significant numbers of people with limited digital skills and experience who rely heavily on public access terminals.
My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) highlighted the high costs and time involved in travelling from rural areas to a diminishing number of jobcentres. I do not think a 200-mile round trip is acceptable. To put that trip in perspective, it would be like asking somebody here in central London to travel to Nottingham or Stoke-on-Trent for a DWP appointment. I do not think that is realistic.
My hon. Friend also highlighted a litany of problems with the telephone helpline. If someone calling from a mobile phone has to wait half an hour on the line, they could spend as much as a third of their weekly income on food, heating and essentials. Twenty quid may not sound like a king’s ransom to higher rate taxpayers, but for someone on a very low income, it is an enormous amount of money. Even if the Government’s assertion that waiting times are only eight or nine minutes was backed up by the documented experience from MPs’ offices and citizens advice bureaux, that is still a fiver. Proportionately, that is a lot of money for someone in receipt of £73 a week who is struggling to pay rent, heat their home and buy food.
Universal credit should have been quite easy to roll out in the highlands, in that there is a relatively buoyant labour market and universal credit should, in theory, be better suited to managing patterns of seasonal employment, which is widespread in the region. But it is proving to be a disaster, not just there but, as we have heard today, across the UK.
My last point is this: leaving aside the catalogue of incompetence that has dogged universal credit from the start, the new benefit is turning the screws on low-income working families and is now unrecognisable from its original design. According to the Child Poverty Action Group, by 2020 families with children will be, on average, £960 pounds a year worse off than they would have been under the previous system. The effects are magnified for families where one parent is working full time and the other is working part time or is at home with the bairns. Parents of severely disabled children are losing out. Those who will be most disadvantaged are single parents working full time in low paid jobs, who will be, on average, £2,380 pounds worse off. That is almost £200 a month.
The idea that work always pays under universal credit is just nonsense. It is a massive cut in household income and it punishes people who are already working full time, doing everything they can to make ends meet. For some of those people, work will no longer pay, and they would be better off if they cut their hours. That is exactly the opposite of what universal credit was designed to do. The policy has been so filleted by successive austerity cuts that it is no longer able to deliver the improvements it promised. Instead, it is set to drive up child poverty.
As we have heard today, the full service roll-out of universal credit is proving to be a disaster. It is causing chaos for landlords, housing associations and local authorities. It is causing turmoil, upheaval and real hardship in the lives of claimants who are entitled to support. We have had no adequate assurances from the Government that the systemic failures are being addressed. In those circumstances, I believe that we need to call a halt to the universal credit roll-out and go back to the drawing board, because at the moment it is an unmitigated mess and ordinary people are paying the price.
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) on her persistence in securing today’s debate and on delivering an excellent, wide-ranging speech. I associate myself with her remarks about the debt of gratitude we owe to PC Keith Palmer. My thoughts are with his family and friends, and all those who lost their lives or were injured in the attack on 22 March. Today’s debate is really important, and we have heard compelling contributions from many Members, including my hon. Friends the Members for Mitcham and Morden (Siobhain McDonagh) and for West Lancashire (Rosie Cooper) and my right hon. Friend the Member for East Ham (Stephen Timms), who spoke with real authority and insight.
In 2010, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), the then Work and Pensions Secretary, announced that universal credit would radically simplify the existing social security system, make work pay and help lift people out of poverty, but the stories we have heard today show that that is simply not the case. Universal credit brings with it a huge range of problems. Its roll-out has been repeatedly delayed. So far, the completion date has been moved back seven times. It was originally set for the end of this year, but the Department is now aiming for March 2022. The roll-out is still mainly restricted to groups whose claims are reasonably straightforward, such as single people without children. However, the Government now intend to speed up the roll-out, and my hon. Friend the Member for Newcastle upon Tyne North described how the introduction of the full digital service is now causing major problems in areas such as her constituency. The former Work and Pensions Minister, Lord Freud, told the Work and Pensions Committee in February that universal credit could take decades to perfect. Does the Minister agree with Lord Freud on that point?
The design of universal credit means that claimants are left for six weeks at the start of their claim without any income while their initial claim is processed. In some areas, the wait is even longer due to delays in dealing with claims. Croydon Council said in January that the average delay is 12 weeks. That can cause people to be in arrears with their rent, leaving them at risk of eviction and turning to food banks. What are the Government going to do to reduce the delays, and will they end the six-week initial wait for payment?
Then there is the Catch-22 that arises when universal credit meets a council’s legal obligations in relation to housing. If councils house people waiting for a payment in temporary accommodation, they are legally obliged to ensure they do not remain there for more than six weeks. However, to claim help with housing costs through universal credit, someone must have lived in a property for at least six weeks. Will the Government reconsider that rule, which does not fit in with councils’ legal obligations?
Once a claim has begun, payments are monthly under universal credit, rather than fortnightly, as with tax credits. That causes some claimants problems with budgeting. There is evidence that private landlords are becoming increasingly reluctant to rent to universal credit claimants because there is no provision for direct housing payments to the landlord except where someone is assessed as being vulnerable or already has two months’ rent arrears. Will the Minister look again at the issue of direct payment of the housing cost element to landlords so all tenants claiming universal credit can choose to do so?
[Mr David Nuttall in the Chair]
An investigation by The Guardian recently revealed widespread evidence that thousands of tenants on universal credit are running up rent arrears because the minimum waiting period for the first payment is just too long. Surveys by housing associations found that up to nine in 10 tenants on universal credit either run up rent arrears or increase the level of pre-existing arrears because many of them are not financially equipped to cope with long waits without any income. In September 2013, a National Audit Office report on universal credit revealed that IT failures had already cost £34 million, and highlighted the
“weak management, ineffective control and poor governance.”
Since November 2014, DWP has been gradually rolling out the full digital service to a limited number of areas as well as the original live service in others. There are differences not just in the way the services are managed and in the kind of claims, but in the rules for claimants between the two versions in relation to childcare costs and assessment periods, for example. Even now, the universal credit IT system is not capable of coping with the two-child limit this April. Families with more than two children who make fresh claims will actually be diverted to tax credits until November 2018. DWP insists on pressing ahead with a policy that is not just morally wrong, because of the way it implicitly treats some children as more important than others, but which the Department cannot even technically implement properly. Will the Government reconsider the two-child policy?
Universal credit poses further challenges. Just as the Government were speeding up the roll-out of UC, they announced plans to close more than one in 10 jobcentres throughout the UK. It is simply not good enough to quote figures about online claims to justify closure plans. Making a claim online can present real difficulties for people who are not confident in using IT or do not have easy access to the internet. DWP admits that it is likely that online claims are sometimes made only with help from jobcentre staff. Sorting out problems that arise is complicated by the requirement that claimants who contact their MP for help also authorise DWP online to release information to the MP. DWP recently said it will not be necessary to do so for MPs, but said nothing about advice agencies and welfare advocates. Will the Minister make it clear that the DWP will release information to advice agencies acting on behalf of a claimant without further online authorisation?
Universal credit will place other new demands on staff, who will have to assess whether self-employed people claiming universal credit have a viable business plan, and operate in-work conditionality, which will require people already in work to increase their pay. Will the Minister look again at the model of generalist work coaches that DWP is adopting to assess whether it is appropriate to the new challenges that universal credit will involve?
Staff will also have to deal with an increased number of claimants. As universal credit is based on household income, the partners of somebody claiming universal credit can be invited to attend a jobcentre to discuss work even if the partner has not themselves made a claim. People not in work who claim child tax credits or housing benefit but not jobseeker’s allowance are not required to look for work at present, but they are required to do so under universal credit. Will the Government reconsider their plans for jobcentre closures, which risk chaos as the speed of the roll-out of universal credit is increased?
Alongside the practical problems that the roll-out presents, changes to universal credit since 2010—especially cuts to in-work support—have undermined its capacity to reduce poverty. The Government have refused to listen to criticisms of cuts to the work allowance from Labour and voluntary organisations. Analysis by the Child Poverty Action Group and the Institute for Public Policy Research shows that families with children will be worse off by an average of £960 a year by 2020, compared with the income they could have expected under the original design of universal credit, and single-parent families could lose £2,300 on average. Will the Minister review the impact of work allowance reductions on working families—particularly working single-parent families?
The combination of the delayed roll-out of universal credit, the U-turn on tax credit cuts and the dramatic changes to universal credit work allowances is actually increasing the complexity of our social security system. If two families have exactly the same circumstances but one claims tax credits and the other claims universal credit, they may receive very different rates of social security. It is a genuine postcode lottery, because that is how universal credit has been rolled out.
Given all that, it is little wonder that the Government are now silent about how many people they believe universal credit will lift out of poverty. In 2011, they estimated that it would be 950,000. Two years later, it had fallen to 400,000, and by last year they preferred to keep silent. Will the Minister tell us the DWP’s current assessment?
We are seeing different rates of social security for people on tax credits and universal credit and different rules for people on the live and full digital services. We have even heard that the Office for National Statistics is concerned that the statistics for the claimant count no longer present an accurate picture of the labour market because they include all universal credit claimants. Is it really a simpler system? Our social security system is already struggling to cope with its introduction, even before the jobcentre closures go ahead. Far from lifting people out of poverty, there is growing evidence that universal credit risks impoverishing people waiting for payments and making it more difficult for claimants to find affordable housing. Severe cuts to in-work support mean that it can no longer genuinely claim to improve work incentives. Even the right hon. Member for Chingford and Woodford Green has called for the cuts to be reversed, as they go against the key principles of universal credit.
Really important issues have been raised in this debate about the effect of the Government’s roll-out of universal credit. There is a huge range of issues, such as debt, eviction, the stress and anxiety for some of our most vulnerable citizens, and pressures on DWP staff and the system itself. I ask the Minister to respond clearly to the points raised in this important debate and explain how the Government intend to get a grip on universal credit.
It is a pleasure to serve under your chairmanship, Mr Nuttall. I echo what the hon. Members for Newcastle upon Tyne North (Catherine McKinnell) and for Wirral West (Margaret Greenwood) said about PC Keith Palmer and all the victims on that terrible day when last this debate was convened. I congratulate the hon. Member for Newcastle upon Tyne North on securing this important debate. We have had a wide-ranging debate today.
Let me be clear at the outset that the roll-out of universal credit continues to plan. As Members are aware, universal credit is now in every jobcentre in the country. The programme has just passed an important milestone of more than 1 million claims. The service has been deliberately rolled out in a steady way, as alluded to by some of my hon. Friends, using a test-and-learn approach to allow us to user-test the service and get immediate feedback.
In such a large system and organisation, with so many branches and so complex a set of data, I admit that sometimes things go wrong. That is not unique to universal credit, but happens and has happened on occasion for many years throughout such systems. Of course we very much regret that when it does happen, but it does not change the fundamentals of what the universal credit programme is achieving.
The longest-standing senior responsible owner and programme director in the programme’s history are in place, and both have been in post for well over two years. In that time the programme has stabilised and delivered all its key milestones on time and on budget. When last scrutinised by the Major Projects Authority, the programme was moved to an amber rating, which is rare for a project of this size.
Even having the best team in charge is not necessarily enough: it has to be combined with the right project disciplines and the proper oversight to ensure success. That is why the team is implementing a fully developed, agile approach to delivery, explicitly designed to ensure that the service is continuously improved, based on the user feedback that I talked about, and is flexible enough to adapt to changing circumstances or new information. The programme is also subject to comprehensive and rigorous review internally and externally.
All that combines to create the safest, most secure programme delivery achievable. We are working quickly, and will continue to do so, to deal with any challenges, which will of course emerge, to ensure that universal credit is delivered safely and securely. I recognise that there are concerns, and I welcome another opportunity today to discuss and address them.
As part of the UC full service implementation process, we had a full external stakeholder plan to ensure that those stakeholders have a proper introduction to the full service before it goes live in their area. The full service was launched at the Newcastle West jobcentre on 15 March 2017, making Newcastle one of the first core cities to transition fully to the service. I am also aware that the hon. Member for Newcastle upon Tyne North has been in contact with the local district manager for Jobcentre Plus on more than one occasion and that she has been invited for a visit.
A couple of hon. Members asked about the changes being made in the DWP estate. I reassure them that in the planning and modelling we of course account for all the changes to welfare systems and our support for claimants. An important point to make is that although we are changing some of the physical estate, which involves some jobcentres merging with others, we are not cutting back on our frontline people—in fact, we expect to have more work coaches working with and supporting people into and in work at the end of this process than we do at the beginning.
The scale and nature of the change represented by universal credit is bound to cause some anxiety, but the benefits it brings are many, going far beyond the £7 billion in annual economic benefits and even beyond the advantages to claimants of simplicity, stronger work incentives and personalised support. UC represents a generation-changing culture shift in how welfare is delivered and how people are helped, creating a system that allows people to break free from being dependent on welfare, to take control of their lives and to move into work. That will have an impact on a large number of people: we estimate that by the time UC is fully rolled out, about 7 million recipients will benefit from the advantages of universal credit.
We must remember that universal credit picks up from a flawed pre-existing system and strives to solve a number of problems that have for some time been thought to be near intractable. In the old system, complexity and bureaucracy had often served to stifle the independence, to limit the choices and to constrain the outlook of its recipients. With UC, we are untangling the bureaucracy, strengthening the incentives and simplifying the system and the signals it gives.
The behavioural effects we are seeing are strong. Claimants are responding to the clear incentives to work and, as my hon. Friend the Member for North Swindon (Justin Tomlinson) said, spending twice as much time looking for a job as they did under the legacy system: 113 people are moving into work under the new system for 100 under the old system. People throughout the country are therefore already benefiting from universal credit, and more will do so.
The design and structure of UC is transformational in its focus on replicating the world of work. UC encourages claimants to take greater responsibility for their finances and incentivises them to earn more and to make progress once in work. A flexible, clear and tailored claimant commitment helps claimants to understand fully their responsibilities, and a work coach provides personalised support, helping people to stay close to the labour market and to overcome whatever barriers they have to work.
Critically, universal credit removes the hours rules and the cliff edges that have long been a feature of our systems, plaguing legacy benefits and tax credits. UC removes the need to switch between different benefits as people move into and progress in work, simplifying the system and ensuring continuity. It provides a consistent taper for claimants as they move into and through work. The recent taper reduction will benefit 3 million claimants once UC is fully rolled out, providing further tangible and visible benefits to making progress in work.
Thanks to the real-time information link, immediate adjustments can be made to the UC award, which is far beyond the blunt mechanism of annual reconciliation. That also means that people can quickly see the effect of the changes they are making. For the first time we now have simple levers to optimise the system, creating a fully dynamic and adaptable welfare system fit for the modern world. Digital is at the heart of the new system. The majority of jobs these days require some computer capability and competency, so it is also right that the system to help people into work is digital, too, as well as more efficient as a result.
If the right hon. Gentleman will forgive me, I will not, or I will run out of time.
Let me assure the House that I recognise what a complex and important issue housing arrears are. Many different factors are at play. As colleagues know, UC pays housing costs directly to the claimants and they pay rent to their landlord. That mirrors the world of work, which is an important part of the fundamental culture change I mentioned. That of course has been the case for some time, since the Labour Government rolled out the local housing allowance in the private rented sector in April 2008.
I am grateful to the hon. Lady for making the important point about the timing of payments to individuals. No one should wait more than 45 days for their first UC payments, unless they are exempt from waiting days, which the hon. Member for Strangford (Jim Shannon) mentioned. Various exemptions include those for prison leavers and for people coming across from other benefits, such as income-related JSA or ESA. For those exempt from the waiting days, the wait is no more than 38 days. A claimant who cannot wait that long, however, may apply for an advance of up to 50% of the total award to provide support through to the UC payment being made. That is an important facility, and we continue to work on raising awareness of its availability.
There have been some delays in the payment of the UC housing element, largely because of, for example, mismatches between what claimants tell us and what landlords tell us is the rent due. We continue to work on process improvements around that. The pre-existing system was itself far from perfect, and we believe the processing times for the UC housing element are about the same as those for local authorities paying housing benefit. According to research by the national organisation for ALMOs—arm’s length management organisations—three quarters of tenants on universal credit were already in arrears before coming on to UC. Nevertheless, we continue to address those issues and we recognise that further improvements can still be made. That includes a dedicated team to handle the processing of rental information for both claimants and landlords.
In Newcastle upon Tyne North, the claimant count has come down by 36% since 2010, but of course we have to continue to support more and more people into work as they fulfil their potential and ambitions. Colleagues will know that implicit consent has been restored to MPs. There are particular sensitivities and difficulties about the breadth with which implicit consent can be granted, given the depth of personal and sensitive information within universal credit to which the individual claimant holds the key, but claimants are able to give explicit consent to advice agencies and so on as appropriate.
I fear that I am out of time. I conclude by saying that we must continue to work together to resolve issues as they arise and ensure a successful roll-out. We are standing on the cusp of historic change in our welfare state—a dynamic and fundamental change that is already transforming lives for the better and will improve many more. This is welfare reform in action—changing the dynamics in the system, making things simpler and ensuring that work always pays, to the benefit of millions.
I am sorry to say that I am not reassured by the Minister’s response to the significant issues with the current system. We are not talking about the principles or the aims of universal credit; we are talking about the serious reality on the ground for people trying to access the support that they are entitled to. The Minister appears still to have his head in the sand. I hope that that is simply because he has not had time properly to address the issues that several hon. Members outlined and he will go away and look at them. These are not just glitches in the system. The consequences are disastrous for the individuals concerned. The Minister did not address the issue of embedding debt in the system and has not taken seriously the impact of the issues that people are experiencing. I am also not convinced about his commitment not to reduce jobcentre staff, given that two of the jobcentres in Newcastle are set to close. This debate will continue.
Motion lapsed (Standing Order No. 10(6)).
Cavity Wall Insulation: Wales
I beg to move,
That this House has considered cavity wall insulation in Wales.
It is a great pleasure to serve under your chairmanship, Mr Nuttall—I think for the first time—and to lead a debate on this issue. Unfortunately, after many years of campaigning, lobbying and debates, it is still unresolved.
Many of my constituents had cavity wall insulation installed, having been persuaded—in fact, I would use the phrase “deceived by omission”—that it was suitable for their homes and for local weather conditions. How wrong they were. Many have found that out to their cost, as they have suffered damp and damage, stress, threats to health and ever-present black walls.
The whole of Wales and indeed much of the UK’s western seaboard is categorised as having very severe exposure to wind-driven rain. Does my hon. Friend agree that the Building Research Establishment maps that point that out should have been widely publicised by the Government so that people could assess whether cavity walling was appropriate in their area?
That is certainly the case. It is an elementary step. One just needs to look at the map of the UK. The west of Wales, the south-west of England, the north-west of England and Scotland are all coloured a deep blue, and areas such as East Anglia are coloured white. A five-year-old could look at that map and see where the rain was going to be and where there might be problems. Unfortunately, many people were not aware of those maps or of this issue.
The consumer redress process so far has been unsatisfactory. Vulnerable people have been left in damp and damaged homes. The industry guarantee scheme has failed many victims and has shortcomings, including sometimes—I am sorry to say this—a hostile attitude to victims. There is an opportunity for the Government to put things right, and my demand—I put it as strongly as that—today is for the Minister to take decisive action to protect consumers from further bad practice, identify all victims and fully compensate all those who have been affected by what is clearly a Government-backed scheme.
I wholeheartedly agree with the hon. Gentleman’s comments. I, too, have constituents who have been terribly affected. In one case, an elderly couple had cavity wall insulation installed 10 years ago by Domestic and General, which subsequently went into liquidation, and they have had the shambolic experience of dealing with the Cavity Insulation Guarantee Agency—particularly its head of customer service—and all sorts of other agencies. It has just become one shambles after another, and they have not had redress.
I am afraid that the picture the hon. Gentleman paints is all too common, especially in Wales but also in parts of the north-west of England. For example, people from Blackpool have travelled all the way to Bangor and Caernarfon to see me to explain the difficulties that they have had in areas where cavity wall insulation has been installed without explanation and there is wind-driven rain, which is the danger.
I welcome the long-awaited report of the Bonfield review entitled “Each Home Counts”, which was released on 16 December last year; some hon. Members may have seen it. A review was first considered by the then Under-Secretary of State for Energy and Climate Change, the right hon. Member for Hastings and Rye (Amber Rudd), on 3 February 2015, during the second debate we had on the issue. I spoke in that debate and expressed my concern about the attitude towards victims of cavity wall insulation of some in the insulation industry and the official bodies that allowed this to happen.
The hon. Gentleman speaks about this issue with great authority and passion for his constituents and people across the UK. My constituent Sarah Morgan recently discovered that she had two different CIGA guarantees for her property—one with a clause detailing the homeowner’s responsibility for property maintenance and one without. Does the hon. Gentleman agree that that subtle change is being used by CIGA as nothing more than a get-out clause?
Perhaps the hon. Gentleman is blessed with clairvoyance, because I was going to raise that matter. It is extraordinary that the maintenance clause is in the small print, as I understand it, and then suddenly reappears in the rather fancy guarantee as a separate and prominent item of its own. I should imagine that had people—especially older and perhaps disabled people—been aware that they had to maintain the house to a high standard, a lot of them would not have gone in for cavity wall insulation in the first place. That has certainly been my experience with the many cases that I have come across.
This matter has been raised on numerous occasions by cross-party alliances, supported by the tireless work of the victims’ support group, the Cavity Insulation Victims Alliance. I am glad to have this opportunity to commend CIVALLI’s work, which it does with virtually no resources. It communicates the distress of consumers who reach out to it, dismayed at the effects of cavity wall insulation, the process through which it was sold and installed, and the attitudes of bodies that were set up to protect them. Its efforts have resulted in this matter being brought to the forefront of the political agenda, a “better late than never” review and some positive steps.
As CIVALLI and I rather expected having met Paul Bonfield, the review focuses on recommendations for future cavity wall insulation but does not place responsibility or blame for redress or provide compensation for those who have been disadvantaged. The review is forward looking, and quite reasonably so, but our concern is with the large number of historical cases.
The review underlines some positive progress. The British Board of Agrément and CIGA have launched a scheme whereby property assessments are independently reviewed for compliance with industry specifications to ensure that cavity wall insulation installations are carried out only on suitable properties. It strikes me, though, that the review’s publication and the progress made so far is much too little, much too late. I might say that the Titanic, alas, is already going down.
My concern is about the millions of homes already treated with cavity wall insulation, a proportion of which are problematic. I do not know what that proportion is, and it seems that no one else does either, for that matter. We do not know how many there are or where they are, but it is clear that cavity wall insulation has been installed in properties unsuitable due to their location, the size of the cavity, the state of external walls, rendering or pointing.
My constituency, Arfon, is in the category 4 area; in fact, much of west Wales is category 4, as my hon. Friend the Member for Dwyfor Meirionnydd (Liz Saville Roberts) noted. When I raised this issue with the then Under-Secretary in the debate in February 2015 and asked her whether cavity wall insulation should have been installed in these areas, her response was:
“My recollection is that mostly it should not have been.”—[Official Report, 3 February 2015; Vol. 592, c. 20WH.]
That is as clear as can be: it should not have been put in, but it was. Installers, CIGA, manufacturers of cavity wall insulation, Governments and everyone seemed to claim that insulations were preceded by a full assessment of the suitability of the property. I am yet to see an assessment report, and seriously wonder whether such reports exist in any real sense.
In my experience, installers failed to take customer complaints seriously and to provide adequate redress. There seems to be a culture of avoiding customer queries, not responding at all, failing to provide full answers to straightforward questions and denying liability. I have heard people say so many times that they were told that it was just condensation—“Open a window and let all that expensive heat out; we’ll sell you some more”, presumably.
Extraction of failed cavity wall insulation is only one element, and most customers will not be offered even that. In my opinion, customers should also be able to recover costs for interior and exterior damage due to the poor installation and extraction, plus compensation for the distress caused. When I have talked to CIGA, it has said—quite reasonably, I think—that it is a guarantee scheme, not a compensation scheme. However, people have suffered, and they deserve compensation.
Many people complain that they signed up for cavity wall insulation only because they were explicitly told that it was a Government-backed scheme, and they feel that the Government should take responsibility for putting things right. In fact, I have seen a sales video that, after about eight minutes of hard sell, has a prominent TV personality saying clearly that it is a Government scheme. Now, he is a salesman and a television personality, but people took him at his word.
We know that CIGA proffered a 25-year guarantee but, again, that guarantee was worth little to most people after it became clear that there was not a suitable system of quality assurance for installers. Indeed, that was a matter I took up with the previous Minister.
Sitting suspended for a Division in the House.
I was talking about the guarantee and the fact that a clause in the small print has now been amplified to the main document. My friends in CIVALLI have told me that, on one property, there are two guarantees, two versions of the same guarantee—one with and one without that clause. It seems to me that CIGA sometimes uses the maintenance condition as a get-out clause. If people had been properly aware of the stringent maintenance rule, many of them would not have risked having CWI. The guarantee is pointless if the maintenance is unaffordable. Many of the people who put this material in are older, disabled or on low incomes; in fact, in Wales 25% of people are living in fuel poverty. Those people will not be up a ladder making sure that the rendering under the roof is proofed against wind-driven rain. The fact is that people in deprived areas were targeted, because they were keen to take part in the scheme and save money on their heat.
Many of the companies that carried out the installations are now defunct. Through recent correspondence with the British Board of Agrément, I have been notified that provisions have been put in place to help consumers where cavity wall insulation has been abandoned, for either company liquidation or inadequacy reasons. I think that is to be respected, but I am worried about this matter more generally.
I am worried that CIGA is under-resourced, hence the resistance to addressing remedial damage and to funding extraction properly. It is adamant that installers should assume liability, but in my constituents’ experience, that often proves impossible, especially given that so many of the companies have gone into liquidation—they were something of a fly-by-night set of organisations. That is resulting in a pattern of CIGA offering to extract from one wall only, which is against expert guidelines and will lead to other problems.
My constituent Alwyn Williams has been battling for three years with this problem. The original installers went bust. CIGA refused to help and refused all liability for two years, on the basis of the poor maintenance clause. It has now offered to extract from one wall. I have spoken to several experts in the field of extraction, including Andrew Quayle of Titan Insulation and Damian Mercer of Cavity Extraction Ltd, who tell me that extracting from one wall creates a cold spot and is likely to severely worsen the problem in the long term.
CIGA does offer an alternative dispute resolution, which I am glad of, and CIVALLI offers support and advice. There is, however, a yawning power gap between the two sides here. Of course, victims require an independent private survey, which can cost around £300; otherwise, there is not a lot of chance of them winning their case. Due to the sheer number of failed CWI installations, the extraction industry is now booming, and I fear we are putting ourselves in line for a further scandal, as extractions are carried out but not properly inspected.
My speech today has been on many of the industry’s failings, but as I said earlier, this is a Government-inspired scheme. Successive Governments have advocated unpoliced and unregulated cavity wall insulation schemes in the race to secure carbon reduction targets—energy companies are being fined by Ofgem for not reaching those targets. That is all at the expense of the quality of life of the victims; their lives have been ruined.
At the very least, the UK Government should have the answer to the following questions. How many people have suffered at the hands of this particular scheme? I have heard estimates of 1% or 2%, but given that there are millions of installations, that is a large number of people. Who are the people who have been affected? Where do they live? I think they live on the west side of Britain. How will their problems be rectified? The big question is, who is going to pay for all this? To be fair to CIGA, it is under-resourced. It depends on its guarantee income, which surely will not be sufficient.
I will end by saying that, in the debate in 2015, the then Minister, who is now the Home Secretary, said that an election was due and she would leave the file open on her desk for her successor. We now have an election due again, and I hope the Minister is not going to sign off by saying that the file will be left open. We really do need some action as soon as possible on what I can only describe as an emerging scandal.
It is a great pleasure to serve under your chairmanship, Mr Nuttall. I start by congratulating the hon. Member for Arfon (Hywel Williams) on not only securing this debate but his persistence over many years on this subject on behalf of both his constituents and a wider population of people who feel their voices are not being represented clearly enough. In that context, I would like to place on record my appreciation for the work of the Cavity Insulation Victims Alliance, members of which I had the pleasure of meeting briefly before the debate started again. We must work towards a situation in which no one feels they are a victim, but we are clearly not there yet.
I would like to say something briefly about the context of the debate and the consumer protection that we think is in place and that should be working. I will also try to answer some of the hon. Gentleman’s questions about the scale of the problem as we understand it and perhaps give him some reassurance about the progress we think is being made and the Government’s commitment to continue to press for an even better response on something that is clearly causing a great deal of hardship, difficulty and distress.
The hon. Gentleman knows the context very well and alluded to it. This Government, like previous Governments, have been keen to make it easier for people to take insulation and other energy efficiency measures that will help to make their homes more comfortable, warmer and more environmentally friendly. He knows as well as I do that if cavity wall insulation is fitted appropriately—that is a big if—it can be very effective in reducing consumption and cutting people’s bills. We have therefore committed to the insulation of a further million homes in this Parliament through a policy tool known as the energy company obligation, which is increasingly focused on trying to provide support for the poorest and most vulnerable households. That is the policy context, which he understands well.
Given that ambition, it is incredibly important that a good level of trust underpins the supply of these services. That trust is what we are really talking about today, and in too many places it does not exist. Consumers need to feel confident that they can trust the quality of the advice that they receive and of the installation that takes place in their homes. We need consumers to have the confidence to make decisions about their properties to improve the energy efficiency of their homes. This will not work unless there is that element of trust in the system.
On consumer protection—I think the hon. Gentleman knows this, but it is worth briefly placing on the record—a lot of regulation is in place to give the kind of consumer protection that we all want to see for our constituents. The installation of all cavity wall insulation must meet the requirements of the Building Regulations 2000. Materials used in cavity wall insulation are subject to specific standards and must be certified by an independent technical approval body. All cavity wall insulations installed under the energy company obligation are subject to a survey prior to installation. I understand his point about independent services, but the requirement for a survey is in place, in part, to verify that the measure is suitable for the property; I think that that is one of his major points, particularly about the part of the country that he represents. All installers working under ECO must also comply with a PAS—publicly available specification—that sets out requirements for the installation of energy efficiency measures in buildings, including cavity wall insulation. Ofgem requires technical monitoring inspections of 5% of measures installed under ECO. It also requires, as the hon. Gentleman noted, that cavity wall insulation measures installed under ECO be accompanied by a 25-year guarantee. As ECO administrator, Ofgem sets out clear requirements for those guarantees as part of its scheme guidance: they must include assurances not only about the quality of installations and the products used, but that funds will be available to honour the guarantee, which must cover the costs of remedial and replacement works.
Those are the protections in place. We recognise, because the data show it, that sometimes things may not work out as expected for consumers. When that happens, it clearly causes a great deal of distress. If there is a problem, our advice is that consumers should initially contact the installer who carried out the work and see whether the problem can be rectified. If that is unsuccessful, they should contact the guarantee provider of the energy company that originally carried out the work. If a consumer’s claim is covered under the terms of a guarantee, either the guarantee provider or the installer will arrange for the necessary works to be completed at no cost to the householder. In many cases that should provide a solution to the problem. However, if for any reason there is no effective guarantee in place, consumers may wish to obtain further guidance from their local trading standards office or seek professional legal advice.
The hon. Gentleman asked about the scale of the problem—the number of insulations completed and the number of consumers who have reported concerns. According to CIGA—the Cavity Insulation Guarantee Agency, which is the largest provider of guarantees for cavity wall insulation, as he knows—since 1995, 330,000 cavity wall insulation installations have been completed in Wales and 3,663 consumers, or 1.1%, have reported concerns. Some may argue that that is a statistically relatively small number, but as far as I am concerned it is 3,663 consumers too many. We need to work towards a situation in which there are no victims and no problems with the quality and probity of insulation work, as he set out powerfully in his speech.
The important thing is that when problems are reported they are addressed. Of the 3,663 recorded cases, CIGA claims to have resolved 2,939 while installers have resolved 724. In answer to the hon. Gentleman’s question, that is what the statistics show. My concern—I will be candid with him because he alluded to this—is that the statistics may understate the problem because they cover people who have reported a problem. He told me anecdotally that in his constituency there may be a much higher number of people who have not reported a problem and who are passive in their misery about what has happened to their homes. The Government must be sensitive to that.
We are not remotely complacent, which is why, as the hon. Gentleman said, we commissioned a review of quality, standards and consumer protection across the whole domestic energy efficiency and renewable energy sector, including cavity wall insulation. I am glad he welcomed that. I know he thinks it may not be sufficient, but I thank him for welcoming it.
The “Each Home Counts” review published on 16 December 2016 recognises that there should be consistent, high quality work in this sector and has made a number of recommendations, which will be taken forward by the industry with the Government’s support. This work is enormously important to our constituents because it is about their homes and very little is more important to them. There should be no room for cowboys in this market and we must hound them out. The review engaged with a diverse range of stakeholders and demonstrates the potential for a new approach to increase consumer trust.
Ensuring a clear and robust standards framework, not just when work is undertaken as a result of Government policy but wherever it happens, is fundamental and that is one of the key actions that the industry is now taking forward, which we will monitor carefully. The review includes recommendations to improve the provision of advice to consumers, as well as for improving skills and training in the workforce. We expect to see implementation plans—words are not sufficient—and delivery proposals from the industry in the coming month.
The hon. Gentleman expressed concerns about CIGA that have been expressed before and those concerns and criticisms have clearly been valid. CIGA is the largest guarantee provider and an important institution in this context. I have been assured—I will follow this up after the debate to seek extra assurance—that it has taken steps to improve the service it provides to consumers. It is under new leadership, as the hon. Gentleman probably knows, and those steps include hiring additional technical inspectors, appointing a consumer champion and introducing access to an independent alternative dispute resolution service operated by a provider approved by the Chartered Training Standards Institute. I will not repeat what previous Ministers said about leaving an open file, but I will write to the chief executive of CIGA setting out clearly some of the reservations that the hon. Gentleman eloquently expressed in this debate, and I will seek an explicit response.
I assure the hon. Gentleman, other hon. Members, CIVALLI and all those out there who are concerned about the issue that we genuinely recognise their concerns. It is in everyone’s interest that the market operates efficiently and that there is trust between customers and service providers. We are focused on ensuring that consumers can choose the right energy efficiency measures for their homes to deliver carbon and bill savings. We share hon. Members’ concerns that the work should be done consistently well and, if not, that appropriate redress should be available.
I am assured that CIGA has listened to the concerns expressed in previous debates in this House—it would have been deaf if it had not—and that steps have been taken to make the organisation much more customer service-friendly, but it needs feedback from Members of Parliament and other representatives on how much progress is really being made. I hope that the details I have set out about the significant steps that have been taken to improve customer service are reassuring.
I assure the House that the Government will continue to work with the industry to improve further the standards and quality in the energy efficiency and renewable energy sectors so that, as we move forward and try to encourage more of our constituents to upgrade their homes to make them warmer, more comfortable and more environmentally friendly, they can do so with trust.
Question put and agreed to.
That this House has considered cavity wall insulation in Wales.
Regional Flags: Driving Licences and Number Plates
I beg to move,
That this House has considered the use of regional flags on driving licences and number plates.
It is a pleasure to serve under your chairmanship, Mr Nuttall, and to have secured this debate. It is worth while bringing this debate before the House as we begin the process of withdrawing from the European Union. As Members will be aware, we see the EU flag on driving licences and number plates throughout our daily lives. All licences have the EU flag as well as the flag of the United Kingdom. While we can display the EU flag on number plates, at the moment it is optional.
In around two years’ time, the UK will be leaving the European Union. That means that our laws will no longer be influenced by European bureaucrats or politicians and the UK will be an independent sovereign state once again, where motor vehicles will no longer be under EU jurisdiction. The EU flag will disappear from UK licences and number plates. That not only symbolises Brexit, but provides us with a great opportunity to be much more inclusive when it comes to the flags representing different parts of our great United Kingdom. Post-Brexit, a standard UK driving licence will just have the UK flag on it. We will also have number plates that will just display registration numbers and letters. That said, it is worth pointing out that motorists have the option of displaying the Union flag, the cross of St George, the Scottish saltire or the red dragon of Wales, along with the other accompanying identifiers, on their current vehicle number plates. That was legislated for in 2009, and the addition of the Union Jack to driving licences was announced in 2012.
With the EU flag disappearing from both, there is a real opportunity for us to consider displaying flags that represent different parts of Britain. First, I would at least like to see the current rules on number plates extended to driving licences. If motorists are allowed to have the flags of England, Scotland or Wales on their number plates, that should be extended to driving licences too. Where the flag would go on the licence is a minor detail, but considering that the Driver and Vehicle Licensing Agency produces tens of thousands of individual licences every year with individuals’ names, addresses, IDs and other details, I cannot see why it would be any more difficult to include a second flag, which could be chosen by the licence holder.
Alongside the flags of England, Scotland and Wales, I urge the Minister to consider flags from other parts of the United Kingdom. I am a very patriotic Cornishman, and it would give me great delight to see the St Piran’s cross on my driving licence. The flags could go on licences and number plates, but if the Minister is in favour of a slower approach, groups of flags could be extended to number plates first and then to licences, if consultation proved to be positive.
My hon. Friend is making a very strong case. Does he agree that it is not just the people of Cornwall and Devon who would like to have something different on their number plates? I am sure that many people based in Yorkshire would like to have the Yorkshire rose on their number plate, rather than the pretentious and increasingly irrelevant EU flag.
It is almost as if my right hon. Friend has read my mind. Later in my speech I will go on to talk a little about Yorkshire, and he has made a passionate case for his area. The Minister may have concerns about the financial and administrative burden for the DVLA from licences, but when it comes to number plates, many motorists will be willing to pay for new plates displaying the flag of their region or of their choice. That could be a way forward, where motorists are allowed to display a greater variety of flags on number plates at their own cost. That could then be extended to licences at a later date, if that was deemed suitable.
The Minister may be concerned that the proposal may create confusion for authorities overseas when vehicles are taken abroad. To address that, I propose that, should a motorist want to have a flag for their country or county—or, in Cornwall’s case, duchy—the flag could be accompanied by a Union Jack to make it clear that the vehicle was from the United Kingdom.
There are many fascinating flags in this great country of ours that represent the whole of the UK. Ultimately, I think our Union Jack is the best. It represents the union of our four great nations and is looked upon by millions of people around the world as a flag of democracy, the rule of law and freedom of speech. Thankfully, the Union Jack has been reinstated on UK driving licences and is permitted on number plates. People are proud of where they come from, and that should be allowed to be expressed in the form of licences and number plates.
As the former Secretary of State for Local Government, my right hon. Friend the Member for Brentwood and Ongar (Sir Eric Pickles), said on St George’s day in 2013:
“The tapestry of the United Kingdom’s regions and counties binds our nation together...we are championing traditional local identities which continue to run deep...by considering the use of regional or county flags, we formally acknowledge the continuing role of our traditional counties in our united country’s public and cultural life. This government is championing local communities, continuing to cherish and celebrate traditional ties and community spirit.”
That brings me on to my favourite flag, the black and white flag of St Piran, which represents a symbol of many people’s Cornish identity.
Although not a country, Cornwall is the duchy. Its Cornish population has been granted national minority status under the European Council’s framework. I have been conducting constituency surveys through communities in North Cornwall. When asked about having the option of the St Piran’s flag on their driving licence or number plate, a big majority say that they would like that to be considered. This debate goes far beyond the St Piran’s flag. The point of having the debate today is to give Members the opportunity to voice any support they have for flags within their areas of the UK. In England, for example, that could include the flag of Yorkshire, with its white rose, the flag of the Isle of Wight, with its diamond shape hovering above the ocean waves, or the Invicta flag of Kent, with its white horse against a red background. In Scotland, it could include the flag of Caithness, with its blue and gold cross representing its beaches and seas. In Wales, it could include the flag of Anglesey, with its three yellow dragons. At this point, this is purely a debate. The Minister cannot go into too much detail on the prospect or any ideas that he has, because of the Brexit process, but I would welcome his thoughts and those of fellow Members.
In conclusion, the United Kingdom is a collection of many different areas that have proud histories, identities and cultures. As we extricate ourselves from the European Union and embrace the brighter future of our sovereignty, it is worth having a debate about the idea of flags on driving licences and number plates. I will now be glad to sit and listen to what other MPs and the Government have to say on the record. [Interruption.]
I am sorry, Mr Nuttall, but I was stunned by the speech of my hon. Friend the Member for North Cornwall (Scott Mann). I thank you for the opportunity to speak and I thank my hon. Friend for securing this debate. We share an office and have discussed this subject many times. His constituency is North Cornwall, while mine is the furthest west it is possible to get, and as he said, our constituents say they would like to see flags on driving licences and number plates.
I know that the Government are ambitious for local areas and are keen to devolve more responsibility to them. They want local areas such as Cornwall to seize the day and take charge of their own destiny. They want to promote regional strength and identity, and of course they want to make a success of exiting the EU. Cornwall is a place of significant interest. Those of us who live there are immensely proud of our heritage, our culture, our natural environment and how we work together as a community to help and care for one another. We know that is true, and every year tens of thousands flock down to see us and covet all that Cornwall is and stands for. Cornwall is a special place in the UK, and I make no apology for asking for special treatment from time to time. My hon. Friend was very generous in describing the various flags that could go on licences or number plates. As far as I am concerned, Cornwall would be a perfect pilot for this. I am ambitious for Cornwall to lead the way in having the St Piran’s flag on number plates and licences.
Cornwall wants to be treated fairly, but we also want more attention than we perhaps get at the moment. On this occasion, our request is straightforward and in the gift of the UK Government, once we leave the EU. My hon. Friend and I are simply arguing that Cornish residents, if they choose, can celebrate Cornish identity by placing our Cornish flag, the St Piran’s flag, on driving licences when they are issued or replaced, and also on vehicle registration plates.
As my hon. Friend said, since 2009 it has been legal to display the Union flag, the cross of St George, the Scottish saltire and the red dragon of Wales on vehicle number plates. Extending that right to Cornish residents and to other regions would be welcomed by my constituents and others elsewhere. Permitting motorists to display the flag of St Piran on their vehicles is a relatively simple yet effective way of enabling people to proclaim their Cornish identity, and I know that many residents in the county would be proud to do so. With modern technology, that cannot be beyond the wit of man. Any costs incurred could easily be recovered from the charges already payable for driving licences and number plates.
I am keen not to prolong this debate more than necessary, so to conclude, Cornwall is a unique and special place. I am unbelievably proud to represent the far south-west of the county. Once Britain has left the EU, there will be more opportunity to safeguard and promote our Cornish identity. Allowing such measures on licences and registration plates provides a tangible way in which a local area can celebrate its heritage, culture and identity. I believe that it would be a great way to celebrate the new Great Britain that we want, post-membership of the EU.
It is a pleasure to serve under your chairmanship, Mr Nuttall. I congratulate the hon. Member for North Cornwall (Scott Mann) on securing this debate. I loved his line about an independent, sovereign state, which is something that has been close to my heart for a long time. I hope to see Scotland as an independent, sovereign state in relatively short order.
We can all support the principle of being able to choose to show a regional or national identity in flags on driving licences and number plates. We should be open to the ability for people to choose the representation to promote their individual area and the nation that they are from—it is incumbent on us to be as open as possible. I fully support the choice for the option of the St Piran’s cross and for it to be set next to the Union flag or indeed the cross of St George. Similarly, in Scotland, if the good people of Caithness want to have their flag next to the saltire on their driving licence, that is something that should be taken forward too. There is lots to agree here and there should be flexibility from the Minister in how that goes forward.
I will be brief in my summing up, because, although we can say that we agree with the principle, it is difficult to pick a lot to challenge. But I would say this: while there is a collective rubbing of hands of some people who favour the Brexit position and cannot wait to exit the European Union, I would remind people that the European flag has been a symbol of free movement across Europe. When that symbol is connected with and on vehicles, it shows how easy it is for people to move from one country to another without any restriction.
One of the biggest challenges coming is not the question of what flag will be on a hon. Member’s or a member of the public’s number plate. It will be what happens to the customs rules, cabotage arrangements and people’s ability to move around and do business in Europe. Although we are enjoying a debate about flags, there are serious issues to be dealt with by the Government. As of yet—the Minister will know this well, because he has been challenged many times by me directly—there are no answers on what is happening with free movement.
The ability for people to choose, and to reflect their area, should be supported, and, as regards the main thrust of the argument advanced by the hon. Member for North Cornwall, I absolutely support people’s ability to make that choice. They should have the choice nationally; they should have the choice regionally.
It is a pleasure to serve under your chairmanship again, Mr Nuttall. I, too, congratulate the hon. Member for North Cornwall (Scott Mann) on initiating the debate. In the light of the Prime Minister’s decision to invoke article 50 last month, and ahead of the general election in June, it is right that we discuss in this place the many and varied ramifications of leaving the European Union, from the big issues right down to what some might see as the finer detail about the symbols that appear on our driving licences and number plates. Detail it may be, but it is important nevertheless, because symbols matter. The questions of who we are as a society and as a country and who we identify with are at the heart of the decision taken last June, so the significance of these issues should not be underestimated. I still carry my “Sack Boris” Oyster card holder from previous London mayoral contests, partly because its message is timeless, but also because it makes a small statement. Doubtless others could cite similar examples.
On the issue of number plates and driving licences, as things stand, the United Kingdom is still a member of the European Union, and as such we operate within the body of EU legislation to which we have agreed. Accordingly, it is clear that we are not at the moment in a position to introduce regional flags on driving licences and number plates, because only the use of national symbols is permitted. With regard to number plates, the relevant legislation is regulation 16 of the Road Vehicles (Display of Registration Marks) Regulations 2001. That allows the display of
“the international distinguishing sign of the United Kingdom”.
Although it was not until April 2009 that the UK Government introduced regulations to permit the display of national symbols, we now see number plates bearing not just the Union flag, but, as we have heard, the cross of St George, the saltire and the red dragon of Wales, as well as letters denoting the UK or one of the individual nations that form the Union.
The EU legislation relating to photocard driving licences is set out in annex I to the third driving licence directive and came into force in January 2013. It states:
“After consulting the Commission, Member States may add colours or markings, such as bar codes and national symbols”.
Since July 2015, all photocard licences issued in England, Scotland and Wales have carried the Union flag alongside the EU flag. However, unlike with vehicle registration plates, symbols of individual nations within the UK are not permitted on driving licences. That has led to some consternation in certain areas of the country; in fact, I am reliably informed that it has even spawned a thriving cottage industry in very small stickers of saltires and Welsh dragons for those who wish to accessorise their driving licence. It does seem inconsistent that number plates are permitted to bear a number of symbols of the various nations that make up the United Kingdom, whereas driving licences are allowed to bear only the Union flag.
The responsibility for deciding which national symbols are put on UK driving licences rests with the Secretary of State for Transport, except in Northern Ireland, where that power has been transferred to the Department of the Environment. As the EU directive does not explicate what constitutes a national symbol, the Secretary of State has to determine what, if any, national symbol they would like to introduce, and consult the EU Commission. That is perhaps the crux of this discussion— what constitutes a nation? That is a very big question indeed and one that, as we know, can both inspire and divide and so has to be handled with care and discretion.
Of course, the party of nations and English regions is Labour, unlike the Conservatives and Liberal Democrats, who tore asunder our regional structures in the last Parliament—an act of vandalism that Vince Cable famously described as “Maoist”. In the spirit of supporting thriving and healthy regions, I happily endorse the notion of regional symbols, but I gently say to the Minister—
I have to say that our detailed policy discussions in the run-up to the general election have not extended to that level of detail so far. It is an interesting suggestion that I will happily consider in the future, but for the moment I will concentrate on regional symbols. The point I was about to make to the Minister is that symbols are important, but if one is to have a symbol for a region, there needs to be a region first; I suggest that that is where we ought to head back to. However, that is possibly a bigger debate for another day.
I conclude by giving an assurance that a Labour Government will bring the policies on number plates and driving licences into line with one another so that, if nothing else, we have consistency. If that helps to build community, solidarity and a positive sense of identity in our nations and regions, that can only be a good thing.
It is always a pleasure to serve under your chairmanship, Mr Nuttall. May I start by congratulating my hon. Friend the Member for North Cornwall (Scott Mann) on securing this debate about the use of regional or national flags on driving licences and number plates? I welcome this opportunity, because this is clearly an area of much interest to colleagues from all over our country.
We all know that, on 23 June last year, we voted as a nation to leave the EU. My hon. Friend is correct that many opportunities will arise from that decision. For example, one of the many implications may well be that we will be able to alter the design and components of our driving licences and number plates. I will take each issue separately, and I will start by commenting upon driving licences, which is actually quite a complex area.
The Driver and Vehicle Licensing Agency has been issuing driving licences since 1973. It holds the records of around 47 million drivers and issues around 11 million licences each year. While I appreciate that my hon. Friend and other colleagues see the outcome of the referendum as an opportunity to include regional flags on our driving licences, I have to highlight that that could have practical implications that I ought to share with the House. There would be an administrative burden on the DVLA, and associated costs that would, in due course, be passed on to motorists .
I will explain a bit about the photocard driving licence itself. As we are all aware, there are different designs for a provisional licence and a full driving licence. At first glance, the driving licence looks a little like a credit card. It is credit card-sized and is plastic, and it contains a photograph and some details about the driver, including their name, address and the vehicles that they are entitled to drive. However, it is much more sophisticated than that. For example, it is made entirely from polycarbonate and is built up of multiple layers. It has been rigorously tested to the highest standards to ensure that it complies with international security standards, and to ensure that it is fit for purpose and will retain its integrity for the 10 years of its lifespan.
In terms of the licence’s production, the DVLA is supplied with base cards, which arrive at the DVLA containing only the title—“DRIVING LICENCE”—the Euro flag, the Union flag and the background print; everything else is printed on-site. The driver’s photograph is actually not so much printed, as one might expect, but laser etched on to the polycarbonate material. The driving licence has many other security features, and is therefore one of the most secure and recognisable public documents that we have.
As my hon. Friend is aware, the Government introduced a new driving licence design in 2015 that incorporated the Union flag. When that change was made, the DVLA explored the possibility of giving drivers the option of having the Union flag on their licence or not, so some of the thinking on the prospect of consumer choice has been started. That work showed that the cost to the DVLA would be between about £14 million to £20 million, and it would potentially take two years to implement. The Government decided, therefore, to include the Union flag on all driving licences, without offering a choice, to underpin the sense of national identity and pride that we all share, notwithstanding that the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) may take a slightly different view of that. Overall I think there is pride in our national flag and our identity as British citizens.
At the same time the DVLA looked at whether it would be desirable to offer drivers the option to have other symbols on their driving licence, such as the cross of St George, the saltire, the red dragon of Wales or indeed, potentially, the cross of St Piran. While it may seem a simple undertaking to give motorists a choice of what to display on their licence, the cost of doing so was even greater than the cost of providing an optional Union flag, which I mentioned earlier. If the optional element is removed—for example if all licences in Scotland were issued showing the saltire—that obviously would have a cost implication, by reducing it. Then, of course, there would be further complications; how would the distribution of the design be decided? Would it be a question of where the driver lived? Of course Scots live right across the United Kingdom, and people from other parts of the country live in Scotland. That presents some quite complicated operational implications for the DVLA.
There are also some potential road safety and security risks. Among the most obvious would be the credibility of our driving licence in the eyes of foreign enforcement agencies. When so many people from the UK drive in places around the world, the recognisability of our licence is a valuable asset.
Does the Minister agree that currently, with the EU symbol on the driving licence, that problem is greatly lessened, and that by choosing hard Brexit, without taking into account cabotage and customs or keeping access to the EU, the Government will create problems for drivers?
I fear that that is potentially temptation to rerun the referendum debate. We have been there, and we need to come together and implement the decision of the British people. Obviously, there are practical implications, some of which are risks, and some opportunities. The key thing, of course, is to make sure that we have the best possible deal for the country, and far more opportunity than risk.
My point about the interoperability and recognisability of driving licences is reasonable, because they are perhaps the most common form of identity document that people use. They are not designed to be an identity document but they are used for that purpose in many cases, and it is important that a driving licence should be a robust and secure document that retains its identity. A further implication is that its integrity should not be compromised by more fake licences being in circulation. A lack of familiarity with the licence could of course make it easier for fakes to go undetected.
We estimated what might happen if each county or region were allowed a design. I recognise that few parts of the country have the sense of identity that Cornwall has—
I am coming on to Yorkshire. We have heard from two proud and passionate Cornishmen in the debate, speaking up for their county, as ever; but other parts of the country also have strong identities. I am a proud Yorkshireman and I think nowhere beyond Yorkshire and Cornwall can match that sense of identity. However, I am treading into dangerous territory, and that is partly the point. We would be treading on regional and county identities that are very complicated. I notice that even within the ceremonial county of Cornwall the Isles of Scilly have their own flag, and their population is just over 2,000, with just 600 vehicles registered on the islands. They may want their own flag displayed on their licences, and I am sure that that would apply to many parts of the country. There are strong affiliations and loyalties across our marvellous, united nation.
Building various designs into the card manufacturing process would obviously have an impact on printing and despatch costs for the DVLA and would also have implications for turnaround time. All those points need to be considered as we take the debate forward.
We have regional identities on our number plates. As my hon. Friend will be aware, the registration number is a unique means of identifying a vehicle for taxation, law enforcement and road safety purposes. It has a proper and significant practical implication. It is important that the police are able to quickly identify a vehicle and that witnesses are able to recall registration marks. To that end, the law requires that number plates are clearly and easily readable.
The rules regarding what can be displayed on number plates, including any optional regional flags, are specified in UK law. Those rules simply ensure safety on our roads. They support the police and other enforcement agencies in identifying vehicles to prevent and detect crime, particularly through the use of automatic number plate recognition cameras. With that in mind, the law has to be specific about what information can be shown on a number plate, to minimise and prevent the use of unlawful products.
Currently in the UK only number plates supplied by official registered suppliers can be displayed on a vehicle. Registered number plate suppliers are fully aware of what is allowed to be displayed and must ensure that the number plates they supply meet legal standards and that adequate sales records are maintained. In addition to display of the registration number, the law provides for the voluntary use of specific national identifiers or the display of the EU flag, if people wish it.
The display of the EU flag with the inclusion of a GB identifier is called a europlate. It enables motorists to travel across the EU without the need to display the conventional oval GB—either a sticker or a little banner—to identify the member state in which the vehicle is registered. Currently UK motorists travelling within the EU can display either the europlate or the traditional oval sticker. Vehicles registered in the UK and travelling outside the EU have no choice but to use the oval sticker.
As we move closer to leaving the European Union, will the Minister look again at this? It seems to me that as long as a number plate is clear and can be read and understood, if someone wants to personalise their number plate modestly, we should not stand in the way of them so doing.
I recognise that we are moving into a place where the old rules will cease to apply, and we can determine more as we wish, but I will come to my right hon. Friend’s point.
The law changed in 2009 to allow the voluntary display of either the European flag or UK national flags, so we have choice in the area of number plates. Motorists can choose between the Union flag, the cross of St George, the saltire or the red dragon of Wales on their number plates. The display of a national flag or the EU flag is a matter of personal choice; nobody is compelled to decide one way or the other.
We have strong regional and national identities within our United Kingdom. My hon. Friend the Member for North Cornwall highlighted the recognition of Cornwall, but that applies to many other parts of our country. It is fantastic that we have such a diverse and unique cultural mix in our different nations and parts of our nations, in which people take great pride. I am certainly a proud Yorkshireman, particularly when it comes to cricketing matters.
Any proposals to allow a wide range of flags or regional identifiers to be displayed on number plates have to take into account the wishes of wide groups in other parts of our countries. Choosing the regional identifier would be complicated. We would also have to ensure that it worked from a law enforcement perspective. So there are practical implications, road safety implications and law enforcement implications, and it is a brave person who treads too far into the area of regional identity.
I entirely recognise the strong desire to reflect the pride that we feel in our different parts of the United Kingdom. We are at the start of a process. I am not saying either yes or no; we are simply at too early a stage in this process to decide. However, I recognise that there are opportunities. I regard this debate as the start of our national conversation about what we would like to have on our driving licences and on our number plates. I also recognise that technology presents opportunities to personalise and to print, but I have also tried to explain that there are some significant practical implications from a DVLA perspective and from a law enforcement agency perspective. There are cost implications as well.
I recognise the proud and passionate pleas from our Cornish colleagues, and I have great sympathy with them. I also recognise that we will receive messages from all parts of our country and I hope that everybody will contribute as we decide what our licences and number plates look like, as we leave the EU and have the freedom to make our own decisions.
We have had an excellent discussion and this has been a very worthwhile debate. My right hon. Friend the Member for East Yorkshire (Sir Greg Knight) made some great interventions; my hon. Friend the Member for St Ives (Derek Thomas) made a very passionate case for his part of Cornwall; the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) made some interesting and valid points, although I do not agree completely with some of the things he said; and the hon. Member for Cambridge (Daniel Zeichner) also made some very valid and interesting points.
I thank the Minister for listening. Obviously, we will not be here in Parliament for much longer, but it would be nice to come back and re-engage in this debate in a few weeks or months. I thank him for listening to the debate and I hope that he will consider this matter in the future if he is back in his position and I am back in mine.
Question put and agreed to.
That this House has considered the use of regional flags on driving licences and number plates.