Tuesday 27 March 2018
[James Gray in the Chair]
Court Closures and Reform
I beg to move,
That this House has considered court closures and reform.
It is a pleasure to serve under your chairmanship, Mr Gray. I am very pleased to have secured this debate on an extremely important topic that is long overdue for discussion.
The justice system is to undergo a radical programme of modernisation. The Minister will no doubt tell us about the potential for information and communications technology to deliver efficient and improved justice. However, against a backdrop of 40% cuts to the Department’s budget since 2010—the most of any Department—there is serious concern that this will be done without the proper safeguards to prevent our justice system from being undermined, and that it will therefore lead to reputational damage.
In January, the Government announced a consultation on the future estates strategy for the Courts and Tribunals Service, with a focus on ensuring access to justice. Separate to that are five consultations on proposals to close a further eight courts: the Banbury magistrates and county court and Maidenhead magistrates court, which will have a direct impact on my Slough constituents; the Cambridge magistrates court; the Chorley magistrates court and the Fleetwood magistrates court; Northallerton magistrates court; and Wandsworth county court and Blackfriars Crown court. Given how many courts the Government have closed in recent years—258 since 2010—there seems little doubt about what conclusion will be reached. Are the consultations not simply a smokescreen for yet more court closures and staff losses?
Capacity should not be the only criterion used to determine court closures. Geographical coverage and the representation of the justice system throughout our country are also important. As I will set out, there remain genuine concerns and a serious lack of detail to the Government’s plan to use technology in the court system, to reduce the court estate and to change the role of case officers. There could be no better response from the Minister today than an announcement that the Government are finally publishing the draft courts Bill. I hope she will give the date for that, as only then can the reforms be subjected to full scrutiny.
Thousands of court staff have been axed in recent years—more than 5,000 since 2010. That is an incredible number; however, the consultation is silent on the impact that further closures will have on staff. Indeed, they are merely called “other impacted groups”. On top of that substantial loss of expertise and experience, the closure of the eight courts would displace more than 130 staff. Does the Minister agree that court staff should be properly included in consultations?
Against this background of funding cuts, court closures and loss of staff and their expertise, outsourcing and temporary staff costs have rocketed. Figures obtained by the Opposition show the cost of the Government’s obsession with outsourcing, privatisation and the use of agency work. The Courts and Tribunals Service spent some £50 million last year on agency and contract staff—a tenfold rise since 2010.
The Government claim that these closures are part of a £1 billion modernisation of the courts service through better use of technology. Where is the evidence to justify the push for a digital courts programme? The Government should publish the business case for their modernisation programme so that the risks of a move to online and virtual justice can be fully examined.
I speak as the co-chair of the justice unions cross-party group. Does the hon. Gentleman share my fears that we have not yet had an effective evaluation of the impact of digital technology on justice and on whether court proceedings carry on? That should be done as a matter of urgency before the Government introduce yet further digital technology into the court system.
I thank the hon. Lady for her pertinent point and fully concur, as I will elaborate.
Virtual courts may significantly increase the number of unrepresented defendants, discriminate against vulnerable defendants or those who do not speak English well, and negatively affect the relationship between defence lawyers and their clients. There are already concerns about video equipment that is in use, including technology failure, poor sound quality and mismatches of sound and image.
In my constituency, I have a large volume of immigration cases. Reports of video links between the Taylor House tribunal hearing centre and Gatwick detention centre breaking down are frequent, as are complaints about the poor sound quality. I am told that users must shout to be heard. That has been unresolved for many years. Likewise, there are concerns about the difficulty of holding confidential discussions where there is inadequate soundproofing. The Bar Council stated last month that
“virtual hearings diminish the ability of parties to follow proceedings and to understand each other. This inevitably will have serious consequences on the quality of justice as it is done and as it is seen to be done.”
Given the current situation, what plans are in place to guarantee that legal advice discussions between clients and lawyers remain confidential when held over video link? In the rush to digitalisation, where is the evidence, rather than the mere assumption, that there will be a reduced need for court buildings in the near future? After all, the Courts and Tribunals Service has recently confirmed that virtual hearings will not be imposed where participants do not wish it, so it is likely that physical hearings will be the norm for some time to come. Has that been a factor in any of the consultations?
I would also like to discuss travel times to court, which will be a significant issue if the courts estate shrinks further. Longer journeys will have a negative impact on the delivery of justice. As the Chair of the Select Committee on Justice, the hon. Member for Bromley and Chislehurst (Robert Neill), wrote recently to the Minister:
“No convincing policy justification has been offered for the current proposal, which appears to favour the principle of value for money over the principle of access to justice.”
I represent Dwyfor Meirionnydd. Dolgellau, the last magistrates court in my constituency, was closed in the last round. It is now impossible to arrive at either Aberystwyth or Caernarfon, the alternative courts, from Meirionnydd by 9.30 am. Does the hon. Gentleman agree that given the situation in rural constituencies, this discriminatory approach needs to be evaluated thoroughly before we move to further changes?
The hon. Lady speaks with a great deal of experience. Indeed, while this will impact everybody in our country, the impact on rural communities will be disproportionately higher.
Does the Minister agree with the Chair of the Justice Committee’s remarks? Our constituents must not be discouraged from seeking justice, and witnesses must not be put off giving evidence. Is the Minister not concerned that court closures will make it less likely that victims and witnesses will travel to courts to give evidence? The equality analysis accompanying the consultations makes no mention of the indirectly discriminatory impact of lengthy round trips on elderly people or women, who are more likely to be caring for pre-school and/or school-age children.
There are relevant points of fact on travel time that consultations neglect to take into account. The consultations assume that a court user is on time if they are there at the time when the hearing is due to start, rather than in advance, when negotiations may take place or further instructions may be given. The Minister will be aware that in a public law children’s hearing, it is a requirement that all parties attend court an hour before the hearing. Will she ensure that such factors are considered when travel time is assessed?
What assessment has been made of access to justice if court users are required to pay for overnight accommodation, leave home in the early hours or return home late at night?
I congratulate the hon. Gentleman on securing the debate. On the issue of accessibility, a few colleagues fought an ultimately successful campaign to retain the courthouse in Limavady, a small town in my constituency. The lack of public transport accessibility to the alternative locations that would have been available was a crucial factor in retaining it. Does the hon. Gentleman agree that that should apply across the UK?
The hon. Gentleman makes an excellent point. That situation has been replicated in other parts of the country, as the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) said in her intervention. All those issues need to be taken into account, especially when dealing with the more vulnerable in our community.
What assessment has been made of access to justice if court users are required to pay for overnight accommodation? Two or three-hour increases in travel time before and after a full day’s hearing, let alone post-hearing conferences, would be onerous—if not impossible—for many constituents.
In my region, the Thames valley, Maidenhead magistrates court and Banbury magistrates and county court are under consideration for sell-off. It is assumed that the workload would be redistributed to other magistrates and family courts in the region, including the small magistrates court in my constituency. According to the Government’s proposals for those three courts, people living in the areas affected by the court closures would be within an acceptable travelling distance of the court that the work was transferred to.
My constituents who rely on public transport will face a significantly longer journey if Maidenhead cases are redistributed to Reading. They will not find that acceptable. It should be noted that Reading has already received the workload from the closure of the West Berkshire magistrates court in Newbury in 2016. Instead of the 20-minute, seven-mile journey between Slough and Maidenhead, people will face a 20-mile journey to Reading or journey times of about one hour to High Wycombe or Staines.
Unsurprisingly, longer journeys also cost significantly more. An off-peak return journey by train between Slough and Maidenhead is £3.90. Between Slough and Reading it is £9.30. During peak times, the Maidenhead journey is £4.40 compared with £10.60 to get to Reading. Whatever the time of day, it is more than double, yet in the Government’s proposal there is no mention—not even one word—of addressing the financial cost to individuals travelling further.
The extra costs will be borne by victims, their support network, witnesses and others. How can the Government claim to have truly assessed the impact of possible closures on court and tribunal users when transport prices have not been considered? It goes without saying that such information is factual, freely available and easily found. There is no excuse for it to be overlooked.
It is not only Opposition Members who are concerned about the lack of information in the Government’s plans. The Minister will know that Cambridge magistrates court, which was purpose-built less than 10 years ago and which serves her constituents, is earmarked for closure. Has she had sight of a letter from the hon. Member for South Cambridgeshire (Heidi Allen) that calls the plans “ambiguous” and “lacking in detail”? Does she disagree with her hon. Friend?
Much more could be said about the use of technology in the court system, the ongoing reduction in the court estate and planned changes in the role of case officers, and about the Law Society’s warning of substantial additional costs for legal aid firms and the impact on police resources and on other organisations that use the courts. Will the Minister address the lack of clarity in the consultations and confirm that more of the necessary research into the digitalisation of court services will be carried out?
While the “Fit for the future” consultation takes place, and until the courts Bill is published, further court closures and digitalisation contracts should be halted. It is time for the reforms to be subjected to full parliamentary scrutiny. I hope the Minister will be able to give us information about the scope of the promised courts Bill and, better still, to answer the fundamental question: when will the Government publish it?
It is a pleasure to serve under your chairmanship, Mr Gray. I am here because I am a member of the Justice Committee, which is meeting now. I have permission from the Chairman, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), to attend and speak in the debate.
The hon. Member for Slough (Mr Dhesi) has raised an important point about access to justice. We ought to keep that concept firmly in mind. We in the Committee—certainly myself—are concerned for access to justice to remain a preferred concept throughout the process, and for it to permeate everything we think and do.
There is a need to maintain a network of well-maintained and fit-for-purpose courts. I understand what the hon. Gentleman has said but, unfortunately, some courthouses are not fit for purpose, and it is necessary to root them out, look at them and make changes to the way they function.
There are three other reasons why the court system is undergoing change and why it needs to be rigorously looked at. The first reason relates to Lord Justice Briggs’s work to set up the online courts, which are not yet set up in full. Lord Justice Briggs has made proposals to change the civil rules that govern how the courts work, which are being piloted in a three-stage process. It is an attractive system for running the courts, particularly for people who wish to avoid huge legal costs. The way in which the courts are being sorted out by that process is focused on the needs of individuals, because litigants in person are expected to be its clients.
I listen with great interest to what the hon. Gentleman says, but does he share my concern that there are discrepancies in power between a person at a distant site contacting a court through video conferencing and a person in the court itself? We need to consider the impact of that on justice outcomes before moving ahead. As the process is at such an early stage, now is the time to do that.
I will speak about aspects of the technology, but postpone answering that question for now, if I may. Having discussed online courts with Lord Justice Briggs, I am enthusiastic that they will come through in the fullness he wants.
The second reason for change is the need to improve technology. I recently did an Industry and Parliament Trust fellowship in law, where I sat with a number of judges in the High Court and the Court of Appeal for two and a half weeks. I sat with Mr Justice Knowles in a hearing in the commercial courts that was conducted entirely in Portuguese, because a Portuguese lawyer had brought the case and had elected for his case to be heard in English law. The level of sophistication of the technology had to be seen to be believed. Almost instantly after the appellant said something, the judge got a transcript in English on his laptop on his desk in front of him. That was an extremely efficient way of using technology. In the Court of Appeal, I saw for myself in a number of sentence referral cases that the court had been connected via video technology to the individual who was still in prison, in order to hear the case. I am absolutely convinced that that is a correct way to try to improve the technology.
In contrast, I experienced sitting with an employment tribunal where, as far as I was concerned, it was so antique that we might as well have been using the quill pen. Three judges were sitting. I coughed and spluttered when they said they would sit for seven days, but it was seven days because a litigant was appearing in person. Nothing was done that could not have been done on the first day—the other days were scheduled in order to ensure that more time could be given to the litigant if necessary.
I want to alert people to the need to be very careful about how we use different languages in the courts, with reference to the last round of court closures. The Ministry of Justice has a Welsh language scheme, part of which is a requirement to carry out an impact assessment of changes. I and others had to press for that impact assessment to be carried out. Welsh speakers have a right to use their language in court, but with technology and changes to courts, that is truly a matter of concern.
I will stick to the point that I started making. From what I have seen of how the courts are using technology, it is going in the right direction. The courts are making full use of the technology—indeed, they are pushing the technology beyond how we would normally expect it to be used.
The third element is alternative dispute resolution—I say that as the chairman of the all-party parliamentary group on alternative dispute resolution. Alternative dispute resolution takes cases out of the ambit of the courts and puts them in the hands of arbitrators who are able to hear the cases and resolve them, and they should do so. During the time I sat with judges in the commercial courts, it was obvious—the judge said it on many occasions—that people should have gone to arbitration before they went to court.
The last time I spoke on this issue, I was asked whether we ought to consider compulsory arbitration. I was doubtful at the time, but as I have come to consider it more, I now believe that a form of compulsory arbitration would be a good thing and should be included within the arbitration rules. This process is not just about the arbitration, or the alternative part of dispute resolution. Bodies such as Network Rail try to solve disputes before they happen by putting in place the mechanisms to solve them.
I mention that because it is an important point about how courts are not being used as much as they were. Alternative dispute resolution is cheaper, quicker and gives much more immediate access to justice—we should not forget that access to justice is one of the key elements of the process. It takes nothing away from the courts: if the alternative dispute resolution fails, there is still recourse to the courts at the end of the process.
Through all of this, there is a need to ensure that we connect with the communities that we are serving. Doing that through existing buildings without exploring the use of town halls and other buildings within a community is not the right way of proceeding.
My hon. Friend made the point right at the start of his remarks about access to justice. Is he aware of any system operating thus far whereby technology replaces the entire work of a magistrates court in a full criminal case, or is that yet to be proven?
If I do not know the answer, I think my hon. Friend is about to tell me where that is the case.
No, I am asking you.
I do not know of a case where that is happening across the whole system. The courts’ use of technology and how they are pushing it, including the exemplary work by Lord Justice Briggs to set up an online court, is going in the right direction in respect of bringing access to justice within the ambit of a huge number of people for whom—I say this with all deference to the Minister—the legal fees involved are out of this world. We should keep that in mind as being a fundamental part of ensuring access to justice.
It is a pleasure to serve under your chairmanship, Mr Gray, and I congratulate my hon. Friend the Member for Slough (Mr Dhesi) on securing this debate and on his excellent introduction to the overall subject.
It will perhaps come as no surprise to you, Mr Gray, that I will mainly concentrate my comments on the potential closure of the magistrates court in my constituency of Cambridge. I should say that I am grateful to the Minister for the discussions that we have had. I understand that she will not make the decision about Cambridge in particular, although I am sure that she is in a position to pass the comments made in this debate to whoever will make that decision and to respond to some of the points that are made today.
The reaction in Cambridge to the news that our very expensive court, which was newly created just a few years ago, was up for closure was one of universal astonishment and dismay across the board. We have heard from court users and magistrates. There has also been an open letter from 39 very senior academics, as one would probably expect given that there are a lot of experts in penal injustice issues in Cambridge. They made many of the points that have been made very eloquently today by my hon. Friend and they also reflect the fact that the justice system is changing. No one is denying that the world is changing; the question is whether this is the right pace of change and the right way to change it.
Some of the opposition has come from quarters that would not normally be expected to provide opposition. The police and crime commissioner for Cambridgeshire, Jason Ablewhite, is a Conservative, of course, and I do not always agree with him on everything, but he has produced a very detailed response to the proposed closure, with many sensible points. He describes himself as being “deeply concerned”, and he finds it “surprising” and “disappointing” that the Ministry of Justice is making these suggestions about Cambridge, and he needs to be convinced that the proposals have been fully thought through.
The latter is the point that I wish to develop, because I hardly need to point out to the Minister, who knows this very well, that Cambridge—and Cambridgeshire—is one of the fastest growing parts of our country, and it has huge problems in terms of its local transport infrastructure. With one of the fastest-growing economies in 2018, the combined authority assumes that the population will grow by more than 100,000 by 2031, and we have seen the Government’s enthusiasm for promoting such growth, with their ideas about east-west rail and so on. Obviously, we would all hope that such growth would produce a record number of well-behaved citizens and that there would be no further problems and no need for a justice system but, sadly, I do not think that likely. At a time when our city is growing so fast, it seems absurd to suck out of it modern facilities that were provided at huge cost only a few years ago. A particular irony is that the consultation talks about the capital value that may be unleashed but there will be no capital savings because the building is leased—the value might not even exceed the £1 achieved when Ely magistrates court was sold a few years ago.
A final point on the Cambridge position is that I am grateful to local blogger Antony Carpen for digging out the history of the city’s justice system. He tells me that Professor Helen Cam found out that Cambridge’s first courthouse was established in 1572. So here we are, 450 years on, and I hope that the Minister will not be the one responsible for undoing that long tradition of local justice in Cambridge.
In the details that underlie the proposal to claim Cambridge magistrates court, the basic case is that it is underutilised. When I visited the court a few months ago, and when I talked to people involved, that was the crux of the issue. Sadly, it has taken freedom of information requests to drag out some of the detailed figures that one would hope would shed more light on the claim of underutilisation: why is this modern court underutilised? When we look at those numbers, an even more puzzling story begins to emerge. Her Majesty’s Courts and Tribunals Service management system tells us that in 2014-15 just over 7,000 cases had their first hearing at Cambridge magistrates court. The following year, the number jumped dramatically to more than 14,500 but the year after that it lurched back to 8,000. That is not about virtual courts, nor is it about changes in the number of people brought to and from court; I am afraid it is about a system that is woefully understaffed and effectively in chaos on a daily basis. I am told that listings are currently running seven or eight months away. It is not underutilisation; it is a building that does not have enough staff in it.
The comparison would be running a village shop with nothing in it—Government Members love the village shop analogy when talking about economics. If there is nothing in the shop there is nothing for people to buy, so it gets into trouble and the answer is to either close the shop or stock it properly. I would say that we have a very modern facility that should be used properly. I understand that there is an issue with the configuration; we have three court buildings in Cambridge and others around the county. The question is how best to do this.
There is also a cost issue. Possibly due to commercial confidentiality, the Ministry of Justice sadly seems unwilling to share this information, but figures are bandied around locally and I am told by some that this is the cheapest court to run in Cambridgeshire and that the private finance initiative court in Huntingdon is extremely expensive by comparison. There may well be contractual issues as to why one might be chosen over the other, but perhaps we ought to know and, particularly at a time of changing lease values in city centres, we ought to look ahead rather than responding in a short-termist way.
We have heard the argument about travel times—travel times will always be discussed in debates on these issues—and the Minister needs no reminding of how difficult it is to travel in and out of Cambridge. Many of the people who have come to me and have written to the local newspaper have explained just how difficult it would be to go to Peterborough or Huntingdon, with the journey sometimes taking much longer than an hour. One person said it took her 40 minutes to get in from Grantchester, which is roughly the time it would take to walk. To get to Peterborough and back in a day is impossible for some people. Those are the same issues as the ones my hon. Friend the Member for Slough raised.
Going back to the fine detail, we also have concerns about the suggestion that non-custodial work might remain in other court buildings in Cambridge. That is to be welcomed, but it might have been useful if the Ministry of Justice had been able to explain at the outset just what the split between custodial and non-custodial work was. My hon. Friend the Member for South Cambridgeshire (Heidi Allen) asked about that in a letter, which was referred to by my hon. Friend the Member for Slough, and a freedom of information request revealed dramatic numbers: 326 of the 14,000 cases in 2015-16 and 481 of the 7,500 in 2016-17 were custodial ones. That rather raises the question of whether it is possible to configure the three courts in Cambridge creatively, to most effectively help everyone.
The consultation has been run oddly, starting with a headline about closing a magistrates court when it should have been about how to make best use of the buildings we have. One of the most useful things I have done, apart from visiting the court and seeing it in action, is to have a conversation with a group of defence lawyers in Cambridge. Their account of what the system is like on a daily basic verged on harrowing. They said that it was extremely pressured, with real issues of access to legal aid in the area and pressure on local defence lawyers, and that there was the possibility, with this kind of change, that people would no longer have access to defence lawyers, because many of the smaller practices would not be able to bear the costs of travelling to and from Peterborough and Huntingdon. I have made an offer to the Minister, which I hope she will pass on to one of her colleagues, to come to Cambridge and sit down with the dozen women lawyers, as I did. They are all friendly, pleasant people and would explain what their daily lives are like and what life is like for defendants. They have very legitimate concerns about what they potentially face.
I conclude by reflecting on a couple of accounts by people who are in and out of the courts. When I visited, it was a long time since I had been in a court and it was pretty much as I remembered from elsewhere—a busy, fraught experience. It was also difficult to organise, and I sympathise with those trying to list cases, ensure that people turn up and deal with what happens when cases overrun or not everything is ready. It is of course hard to run a system to maximum efficiency, but a local journalist, Tara Cox from Cambridge News, who regularly goes to the court, writes:
“Every day there are delays, adjournments, and rescheduling of court hearings at the last minute. If you want to find out exactly how the magistrates’ court operates”
come and see. I extend that invitation to whichever Minister is making the decision: come and see exactly what people are up against.
Another journalist who spent a day at the court talking to its users was told:
“it would have taken me a silly amount of time to get to Peterborough”.
The mother of a teenage defendant said it had taken her an hour and 15 minutes from a village just outside Cambridge and one can imagine how much longer it would take her to get to Peterborough or Huntingdon —it could well be the best part of two and a half hours each way, which is impossible to do. The journalist also spoke to court staff, who told her that in their view the court closure would lead to an increase in the number of defendants and witnesses not turning up, which, they said, was already a significant problem. Surely the extra cost of failures to appear must be balanced against any potential savings—a point the police and crime commissioner makes forcefully in his submission.
I ask the Minister to consider the matter closely and think hard about the best way of configuring services in a city such as Cambridge. I have nothing against considering how to make best use of our existing estate but the overall message should be clear: keep the magistrates court in Cambridge open.
It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Slough (Mr Dhesi) on securing the debate.
I speak with a Scottish element. I will not take up too much time as that is not the remit of this Parliament, but it provides the experience of similar changes north of the border. I was my party’s justice spokesperson in the Scottish Parliament at a time when a number of courts were closed by the Scottish National party Government. The Library briefing for this debate states:
—of both political persuasions—
“have identified the courts estate as a target for efficiency savings”.
It states that that is for two main reasons:
“The first is that the utilisation rate of some courts is low…The second is the policy aim of reforming access to justice through modernisation, and by increased use of technology in particular.”
I want to focus on both those points in terms of what we have been discussing today and what we have been through in Scotland. Between November 2013 and January 2015, 10 courts were closed in Scotland for exactly the reasons mentioned in the briefing. Those closures were objected to by many people across the political spectrum—even SNP Members, although ultimately when it came to a vote, they voted with the Government. It is useful to look at Scotland as an example. Figures uncovered by the Scottish Conservatives in November last year show that in the previous year, only three of the 39 sheriff courts across Scotland met the target for dealing with 100% of cases within 26 weeks of someone getting a citation or caution. We have seen the impact that closing 10 courts across Scotland has had on the remaining courts. The problems are getting worse. In the past year, Elgin sheriff court in Moray has not once met its target to deal with 100% of cases in 26 weeks.
I also want to speak about digitalisation. I understand the concerns that the hon. Member for Slough has articulated, but there are great benefits. We are behind the curve in Scotland. Lord Carloway did a review in 2015 of evidence and procedure. He was a very good person to do the review, because in 2013 he said that there should be “clear sky thinking” about digitalisation in our courts system. We are no further on from his comments in 2013 or his report in 2015. We are still suffering as a result of the lack of use of digital in our court system in Scotland and the rest of the UK.
Lord Carloway said:
“Police Scotland is currently migrating to a unified IT system, known as i6”—
that was a computer programme that Police Scotland was going to take in—
“which will resolve the inconsistencies currently experienced because of the incompatibilities of the legacy systems from the eight predecessor forces.”
He said that in his report in 2015. We are now in 2018, and Police Scotland has abandoned its plans to introduce i6. Three years on, we have not resolved the issues. In fact, the issues remain. He also spoke about a
“digital evidence vault to securely store all documents, audio, pictures and video content, preserving citizens’ privacy”.
There is now an evidence vault, but it is rarely used, because lawyers and the police are not happy with it. There are still problems with getting digital to have an impact in our courts. It would have great benefits.
When I was on the Justice Committee, we did an inquiry into the issue. We were looking at the role of the Lord Advocate and the Crown Office and Procurator Fiscal Service. We were given an example of a case that had been given a date. Everyone turned up—the witnesses turned up, the accused turned up and the defence was ready. Then they said that they were not able to view the key piece of evidence, which they had had months and months to look at. It was a CCTV image. When the police had copied it on to a disc and given it to the defence solicitors, the defence solicitors could not view it on their DVD player. Witnesses had travelled a considerable distance. We had the cost of the court sitting that day only for the case to be put back again to get a new disc produced that was compatible with the defence solicitors’ DVD player and Police Scotland’s DVD player. It is 2018, and we still have such instances. They are causing delays in our court system, which is causing significant strain on our resources and considerable difficulties to witnesses and victims. They are turning up for trials, which are being put off and delayed because what we are doing is not in the modern era.
Since Lord Carloway’s report, there has been some progress on child and vulnerable victims, but not enough. I listened carefully to what Members have said, but I think that part of the barrier is the legal profession itself. It may be ironic that Members of this House are speaking about moving into a more modern age, but there seems to be resentment of change in some parts of the legal system. It has been their career, and their lifestyle has been immersed in a more traditional way of doing things, but we have got to overcome that. We are in the modern era, and there are modern technologies that we can adapt and use in our court systems. We should look to do that.
In conclusion, the Minister is obviously carefully considering the changes being proposed for England and Wales. She has to take care with those changes. I have no doubt there will be many benefits, but there will also be some dangers. I urge her not to do what the SNP Government have done in Scotland, which is to ignore all the warnings and forge ahead with the changes regardless. By doing that, the SNP has introduced changes that have resulted in our justice system suffering north of the border. More crucially than that, our victims and witnesses are being let down by justice in Scotland just now.
It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend the Member for Slough (Mr Dhesi) on securing this important debate. The Ministry of Justice finishes consulting later this month on eight closures across five regions, which would add to the 200 courts and tribunals closed since 2011. The lack of clarity from the Government on the court reform programme has been appalling. Bedford magistrates court closed in 2017 amid confusion over when services would be lost and where they were going. We were told that employment tribunal court services would remain, but then a shock announcement by the Ministry of Justice in July confirmed that Bedford tribunal court would close due to the termination of the lease on the building. That problem surely could have been foreseen.
I was assured by the former Justice Minister, the hon. Member for Esher and Walton (Dominic Raab), that the tribunal service would move to the former home of the magistrates court in Shire Hall. Technically, tribunal cases can be listed at Shire Hall, but that is not happening in practice. As I understand it, only one case has been listed at Shire Hall since the move. That case, to be heard in June, was granted under exceptional circumstances. I hope the Minister will clarify the status of court listings in Bedford when she speaks.
Access to justice is being denied to Bedford residents. Nearly all cases are now heard at least 30 miles away. The cost of transport is prohibitive to many, and the change comes at a time when peak rail services are also set to be cut. What about the dedicated court staff and lay members who have to make difficult journeys to work? The number of court officials and lay members leaving the job is rising at a time when the workload is vastly increasing.
One of the Government’s main arguments for closing courts is the underutilisation of facilities, but that argument does not stack up. Since the Supreme Court ruled employment tribunal fees unlawful in 2017, the workload for cases in Bedfordshire has gone up by 100%. Those are new cases, not the backlog. The Government can talk up their series of reforms and modernisation to make much greater use of digital technology and increase access online, but none of that means anything if people cannot access it.
The Government have committed to moving to a system where access to justice is not defined by proximity to a court or tribunal building, but ordinary people are finding it more difficult to access justice because of legal aid cuts, court closures and increased court fees. There is little evidence of the benefits the Government are trying to sell us. Instead, we have further announcements of closures, and further consultations that seem to ask questions but not listen to the answers. The Government should cease any further court closures until their promised courts Bill is published and their reforms can undergo full parliamentary scrutiny.
It is a pleasure to serve under your chairmanship, Mr Gray. I thank the hon. Member for Slough (Mr Dhesi) for securing this very important debate. The policy certainly affects my constituency, with Northallerton magistrates court scheduled for closure. We cannot disconnect this policy from the overall policy of trying to improve our public finances. It has been a long road from the position in 2010 when our day-to-day spending, which is a key measure, was in deficit by £100 billion a year, but finally in 2017 we got that back in the black, if we exclude investment spending, for the first time since 2001, which is a remarkable achievement.
We must always be careful when talking about the spending of taxpayers’ money, so it is absolutely right that we look for efficiencies. That cannot exclude our courts and court estate. The Minister has been a model Minister in her engagement. She has gone out of her way to engage with me, and I am sure other colleagues, to ensure we understand the policy and the reasons behind it. My principal question is: has the policy been properly rural-proofed and is it fair?
My constituency of Thirsk and Malton is very rural with far more acres than people. It is not a rotten borough—just a huge constituency, with 77,230 people entitled to vote in it—although it was rotten in the 18th century when Edmund Burke represented it. There are many similar constituencies up and down the country: 20% of our population live in rural areas; such areas have 25% of all businesses; 3.4 million jobs are in rural areas; and 16.5% of our economy is in rural areas. There are demographic challenges in rural constituencies. I know we are not debating the NHS, but I can draw a parallel in some of the consequences of policies. I recently had correspondence from a constituent who lives near Scarborough and had been forced to travel to York for her operation. She had to take a bus and stay overnight even for a consultation. Policies in rural areas have a profound effect and might have a similar effect in terms of people’s access to justice.
Many other services are impacted, such as bus services. In my constituency, because of the demographics, we have many bus passes but not many buses. All that needs to be taken into account in policy. If Northallerton court closes, travel times will increase significantly. The logistics must be considered. For example, a journey from Rosedale to York would require three different buses and would probably be a four-hour round trip. Hawes to Skipton would take a similar time. That can affect access to justice in rural areas.
It is important that defendants are able to access justice fairly. I have talked to magistrates, including one who works in my constituency office, Nigel Knapton, who is a JP. A lot of defendants are vulnerable and have mental health conditions, and difficulties in accessing a different court would be more profoundly felt by them.
The journey times would effectively transfer cost and time from the Ministry of Justice budget to the police budget, because our police officers would have to travel to the courts. We have seen that in other areas with the closure of the custody suite in Northallerton, which means our police officers have to take an individual they have arrested to Harrogate, which is an hour’s journey. That might seem like a sensible efficiency, but is transferring costs from one budget to another a false economy?
There is also an effect on witnesses if they have to travel to courts that are hours away. They can be compelled to attend, but that is not usually the approach. Having to travel early to get to a morning session would be harshly felt by many witnesses, which could mean fewer prosecutions being brought. Magistrates, who are volunteers—we need more magistrates and are looking to recruit—might be less attracted by the prospect of travelling to a court in Teesside, Harrogate, Skipton or York, miles away from my constituency.
I have talked to JPs such as Michael Colyer, who came to see me in 2016. He was worried about the potential closure of Northallerton magistrates court, and we were assured at that time that there were no plans to close it. He made the point that 95% of all criminal work is heard in a magistrates court, yet only 1% of the cost of the judicial system is in our magistrates courts. He asks why, instead of saying magistrates courts are not busy enough, the threshold for cases that can be heard in a magistrates court cannot be opened up. The current limit is six months. The Minister will know more than I do but, if we increased that to 12 months, magistrates could hear many more cases, and those cases could be heard in the most efficient part of the justice system.
The Minister was clear that we need to look at the issues carefully and to see whether technology can provide a solution to some of the challenges for rural areas. I am certainly very happy to move with the times, but we need to ensure that there has been a successful evaluation of the technologies to ensure they can deliver suitable access to justice for people in rural areas. I was interested to hear my hon. Friend the Member for Henley (John Howell) talking about Justice Briggs and his online courts. I am not against that, but my concern is that the announcement of the potential closure, which is rightly subject to a consultation, is premature, coming before we have seen the outcomes of the pilots. I would welcome a pilot in my area to see whether my concerns and those of many other people who have contacted me, including my police and crime commissioner, can be eased. I am happy to move with the times, but the policy must be fair and rural-proofed. People in rural areas must have access to justice just like everyone else.
It is a pleasure to be called to speak in this debate, Mr Gray. I congratulate the hon. Member for Slough (Mr Dhesi) on setting out the case so very well and on giving us an opportunity to participate in the debate.
We increasingly live in an age that seeks to centralise things and to consolidate physical holdings. Why have a bank in rural villages when people can bank online and can attend the bank in the next bigger town? The next step, more recently, has been the closure of banks in our bigger towns, with the main town of my constituency, Newtownards, having lost the First Trust Bank, the Bank of Ireland and the Halifax bank, and all branches making changes to the way they do things, all in the name of streamlining.
Yes, we have to streamline—in a way this debate is about streamlining—and yes, we have to modernise, yet there is a time and a place for that. Like the hon. Member for Moray (Douglas Ross), I want to comment on that and encourage the Minister. I know she listens to what we say and makes sure our viewpoints are taken on board, which is important.
I recently had a proposal on my desk to close the courthouse in Newtownards in order to centralise in Belfast. It was a worrying move that concerned us. The proposal was, if I can use these words, Mr Gray, absolutely crazy. The idea of closing the third biggest courthouse in the Province was simply a threat to justice in the area. The issue is as simple, as big and as important as that.
The former Minister decided to close a lot of courthouses in Northern Ireland—a decision that the new Minister reversed. The former Minister would have closed the only courthouse in the city of Armagh, the citadel city. That decision was rightly reversed, so that people could still access it.
I thank my hon. Friend for his intervention. I will tell the story from my constituency, as the hon. Member for Moray told his constituency’s story. It is wonderful to discover that things in my constituency are very similar to those in Moray, because things happen that are universal across the whole United Kingdom of Great Britain and Northern Ireland.
The Northern Ireland Department of Justice proposal was to reduce the court estate from 20 to 12—a 40% reduction. That is a massive reduction, and that did not include the courts that had already closed, including smaller courthouses such as a neighbouring one in Bangor, the closure of which was a downwards step. I believe that the level of closures was disproportionately high compared with the closures in England and Wales referred to in the Department of Justice consultation paper; there was a 28% reduction in 2010. That level of culling of courthouses in Northern Ireland was not necessary or beneficial, and did not provide basic access to local justice.
Newtownards courthouse has a significant volume of business. I want to put something important on record that relates to the reasons for retaining that courthouse: it is the busiest court outside Belfast and Londonderry, dealing with all types of specialised court business—civil, criminal and family. It is now a specialist centre for children’s courts, youth courts, magistrates courts, civil courts and Crown courts. The work of that courthouse has increased, taking a bit of pressure off the larger ones. Many disability living allowance and other benefit appeals are now held there, because the safety and security aspect is much better. That is important not only for confidentiality but for those who attend. The courthouse is now seen as thriving and constantly busy. It also brings business to the local coffee shops. The spin-off from the courthouses to the surrounding area can never be ignored, and shops in the town must also be taken into consideration.
The idea of taking justice from Ards to Belfast without just cause, closing the courthouse after spending almost £1 million on refurbishing it—the hon. Member for Slough referred to the spend on another courthouse—made no sense. Asking people to make the journey from Portaferry to Belfast made even less sense, and would in itself have been a barrier to justice, as the courts there are already overworked. The Department’s target that people should be able to reach a courthouse within an hour by car is fine for those who have a car in which to travel, but for too many people it is a matter of catching a bus or train. The hon. Member for Thirsk and Malton (Kevin Hollinrake) spoke about people having to make three bus changes to get to a new court. That is illogical and unfair. Catching a bus or train rarely, if ever, takes less time than it takes someone to jump into their own car.
Another important point is that people have to be at court at a particular time. They have to get up at whatever time is necessary and get on buses or trains to ensure that they arrive in advance. The hon. Gentleman referred to a four-hour journey for some people to get to court on public transport. The hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts)—I hope I said that right, Mr Gray; my Welsh accent is atrocious, but I tried very hard to grasp those two words—mentioned that as well. The issue of distance is very real to all of us in the Chamber.
I do not find the mentality of “Oh, what’s an hour’s drive?” acceptable. I do not accept it in my constituency of Strangford. I therefore support my hon. Friend the Member for Slough, if I can call him that, in his stand against the reforms in his constituency. The good news is that we managed to overturn them in ours. The legal community, the community of Newtownards, elected representatives, the local council and elected representatives from the Northern Ireland Assembly managed to combine our efforts and present an evidence base to Ministers to overturn the “economy savings” in my constituency by proving that it was a false economy. Ministers accepted that, and we now have a thriving and retained service in Newtownards as a result.
I am listening to the hon. Gentleman’s passionate speech about what happened in Northern Ireland, and how the Assembly listened to the concerns of the local community and experts. The Scottish Government and the Scottish National party failed to do that north of the border. There was clear evidence from experts and local communities that the 10 closures over two years would be damaging. We are now seeing that in Scotland, but the Scottish Government and the SNP would not listen.
I will not get involved in the local politics, but I will say that it is important always to listen to the evidence.
I trust that the hon. Member for Slough will succeed in showing that what matters more than the red or black line in the accounts is accessible justice—enabling victims to come to court and do what needs to be done, without being stressed by additional worries about journeys, bus routes or anything else. We should enable victims to have time to speak with their solicitor, rather than their solicitor being on the commute, unavailable to meet them until the court time. There are so many ways in which a victim is better supported by a court that is close to hand rather than removed. I know that the Minister has listened intently to all the comments in the Chamber, and will listen to those of the shadow Minister. I hope that the Minister will take on board those viewpoints and the evidential base for keeping courthouses in place.
It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend the Member for Slough (Mr Dhesi) on securing such an important debate at a crucial time. The scale and pace at which the Government are pursuing change necessitates careful consideration of the costs and benefits of the proposed changes. With £1 billion being spent and more than 250 courts having been closed already, it is crucial that they are carefully considered and scrutinised.
We are not against court closures or digitalisation in all instances, but we want to see justice done in the most effective manner possible. We believe that the local court system must meet the demands of the 21st century, catering to the needs of all our citizens. However, we have become increasingly concerned that the Government have instituted changes that will disproportionately harm the most vulnerable, and have prioritised cutting expenditure over the delivery of justice. The Government have closed courts, or proposed closing courts, without taking into account, for example, the issues surrounding the Cambridge magistrates court closure, which my hon. Friend the Member for Cambridge (Daniel Zeichner) set out in detail. My hon. Friend the Member for Bedford (Mohammad Yasin) set out his own case as well.
Importantly, in 2010, the travel time standard used to determine court location was one hour, but that has now gone up to a whole day for a return trip. Clearly that will affect many courts, and the most vulnerable will bear the heaviest costs. For young mothers who are unable to find care, or the elderly who find long journeys difficult, such court closures will prohibitively reduce access and will cost more. It is therefore hard not to share the conclusions of the Justice Committee last month that underlying such changes is an approach
“which appears to favour the principle of value for money over the principle of access to justice”.
In the light of that, I ask the Minister directly whether the Government are seriously not concerned that court closures will make victims and witnesses less likely to travel to courts to give evidence.
I acknowledge the contribution of the hon. Member for Thirsk and Malton (Kevin Hollinrake), who set out in detail what court closures could involve for all the people who use the system. It may be a case of a false economy: saving in one budget, but spending from another. Does the Minister agree that the reduction in courts is a backward step for our criminal justice system, because it would be difficult for people to access it?
Another important point is that the price at which the vast majority of such buildings has been sold seems alarmingly low. We recently found out that 80% of courts sold—that is, more than 120 courts—raised an average of not much more than the price of an average UK home. Research has shown that half the courts were sold for less than one and a half times the price of an average UK house. That is worrying, considering that most courts are in central city locations and are much bigger than most houses. Of the money raised so far, almost two thirds was generated by the sale of just nine courts in prime sites in and around London. Indeed, with courts in Ely, Rochdale and Consett being sold for a grand total of £21,000 combined, we see a clear picture of public property being sold off at knock-down prices. Perhaps that is not unsurprising from the party whose Government oversaw the underselling of Royal Mail by £1 billion.
The pace and width of sales bears the distinctive hallmarks of a Government who are selling off the family silver, which Conservative Governments have engaged in in the past. They find underutilisation and say that it is done for that reason, but that is not right. We know that courts are being utilised far more than is said. Hon. Members have already alluded to the fact that, for many of the courts that have been earmarked for sale on the basis of underutilisation, that is not actually the case, for example in Cambridgeshire or at Blackfriars Crown court, not far from here. Are the Government not concerned that selling recently updated buildings represents a clear waste of public money? Clearly, they need to reconsider whether there really is a need to close a court, in light of not just cost but the impact on everyone who uses it.
The digitalisation of courts is a historic shift. Digitalisation and virtual courts will have a lasting impact on our judicial system. Again, we have no objection to that. As the hon. Member for Henley (John Howell) said, technology can be used very effectively in courts. However, we are concerned about whether the Government have carried out proper consultation, looking at not just cost-effectiveness but the impact on people. At the moment, there is nothing on record from the Ministry of Justice to show what impact virtual courts and digitalisation will have on people involved in court proceedings.
A recent survey of magistrates, lawyers, probation officers and defendants highlighted serious concerns that appearing on video may make it more difficult for defendants to understand and participate in court hearings. Shockingly, prior to the introduction of the Prisons and Courts Bill in the previous Parliament, which was aborted due to the general election, no research had been carried out on the effects of virtual justice reforms on victims or defendants. In light of that failure, I ask the Minister again that she will guarantee that research into that key area will be done and published in advance of the courts Bill being brought to the House.
Further, in the push to move to virtual courts the Government seem to be assuming that town halls, police stations and other civic buildings will be able to provide space for virtual courts, and witnesses giving evidence from one court to another. No research has been done on whether any of that is plausible.
In addition, little consideration has been given to ensuring that there is proper legal advice for defendants. In the present system, if someone goes to court, a clerk and sometimes even friendly lawyers are on hand to give advice. I remember being in court and hearing somebody who was unrepresented saying something. I intervened, saying that they might need to see a lawyer or get advice. Obviously I cannot give advice in that situation, but guidance can be given. That happens so much in court, but it will not happen in a virtual court, because nobody is going to be there to see the problems arising. That aspect of the change has not been considered at all.
For most people, courts are something they only face once in their lifetime and the court system is alien, highly intimidating and difficult. Constituents have come to me with simple, straightforward issues, and they are so worried about what to do if they have to go to court, because it is an unusual situation for them. Although we have no problem with virtual courts, digitalisation or technology, there is again a question about how that is rolled out and how people who could be affected are considered.
The Government’s plans for automatic online convictions risk defendants pleading guilty without understanding the full implications of doing so. I ask for reassurance from the Minister that defendants will have sufficient legal advice to ensure that that does not happen. What mechanisms will be put in place to ensure that people online understand what is happening? Some of us may be computer-literate, but there are many people who do not have email accounts or internet in their home. What will be done about that?
In the reform proposals, the Government have spent more than £100 million on contractors, £30 million of which has gone to management consultants such as PwC. The amount of money spent—I would point out that it is equal to the amount raised from the sale of 223 courts —on projects that depend on an unpredictable future is a worrying sign of this Government’s attitude to proper parliamentary scrutiny.
Going forward, I ask the Government to ensure that all those concerns are addressed and that the issue of transparency is taken into account. If people are sitting in small rooms in different offices in civic buildings giving evidence or being dealt with, how do we ensure that our justice system is transparent? At the moment, we have physical courts that we can go and see, so how to ensure transparency in the court system must be addressed. Justice must be done and must be seen to be done. I ask the Government to look at the issues we and other hon. Members have raised and to promise that there will be no further court closures or reforms until they have published the draft courts Bill, fully detailing their proposals, and this House has debated those proposals.
It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Slough (Mr Dhesi) on securing this debate. He made some important points about the justice system in general. I am grateful that he secured the debate, has raised those points and has given me an opportunity to respond.
I make one point at the outset. The hon. Gentleman talked about cuts. The reform programme is certainly not about cuts. As he mentioned, the Government are putting £1 billion into our court reform programme and every time a court closes, the money from the sale of that court goes straight back into our justice system—more particularly, our court system.
Like the hon. Gentleman, I would like to address the issue of justice in broader terms. We should start by asking ourselves a question in the context of the debate. What is justice, and how should it be administered? It is not necessarily about a court, a wig and a dock—it is much broader than that. It is not constrained by a particular location or a setting. It is about the fair determination of rights. Although a court of course plays an important part in the determination of those rights, we must also think about how in the modern world we can deliver better, fairer and more effective justice, which is why the Ministry of Justice has started to invest £1 billion in our justice system over the last few years.
We are upgrading our system so that it works better for everyone—judges, legal professionals, vulnerable victims, witnesses, litigants and defendants. We are modernising the system. The hon. Member for Slough asked what the evidence is of the advantage of technology, and I will answer that. The Civil Justice Review of the 1980s said that we needed to use computers to manage listing. Lord Woolf called for the use of technology in the 1990s. In 2015, the Civil Justice Council stated that online dispute resolution had the possibility and potential to bring forward advantages to our justice system, such as lower cost but also more access to justice. When the court reform Bill went before the House before the general election, a document on transforming justice was put together by the Lord Chief Justice and Lord Chancellor of the time and the Senior President of Tribunals. They all called for our justice system to be brought up to date using technology. They recognised that it would bring our system forward and that by doing so, we would need fewer court buildings. I was interested to hear my hon. Friend the Member for Moray (Douglas Ross) calling for more digitalisation in Scotland.
Would the Minister accept that the move towards, for example, online courts has come not from judges but from potential litigants who would like to see that as an alternative?
My hon. Friend is absolutely right. It is not only justices who are advocating online courts but people who use the system. We recently launched our online digital court process, through which people can make claims of up to £10,000. The pilot has been extremely successful.
That brings me on nicely to our other pilots. We are in the midst of upgrading our system in a variety of ways, in different courts and for different remedies that people need. It is now possible to apply for an uncontested divorce and for probate online. It is possible to make pleas for lower level offences, to respond to jury summonses and to issue and respond to civil money claims online. In the social security tribunal system, it is possible to track an appeal online and get mobile updates about the progress of a case. Those changes are making access to justice more efficient, quicker and, for many, much easier to use.
Thousands of people have already used those pilots and received straightforward digital access to justice for the first time, and the public feedback has been extremely positive. By providing services online, we are significantly improving the experience of those using the courts. We see that in the number of forms completed correctly. The rejection rate for paper divorce applications was 40% due to errors and omissions. Since the latest release of the online divorce service, the online rejection rate is now less than 1%.
The hon. Member for Bolton South East (Yasmin Qureshi) made some important points about vulnerable people. She is right that not everybody has a computer, uses the internet or is comfortable doing so. We are establishing a range of support channels, including telephone and face-to-face assistance, and we have worked closely with other Departments to ensure vulnerable people are protected. Our experience shows that the most vulnerable will still be able to access digital services. For example, in relation to our help with fees, the rejection rate stands at about 20% after the introduction of digital processes, compared with 75% for the paper version.
The hon. Lady also said that court can sometimes be intimidating. I said previously that we have social security updates for people going through the system on their mobile phone, and the feedback from that has been extremely positive. Someone said recently, “Courts, judges, decision all quite frightening. This completely calmed me down.” My hon. Friend the Member for Henley (John Howell) talked about the possibility of technology improving our court service—not only in the commercial court but elsewhere. It is right that we consider the possibilities for justice.
We are not just investing in digital. Since April 2015, we have spent £108 million on capital maintenance to improve our estate, including £2 million for refurbishments in Manchester Central, £1.5 million for rewiring and replacing windows in Preston and more than £1.5 million for a roof and lift replacements in Leeds Central.
Other hon. Members raised issues about court closures. We must recognise some important facts about the court and tribunal estate, which is underused. About 41% of courts and tribunals used less than half their available hearing capacity in financial year 2016-17, and much of that space is in poor condition. The hon. Member for Slough talked about Maidenhead. The court is underused and sat for less than one third of its available hours in the past financial year. It is in a poor state of affairs and requires a new roof and windows, generating a total maintenance backlog of more than £1 million.
The Minister is making a very good point about buildings that need investment, but is she aware that Northallerton is in fantastic condition, having recently been refurbished, and that it has the best disabled access in North Yorkshire?
I was coming to Northallerton, but as my hon. Friend raises it I will deal with it now. As always, he made some very valid and rational points in his speech, including about the need to keep our finances under control. We are doing that and must continue to do so. He also made some valid points about rural areas. I represent a rural area, and I understand his concerns. I am pleased to have met him and the police and crime commissioner for his area. There is a good service in Northallerton, but it is underused. An interesting fact that has recently come to light is that only 11% of cases held in Northallerton magistrates court actually come from the Northallerton area, so the court actually serves a much wider area. That is how our civil justice system operates.
It is important that when we are looking to close courts—of course, no decisions have yet been made about any of the courts that are under consultation—we need to ensure that the technology we are talking about is operative so people still have access to justice.
Should we not thank lay magistrates and justices of the peace who support our magistrates courts across the country for very little recompense, other than the satisfaction of contributing towards society? When court reorganisations take place, should we not consult magistrates to ensure we get the best outcome for local people?
My hon. Friend makes a very important point. Magistrates voluntarily make a significant contribution to our justice system. I recently met the Magistrates Association, which does incredibly important work, and I will continue to engage with it. I met a number of magistrates in my constituency. This is not just about them; there are also volunteer legal professionals and victim liaison and support workers. A lot of people do pro bono work. The justice system relies on the voluntary work of a lot of people in our communities.
It is important that we ensure witnesses can get to court. Our use of video technology means that people do not necessarily have to go to court at all. Therefore their journeys are non-existent, rather than increased.
The hon. Member for Slough asked whether court staff should be invited to respond to the consultation. They have been, and we welcome any responses to it.
I am pleased that the hon. Member for Cambridge (Daniel Zeichner) acknowledged that justice is changing, and that we need to adapt to that. His points have been heard and will be passed on.
The hon. Member for Slough talked about the principles we should think about when we close a court. That is why, alongside the consultation on the eight courts, we opened the consultation “Fit for the future: transforming the court and tribunal estate”, which sets out our strategy for the wider reform of our court system and underlines principles that should be considered. People can have input into it as we go forward.
It is important that we have a sensible, proper debate about how we spend our money in the court system. We have consolidated our court and tribunal estate since 2016, and we have put the money from those surpluses into our court estate, and we will continue to do so. I am grateful to have had the opportunity to debate this important topic. The Government are investing to transform the service provided by our courts and tribunals so we continue to deliver an effective and fair justice system that serves all users whenever they need it.
Again, I am grateful for having secured this important debate, and I am grateful to all hon. Members who contributed to it. Many talked about the effect on their constituencies. The hon. Member for Henley (John Howell) talked about the use of technology in hearings and about alternative dispute resolutions. My hon. Friend the Member for Cambridge (Daniel Zeichner) spoke persuasively about the impact of the court closure in Cambridge, and about how local justice, which dates back centuries and for which we in this country are famed, will no longer be available if the court is closed.
I thank the hon. Members for Moray (Douglas Ross) and for Strangford (Jim Shannon) for their kind support. They spoke passionately about the impact that this is already having on Scotland and Northern Ireland. We need to be careful, because the closure of banks, which the hon. Member for Strangford mentioned, and courts is ripping the heart out of local communities. My hon. Friends the Members for Bedford (Mohammad Yasin) and for Bolton South East (Yasmin Qureshi) spoke passionately about the impact in their communities. My hon. Friend the Member for Bolton South East called for a halt to the sell-off until the courts Bill is published.
Nobody would argue against reform, but it must be done in a holistic and sympathetic manner. The Minister referred to Maidenhead, but it is not merely about costs and savings—
Motion lapsed (Standing Order No. 10(6)).
I beg to move,
That this House has considered provision of lymphoedema services.
It is a pleasure to serve under your chairmanship, Mr Gray, and I thank the Minister for being here to respond. This is the first Westminster Hall debate I have secured, and I am proud it is on an issue that affects many people in the United Kingdom. It was first drawn to my attention by my constituent Melanie Thomas MBE.
Lymphoedema or chronic oedema is a chronic swelling due to the lymphatic system failing. It mainly occurs when the lymphatic system is damaged by surgery, radiotherapy, trauma or infections. People can also be born with lymphoedema if the lymphatics have not developed properly. It affects people of all ages, and the swelling can occur in any part of the body. People think it is rare, but it is not, and research suggests that about six people per 1,000 have lymphoedema which, to put that into perspective, is about 400,000 people in the UK. If we look at the legs and feet of people in supermarkets or even here in Parliament, we will see swollen oedematous legs.
The problem of chronic oedema is getting worse as we get fatter and live longer with the consequences of other health conditions. Fifty-five per cent. of the average community district nurse case load is people who have swollen oedematous legs, with or without wounds. Such nurses, however, are not lymphoedema experts, and most do not have the skills in lymphoedema bandaging or prescription of compression garments.
I congratulate the hon. Lady on achieving this Westminster Hall debate. She referred to 400,000 people suffering from lymphoedema. Macmillan Cancer Support has estimated that there are 124,000 sufferers in the UK. Does she agree that there must be a better NHS support system, including more practice nurses, and specific training in lymphoedema care? The Government need to allocate the funding to support those suffering from this chronic condition.
I wholly agree with the hon. Gentleman. I will discuss training needs later—there is a definite need.
Lymphoedema can affect people physically, psychologically and socially. It has a significant impact on quality of life and prevents people from undertaking the normal activities of daily living. Reported issues include: massively swollen limbs that leak through clothes and soil carpets and beds; poor mobility; the inability to find shoes that fit and a limited choice of clothes; increased pain; inability to work; frequent admissions to hospital with cellulitis; stigmatisation and people being scared, anxious and depressed; and inability to cope and a feeling of lost control.
We might think that people can get treatment, but they cannot—that is the problem. Lymphoedema services are scarce. People suffering with lymphoedema cannot access the treatment they need or deserve. There is wide variation in the organisation and delivery of lymphoedema services throughout the United Kingdom. Some areas have commissioned full lymphoedema services—services for both cancer and non-cancer patients—others offer cancer-only services, and others provide no lymphoedema services at all.
Lymphoedema services that have been commissioned range from lone practitioners to small teams, so waiting and treatment times vary, as do treatment options. That diversity is not a result of patient need and is not patient-centred. Most people with lymphoedema go undiagnosed and untreated for long periods as a consequence of the poor level of knowledge among health professionals and the limited support from healthcare managers and commissioners. Lymphoedema is a growing condition, so what support are the Government providing to develop pre-graduate and postgraduate education for healthcare professionals to raise awareness of the condition? Something has to change.
Becoming aware of the lack of lymphoedema services in Wales, the Welsh Government listened to its members. I am very proud of that. The Conservatives might slate the Welsh NHS in the Chamber, but this is a wonderful area of work that has been developed in Wales, and I want to hail it. In 2009, the Welsh Government commissioned a lymphoedema strategy for Wales, which sets out clear aims to enable access for all lymphoedema patients to the appropriate services at the right place, at the right time and with the right person, regardless of whether their lymphoedema is related to cancer. Lymphoedema strategies have also been written in Northern Ireland and Scotland. England is the only nation not to have one.
In 2011, the Welsh Government invested £1 million to implement their lymphoedema strategy. The funding enabled lymphoedema services to be set up under every health board in Wales, managed by Lymphoedema Network Wales to maintain strategic oversight of the strategy for lymphoedema in Wales. Services are also made available in the more rural areas of Wales by the Tenovus Cancer Care mobile unit, which works closely with Lymphoedema Network Wales and the Abertawe Bro Morgannwg University Health Board.
Lymphoedema has always been a chronic, incurable condition, but new evidence suggests that significant improvements can be made for patients. In Japan and Europe, a super-microsurgical technique, which joins the defunct lymphatics to a functioning vein, has seen a 96% reduction in cellulitis episodes, and 70% of treated patients have stopped utilising compression garments as a result. The technique—lymphatic venous anastomosis, or LVA for short—is available on the NHS only in Wales. The Welsh Government supported the investment to make that happen and 42 patients per year can now have the innovative surgery that has the potential to cure their lymphoedema.
I have a constituent called Caroline, who is in her late 30s. She has had lymphoedema affecting her leg for several years. She recently had an infection and had to go to accident and emergency three times. She now has to wear surgical stockings for the rest of her life. Had she been diagnosed earlier, she would not be in that situation. Does my hon. Friend agree that, if a strategy had been in place, my constituent would not have needed to go to the NHS so often, saving money by controlling the condition when she was first diagnosed?
My hon. Friend makes a valuable point about the waste of money. The money is wasted on services because the lymphoedema is not being treated properly with the correct garments. We hope that that will be addressed so that the NHS can save money and be more effective.
We want better outcomes for patients as well as to save the NHS money. LVA is available privately in the UK, but not everyone has the £15,000 needed to have the surgery. LVA has the potential to cure lymphoedema and stops the need for admissions to hospital for cellulitis and for expensive compression garments. When will this surgery be available on the NHS for England, Scotland and Northern Ireland?
Wales also leads the way in developing a national paediatric lymphoedema service. Children can have lymphoedema, and in Wales 260 have the condition. Last summer I had the opportunity to meet some of them in Margam at an event organised by the Lymphoedema Wales Network. I saw them participate in a wide range of sports—that is important, because having lymphoedema does not mean people cannot participate in sport, and those young people were being actively encouraged to play football and rugby. The most important thing that came out of that day was the opportunity for young people to meet people like them, and for parents to meet one another. It was absolutely invaluable for those young people and their families to discuss things and have a support network.
Hon. Members should not think that Wales has it easy, because it does not. When it got the funding, the prevalence of lymphoedema was two per 1,000. It has now tripled to six per 1,000. It is the same story in Northern Ireland—when the Lymphoedema Network Northern Ireland was started, the prevalence was 1.33 per 1,000; it is now five per 1,000.
A small change can make a difference. If Wales and Northern Ireland can do it, why can we not have an equitable service among all nations? In England, I have been made aware that Herefordshire, Bedfordshire, Tamworth, Coventry, Luton, Southport and Aintree have services available only for cancer patients. Warrington, Barking and Bolton have no lymphoedema services at all. Morecambe bay’s services were under threat, but there was good news of additional funding. What is NHS England going to do to support its clinical commissioning groups in commissioning lymphoedema services, to end the inequity of service provision and patient suffering?
The NHS is wasting money trying to treat lymphoedema patients, as well as having a huge impact on patients’ lives. Many tell stories of wasted time, of being referred to numerous hospital specialties, of inappropriate wound dressings, with bandages often used, and of patients being admitted to hospital with cellulitis because the lymphoedema has not been treated. We need to save money and start treating patients with lymphoedema better. Let us improve education on chronic oedema, get more clinical expertise in the community to prevent complication and admissions, and ultimately, stop the current postcode lottery as well as the non-cancer inequity.
In 2002, a debate was held in this place. Very little has changed in the 16 years since. What will the Government do to support our constituents to gain the lymphoedema services they so rightly deserve? I would welcome the opportunity to facilitate a meeting between Lymphoedema Network Wales and the Minister at his earliest convenience.
I congratulate the new hon. Member for Gower (Tonia Antoniazzi)—I knew the last one—on securing her first debate in Westminster Hall, as she said, which is on a very important issue.
Lymphoedema Awareness Week took place earlier this month, so today’s debate is timely. We heard much from the hon. Lady on the impact of the condition, which she set out very well, although Members should watch themselves looking at people’s legs and feet in supermarkets. I am sure therein lies a problem for me in Winchester, but I take her point. She set out very well the difference that high-quality care and support can make. We can all agree that we want that for people affected by lymphoedema. I hope the debate will encourage service providers across England to consider the improvements that they might make.
It is estimated that between 75,000 and 220,000 people in England are affected by lymphoedema. The condition is caused by abnormal accumulation of lymph fluid in body tissue, which can be the result of a congenital defect, of damage to the lymphatic system or of removal of lymph nodes by surgery, radiation, infection or injury. Obviously, cancer plays a role in that, which I will come to. Regardless of the cause, it is important that the NHS responds appropriately in diagnosing and managing the condition, and that it provides appropriate support and advice to those affected. A lot has changed since we had the last debate.
Will the Minister say more about consistency of services for lymphoedema across the country, and acknowledge the role of our hospices? In my constituency, the Mary Ann Evans Hospice, of which I am a patron, has a lymphoedema care service, which is very valuable to local people.
In my response I will touch on services across England. My hon. Friend is right to mention the hospice movement. Many people working in hospices become experts in this field by virtue of their day-to-day work. I am very happy to endorse what he said, and I thank everyone working in the hospice movement who is helping patients affected by lymphoedema.
In Scotland, Wales and Northern Ireland, certain national lymphoedema initiatives have been developed—we have heard about the initiatives in Wales. Health is a devolved matter, and devolution is important. The devolution settlement from the last Government stands, and allows the four nations of our United Kingdom to develop the services that they believe meet the needs of their resident populations and the respective size of them. In England, responsibility for determining the overall strategic national approach to improving clinical outcomes for healthcare services lies with NHS England, and the provision of lymphoedema care is the responsibility of local NHS commissioners.
Although lymphoedema has no cure, interventions such as decongestive lymphatic therapy, skincare, exercise advice and weight management can ease symptoms and improve quality of life for those affected. The hon. Lady was absolutely right to raise the issue of weight management—there is a lot of discussion in this place about the obesity challenge that we face. This condition is a not-often-talked-about consequence of the obesity challenge, and I am grateful she raised it. People with lymphoedema can usually be treated through routine access to primary or secondary care services with access to dedicated lymphoedema clinics. I have experience in my family of attending such clinics.
To support clinicians in the diagnosis, treatment and support of patients with lymphoedema, an international consensus document on the condition was produced in 2006, which is endorsed by the British Lymphology Society and the Lymphoedema Support Network. Additionally, the Royal College of General Practitioners offers an e-learning course on lymphoedema—the hon. Lady said that that was one of her concerns. That often supplements GPs’ existing understanding of the condition, which is covered in the GP curriculum, and I am pleased to say that it is identified as a key area of knowledge that we expect of them in their qualifying exams.
We heard from the hon. Lady about calls for a national lymphoedema service in England. Hon. Members may be aware that, in 2015, the British Lymphology Society submitted a proposal for a nationally commissioned specialised lymphoedema service to the Prescribed Specialised Services Advisory Group—we like our titles and acronyms in health—which is an expert committee appointed by the Department to consider these very matters.
Four factors should be considered when determining which prescribed specialised services should be directly commissioned by NHS England, the first of which is the number of individuals needing the service. The second factor is the cost of providing the service—after all, it is a publicly funded health service. The third consideration is the number of persons able to provide the service—the workforce—and the fourth is the cost to clinical commissioning groups in England for providing the service.
Taking account of those four factors, the advisory group concluded that lymphoedema services were not suitable for national commissioning. As the patient population was high in England, there were numerous providers and the burden to commissioners was low. However, we keep that under constant review, which links to my next point about Wales. We recognise that there can be opportunities to learn from our partners in the devolved Administrations while taking high-quality clinical advice from our advisers, such as I just mentioned.
We are aware of the recent evaluation of the lymphoedema service in Wales, which was published in the British Journal of Nursing, and we agree that the results appear to be very positive in addressing the challenges faced in Wales. We also note the caution applied to some of the figures but, as I say, we keep it under constant review, and the hon. Lady’s debate is helpful in that regard.
In my experience as a Health Minister, NHS commissioners are always keen to hear about services that have demonstrated savings and improved care in other parts of the country and the United Kingdom. For example, the Healthy London Partnership, a collaboration including London’s NHS, councils and Public Health England, for which I have responsibility, has drawn on the work of the Welsh lymphoedema service for its own service. We watch that closely. NHS England is also aware of the evaluation of the Welsh service and—the hon. Lady asked about this—is in touch with the national clinical lead for lymphoedema in Wales, who is one of her constituents. That relationship is ongoing and bearing fruit.
The hon. Lady mentioned cancer, for which I am the Minister responsible. Lymphoedema resulting from cancer treatment, which, sadly, has touched my life, is common. About one in five people have lymphoedema of the arm after breast cancer treatment that affects the lymph nodes, which are so difficult. Much of the lymphoedema service improvement in England has developed as a result of national initiatives to improve cancer services and, sadly, the high number of breast cancer incidents. There is growing recognition of the need to support cancer survivors after they fall off the cliff edge when their treatment ends. Lymphoedema services are a key part of that, and I have seen them when out and about doing my job.
Over the years, the Government have driven forward the cancer survivorship agenda, which I am passionate about and committed to, first through the national cancer survivorship initiative, and then through the living with and beyond cancer programme, for which I am responsible. Central to that work has been embedding in mainstream NHS commissioning a recovery package, which is a combination of interventions that, when delivered together, can greatly improve outcomes and the co-ordination of care beyond the cancer pathway, which is what we are looking at, including through better and earlier identification of the consequences of treatment for conditions such as lymphoedema.
Members will be aware that our world-class cancer strategy for England, which has another two years left to run, was published in July 2015 by the independent cancer taskforce. It recommended that NHS England should accelerate the commissioning of services for cancer survivors, including the development of a minimum service specification to be commissioned locally for all patients, based on the recovery package I just mentioned. That specification was published in April 2016 and includes provision of lymphoedema care. It was followed by £200 million of funding to support the implementation of the recovery package and other areas of the strategy, which I am sure I will talk about again in debates in this place. Those services should be provided on the basis of need, not of whether someone has had cancer.
Finally, let me highlight the research that is being undertaken. We invest more than £1 billion a year in health research through the National Institute for Health Research. The NIHR is currently supporting three important lymphoedema studies: an analysis of genes and their functions in primary lymphoedema; an investigation of the pathophysiology of breast cancer-related lymphoedema of the arm, which I mentioned; and a feasibility trial of early decongestive lymphoedema treatment for women newly presenting with breast cancer-related upper limb lymphoedema, which is very important.
As well as thanking you, Mr Gray, for sitting through what I hope has been as interesting a debate for you as it has been for us, let me thank the hon. Lady again for using her first Westminster Hall debate to raise this important issue and highlight the many challenges that people with lymphoedema face. I am confident that, by continuing to build our expertise, increasing the research I listed and ensuring that our commissioners and clinicians have the training, tools and guidance to deliver high-quality lymphoedema care, we can ensure that patients receive the treatment and support they need and deserve. As ever, I am grateful to Members. We keep everything under constant review, because ultimately we have a publicly funded health service that is there for patients. As the Minister with responsibility for primary care, I have responsibility not only for cancer but for prevention, and I am interested in anything that can help us to reduce people’s suffering and the cost to that publicly funded health service.
Question put and agreed to.
[Dame Cheryl Gillan in the Chair]
I beg to move,
That this House has considered digital taxation.
It is a pleasure to serve under your chairmanship, Dame Cheryl. Let me start by thanking all hon. Members who have come to take part in the debate. I feel we have a slight imbalance of forces in the Chamber, but none the less it shows the high level of interest in the subject.
My interest in it comes from talking to the small businesses in my constituency. Those Members who know my constituency well will know it is not a place with one large or dominant employer or sector but a place of very successful small businesses. We have wonderful independent shops in Market Harborough and on Bell Street in Wigston, we have fantastic manufacturing businesses such as COBA in Fleckney, which I visited the other day, and we have great high-tech businesses, particularly around Kenilworth Drive in Oadby. A lot of small businesspeople ask me, “We are paying our business rates and taxes, but are large international digital businesses paying their fair share of tax?” We need to ensure that the answer is an unambiguous yes.
This debate is timely. At the time of the spring statement, we saw the Treasury publish its position paper, “Corporate tax and the digital economy,” and since then the OECD has produced a report on the same issue as part of the work on base erosion and profit shifting that the UK has led on and, just last week, the European Commission published a paper on the same subject. It is significant that both the European Commission and the Treasury have independently arrived at some similar conclusions. In fact, both the Treasury paper and the European Commission put forward two options: a comprehensive international reform, or an interim tax to be levied before such a reform can be agreed internationally.
It is clear from reading all of those documents that taxing large digital businesses and distinguishing them from other firms that trade internationally is not simple or straightforward at all. None the less, I was encouraged to see the Treasury consulting on that question and being prepared to think radically about what we need to do to address it.
What is the case for action? Put simply, international tax treaties were designed in an era when doing business internationally inevitably meant having to have physical premises, offices, factories and lots of people in the country where business was to be done. However, today things are different. A large digital business could sell advertising to firms in country A, to be seen by users in country B, served off servers in country C, perhaps under a brand owned in country D, which is financed and owned by a company in country E. That business can ensure that its profits are booked in whichever jurisdiction taxes are lowest.
That is the issue in abstract; let me give a concrete example. I do not want to pick on a particular business, but I use the example cited by Jonathan Ford in the Financial Times relating to Google in 2014. He reported that the firm had made about £4.3 billion of sales in the UK and that, in line with its global profit margin of about 26%, that would have meant about £1.1 billion of profits to pay tax on—and, in turn, a corporation tax payment of £220 million. However, he reports that in that year it paid only £30 million in corporation tax.
A simple division of Google’s global profits by its share of users in the UK would not be a fair basis to work out its tax liability here, because obviously a large proportion of its engineers and research and development are in the US. None the less, it feels like we might expect a bit more of the value created by UK users to be reflected in taxable value in the UK.
Since 2014, things have moved on. We have seen the introduction of the so-called Google tax to stop some of the worst abuses of the international system, stopping firms from artificially signing all of their contracts in a particular country, and looking through some of the artificial arrangements put in place by some firms. However, there is much more to do.
In fact, this issue is far from unique to the UK. The European Commission reports that digital companies pay on average roughly half the effective tax rate of firms in the traditional economy. A revealing map in the Commission’s impact assessment shows very little correlation between where digital businesses’ user activity is and where in Europe their profits are booked. In other words, there is no real link between where value is being created and where tax is being paid. It is therefore absolutely right that the Treasury is consulting on going further.
That is the case for action. Our approach should be guided by three principles. First, any new tax has to be for the largest international businesses only, with generous allowances to carve out small firms. We do not want to do anything to hamper the vibrant tech start-up scene we have in the UK, and it would make no sense to try to impose a large and complex tax on minnow-sized companies where the cost of administration would outweigh the benefit of the tax we might collect. I was glad to see a nod in the direction of carving out smaller firms in the Treasury paper, if I have interpreted it right.
Secondly, we need a tax that has a clear distinction between tech businesses and other international firms. We do not want to unravel the complex web of global tax agreements we have at the moment or come up with something that can never be agreed internationally. We need to distinguish between tech and other sectors. Let me give an example. There is no real difference between selling advertising on a British newspaper website or a popular blog and selling it in a physical newspaper—the value is still created by the journalists based in the UK. If, on the other hand, I post a video I have made or a song I have recorded—many Members will be horrified by the idea of listening to me singing—even if that website is ultimately owned in some tropical tax haven, I have created the value in the UK, and it is right that the profits should be booked here and taxes paid here. The emphasis in the Treasury’s paper on the concept of user-created value is the right way to make that distinction.
Thirdly, we need small businesses to reap the benefits from any new tax on large digital firms. I am proud that we have helped hard-working people in the small firms in my constituency by reducing corporation tax and taking large numbers of small firms out of business rates altogether, but many still do pay a lot and it would be good to be able to go further.
Realistically, a new tax on large tech firms is unlikely to raise more than a few hundreds of millions of pounds, which is not a huge amount in the grand scheme of Government spending but none the less enough to help level the playing field a bit and allow the Government to do more to cut tax on small businesses. For example, the Government recently allocated £25 million to reduce business rates for small pubs, which has been a huge help to many of them. If we could raise more from large tech firms, we could do even more of that.
Those are the principles. Let me turn to the detail of how we might implement such a tax. There are a number of important decisions to make about its design. First, what should we be trying to tax? The clear principle we must push for internationally is that a business’s profits should be taxed in the countries where the value is created. At present, the accounting profits are simply too easy to move to a low-tax jurisdiction. Some in the media have talked about a tax on sales, but ultimately they are not a good proxy for value being added. Sales overseas are far from unique to digital businesses, and the idea of sales is not necessarily easy to define for businesses that have a free-to-use model. The Government are right to focus on the core concept of user-created value. What kinds of businesses does that mean we should try to tax? It means the free-to-use services that many of us use, be they search engines, social networks, app stores or online marketplaces; I am sure we could all name firms in all those categories. Those online platforms are not like other kinds of businesses, which perhaps create or store a bit of data on their customers; they are platforms substantially made up of user-generated content or have very valuable data from deep engagement with their users.
It is sometimes said online that with some of these businesses, “If you aren’t the customer, then you are the product.” Personally, I would put it more positively: the users are both the producers and the consumers for those new types of business. The European Commission uses the rather ugly word “prosumers” to describe that business model. That new business model is the reason why the tax system now needs to change to keep up.
The third question of detail is how exactly to design a tax on that new category of business. There is a distinction to be made between the ideal international agreement and something we could implement in the nearer term. Looking to an international agreement, I note that the Treasury’s paper talks about allocating,
“a share of the profits of the principal companies after routine functions in the group have been remunerated with an arm’s length return. That share would be designed to approximate the value that users generate for the business.”
That is simultaneously the right thing to be taxing, and something that will be quite an art to determine. I will give a couple of examples of the complexities here. The Treasury paper includes a discussion of the different kinds of value created by more or less active users and the issues created by users who cross borders regularly. It also explores some of the potential avoidance measures that firms might be tempted to take.
Looking at the positions that different Governments around the world are taking on this question, it seems unlikely that a new global agreement will be reached soon. Both the Commission and Treasury papers talk about a simpler interim tax on revenues in the meantime, which I think it is right for us to consider despite the difficulties of revenue-based taxes. The Commission paper talks about three types of revenues that would be taxed—revenues from selling online advertising, from digital marketplaces and from the sale of user-provided information. The Treasury’s paper has a similar range of options on the design of a tax: types of business, types of activity or a hybrid of the two. Personally, I think types of activity looks like the simplest option, but any of them could potentially work.
Finally, questions arise about what rate we might reasonably set, how much a tax could raise and who would be paying such a tax. A study by the United Nations of the largest 100 digital businesses in the world suggests that around two thirds of them are based in the United States, compared to only one fifth of other multinationals. We might expect such a levy to fall mainly on US-based firms. The European Commission in its paper goes a little further than the Treasury and sets out some potential thresholds and rates; it suggests taxing firms with worldwide revenues of over €750 million and European Union revenues of €50 million. There are, of course, very few firms with revenues on that scale. To me it feels as though that is the scale of businesses we should be aiming to tax.
I congratulate my hon. Friend on securing this debate. This is an important, interesting and tricky subject, and one that we need to take a good long run-up to, so it is exactly the kind of debate we should be holding. He seems to be addressing mainly the question of how to make corporation tax, the historic tax on profits, work in a new age with these new kinds of businesses. Does he not feel that we should also be thinking about what is happening to the property taxes we have historically raised from business, and our likely need to replace business rates as a source of revenue? Rather than just fixing the profit tax, which he seems to be mainly suggesting, should we also be thinking about whether we might use whatever new tax base and taxing mechanism is created to also replace some of the property tax that businesses currently pay?
Order. I am delighted to welcome the hon. Gentleman back to Westminster Hall for, I think, the first time in two years. I will just remind him that interventions need to be short.
Forgive me, Dame Cheryl.
I thank my hon. Friend for his thoughtful contribution. I agree that there are a number of different aspects of the tax system that are no longer very buoyant and need to be modernised. He picks on one that is perhaps a debate for another day, but none the less an important one.
Coming back to my point, few businesses would be affected by a tax with the kind of carve-outs that the European Commission is talking about. I hope that similarly, when a detailed proposal comes from the Treasury, we will also see a generous carve-out for smaller businesses. To give a sense of the difference it makes, I note in the Commission’s impact assessment that reducing the threshold for inclusion from €750 million to €500 million would double the number of firms affected and caught up by such a tax, but only raise revenues received by 7%—a lot more bureaucracy for not a lot of gain. That suggests to me that a focus on the very largest players is the right one.
On that basis, and on that base, the Commission suggests a 3% tax on revenues of those kinds, which it believes would raise around €5 billion a year across the EU as a whole. That would potentially mean hundreds of millions of pounds in the UK if we did something similar. As the Treasury moves towards making its own decisions on setting rates and thresholds, I am sure the Minister will be thinking about the same considerations and thinking about how a UK tax might fit alongside an EU one, if the EU ends up with a consensus to take action.
To conclude, while a new tax on large digital businesses might not raise vast sums, it could raise enough to make a substantial difference to small businesses in my constituency. It would be a welcome addition to the raft of anti-avoidance measures that we have seen in recent years—over 100 measures now, raising over £175 billion since 2010 alone—and if we can get those large, digital businesses to pay a fairer share of tax, we can go further in cutting the taxes small businesses pay, such as doubling the small business rate relief we have seen and extra help for small shops and pubs on top of that.
To get big tech to pay a fair share of tax, it seems to me that the Treasury is gearing up to propose some pretty bold and unconventional measures. I am sure some people and some firms will come out to oppose that, but given that we have completely new business models changing our economy and a clear case for reform, Ministers should be bold and I encourage them to go for it.
As a member of the Science and Technology Committee, I am delighted to contribute to this debate and champion the transition to a digital form of taxation. The issue here is not only the businesses that we will be looking to tax, but the form that our taxation regime takes. Far too often, Governments are slow to modernise and adapt to the times, and I am glad to see that my colleagues in the Treasury have chosen to focus their attention on this area. I will follow the results with great interest.
Although I would never encourage digitalisation simply for its own sake, developments over the last five years have made the creation of a workable, transitional period leading to digital taxation an absolute necessity. We live in an age when cryptocurrencies, challenger banks and blockchain technology are taking off, while e-commerce continues its shake-up of the retail sector. Furthermore, the closure of local bank branches en masse around the country has resulted in individuals having to adapt to a rapidly changing pecuniary landscape. Her Majesty’s Revenue and Customs can and must keep pace with the innovations of Silicon Valley and Tech City, as more and more tech companies enter the financial arena.
From a purely practical standpoint, the current annual system of tax returns is an administrative burden and an overly lengthy process for businesses. The programme of reforms will contribute to the HMRC target of reducing tax administration costs by £400 million by the year ending 2019-20. The old system was far too complex, and businesses would often only know their tax liabilities at the end of a financial year, which imposed uncertainty on them and ultimately prevented them from planning for the future.
As I understand it, by 2020, businesses, self-employed individuals and landlords will have the option of keeping track of their tax affairs digitally, updating HMRC at least quarterly via their digital account. Those quarterly updates will not amount to four separate tax returns in a year, despite a degree of uncertainty on that point. The Government have assured us that bureaucracy and constant form-filling will become a thing of the past, with the information that HMRC requires being automatically uploaded on to people’s digital accounts.
Businesses will be required to use the Making Tax Digital for Business system only from April 2019, and even then only to meet their VAT obligations. That will apply to businesses with a turnover above the VAT threshold; the smallest businesses will not be required to use the system, although they can choose to participate voluntarily. I believe that businesses with a turnover of below the £85,000 VAT threshold can also be great beneficiaries of digital taxation, and I hope the Government will give a lot of thought to the bespoke and innovative ways in which small businesses will be able to engage with these new foundations of tax.
Currently, most taxpayers cannot see a single picture of their liabilities and entitlements in one place. However, by 2020 customers will be able to see a comprehensive financial picture of their digital account, as they can with their online banking. HMRC customers and their agents will be able to interact with HMRC digitally and at their convenience. They already have access to a digital account, which will allow them to access an increasingly personalised picture of their tax affairs, along with prompts, advice and support through webchat and secure messaging. Digital record-keeping software will be synced with HMRC’s systems, allowing customers to exchange information directly from their software. I welcome these innovations and can see the utilisation of this system eventually being as natural as online banking.
The Government have said that they will not widen the scope of Making Tax Digital beyond VAT before the system has been shown to work well. I, for one, will be following the development of the programme throughout its implementation, with the expectation that this change will result in the desired outcomes. There will inevitably be some kinks in the system, and I hope that they will be ironed out. However, make no mistake: this is a progressive move that will encourage greater engagement with HMRC, save both the Government and the taxpayer money and ensure that businesses, whatever their size, are not shackled by bureaucracy and burdened by paperwork.
It is a pleasure to serve under your chairmanship, Dame Cheryl.
I start by congratulating my hon. Friend the Member for Harborough (Neil O'Brien) on bringing about this extremely important and timely debate. I know that many points will be made that reflect the strength of feeling in our own constituencies, as well as points about what we will look for from the Government in due course. I declare an interest at the outset as the chair of the all-party parliamentary group for small and micro business.
Online businesses are growing rapidly and will continue to do so. I think we probably all agree that, as that happens, our tax system must catch up. As my hon. Friend said, international tax treaties and much of our domestic tax system were designed in an era when doing business necessitated having a physical presence. Large tech companies are able to create large, complex international tax structures to keep their taxes as low as possible, at the same time as their businesses stretch across borders. Small businesses in west Oxfordshire often ask me whether those large companies, which now take up so much of the market, are paying their fair share of tax. It is a real sore point and a bone of contention for small businesses that are required to have a concrete, bricks-and-mortar presence when many larger companies do not.
Independent high street shops, trading from brick-and-mortar premises, are now competing, in a very real sense, against large online companies that do not pay the same business rates in particular, because they do not have that same physical high street presence. Moreover, large companies can absorb the costs of bureaucracy and overheads—the costs involved in all businesses—much more because they have a larger presence but without the physical footprint.
Small businesses do not have international structures, and they do not have teams of expensive accountants and lawyers to help them to make the system work for them. In many cases they are run by a husband and wife, a father and son or members of a family who have owned a business for years and still work every hour God sends to make it work. The role of Government is therefore to help to level the playing field, to make sure that these engines of our economy and these jewels of our high street are able to compete with the large multinational companies on the internet.
We can all agree that we want our high streets to remain vibrant, buzzing and full of different businesses that sell, make and create all sorts of different products and jobs. I am particularly reminded of that every time I spend a day in my constituency in west Oxfordshire, or when I go around the streets of Witney or Chipping Norton or Woodstock. I know that the shadow Chancellor has a red book that he likes to illustrate his points with. I also have a red book that I will illustrate my point with. I can see the alarm on the Minister’s face as he wonders precisely which red book I am about to brandish, but it is a leaflet for the west Oxfordshire business awards 2018, which I attended last Friday night.
There are an extraordinary number of businesses in west Oxfordshire that do wonderful work, covering everything under the sun that one could possibly imagine: coffee, children’s clothing, travel, gardening and speciality milkshakes—who would have thought it? That is only the finalists for this year’s competition. Hundreds of others were not listed as finalists, and hundreds were listed last year or the year before.
If ever there was an illustration of quite why it is important that the Government pursue the business-friendly policies that they do, it is contained in this little red book—this bible, if you will, of economic success. It is a real testament to the dedication, passion and commitment of people all over west Oxfordshire who wake up one morning, have an idea, take a chance and then, without a large physical presence or large teams of international lawyers and accountants, make that idea a success. It is to help them that I rise today.
I have set out my stall, but what can the Government do? I submit that they can take a number of actions. In 2017, Amazon—I should say that other large online retailers are available—paid £7.4 million in corporation tax, despite making sales worth more than £7 billion in the UK, because tax is of course paid on profits, not on revenue. I suggest that more can clearly be done, and I know that the Government are starting to look at doing it, to reflect the true value of such companies and to ensure that our tax system is designed for the 21st century, not the 20th or the 19th.
I welcome the Treasury’s consulting on a new tax on the tech giants. We need to ensure that they pay their fair share alongside the smaller companies, and moreover that small companies are confident that the tax system is not stacked against them. I draw a distinction between types of online companies. My point is about large online companies; of course, many tech start-ups are online but are very small. I suggest that any such taxation—whether a new tax or an amendment to the existing tax system—should be reserved for the largest international businesses. What better way could there be to fund the NHS, defence or schools than by ensuring that those larger online companies pay their fair share of taxation alongside the small companies?
I am delighted that the 2017 global start-up ecosystem report from Startup Genome ranked London as the third best city in the world for tech start-ups—the only European city in the top five—behind only New York and Silicon Valley. Large cities tend to dominate the headlines, but as I hope I have illustrated, in the green lanes and rural villages of west Oxfordshire are hundreds of companies that drive our economy every day. It is those businesses that will make a real difference to all our constituents, our constituencies and the nation’s economy overall. We must not burden those start-ups with further administrative costs or further taxation. I welcome the action that the Government have taken to reduce corporation tax, but the additional revenue from any tax on big online retailers could enable us to help small businesses further with their corporation tax or to provide for further relief or exemptions for small firms—particularly those on the high street.
The Government can help with this issue, but I am very keen, in the final moments before I let others have a say, to say that there is more that we can do as well. The Government can help to level the playing field, but we must not forget that we all have a responsibility to shop local whenever we can and to support local businesses when possible. We must try to shop from them and not simply go to the large online retailers. That may make things easy, but it does not support those who are living in our towns and villages. We need small businesses—they are the engines of our local economies and they bring jobs, services and colour to our high streets. I ask the Government to bear those points in mind as they consider a way to tax the large retailers.
It is a pleasure to serve under your chairmanship, Dame Cheryl. I am grateful for the opportunity to speak. Like my hon. Friend the Member for Witney (Robert Courts), I congratulate my hon. Friend the Member for Harborough (Neil O’Brien) on securing this vital and incredibly timely debate on an issue that we talk about in this Chamber and beyond.
An important principle that needs to be established is that of a level playing field on taxation as a whole across commerce. If we do not ensure that people have confidence in that, legitimate questions can be and are asked about how markets work, whether they are effective and whether the Government are regulating them properly.
Before I talk about the specific issue before us, it is important to recognise the huge benefit that the development of the internet has brought over the past 20 or 30 years. It is something of a truism to say this, but we have an entirely epoch-changing set of opportunities before us because of what the internet offers us and what e-commerce hopes to drive. We have been able to make more perfect—I use that phrase advisedly—markets in terms of reduced barriers to entry. We are able to serve customers in an easier, more timely and more convenient way. We can ensure that people have the things that they want, and that we respond to the combined views of people, as demonstrated via the mechanism of the market. In the United Kingdom, 1.5 million people are employed in e-commerce businesses directly, and a vast supply chain and vast group of people support those industries indirectly. It is important to recognise and acknowledge the benefits that the internet has brought over the past 15 or 20 years—within our lifetimes—to the country as a whole and to the world in general.
However, the principle that my hon. Friend advances is absolutely right. We must have a taxation system that is fair, notwithstanding the huge benefits that have been brought to society by the internet over the past 15 or 20 years. I completely agree with the statement in the Government’s paper that failure to find the right system undermines the fairness, sustainability and public acceptability of the corporate tax system, which we need to avoid at all costs.
I therefore welcome the review of taxation and what the Government are doing to look at the matter in more detail. I acknowledge and recognise the challenge—my hon. Friend outlined that better and more comprehensively than I could ever hope to do it. The Government are right to have an open mind on many aspects. It is right that they will have an open discussion with those who are interested, and to set out that, of necessity, they are likely to look at both short and longer-term solutions.
Underneath, there is an inherent tension and problem, which is how we define user-created values. I think I accept the principle that taxation should be based on value creation as a whole, but how we define that and whether we create a system that is incredibly complicated in order to be able to tax it is something on which the debate and discussion has a long way to go. It is good to see the Government are approaching the matter in that open way.
I also think we have to get away from some of the tendencies over the past five years or so on corporate tax to shout loudly as a collective political class about corporate tax, rather than doing some of the hard spade work. That is exactly what the paper suggests and what many hon. Members are debating. It is no good shouting at companies in Select Committees when they are obeying the letter of the law, even if they are not obeying the spirit. Let us change the law so that that does not need to be done. I say that as someone who has just joined one of those Committees and will probably be shouting at people over the coming months and years as a result.
I understand why that happens, but I am similarly sceptical of gifts, benevolence and contributions to the Exchequer for no apparent reason, much as I understand the principle. That kind of approach is not one that we should perpetuate over the long term if we want to create the stable taxation system that attracts companies, promotes economic growth and supports development on all sides.
I therefore welcome the discussion. I welcome the willingness to review and to do so in such an open way. I agree with many of the points that have been made, particularly in the introduction. I would just like to broaden the subject slightly and make two additional points.
This is a symptom of a much wider challenge in capitalism, corporation tax and taxation in general. We are entering an era of internationalisation with regard to many of the challenges. That has been evident for a number of years, but has come increasingly to the fore over the past decade or so. I am thinking of the cross-border challenges that my hon. Friend outlined. What the OECD has done to date is a good start—the principles it has outlined are positive—but there appear to be limited opportunities to move that forward in the short term. We have to encourage supranational organisations to take on these knotty problems and look more closely at how they can solve them over the long term. If we do not have the institutions that can support the regulation of things such as tax, we will lose the confidence of populaces that rely on us to ensure that taxation is taken. We can debate in this Chamber how big or small that taxation should be, but we have to ensure that the framework is there in the first instance to support it.
There is a much wider conversation to be had, not just about taxation but about the approaches within the sphere of the internet, and how it has commercialised over the past 20 years or so. That is probably a debate for another time, but I hope you will allow me to spend just 30 seconds on it, Dame Cheryl.
I separate out entirely the many hundreds of thousands, or millions, of companies that use the internet to deliver services daily in a cheaper, and a more efficient and effective way. I welcome and celebrate them as an excellent example of how capitalism works, but a very small number of very large companies at the top of the tree have created what are essentially monopolies. They have essentially taken over whole swathes of industries. Some of them have created those industries, and all credit to them. Many of them have become very rich in doing so, or the people behind them have. But they have essentially annexed an individual industry. In any other area of commerce, we would call them out for what they are. They are monopolies or oligopolies. If someone has 90% of the search engine market, they are a monopoly. If they have 100% of the social media market, they are a monopoly. If they have 47% of the e-commerce market in the United Kingdom, they are a monopoly.
We can debate the definition of monopoly, but there are monopolistic companies at the top of these industries, and we have to think in the longer term about how we address that. If we do not do so, we will lose the confidence of people that we can regulate effectively. Either they have become so embedded that they are ultimately the infrastructure—they are the pipes upon which things run—and should be regulated accordingly, or we have to look at how we can stop monopolistic practices. The first duty of those of us who are pro-free market and pro-capitalist is to avoid corporatism and monopolistic practices at the top. Perhaps that is a debate for another time, but it is important for the wider point about how we tax, because of the activities of those companies. The reasons why we tax them in the first place derive from some of the things that they do—some of the practices and some of the monopolistic instincts that, for good or otherwise, have grown up over the past decade or so.
I therefore very much welcome the debate. I again thank my hon. Friend the Member for Harborough for introducing it and for giving us the opportunity. I look forward to the Government’s response in relation to the paper.
It is a pleasure to serve under your chairmanship, Dame Cheryl, and to see in his place the Paymaster General, who is one of the most thoughtful Ministers in the Government and whom I look forward to hearing from later. I congratulate my hon. Friend the Member for Harborough (Neil O’Brien) on securing this important debate. I do not wish to go through content that has already been provided to hon. Members, but I do wish to approach the topic from a slightly different direction.
This is an exciting time for the United Kingdom. Whatever side of the fence people were on, we are leaving the European Union, and we need to ensure that the economy and the country are fighting fit, not only for businesses to exist for their own sake, but for the people they are there to create jobs and wealth for, and for the next generation who will live with the consequences of our decisions today.
I am very pleased that the Government have an agenda for a more global Britain. We are finding our feet in the world and want to ensure that we build bridges with more countries around the world, and become more internationalist and a great trading nation once again. In that context, it is important to consider, as my hon. Friend the Member for Havant (Alan Mak), who is not able to be in his place this afternoon, would say, the fourth industrial revolution, which is at a critical juncture in our country’s and the world’s history.
Technologies are emerging and affecting our lives in ways that former generations could not have imagined, perhaps in ways that we could not have imagined only 10 years ago. We are in a new era that builds and extends the impact of digitalisation in new and unanticipated ways. In that context, it is important that my hon. Friend the Member for Harborough secured this debate.
In 2016, digital tech employed some 1.5 million people in this country with about £6.8 billion worth of investment in the United Kingdom, which is 50% higher than any other European country, which shows that this country is leading the way. There is always more to do, but we have a good track record of success. It is important to cite that, because we must ensure that, as we develop our industrial strategies, and as the Government develop their digital taxation policies, we continue to back the innovators and drive growth. We must support those creating jobs and those who trade with the world to create lower prices for our consumers, providing greater choice for people across this country, but we must step in when people do not play by the rules.
Some Members have made the point about the delicate balance whereby we want to grow the economy and back those who do the right thing, but must ensure that it is fair. It is that sense of fairness—it is almost a gut feel—that people out in the country feel is often not delivered on. I welcome the fact that the Government are trying to tackle that but, as I said, there is always more to do. That comes in the great context of the UK economy growing. It continues to grow—it has grown 14.8% since 2010, perhaps confounding those who are pessimistic about the United Kingdom’s prospects in the years ahead. I mention that because it is important that digital taxation and the plethora of Treasury policy is pro-business and pro-people.
Corporation tax is 19%, down 9% since 2010, with a target of going further, which is a good thing, but I agree with my hon. Friend the Member for Grantham and Stamford (Nick Boles), who referenced earlier in an intervention that it is not just corporation tax that counts, and that business rates are very important to small businesses, to which we have given a significant number of exemptions. That is welcome, but there is always more to do. Why? Someone can have a big warehouse in any town or even in the countryside selling lots of very low-margin products, on which they will not make much profit.
Such businesses face challenges when they compete with small offices, or perhaps not even offices, selling high-margin products but paying low rates or no rates, and of course they compete with others further afield who have a different tax regime, with different rates or different regimes entirely. We must ensure we are internationally competitive. Just as we have reduced corporation tax so that we are leading the world, we must ensure we do the same in other taxation.
It is important that we raise taxation in a fair way. We are raising taxation because, without a strong economy delivering it to the Exchequer, we cannot fund public services. Nor can we help people to keep more of the money they earn. We have cut income tax for 31 million people, raising the personal allowance to do so. We have taken a lot of people out of tax altogether. We can afford those things in the long run only if we get taxation right, and only if we ensure that business taxes are internationally competitive. We should encourage businesses to base themselves here, and ensure that they genuinely get money into the Exchequer.
As I said earlier, we must ensure that the system is fair, because tax evasion and aggressive tax avoidance irks people. I am pleased that, since 2010, HMRC has recovered £160 billion for the Exchequer, which is good news. That money can go into public services when it did not previously. I understand we are trying to combat online VAT fraud as well. That is good progress, but there is more to do.
I note in the Government’s report that they seek to have more OECD and G20 co-operation to control those measures and tackle the issues. The report states:
“the preferred and most sustainable solution to this challenge is reform of the international corporate tax framework”.
I agree with that because there is no point in our doing one thing if other countries do not follow, and no point in our doing one thing if we cost jobs in this country and put businesses out of business. That is not in the Government’s, the country’s or the people’s interest.
Businesses employ people who need to look after themselves and their families through the security of a job. We must maintain competitiveness and ensure we deliver lower taxes for all, but we must ensure that those taxes are fair and that they are paid. I am afraid to say that that is absolutely in stark contrast to Labour party policy. Although the hon. Member for Bootle (Peter Dowd) is a good chap with whom I have had many pleasant exchanges, I have concerns that the Labour party—I wait to be confounded and corrected—does not seem interested in how to make businesses and taxes work, and instead is looking at policies concerned only with protectionism, looking at the past and taxing hard-working people more.
My hon. Friend is making a very good point about Labour and tax, but it is not just about Labour. It is important to take into account the Scottish National party. Its tax-varying powers were used to increase bands of taxation, which has led to unintended consequences. The impact on marriage allowances and pensions and things will disadvantage people in our constituencies.
My hon. Friend makes a strong point. It is right that we consider the implications across the whole of this country of the policies of the Labour party and the SNP-led Government. We should also look at where the Liberal Democrats and Greens wish to take our taxation system, which is wrong-headed in so many ways. The tax systems they espouse seem to look back and to tax people more. They do not seem to be interested in how to boost business. They are not interested in the future. They do not seem to care about the next generation and how we will ensure that we create a Britain fit for the future.
I call Chris Philp.
Thank you, Dame Cheryl, for a carefully considered selection. I am glad I was the least worst alternative.
Order. I was expecting another hon. Member to stand to indicate that they wished to speak. They have not yet stood, so you may speak, Mr Philp.
I am sorry that that more attractive alternative did not present itself. However, it is of course an enormous pleasure to serve under your chairmanship, Dame Cheryl. I add my congratulations to my hon. Friend the Member for Harborough (Neil O'Brien) on securing the debate.
I am not sure I want to confess this in public, but I will: when this document, “Corporate tax and the digital economy: position paper update”, arrived in my inbox this month, I quivered with excitement because the topic is so important. I am delighted to see the Government, and particularly the Financial Secretary to the Treasury, my right hon. Friend the Member for Central Devon (Mel Stride), who I gather has been upgraded to be the Paymaster General as well—
He is a man of many talents. I was delighted to see him taking the initiative in this important area.
It is worth saying that significant progress has been made in the past eight years, as some colleagues have mentioned. The country’s tax gap is at just 6%, down from 8% in 2010, and is the lowest among OECD countries, which is a very good thing. The amount of corporation tax that we have collected has gone up from about £35 billion to about £55 billion in the past eight years, despite the fact that, as my hon. Friend the Member for North East Hampshire (Mr Jayawardena) mentioned, the rate at which it is levied has gone down. That is all extremely welcome, and the Government are to be warmly commended for that progress.
It is, however, also true—I think this view commands widespread support—that a number of typically large multinational companies, often providing digital services, such as Google and Facebook, have succeeded in organising their affairs, fully in conformity with current international tax laws, such that they manage to argue that the substance of their economic activity takes place in very low-tax jurisdictions. Those jurisdictions are often in the Caribbean, and I suspect that they are not selected for their clement climate. That situation strikes me as fundamentally unfair and unreasonable. The Government have, of course, already taken a lead in the matter, via the base erosion and profit shifting initiative, including such things as limiting the deductibility of interest expense to 30% of earnings before interest, taxes, depreciation and amortisation. The UK Government led on that, and are to be strongly congratulated on it. However, there is scope to go significantly further.
It just does not seem right or fair that a company such as Google, with revenues in relation to UK customers in the order of £4 billion, pays virtually no tax by successfully arguing that the substance of its economic activity lies elsewhere. That is why I was so excited by the position paper update, published a few weeks ago. The approach laid out in the excellent position paper, which by the way I fully support, is a multilateral one of trying on an international basis to redefine economic activity to account for the value created by users. It is exactly the right thing to do, and I hope we are successful in that. However, I suspect that as with any multilateral enterprise, it will take time to get agreement with many other countries, particularly when some of the companies concerned will use their influence to try to slow things down and stymie progress. While it is certainly right to take a multilateral approach to changing the way we define economic activity, it is important to have a plan B that could be implemented much more quickly.
The position paper deals with that admirably. It discusses a tax on sales and, as hon. Members have said, the European Union is looking at that. I fully support that approach. A threshold of the kind that we have talked about, to exclude small and even medium-sized companies, is the right thing. The number that I heard mentioned—3% of sales—seems reasonable. A point that I want to make more for the 27 European countries than for us is that care should be taken to ensure that the EU does not use it as a pretext for retaining the tax receipts and developing a European Union treasury function for the first time. That will not, I think, concern us, but it might concern the other 27 members.
I advocate that if the European Union does not move quickly enough and implement the sales tax in a timely fashion—and by “timely” I mean that I hope it would happen in the next 12 to 24 months—the UK should take unilateral action. My hon. Friend the Member for North East Hampshire made a cautionary point about not making the UK uncompetitive, but of course the tax would be based not on where the company was domiciled but on where its sales occurred and where its users were. It would not be a disincentive to locating in the United Kingdom, either for permanent establishment or locus of incorporation. A sales tax or, indeed, a user tax would not violate the principle of competitiveness to which my hon. Friend rightly referred. We are generally speaking the second largest market for the companies in question, behind the United States of America. We are significantly larger than Germany because our economy tends to be rather more intensively digital. I do not think that, if we took unilateral action, Google or Facebook would suddenly refuse to do business in the United Kingdom. If they did, they would be pulling out of their second largest global market.
I suspect that unilateral action on a sales tax while we are a member of the European Union—and, I suspect, during the transition period up to December 2020—would probably be classed as VAT, or sufficiently similar to VAT to fall foul of European regulations. If we have to consider unilateral action, which I advocate and support, prior to our exit from the EU or the end of the transition period, something other than a sales tax would have to be considered. Something we might consider that would not fall foul of EU regulation on sales taxes and VAT would be a tax based on users. We might set a user-based tax of a certain pound amount per active user, for example. That would, again, apply only to the very largest companies with, perhaps, a UK turnover in excess of £100 million. That would make sure that they made a reasonable contribution before we managed to come up with a multilateral solution at global level or a sales tax at European level. It would, I think, be a good move. It would not undermine our competitiveness and it would mean that those companies were seen to make a fair contribution.
The proceeds of such a tax could usefully be applied in the area of business rates. Several colleagues have mentioned that, and I am sure that small businesses in all our constituencies have raised the issue of business rates with us. Of course, digital companies such as Google and Facebook—and even Amazon, because it operates from large warehouses in remote locations that do not have a high rateable value—pay little in business rates. They also pay little in corporation tax, although of course they pay their full share of payroll taxes. It is inherently rather unfair: local high street businesses pay their full share of business rates and corporation taxes. So some of the money raised by the digital tax, whatever form it might take, could be applied to offer business rate relief, particularly to smaller businesses—perhaps those with less than £28,000 a year of rateable value.
I should be interested to hear the Financial Secretary’s response to the one or two ideas that I have set out. Really, however, I want to express my strong and enthusiastic support for the course that he has laid out. It is a great pleasure to come here and support it.
What a pleasure it is to serve under your chairmanship, Dame Cheryl.
When I heard that there was to be a debate on digital taxation I was really excited, because digital and tax are two of my favourite subjects. I am sure that hon. Members know that I classify myself as a low-tax Tory, but not many people will know that my career to date has been in digital. I congratulate my hon. Friend the Member for Harborough (Neil O'Brien) on securing the debate and wholeheartedly support his comments and suggestions. I shall focus on user-generated content, an important matter that he spoke about.
Many hon. Members have spoken today about property taxes, business rates and the losses that smaller companies have had to endure in competing with large digital companies. Inevitably, the wider discussion when we talk about large tech companies is about tax avoidance and tax evasion. Tax has various purposes, and one is to deal with the negative side-effects of those activities. The Financial Secretary will be familiar with Pigouvian taxes, which are designed specifically to tackle those negative externalities. That is what I propose today.
The main externality for my constituency is to do with crime and policing. Cyber-crime has grown exponentially, and user-generated content is a significant part of that. There are crimes we never saw previously—the creation, sharing and distribution of indecent images, especially of children; harassment on social media; cyber-bullying and other activities designed to cause distress and anxiety; and, of course, online activities related to terrorism, hate crime and all sorts of incitement. All those activities take place on large digital platforms, but it is claimed that the content is not theirs but belongs to the user. How are we going to deal with that? This issue has taken up a significant proportion of the time and priorities of Essex police. The police and crime commissioner and the chief constable have reiterated that dealing with cyber-crime is their No. 1 priority, and a lot of police time is redirected to that area. Who has suffered? The people with whom many of these large digital businesses are competing.
Local businesses in my high street have suffered an unprecedented spate of burglaries. I will not get into arguments about cuts in police numbers or whatever, because I do not think it is about that. This is about the police having to do so much more than they ever did before. Many of the crimes that I have listed did not exist 20 or 30 years ago. This is not just a matter for the Home Office; it is one for the Treasury.
The principle of a Pigouvian tax is a financial matter and has been established in many other areas. For example, the British Transport police are funded by subscriptions paid for by train companies, and local businesses in certain towns invest in business improvement districts that fund police officers. Pubs and clubs have to pay licence fees that contribute to the policing of the negative externalities that come from their activities. Recently, I have seen beauty parlours have to get a licence because they have been used as a cover for money laundering and other illegal working. We should consider taxing this new area. I do not like to propose new taxes, but the cost of these activities is being borne by citizens and businesses across the country, and it is those who make the most money from them who should be paying.
A double dividend comes from these sorts of taxes—we can see the cost of the crimes and direct money to the areas most affected. It is not good enough for companies to say that the issue has nothing to do with them, or not to appreciate the social cost of their activities. My remarks have been brief, but my question to the Minister is this: given the many externalities from online businesses, and particularly from user-generated content, should the large digital companies that create and run those platforms pay a significant amount of the cost?
It is a pleasure to serve under your chairmanship, Dame Cheryl, and I congratulate the hon. Member for Harborough (Neil O'Brien) on securing this genuinely important debate. I agree with much of what he said at the start of his contribution, particularly about tax base erosion. That is why I welcome what the Government have said previously about the focus being on economic activity rather than simply profit. We must begin to tackle the rather vexed and long-standing issue of profit shifting.
However, I am not sure whether the hon. Gentleman’s interim solution would work. In essence it would be a turnover tax, and although there might be some superficial merit in that, it could potentially be damaging for high-volume, low-margin businesses. It would also, I suspect, immediately increase the risk viewed by those who provide capital for large digital start-ups—perhaps those with a large turnover and a business plan that will not see profit for some time. One can see how the funders of capital for such start-ups might be tempted to put their money into similar businesses located elsewhere.
Google and Facebook can be described as many things, but “low-margin” is not one of them. I suggested a threshold of £100 million for UK sales or €750 million for EU-wide sales—such businesses are certainly not the start-ups referred to by the hon. Gentleman.
Indeed they are not, but I was referring specifically to an increased risk for start-ups that perhaps have a similar model. That is important if we are to tackle the monopoly argument that was raised earlier.
This debate is not only about taxing digital companies; it is also about the UK Government policy of making tax digital. The SNP fully supports the principles behind that and the move to a phased introduction of digital reporting, not least because we called for it previously. However, we have concerns about the implications that digital reporting might have for small businesses with limited connectivity or in rural areas. We are also concerned about the closure of HMRC offices in Scotland and the rest of the UK, because that will limit the Revenue’s ability to provide the help and guidance that small businesses and individuals need.
Let me briefly take those three issues in turn. Following the consultation, on 13 July the Minister outlined the new timetable, which we welcomed, and said that only businesses with a turnover above the VAT threshold would have to keep digital records, and only for VAT purposes. That will happen in 2019, and businesses will not be asked to keep digital records or to update the Revenue quarterly for other taxes until at least 2020. We welcome those measures, but they will still require businesses to face challenges. Those challenges include changes to record keeping, because businesses will no longer be able to rely solely on manual records. There will also be changes to VAT returns, which must be submitted through the functional compatible software and not the normal HMRC portal, and all that is supposed to take place at around the same time as the UK leaves the EU. We all know that in a period of flux when there are changes to systems, there is more opportunity for fraud. What action will be taken so that we are observant and ensure that people do not try to fiddle the system at a time of a number of simultaneous changes, which include leaving the EU and the introduction of the online digital report?
As I said, the SNP is concerned about the effect that digital reporting could have on small businesses with limited connectivity or in rural areas. In particular, we are concerned about the impact on small businesses with limited technology for connectivity—or those that do not make much use of the internet—if they have to report online. Such measures will also affect smallish businesses in rural areas, where connectivity may not be as good as is required. I know there is a fall-back position, which I welcome, but will the Minister confirm that if digital capacity is not there, the fall-back position will be the current manual system, and that we will not create a new manual system to replicate the online system as it goes live?
The closure of HMRC offices could limit the Revenue’s ability to help businesses and individuals. That is important because as we know, a large part of the tax gap is due to error by both those paying and the Revenue. With the introduction of a new system, combined with the closure of local tax offices, may we have an assurance that there will be a good degree of forbearance for anything identified as an honest mistake during that period? I am also aware, as other hon. Members will be, of how specific local knowledge has uncovered fraudulent activity that would have gone undiscovered in a more general, generic system. Will the Minister confirm what checks and balances will be introduced with the new digital reporting, particularly on VAT, to ensure that some of the rather more obvious scams that we all know and have seen are detected, and the fraudsters punished?
My final point is slightly tangential, but it is important: we must not let technology drive the policy. If the digital tax roll-out is a huge success, one can see the temptation for the Government to say that we should lower the VAT threshold—after all, it is only a change to a number in the computer system. However, if the VAT threshold is lowered—it was rumoured that that would happen at the last Budget—businesses that turn over £60,000, £70,000 or £80,000, and make a good living for someone, or even two livings, will suddenly have to take 20% off their bottom line because their raw costs are low and they can claim little back. If the digital tax roll-out works, the Minister must not allow that to drive the policy and drive down the VAT threshold. I believe that would be a mistake, because it would crush entrepreneurialism and start-ups if people thought that with that additional VAT burden, it would be a struggle to make even one living out of a business that turns over £60,000 or £70,000.
It is a pleasure to serve under your chairmanship, Dame Cheryl. I thank the hon. Member for Harborough (Neil O’Brien) for securing this debate on this important topic. I am in agreement with much of what has been said: I am not sure whether I should be worried about that or the other side of the Chamber should be. As for the hon. Member for Witney (Robert Courts), I am more than happy to get the shadow Chancellor to sign his red book, if he thinks that will be of help. I think I will give the hon. Member for North East Hampshire (Mr Jayawardena) a copy of “Funding Britain’s future”, and he will be as excited and quivering as the hon. Member for Croydon South (Chris Philp) as he reads it.
In today’s tax system there is clearly one rule for workers, small businesses and the self-employed and another rule for large multinational corporations, which have successfully harnessed globalisation to maximise profits while minimising the tax they are required to pay. People have indicated that today. According to HMRC, multinationals avoided as much as £5.8 billion last year in corporation tax alone. That represents a 50% increase from the Government’s previous forecast.
The growing discrepancy, as hon. Members have alluded to, between the revenues that companies such as Google and Amazon record and the low level of tax they pay in the UK only demonstrates how divorced from the reality of the modern economy our corporate tax system has become. Small businesses, on the other hand, will be subjected by April 2019 to increasing regulations and stricter timetables for the filing of online taxation, notwithstanding some of the amelioration of that process. The Opposition have raised that issue many times. The mandated start time for small businesses to file online for returns will coincide closely with Brexit, so there is a serious risk that they will be overwhelmed with the nature and scale of changes required during that period, especially in relation to digitalising tax returns.
I congratulate the Minister on his Paymaster General position. That reminds me, when the cheques are signed in Her Majesty’s presence and it is not the Minister, I am not sure who does not trust whom in that situation. Despite the Minister’s promises over the past year, I am not quite sure that enough has been done to trial the software and that should be looked at. There is a consensus across the Chamber about large multinational technological companies not paying their fair share of tax, and increasingly shifting profits offshore to tax havens and countries with low-tax regimes. We have heard, for example, that eBay paid £1.6 million on £1.3 billion worth of revenue raised in the UK. It goes on and on. Credit to those hon. Members who have raised this.
There is also the question of HMRC resourcing—raised by the hon. Member for Dundee East (Stewart Hosie)—which is an elephant in the room as far as I and other hon. Members are concerned. The Government launched two consultations last year on corporation tax and the digital economy, and royalties on withholding tax. Those are important steps, but they remain pretty poor compensation when considering the deficit of meaningful action that is being taken. The EU, on the other hand, is already considering, as hon. Members have indicated, the introduction of 3% tax on the revenues of multinational digital businesses. That tax would affect firms such as Facebook and Google with a global annual revenue—as the hon. Member for Croydon South has said—of above €750 million and taxable EU revenue above €50 million. So the policy reflects a growing shift across the world, where many countries are moving towards a tax system where companies would be expected to pay a tax on revenues rather than profits. For example, there is currently a Bill going through the Indian Parliament that would force companies to pay tax on their economic presence. Those are all options for discussion and debate. I am pleased that the hon. Member for Harborough has brought this debate to us today, because we can start the particular process of teasing out those options. That was a problem first raised at the global level by the OECD in 2012 via its base erosion and profit shifting initiative, which has also been mentioned today.
In the press, the Financial Secretary to the Treasury said that a tax on the revenues of tech companies in the UK is the “preferred option”. It might come out in the Government’s review. It will be interesting to know how the Financial Secretary came to that decision. Perhaps he can tell us more about that today. The Chartered Institute of Taxation has rightly pointed out that any action must be in co-operation with other states, as far as possible, to prevent the UK becoming an outlier. It argues that unilaterally abandoning a negotiated international approach to allocating taxable profits between countries would risk retaliation, double taxation and perversely new arbitrage opportunities.
The hon. Gentleman is right to point out that in terms of profit allocation that does need to be done multilaterally on a global basis, but does he accept that a sales tax—or certainly a user tax—could be done unilaterally?
I think the debate is to be had. That is the point. In the spirit of co-operation the debate has been started today and I have tried to put in my tuppence worth, as have other hon. Members. With that in mind, I ask the Minister what discussions the Chancellor has had with EU counterparts about an EU-wide initiative to tax tech companies’ revenues. How will the EU’s initiative complement the Government’s plans? What is the likelihood of the EU’s tech tax being introduced before we leave the EU on 29 March 2019? Will the UK adopt the EU’s tax on tech companies’ revenues irrespective of us leaving?
Finally, what discussions has Her Majesty’s Treasury had with representatives from other countries outside the EU on a tax revenue for tax companies, particularly at last week’s G20 meeting? It is extremely important that the UK acts as part of a collective effort to stand up to tax avoidance and to ensure that tech companies and other multinational corporations pay their fair share and cannot operate outside the law. I exhort the Government to test out some of the suggestions made today. I look forward to hearing the Minister’s response.
It is a pleasure to serve under your chairmanship, Dame Cheryl. It was a pleasure to hear the opening speech, because it was insightful, clear and well-structured and set out. Given that this is a highly technical subject, that was quite an achievement. It was also extremely thoughtful. It has been remarked by a number of hon. Members that there are quite a few of us on this side of the House. That is because we care deeply about issues such as tax. Traditionally, we like to see taxes as low as possible, as my hon. Friend the Member for Saffron Walden (Mrs Badenoch) rightly pointed out, but we also recognise that tax is important, because it provides the finances for vital public services—our national health service, our social care, our armed forces, our police, our teachers and so on. We also recognise, as several hon. Members have pointed out, that it is important in terms of fairness and of having a level playing field—particularly, in that context, for those hard-working small businesses that occupy our high streets, which have to pay their business rates, a tax which cannot be avoided whether a business is profitable or unprofitable. On this side of the House, we recognise the paramount importance of getting to grips with the issues we have been discussing today.
Hon. Members have, understandably, raised the issues of avoidance, evasion and non-compliance. Conservative Members have dealt at length on the great success we have had in that respect. We have raised or protected £175 billion since 2010. We have one of the lowest tax gaps in the world—the difference between what we could collect and actually do collect—at 6%. HMRC is doing a great job, by and large, in ensuring that those who are due to pay tax do indeed pay it.
It is important to point out, as several hon. Members have, that what we are discussing today is predominantly not about avoidance and evasion. That is an important distinction. Whatever we may feel about tech companies or internet-based businesses—and they do not always acquit themselves admirably—the accusation is not in any way that they are avoiding taxation, but simply that the current international tax regime does not effectively accommodate the way they generate value within the United Kingdom.
If this is not about avoidance, what exactly is it all about? It is about the way the current international tax regime assesses taxation and where corporation tax should fall due based on where the economic activity occurs. As my hon. Friend the Member for Harborough (Neil O’Brien) rightly pointed out, typically we would be looking at the factories, the employment of people, where the intellectual property lies and where the decisions around risk and investment in the business are taken. We know that for certain types of digital platform—typically, the search engines, the online marketplaces and the social media providers—a lot of the value is generated via the interaction between the end user and the platform itself. Therein rests the actual value. The question we then have to ask is how do we effectively address that situation and ensure that where businesses generate huge sums of profit within the United Kingdom, a fair share of corporation tax falls due to them.
We have already brought in a measure, announced in the autumn Budget, to tax the royalties that flow to intellectual property held in zero and low-tax jurisdictions. This is very much a front-foot approach to those digital-based businesses that are shifting profits out of the United Kingdom in tax terms. We are consulting on that and legislation will come forward in due course. We expect it to raise around £800 million by 2023. That is a significant sum. It is the kind of amount that could potentially be useful to ease the pressure on our high streets, as many have called for this afternoon.
The position paper last year and the March paper we just introduced by way of consultation were mentioned. In those papers, we have suggested that our preferred route is a globally negotiated deal with our partners in not just the European Union but the wider OECD. That is to ensure that any agreement works effectively, and that we avoid the problems associated with unilateral action, such as situations of double taxation between ourselves and countries that we trade with around the globe. However, in that paper we do set out an interim position.
I should make clear the Government’s intention that if we do not move forward at sufficient pace to put the appropriate measures in place, we will seriously consider an interim position—a unilateral move, which my hon. Friend the Member for Croydon South (Chris Philp) was keen to see. Under those circumstances, we would potentially look at a tax based on revenue, recognising that we do not want to capture market entrants or early-stage companies that may have some level of revenues and therefore fall to this type of tax, but which could be unprofitable at that stage of their development. This is where the whole issue of de minimis and thresholds comes in, which hon. Members have spoken about this afternoon.
In that context, it might be worth briefly referring to the proposals put forward by the European Union in its recent paper. As my hon. Friend the Member for Harborough pointed out, it has suggested that a 3% tax on revenues would be appropriate, raising about €5 billion, but that there should be a de minimis on the basis of those companies’ worldwide turnover and the level of taxable revenues that would fall due within the European Union. It also makes the point that it is important, within EU domestic tax legislation and the treaties between member states, that we have a definition of the concept of significant economic presence, which captures this idea of creating value in the way that I described. It also recognised the importance of going further and factoring in those definitions within the bilateral or multilateral trade agreements and tax treaties that we have with the rest of the world—with non-EU member states. That is to capture the fact that it is often companies outside of the EU that are transacting in this manner—many of those businesses are in the United States.
I will conclude by saying that we are very serious about this matter. I have a great deal of time and some affection for the shadow Minister, the hon. Member for Bootle (Peter Dowd), despite the red book that beats in his breast pocket as I address him. In response to him I have to say that it is this party, the Conservative party in government, that is doing something about this issue. It is not the Labour party that ever got on top of avoidance, evasion and non-compliance—just look at the 6% compared with the 8%-plus under Labour. We are the party that is bearing down on these issues.
My hon. Friend the Member for Harborough, who will wrap up the debate in a moment, has my personal assurance that we will continue to take this matter extremely seriously. We will press ahead with vigour on the basis that, ultimately, it is only fair to do so.
It has been a pleasure to serve under your chairmanship, Dame Cheryl. It has been a huge pleasure to see so many right hon. and hon. Members and Friends taking part in this debate and we have heard some brilliant contributions.
My hon. Friend the Member for Southport (Damien Moore) made a series of good points about Making Tax Digital and the huge £400 million benefit of reduced administrative costs that we might see from it. My hon. Friend the Member for Witney (Robert Courts) represents Woodstock. Although it was not in his constituency, it is sometimes said of the Woodstock festival that, “If you can remember it, you weren’t there.” Clearly the same is true of the West Oxfordshire business awards. He made the good point that we must all shop local.
My hon. Friend the Member for North East Derbyshire (Lee Rowley) made a brilliant speech and talked about the potentially monopolistic nature of some of these firms. That was a further rationale, which I did not pick up in my speech, for having a tax that is targeted on the very largest firms. My hon. Friend the Member for Saffron Walden (Mrs Badenoch) added another rationale for such a new tax—to pay for the externalities caused by this. People running trains pay for the police on the trains. People in business improvement districts pay for extra policing. It is right that some people pay for the costs created by the growth of the online economy.
My hon. Friend the Member for North East Hampshire (Mr Jayawardena) made the point about Britain’s incredibly strong tech start-up scene compared with those of other countries, and the need to protect it. My hon. Friend the Member for Croydon South (Chris Philp) made the really interesting point that we might be less concerned about the development of the EU’s tax in this area because we are leaving. It might unite leavers and remainers to think that this is an instance in which we might be leaving, but becoming good neighbours.
The hon. Member for Dundee East (Stewart Hosie) raised some important questions and concerns about such a tax, including answerable questions about carving out start-ups and lower margin businesses, which my right hon. Friend the Minister answered well. The hon. Gentleman is right that a turnover tax is quite an unusual thing to be doing. However, because it is the only way to solve the problem, it is right to explore it.
The hon. Member for Bootle (Peter Dowd) said that we might all wonder who is more worried about the growing consensus. All I can say is that I look forward to being in the same Division Lobby as him later in the year perhaps. I thank the Minister for his kind words and reassurance that the Government plan to press ahead carefully but decisively to ensure we have what we all want on this side of the House—a low-tax system that is also a fair tax system.
Question put and agreed to.
That this House has considered digital taxation.
Emergency Services and New Estates
[Mr Philip Hollobone in the Chair]
I beg to move,
That this House has considered the response of emergency services to calls from newly built estates.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful for the opportunity to bring this issue to hon. Members’ attention. In August 2017, my constituent Charlotte told me about a heartbreaking incident that claimed the life of her partner and changed her life dramatically. My constituent and I want the debate to be the beginning of a meaningful conversation, and to press for change in the way that emergency services and local authorities communicate when a house becomes occupied on a new housing estate.
On average, it should take the emergency services seven minutes to be on the scene of a critical incident, or a maximum of 15 minutes. In my constituent’s case, it took over half an hour. Neither the operator nor the paramedics were at fault. Instead, we found a significant problem with the GPS system on which our first responders rely.
We all have new developments springing up in our constituencies.
I thank my hon. Friend for securing the important debate. I had a similar incident in my constituency in Kirkby on a new housing estate, where the ambulance took 30 minutes to arrive. Thankfully, that did not result in my constituent’s death, but we are talking about life and death situations. There must be a practical way of solving the problem.
I agree, and I am grateful to see my hon. Friend and other hon. Members present. I regret not asking for more time, because conversations that I have had with hon. Members in the lead-up to the debate have indicated that there is substantially more interest in the problem than I had realised.
Like many young couples, Andy and Charlotte had recently moved into their new property. It was their first home together, in which they dreamt of starting a family. On the night of 11 February 2017, Charlotte found herself in a situation she had never thought she would encounter. Her partner Andy, a fanatical cyclist, had just completed a 50-mile bike ride—he had ridden more than 1,000 miles in the previous year. After settling down for the night, Andy became unwell, and it was later confirmed that he had suffered a cardiac arrest. Charlotte called 999, proceeded to carry out CPR on her husband and spoke to the operator.
Charlotte told the operator that the ambulance crew would need to access her estate via a particular road. Unfortunately, although a property may have a postcode, many homes on the 40,000 unadopted roads on new estates are not visible on the systems used in emergency or first responder vehicles.
As I later found out by sending freedom of information requests to all ambulance trusts, in many cases, emergency vehicle sat-navs are updated only every six to eight weeks on average. Even when updated regularly, the information used to update the sat-navs is only as up to date as that provided by Ordnance Survey. There is no standard process across ambulance trusts or other emergency services. One trust stated that it is
“aiming to update a minimum of every 6 months but sooner if practically possible”.
Thanks to Charlotte’s directions, the paramedics were in the correct area, but the ambulance ended up driving down a lane that led to a river bank with no bridge across to her estate. Charlotte could see the ambulance, but its way was blocked by a five-foot wall on one side and a six-foot fence on the other. The paramedics had no choice but to reverse back up the lane for three quarters of a mile, causing further significant delay.
Charlotte heroically gave CPR to her husband and directions to the operators. Thirty minutes after she dialled 999, paramedics finally arrived on the scene and took control. Their best efforts to resuscitate Andy tragically came too late to save his life.
I applied for the debate because in different circumstances, we would not be having this discussion. It is often the case that, through awful events, faults are identified and can be dealt with. Although nothing can bring Andy back, Charlotte would like his story to be used to stop similar incidents happening in future.
About 200,000 homes were built in 2017. Many hon. Members have such developments in their constituencies, so it is important that we get this right.
Has my hon. Friend given any consideration to earlier action? Perhaps local authorities could better engage with health services, ambulance services and Ordnance Survey at the planning stage.
Yes. As I will go on to explain, the problem is that there is no standardised approach, but there ought to be.
At the moment, ambulance trust mapping databases are provided under the national public sector mapping agreement. Under the terms of that agreement, Ordnance Survey releases updates free of charge every six weeks, but it is reliant on local authorities or developers submitting a request. As I mentioned earlier, emergency vehicle GPS systems are updated only every six to eight weeks on average, when they receive a routine mechanical service—though even that is not the case for all trusts. There is potential for delay at several stages of the process.
There is no consistency between local authority areas, and I have found idiosyncratic practices. In one local authority, the ambulance trust said that its way of dealing with the problem was to send its officers along to planning meetings in person so that it could be promptly informed of new developments. Surely we can find a better way of doing it than that.
If different systems operate across emergency services, we miss the opportunity to find a much more collaborative approach. I ask the Minister whether, given the technological advances at our disposal, an auto-upgrade solution is possible. Most of us have self-upgrading smartphones. With lives at risk, surely we must be able to find some kind of new solution along those lines.
The practices of local authorities and developers could be standardised to ensure that they request that Ordnance Survey carries out work when at least one property on a development is occupied, even if the development is not completed and the roads are not adopted. If the postal service and Amazon can find a property such as Charlotte and Andy’s to deliver mail, could procedures and knowledge not be shared in a joint approach?
A good example can be found in the north-west. The North West Ambulance Service Trust response to my freedom of information request stated:
“On new large developments the map is often blank…so the team add descriptive route notes to aid crews. For example, take the first left on to Flower Crescent off New Bridge Street”,
which might be an existing road. That highlights that different and better ways of developing new mapping systems could save such incidents from occurring.
In speaking on Charlotte’s behalf, I want to make it absolutely clear that what happened was in no way the fault of the paramedics or the operator. It is a flaw in the complex system that our emergency services work with. I have called the debate to make the Minister aware of the problem in the hope that he will commit to act promptly to find the best way to resolve it.
To give some additional information, we sent an FOI request to every ambulance trust. I can provide the Minister with the responses we received, so he can see the disparity for himself. London Ambulance Service said that it had recorded 17 of these occurrences during the last three years, whereby crews had encountered difficulties in locating new build properties. The Welsh Ambulance Service recorded four occurrences, but most ambulance trusts just did not record incidents at all, so we do not know how frequently they are happening.
Given the risk to our constituents and the number of new developments, and the fact that this is a completely solvable problem—it does not require additional resource, and requires only someone’s attention to look at the process and organise it—the Minister could commit to action today.
I thank the hon. Lady for securing a very important debate and for sharing the details of the extremely regrettable tragedy endured by her constituent. After 31 years in the fire service, I understand what she is saying, and my heart goes out to the family and to those who responded, for the challenges that they face in dealing with incidents that would have affected the fire service, the police service and other emergency services. I agree with her point that if Amazon and DHL find places, we should be doing it, and doing it better.
Should that be a planning obligation somewhere in the conditions of planning consent? Prior to a purchaser occupying a house, the developer could be obliged to ensure that the emergency services are aware, so that they can respond to calls using new technology? It is so important.
That is a very sensible suggestion. I called for this debate not to provide the Minister with the answers—I just wanted him to know what the problem was and make him understand that it has a direct impact even though it is completely solvable. Nevertheless, the hon. Gentleman’s suggestion may well be a helpful contribution and could well provide us with a sensible way forward that would help significantly.
That is all I wanted to say. I just wanted to make the Minister aware of this problem, and I look forward to hearing his reply.
It is a pleasure to serve once again under your chairmanship, Mr Hollobone. I commend the hon. Member for Darlington (Jenny Chapman) for securing this debate. First, I extend my sympathies and, I am sure, the sympathies of all those present, to Charlotte for her loss.
The hon. Lady has used a Westminster Hall debate in the finest tradition, by raising an issue that I was not previously briefed on to the degree that I am now as a consequence. There is ongoing work on it, which I will happily update her and the rest of the House on. She has highlighted an issue that affects all of us in all our constituencies, because as the Government seek to build more housing, this issue will grow across constituencies and have greater reach. Also, as she rightly said, it applies not only to the ambulance service but to the blue-light fraternity as a whole, so I very much commend her for raising the issue.
The hon. Lady showed that she already has an in-depth knowledge of some of the challenges caused by the time lag in how systems are updated. However, I am pleased to reassure her that there is work ongoing in this area specifically. The Department of Health and Social Care is centrally procuring new control room and vehicle communications systems for NHS ambulance trusts, which will be able to update wirelessly. There are questions as to the frequency of those updates, which relates to the point that my hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant) made about the flow of information from the Department for Communities and Local Government, the planning system and the Ordnance Survey. The ongoing work in the Department is looking at how the central procurement of information into control rooms can ensure that there is a better supply of data about new housing of the sort that the hon. Member for Darlington referred to.
Although the effective deployment and maintenance of GPS systems is, as I am sure the hon. Lady recognises, an operational matter, they are centrally funded systems. As she said, the Department for Business, Energy and Industrial Strategy sponsors the Ordnance Survey, which owns the public sector mapping agreement. That is a 10-year agreement entered into in 2011, which provides the geographical datasets that are used centrally. That information includes data to advise emergency services of the best locations in which to position their vehicles at any given time of the day, based on historic patterns of where they are most likely to be needed. Updates to those datasets are available every six weeks, and the Ordnance Survey is engaged with the emergency services on their specific needs and on whether increasing the frequency of that supply of information would be useful.
As the hon. Lady may be aware, there has recently been a trial, which concluded at the end of February, and the Ordnance Survey is currently analysing the findings of that work in order to develop options. The North West Ambulance Service—not the north-east service—was part of the initial trial, and it has fed its experience into that process. So there is ongoing work on central procurement and also on that trial, examining the issues that the hon. Lady has brought before the House today.
I recognise that the frequency of the updates has been variable, and the hon. Lady was quite right to draw the House’s attention to that. As part of the ambulance radio programme, a replacement mobilisation application has been procured for use in ambulance vehicles across all the NHS ambulance trusts in England. Under that contract, the supplier is required to provide mapping software and an embedded satellite navigation system to assist ambulance crews with the prompt location of emergency incidents. The contract also requires the supplier to provide automated, over-the-air map and satellite navigation updates on a quarterly basis, and to report the current versions of the maps being used for audit purposes.
I am sure the hon. Lady will join me in welcoming those developments. The new system will make up-to-date map and satellite navigation data more readily available to all emergency crews.
Has the Minister given any consideration to my hon. Friend’s concern about the lack of data that has been collected, and would there be any benefit to collecting that information, to make sure that the new system that will come on-stream is distinctly preferable to the old system?
The hon. Lady makes a pertinent point; I was just going to come on to the issue of timing. There are two aspects to this process: the updating of control systems and the updating of vehicles. Different work is happening on both those things, but she suggests a third point to be considered—the data that feeds into those two systems, and the time period between housing development coming on-stream and the systems being updated. Those are the points that I take from her remarks and they will inform further discussions with Government as part of the pilots and the other work that is already under way.
The North East Ambulance Service has improved the processes for updating its mapping system, and I suspect that much of the credit for that goes to the hon. Member for Darlington for raising the issues that she has raised. The trust has upgraded its computer-aided dispatch system and control room mapping updates, and they can now be installed without affecting the wider system, which was one of the difficulties previously. The upgrade allows for six-weekly additions of notifications received from local authorities when new housing estates are opened, better equipping 999 dispatchers to guide ambulance crews to locations when they need assistance. Other ambulance trusts have similar arrangements for updating the control room systems that are currently in place.
The North East Ambulance Service Trust has also improved the frequency of its updates to its individual vehicle mapping systems, moving from an annual update to one every six months. Again, that is not the timeline that the hon. Lady quite rightly highlighted, but it does show that there is a focus on this area, and it shows the direction of travel on improvements.
We recognise that there is variation in the updating of ambulance vehicle systems. That is driven by the fact that different systems are in place in different services. For example, some trusts are able to update their ambulances through wi-fi, while others require lengthy manual updates to be performed during regularly scheduled vehicle servicing. Following this debate, one of the issues that I will be keen to explore further with officials is what will happen as we procure new vehicles. We will consider what can be done to address the issues that the hon. Lady raised today.
The common ambition among ambulance trusts is to upgrade vehicles in a six-month rotation, and we will improve on that rate further with the new national solution. Some trusts have also taken the approach of providing personal-issue tablets with online-style mapping, which can be used by ambulance crews as a back-up to the vehicle’s satellite navigation system and use the most recent commercially released maps.
A range of work is under way within the ambulance service on changes to how calls are triaged and processed, which will address some of the imbalance between rural and urban areas that we have seen in the past. There is work on changes to control room systems and on upgrades. I will happily take forward the point raised by the hon. Member for Great Grimsby (Melanie Onn) about the timescales and about what work can be done and is being done on that.
The hon. Member for Darlington deserves credit within her own trust area for raising these issues as a consequence of the tragedy that Charlotte has had to endure. There is a focus within ambulance trusts across England on the need to ensure that upgrades are made in a more timely fashion. The hon. Lady has rightly brought that point before the House, and I will continue to take it forward with officials in the weeks and months ahead.
Question put and agreed to.
Legal Aid: Birmingham Pub Bombings
I beg to move,
That this House has considered legal aid for families of the victims of the Birmingham pub bombings.
It is a pleasure to serve under your chairmanship, Mr Hollobone. This debate follows on from an Adjournment debate in October 2016 led by my hon. Friend the Member for Birmingham, Yardley (Jess Phillips). What I am going to say has the support of every single Birmingham MP, irrespective of party, and has wide support across the House, as I think will be demonstrated by the contributions we will hear.
At around 8.20 pm on 21 November 1974, two explosions rocked two pubs in Birmingham: the Mulberry Bush and the Tavern in the Town. Twenty-one people were killed and some 222 people were injured. A third bomb placed at Barclays bank on Hagley Road was defused the same evening. We know that six men were jailed for that atrocity, and we now know that that was a miscarriage of justice. It took years for that to be addressed and for those six innocent men to be finally released.
There was, however, to be no release for the families of the 21 who died and the hundreds who were left with injuries and the trauma of that night in November 1974, because nobody has been brought to justice for those 21 murders. There remain big unanswered questions about what exactly happened that night, including the circumstances surrounding the plantings of the bombs, if and how warnings were given and how the police reacted that night and subsequently. Some of those family members are watching our debate, and I am sure all Members would wish to join me in welcoming them to this place and in paying tribute to their tenacity over so many years in trying to get the answers they deserve.
For years, those families have had to overcome hurdle after hurdle in pursuit of justice and to get answers. They had to fight to get the inquest into the pub bombings reopened in the first place. They then had to fight to be granted legal aid to be legally represented at that inquest. Now, having eventually won those battles, they have once again been denied legal aid for a Court of Appeal hearing on the rules governing that self-same inquest. Why is that? Last year, the Chief Coroner, Sir Peter Thornton QC, ruled that the people suspected of carrying out the pub bombings cannot be identified at the inquest. The families disagreed and took their case to the High Court. They won, and the coroner was directed to review the ruling he had made on the identification of suspects. We now know that the coroner has responded by applying for leave to take the case to the Court of Appeal, as he has every right to do. The fact that different conclusions were reached by the High Court and the coroner himself—he is a senior QC—underlines the difficult and complex legal issues that the case raises.
Today’s debate is emphatically not about taking sides on whether suspects should be identified at the inquest—that is properly a matter that should be decided by the courts—but about whether both sides should have an equal opportunity to put their case to the court. However, as things stand, that equality is missing in practice, because although public funds will rightly be available to present the coroner’s appeal against the High Court’s judgment, the families have been told that they have to pay for their own legal representation to defend the High Court’s decision. That is the disparity I am asking the Minister to address today.
The disparity was not addressed when the case was at the High Court. The families were refused legal aid at that stage and were only able to fight and win their case there by the generosity that ordinary citizens showed in response to their crowdfunding appeal. The families should not have to go through that again at the Court of Appeal. It is in the public interest that all the arguments for and against the identification of suspects at the inquest are heard by the Court of Appeal so that it can make its decision on the merits of the case with confidence that a shortage of resource has not hampered either side from putting forward their cases.
It is not only Members and the families who are asking for the situation to be rectified. The coroner himself has said that public funding should be made available to the families so that legal representation can be secured for them to contest the case he is taking to the Court of Appeal.
I am grateful to the hon. Gentleman for securing this debate so that we can show our concern as MPs for the families, who still have no closure. The early-day motion tabled by the hon. Member for Birmingham, Yardley (Jess Phillips) has garnered, as far as I know, 21 signatures across the House. It emphasises that the Chief Coroner has called not once, but twice—and recently—for legal aid to be provided. While these events occurred a long time ago, it is still a live issue, and the Chief Coroner, whom we must respect in this matter, has called for legal aid to be granted.
The right hon. Lady is absolutely right. The early-day motion tabled by my hon. Friend the Member for Birmingham, Yardley—I am pleased to welcome her to the debate—is getting wide support across the House, irrespective of party. This is not a party matter; it is a matter of justice and parity. As the right hon. Member for Meriden (Dame Caroline Spelman) said, the fact that the coroner supports public funding being made available for the families of the pub bombing victims underlines that he understands that this is a question of justice. We are asking for Ministers to have that same level of understanding.
The Legal Aid Agency is insisting that existing regulations prevent it from providing assistance, even though the families were eventually granted legal aid for the inquest. One reason the LAA put forward is that the families should instruct lawyers on a no-win, no-fee basis. That argument is undermined by the fact that a protective costs order was already accepted by the High Court and would quite possibly be accepted by the Court of Appeal. The avenue of getting representation on a no-win, no-fee basis is simply unlikely to be available to the families.
However, it seems that the Legal Aid Agency’s main reason for refusing legal aid this time is because the collective capital of the families provides
“potential source of funding from which it would be reasonable to fund the case”.
Indeed, in a letter to one of the law firms representing the families, the Legal Aid Agency went so far as to suggest that the possibility of further crowdfunding appeal could suggest that the families do not need legal aid to present their case. I find that suggestion astonishing. It is in the public interest for this case to be heard; it should not be dependent on how successful the families are in passing the hat around. The bottom line, however, is that in a letter to me and other Birmingham Members, the Legal Aid Agency insists that it has no discretion to come to any decision other than to refuse legal aid.
From my reading of the rules governing legal aid, I do not know whether the Legal Aid Agency has no discretion here. It is not clear how the refusal of legal aid for the Court of Appeal hearing logically squares with the fact that families finally won legal aid for their representation at the inquest. As inconsistent as it may appear, if for whatever reason there is no discretion by which the families can be granted legal aid, my request to the Minister is for the Government to step up to the plate for justice by directly authorising that public funding be made available outside the regular legal aid framework.
I commend the hon. Gentleman for the way in which he introduced the debate. He is right that this is a cross-party, cross-nation issue. One of the premises of British law is that justice must be seen to be done. Is he as perplexed as I am by what has happened in this case? The British public are aghast, wondering why other groups and individuals appear to find it so easy to get legal aid, while a group of victims who have gone through the wringer for many decades cannot access justice, and are therefore having justice denied them.
The hon. Gentleman is right that people in Birmingham, and people throughout the west midlands and beyond, are looking at this situation and saying: “If it is the public interest for the case to be tested at the Court of Appeal, how can it be that only one side is being funded to do so?” I am not sure that I agree with him that it is easy for a lot of other people to get legal aid. In fact, the changes to the legal aid system have been a concern for a wide range of people seeking public support in their quests for justice. Certainly in this case, however, it is astonishing that legal aid has been denied.
Ministers know that public funding has sometimes been made available outside the legal aid system. It was rightly made available for the Hillsborough inquests, when legal aid was not available. I therefore ask the Minister: does she agree with the Legal Aid Agency’s contention that it has no discretion at all to grant legal aid for the appeal court hearing? If she does not agree, will she put the Legal Aid Agency right? If she agrees with the Legal Aid Agency, does she also agree with my contention that it is in the public interest for both the coroner and the families to have equal resources to test their cases at the Court of Appeal, and that the Government should therefore make available the public resources to achieve that objective outside the regular legal aid framework?
Beyond the specifics of this case, I refer the Minister to what the then Minister, the right hon. and learned Member for North East Hertfordshire (Sir Oliver Heald), said in response to the Adjournment debate secured by my hon. Friend the Member for Birmingham, Yardley in 2016. He said that
“families in very difficult circumstances with complicated cases have gone unrepresented while public bodies and individuals are represented at a cost to the public. The Ministry of Justice and the Home Office are rightly working collaboratively to consider that issue”
“are looking at the best way forward.”—[Official Report, 26 October 2016; Vol. 616, c. 400-402.]
Furthermore, in October last year the Lord Chancellor issued a written ministerial statement confirming that a post-legislative review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, better known as LASPO, was commencing. Will the Minister please update the House on the progress of that post-legislative review, particularly given that a number of bodies, not least the Law Society, have called for the criteria for providing public funding to be simplified, and for the guidance to the Legal Aid Agency to be amended to widen the scope for funding for representation, particularly of bereaved families?
Irrespective of what progress is or is not being made in those inter-departmental discussions and in the post-legislative review, the issue of how these families’ cases will be funded at the Court of Appeal will not wait. If the system has failed them, and if legal aid has failed them, it is time for the Government to step up to the plate directly and make public funds available some other way. It is simply about fairness and parity. Justice demands no less.
Order. I am obliged to call the first of the Front-Bench spokespeople at no later than 5.7 pm. The guideline limits are five minutes for the Scottish National party, five minutes for Her Majesty’s Opposition, and 10 minutes for the Minister. Mr Burden will then have three minutes to wind up. Until 5.7 pm, the debate is open to Back-Benchers. Two stood to speak, and more may be motivated to stand as the debate goes on, but first I call another Birmingham MP, Jess Phillips.
Thank you very much, Mr Hollobone. I thank my hon. Friend the Member for Birmingham, Northfield (Richard Burden) for a forensic trot-through of the problem that we face. I will not cover the same ground, but I associate myself with everything he said in laying out exactly how long we have been to-ing and fro-ing on this issue.
I feel as if I am on a merry-go-round. I have been on it for only about four or five years, from just before I was elected. I meet with the families regularly. They are in their 40th year of dealing with this issue, and I feel tired of having to bring it up once again. We have won this argument before, and we have been here before. They were refused legal aid at the inquest stage and there was a lot of hullabaloo from many of the same people who are in the Chamber today, from both parties. We won that argument, yet here we are again.
For me, the fundamental problem is inequality of arms. These people are ordinary citizens. It is not okay for the public bodies involved, whether they be police forces, Government Departments, or in this instance the coroner, to have a resource that is simply not available to the party that represents the victims. Not a single one of the families of the 21 people murdered on that night wishes to be in this position. They do not want to be any trouble and to have to constantly make these arguments. They wish, more than any of us, that we were not standing here having this debate. They wish that in a way that most of us in this place will never understand, although unfortunately some Members of the House do have personal experience in that regard. The fact that we are here again, with ordinary citizens feeling as though they were begging the state to allow them to be represented, is a source of deep sadness. I feel a bit tired by this constant battle, although having met the families I know that they are battle-weary but fairly tough.
I want to go over some of the reasons why legal aid, at this stage, has been refused, most recently to my constituent Margaret, who was the mother of one of the victims. Just to big up the women who come from my bit of the world, hon. Members will never meet a woman as tough, steely and certain as this woman. She makes me look like a wallflower.
Yes—you can imagine. As her MP, I know what it is like to sometimes have to disappoint her. The fact is that as my hon. Friend the Member for Birmingham, Northfield outlined, the most recent round of legal aid has been endorsed by the coroner as the only fair way for justice to be served in the appeal process.
The reason given to the families for legal aid not being granted is that, despite the eligibility of one applicant, the other families cumulatively have sufficient resources to fund the legal action. I know these families. They are not rich people. They are ordinary people who live in ordinary houses. They are all extraordinary people in their own way, and in what they have been fighting, but they are not like the people we meet in this building. They are not people with thousands and thousands of pounds in the bank. They are ordinary people who perhaps own ordinary houses.
Are we saying, as the state, that if someone—a normal Joe or Jill—wants to seek justice, they will probably have to sell their house? That if someone’s family is murdered, in order for them to go through the process of getting justice we will take away all their assets? My constituent will also be judged on the assets of her children—we are going to strip away those assets because they want to go through the process. What they want is justice. Taking away their assets is not an acceptable standard for any of us here; I am certain that Government Members do not feel that it is. I wish that I could hold up photos of these people’s homes, so that hon. Members could see what ordinary lives they lead. They are ordinary Brummies.
The hon. Lady is making a very good point. There is an absurdity to any argument that justice should be means-tested, in the sense that property prices are so significantly different around the country that there is an in-built disadvantage for some parts of the country. I do not know whether the Minister knows what the average property price is in the west midlands, but the average home in the west midlands is sub-£200,000. Most people living in London could only dream of a house at that kind of level—they do not exist anywhere in London—so straight away there is an absurdity to the argument that a person’s principal home should be considered as part of a means test for achieving justice. It just is not right.
It certainly is not. I remember giving the figures on the day when the threshold for inheritance tax was raised to £375,000, when I stood up and told the Minister that, in my constituency, eight people would benefit from that, and they had to be dead. My husband said that that Budget day was a great day to be dead. That gives a bit of an idea of the property prices in the area that I represent and live in.
The second issue that my hon. Friend the Member for Birmingham, Northfield raised was the idea that because the families have previously been successful in raising funds themselves, they could probably lean back on that. To be clear, are we saying that if families, victims or anyone else wants to seek justice, the state currently feels that it should fall to those who can shake a tin best, or perhaps run a fun run? We could dress up as—I don’t know—victims, and do the London Marathon, and see how many people wanted to give us some cash so that we could find out some of the answers that the families have waited decades for. Even for those who do not know the families and do not have personal involvement, that cannot be a standard for our justice system. Crowdfunding and who can write the best tagline on a website and bleed the most hearts should not be the most likely way for people to access justice, going up against a state actor that is paid for by the same people’s taxes—we are the same people.
My hon. Friend will be aware that on 6 November 2014, Nils Muižnieks, the Council of Europe commissioner for human rights, addressed this issue. His ruling, which we signed up to and support, was:
“It is clear that budgetary cuts should not be used as an excuse to hamper the work of those working for justice.”
We as a nation support that. Should we not extend that to this horrendous case?
I could not agree more. There are probably endless quotes from the bishop who did the inquiry into the Hillsborough situation, and we will almost certainly face the exact same arguments when the Grenfell disaster eventually comes before inquiries, courts and inquests. This is not just about the families in Birmingham; it is about a standard of justice. It is a David and Goliath situation, where David is the one paying for Goliath. That cannot be right, yet these families, having already lost family members, are having to do the heavy lifting for the rest of us to have a better system. For that, on behalf of anybody who has ever gone up against a state actor, we owe a debt of gratitude to families such as the Justice for the 21 families and the Hillsborough families, who are doing this on behalf of all of us to make justice better and fairer.
I worry that the Legal Aid Agency is using its powers to make decisions on whether it grants funding based on the merits of a case, and is deciding that it has authority on those merits. A High Court judge has agreed that the review should take place. It is perfectly reasonable that the coroner feels they have the right to appeal against that decision—that is absolutely fine—but it is not acceptable for the Legal Aid Agency to decide on the merits of that case. Are we saying that in the very complicated hierarchy of justice that these ordinary people have had to learn—they could probably sit legal degrees with ease now, these ordinary people with ordinary jobs, who did not know anything about this—the Legal Aid Agency now sits above a High Court judge in deciding which cases have merit? I hope the Minister can answer that question, because I am confused. She is learned; I am not learned—nobody gets to be learned just from being street smart, unfortunately. If only there was a degree in that.
My hon. Friend would be a professor emeritus.
I would be an emeritus professor in street smarts.
I feel that the Legal Aid Agency or the Government will eventually renege on this point. I associate myself with all the requests made by my hon. Friend the Member for Birmingham, Northfield, but we have had to go around the hamster wheel again to ask whether, if the Legal Aid Agency is not the route for families, justice can be served through extra funding that the Government allocate from elsewhere.
My hon. Friend is making a very good point. Most people can remember where they were on the day when this tragedy happened. It is interesting that the Government can find the money when they want to do something, but when ordinary families want to take legal action and get justice, the Government cannot find the money. I always thought it was the Government’s duty to protect people, and one way to do that is through securing justice for them. Does my hon. Friend agree?
Quite. I cannot remember where I was on that day, because I was not yet born, yet it has stayed in the history of the city that I come from and have lived in all my life. If Birmingham were cut, it would bleed still with this unsolved disaster. After years of quite rightly hearing about the miscarriages of justice for those who were convicted of the crimes, the victims in the story have been lost, and it is now time for their story to be told.
I absolutely agree with my hon. Friend—the Government will perfectly easily fund the side that fights against this. I have no doubt that the coroner will have all the resources that are needed. Why can they always find it for one side and not the other? This is not a case of people making vexatious claims that will open the door to everybody being able to make a load of claims against the state really easily. If these families have proved anything, it is that this is no picnic. It is not easy. There is nothing easy about this process, and that suggestion should be disregarded as a reason why what seems to be an austerity measure is affecting them so much.
I finish my remarks by paying a massive tribute to the families in this case. I am often proud to be from Birmingham—in fact, almost daily. These families make me incredibly proud of my city’s resolve in keeping on going.
It is a pleasure to speak in this debate. I congratulate the hon. Member for Birmingham, Northfield (Richard Burden) on bringing this issue to the Chamber. He and the hon. Member for Birmingham, Yardley (Jess Phillips) passionately presented the case of the victims of the Birmingham pub bombs.
I am here today not because I am from Northern Ireland but because, like my hon. Friend the Member for North Antrim (Ian Paisley), I have empathy with and a real understanding of the victims’ families. In my constituency, there are many people in a similar situation, whose lives have been torn apart by evil men. The victims had no sin and no guilt, but were in the wrong place at the wrong time. While the world seeks to brush over the atrocities of the past, and people—at least in New York—seek to rename St Patrick’s day after the unrepentant terrorist Gerry Adams, the families of the 21 people murdered by the Birmingham bombs daily pay the price in sorrow and tears. The hon. Members for Birmingham, Northfield and for Birmingham, Yardley spoke with passion and belief. I am sure everyone in the Public Gallery is proud of them and of all Members who are here to support the case of the victims’ families and make sure it is well made.
The hon. Member for Birmingham, Yardley, in her passionate and compelling speech, told us about the victims of the Hillsborough disaster. Let us be quite clear: we all wanted them to get legal aid, but we also want the families of those who were killed in the Birmingham pub bombs to get it. Those families see single parents where once there were two; mothers at their child’s graveside, against the natural order of things; little girls walking down the aisle without their father; lives half-lived because huge parts have ripped away—all because IRA men decided to make their point by choosing that place at that time. That is my concern, and that is why I am here today. When the hon. Lady secured her Adjournment debate, I went along to support her, not because I intervene in them all but because I agree wholeheartedly with what she was trying to do. I am here to do the same thing again.
Those families seeking justice should not have to fight so hard in this day and age. When I think of the public money that was spent on the Bloody Sunday inquiry into an incident in which 13 people died—I am in no way trivialising those families’ heartache—and see a bill in excess of £195 million, I am flabbergasted. I cannot understand the rationale for not allowing the families to seek justice through the legal aid system. I make that point about the Hillsborough inquiry and about the Bloody Sunday inquiry.
Do the lives of those 21 people not count enough? Is it simply that the wrong people were killed? Do we run a two-tier system, in which some people are entitled to legal help for justice and closure while others are not allowed that support? I hope we do not. I am putting the Minister on the spot, but we look to her with concern, and we request a positive response. That is not the system I signed up for. I believe in real equality—hon. Members know that. Everybody aggrieved by the troubles deserves the same time, attention and support.
I read an article that said that although the application of the families of the victims of the Birmingham pub bombs for legal aid was turned down, the black cabbie rapist has accessed £166,000-worth of legal aid. Am I the only person who sees something wrong there? We all do. He got an obscene, disgraceful amount of legal aid. I am really lost for words sometimes when I try to understand how the system works. I stand by people’s right to have legal support regardless of whether they are innocent or guilty, but it hurts to see these families denied access when there is no question of guilt. I understand the system, but understanding it does not make it right. The fact is that this is wrong.
I say respectfully and gently to the Minister that I am looking to her to make it right and ensure this case is reassessed. For too long, the victims of IRA atrocities have had to fight for the recognition that their families are important. This fight for legal aid is yet another example of salt being poured into wounds that cannot heal because they are not allowed to. Reopen the inquest, hear the evidence, do the right thing by those people, who have done no wrong. Please—for those victims and the victims of terror at home, enough is enough. I want to send this message to those families: they are not being asked to drop the case while watching the perpetrators and masterminds being celebrated, lauded and, in some cases, almost canonised and made into saints. The families of the victims of the Birmingham pub bombs deserve at least as much help, support and consideration in their quest for justice as those affected by other troubles-related murders.
I support the families’ quest and that of the two MPs who have spoken and those in the Public Gallery who are here to request legal aid help. I am sorry for the price they are paying and the grief they continue to go through. I am sorry that they are not getting the support they should get without question. They are not alone; I stand with them in this House.
It really is a pleasure to serve under your chairpersonship, Mr Hollobone. I congratulate the hon. Member for Birmingham, Northfield (Richard Burden) on securing this important debate, and the other Members of Parliament who have fought for this right and just cause. I pay tribute to the families’ courage and bravery.
As the hon. Member for Coventry South (Mr Cunningham) said, those who were alive at the time of this incident will never forget it. I was just a little girl, but I do remember it. I looked again at photographs of the victims today, and it is fair to say that their faces are familiar to those of us who are strangers to them: they have haunted us for many years.
It puzzles me that it has taken so long to get to the bottom of who carried out that atrocity. One almost wonders whether it suits some in authority for us not to get to the bottom of it. We are close to getting to the bottom of it. It is many years since innocent men were imprisoned and cleared in relation to the atrocity. There should have been inquests. The inquests that were originally opened in 1974 should have been reopened when the Birmingham six were cleared, but they were not. They were reopened in 2016 because of the families’ campaign.
The coroner’s decision—he is entitled to make it, but it is controversial—should be challenged because the decision to exclude the perpetrators from the scope of the inquest means that it will avoid the crucial issues of who carried out the bombing, who organised it, who ordered it, who made the bombs, who planted them and who their associates were. The families of the victims have the right to know the answers to those questions. As others said eloquently, this is about access to justice and equality of arms.
As others said fairly, the coroner himself said that the families should get those funds so the fight can be equal. Other parties will be publicly funded, so why should the families not be? I am a Scots lawyer, so I do not really understand how the Legal Aid Agency works down here, but it puzzles me greatly that people are seriously expected to give up the homes in which they live to fund this litigation.
I am a member of the Joint Committee on Human Rights, and we are currently carrying out an inquiry into the enforcement of human rights and access to justice, which is a very important issue in our society—it is a fundamental right. Many of the witnesses who have given evidence to our inquiry have said that an independent review is needed of legal aid in England. The LASPO review is under way, but it is not independent. The witnesses who have given evidence to our Committee have, in the main, said that there should be an independent review separate from the Government so the matter can be looked at independently.
North of the border, there has been an independent review into legal aid, separate from the Scottish Government, who run legal aid in Scotland, and it has made certain recommendations. It also found that although the Scottish Legal Aid Board spends less per head than is spent in England per head, there is much wider scope to and eligibility for legal aid in Scotland—indeed, 70% of the population of Scotland are eligible for legal aid.
It is therefore possible to run an economic and effective legal aid system. A legal aid system that denies access to funding for people to get to the bottom of the truth about who killed their loved ones cannot be a just system. Will the Minister consider holding an independent review into the Legal Aid Agency and into the criteria and eligibility for legal aid south of the border? In support of others’ requests, will she tell us clearly whether some special arrangement could be made to fund the families pending the outcome of any independent review into legal aid? If the answer to both those questions is no, will the Minister tell us how she thinks it is possible for there to be true access to justice when there is such inequality of arms?
It is a pleasure to serve under your chairship, Mr Hollobone.
I thank my hon. Friend the Member for Birmingham, Northfield (Richard Burden) for securing this debate. He and other colleagues who have spoken today have stood with the families of the Birmingham 21 as they have campaigned tirelessly for justice for the loved ones they lost on that terrible night. As others have done, I pay tribute to the families themselves. I am in awe of the determination of people such as Margaret Smith, Brian and Julie Hambleton, and all the family members who are still fighting for the truth about what happened on that terrible night. It is testament to the strength of their love for the family members they lost that they are still fighting for justice 43 years later.
Fight is what the families have had to do every step of the way. They fought to reopen the inquest after 40 years without support or answers, and they had to fight to receive legal aid for that inquest. I am proud that the Labour party has long supported the families in their quest for legal aid so that they can pursue justice for their loved ones. The Labour party will continue to do that.
Over 43 years an awful lot of Ministers of different political persuasions have looked and looked at this. Will the hon. Lady join me in appealing to the new Minister who is picking the issue up for the first time to look at it with fresh eyes? Everyone who has filled her role comes to the view that it needs to be put right, but every fresh start is more pain for the families concerned.
The right hon. Lady is right: this is an opportunity for a fresh start, and I agree that there have been many opportunities for such fresh starts. Now the families are fighting for the scope of the inquest to include those believed to have been responsible and their actions leading up to the bombing. They therefore raised £20,000 through crowdfunding for the judicial review into the scope of the inquest. At the end of last year they won their battle in the High Court.
Even now, however, the families cannot stop fighting—they have been denied legal aid to represent themselves at the coroner’s appeal against the High Court’s decision. Mr Malcolm Bryant, in his letter to the families denying legal aid for the challenge, stated:
“I am confident that a new crowdfunding drive could provide an alternative means of funding the appeal.”
The head of the exceptional case funding team for high-cost complex cases is suggesting that families must resort to crowdfunding in order to obtain justice. Is that not a sign of something very wrong in our justice system that bereaved families are being told to resort to crowdfunding drives to continue their quest for answers?
Families must apply for exceptional case funding and meet stringent tests in order to receive legal aid at an inquest. In certain cases the Legal Aid Agency may decide to waive the financial eligibility test for family members, if it can be argued that it would be unreasonable for the family to bear the full costs. Where the family has lodged a legal challenge to the basis of the inquest—the Justice for the 21 group has asked for the suspects to be named—there is no such discretion, even though legal fees to defend the families’ point in the Court of Appeal might run into tens of thousands of pounds.
Will the Minister therefore ask the Lord Chancellor to review the Legal Aid Agency’s decision not to grant legal aid in this case? Will the Government consider extending the financial eligibility waiver to proceedings directly related to the inquest so that the families of the Birmingham 21 and others can be sure of a level playing field when fighting for the truth? When families are grieving and simply looking for the truth, they should not have to think about taking out loans, resorting to crowdfunding or being burdened with legal fees.
The Government claim that families do not need legal aid for representation at an inquest because it is not an adversarial process, but if that really is the case will the Minister explain why the Government still feel the need to spend hundreds of thousands of pounds in public money to ensure that their side is represented effectively at inquests? Why should families not have access to the same degree of representation? It is a simple matter of ensuring a level playing field.
The families of the Birmingham 21 were victims of an act of terrorism, and then of a system that has made them fight every step of the way for answers. Families who have been through so much, who have suffered the death of sisters, daughters, husbands and fathers, should not have to fight every step of the way for answers to how their loved ones died and who was responsible. I hope that today the Minister will back the families of the Birmingham 21 and all those fighting for answers, and guarantee that legal aid will be made available.
It is a pleasure to serve under your chairmanship, Mr Hollobone.
I am extremely grateful to have the opportunity to respond on such an important issue in such an important debate, and I congratulate the hon. Member for Birmingham, Northfield (Richard Burden) on securing it. He has been very active in supporting his constituents and in making representations to the Legal Aid Agency, as the hon. Member for Birmingham, Yardley (Jess Phillips) has been in raising the profile more broadly. Like them, I welcome the families to Westminster today.
I understand why there is such strength of feeling on the subject from hon. Members on all sides. I have the deepest sympathies with the families and friends of those who were injured or lost their lives in the terrible atrocities that took place in Birmingham in 1974. I cannot imagine what they have been through. I understand the inquest plays a crucial part in the investigations that continue, and I appreciate that it plays an important role in enabling families to understand and make sense of what happened to their loved ones.
Much of the debate has focused on legal aid. The hon. Member for Birmingham, Northfield asked me to explain how legal aid differs in the various types of cases for which it can be granted in relation to an inquest. It is therefore important to identify the types of assistance that can be granted and have been sought in this case.
The Ministry of Justice acknowledges that, in certain cases, legal aid in the lead-up to an inquest may be required, and has ensured that early legal advice for inquests is available under legal aid for those who are eligible. I understand that such legal aid was sought and granted in this case. Next is the issue of legal aid for representation at the hearing itself. An inquest should be an inquisitorial process that focuses on establishing the facts of death. It should not really be an adversarial hearing, and should be conducted in a very different way from a court proceeding. Participants do not always need to present legal arguments and so, in most inquest hearings, the bereaved family do not need representation to participate in the process. Most inquest hearings are conducted without the need for publicly funded representation.
Having said that, publicly funded representation may be needed in certain circumstances and is then sought. Legal aid is available for legal representation at inquests under the exceptional case funding scheme. Legal aid is awarded through that scheme on a case-by-case basis. In deciding whether funded representation may be necessary, the Legal Aid Agency considers all the relevant individual facts and circumstances of the case, which usually include the particular circumstances of the family. Legal aid for representation at inquests is subject to means and merits tests. In such circumstances, means can be waived.
As the hon. Member for Birmingham, Northfield highlighted, the families have previously received publicly funded legal representation for the inquests on this matter.
Like me, the Minister practised in the courts before she became an MP. Does she agree that, where the families of the bereaved are not represented at inquests, stones are often left unturned that would have been turned had the families had a lawyer?
The hon. and learned Lady makes an important point, as always. The position is that it is not always necessary. If it is necessary, families are able to apply for it, but in his report on Hillsborough, the Bishop of Liverpool identified that, according to a 2003 fundamental review of death certification and investigation cases, no representation was needed in 79% of cases, because the families could represent themselves.
In many inquests, legal aid is not needed because the families do not need to advance legal arguments, because it is not an adversarial process, but I recognise that in some cases, it becomes a very adversarial process—that is not really appropriate, but it does become that—and legal aid can be and is sought. In fact, exceptional case funding has been granted in half the cases where people have applied for it.
The Minister mentions the Bishop of Liverpool’s review. His report called on the Government to instate:
“Publicly funded legal representation for bereaved families at inquests at which public bodies are legally represented.”
It has been five months since that report was published, but we still have not had a response from the Government.
The hon. Lady is right—others have also called for that. That is why the Government are undertaking a review, which has started and which I will come to, in relation to legal aid funding and the Legal Aid, Sentencing and Punishment of Offenders Act 2012 generally, but more particularly and more relevant in this case, in relation to legal aid funding for inquests.
I have identified the two circumstances where legal aid was sought and granted in this case. The third, which is what the debate centres on, is the provision of legal aid for judicial review. Legal aid is available for judicial review in generic terms. However, as with legal aid for inquests, this availability is subject to a number of restrictions. Applicants must satisfy statutory tests for their means and merits in order to qualify for legal aid for judicial review. The reason that they are required to satisfy those tests is to ensure that the resources that are available for legal aid generally are given to those who are most in need. In the case in question, which was an application for funding for a judicial review, the Legal Aid Agency determined that those requirements were not met.
I fully appreciate that the families have found that decision of the Legal Aid Agency very frustrating. The hon. Member for Ashfield (Gloria De Piero) asked whether I can review that decision, but it is important to point out that funding decisions are made by the Legal Aid Agency independently of Ministers. I am not privy to the details of the decision. The decision whether to provide legal aid funding in an individual case should not be a political one. It is solely for the director of the legal aid casework at the Legal Aid Agency to decide whether a case is within the regulations and the laws that Parliament has set. I was not aware of the reasons why legal aid was determined—that is a decision of the Legal Aid Agency independent of Ministers.
My right hon. Friend the Member for Meriden (Dame Caroline Spelman) and the hon. Member for Birmingham, Northfield made very important points at the beginning of the debate about the coroner having called for legal aid to be reinstated but, as I said, that is not a decision for me or for him—the decision on legal aid is a matter for the Legal Aid Agency.
Will the Minister give way?
I am conscious of the time, so I would like to press on.
I will make two wider points about legal aid outside this case. First, legal aid is a fundamental pillar of access to justice. More than a fifth of the Ministry of Justice’s budget is spent on legal aid in England and Wales. The system was designed when it was implemented in 2012 to ensure that those who are most vulnerable and have no other means of funding support are provided with assistance. Those principles in generic terms are fair ones.
Secondly, we recognise that it is right to look at and review inquests more broadly. An inquest ought to be an inquisitorial process that focuses on establishing the facts of death and should not be adversarial. The presence of several lawyers at a hearing often adds to the distress and anxiety of the family, who feel, as was stated by many hon. Members, that there is an imbalance and unfair representation. With that in mind, the Ministry of Justice is undertaking and exploring a number of ways to make inquests less adversarial and more sympathetic to the needs of bereaved people. We are working with other Government Departments that are often represented at inquests, as well as the legal profession. We are looking at ways to reduce the number of lawyers, training for coroners and lawyers, extending support services, updating our written guidance and updating the legal guidance on deaths in custody, so that we ensure the starting presumption is that legal aid should always be available.
Many Members mentioned that we are reviewing legal aid for inquests in general. That review has started already. Experts are giving evidence, and there will be a public consultation. I encourage family members to give evidence to the public consultation if they wish to do so. I also encourage Members to respond. The hon. Members for North Antrim (Ian Paisley), for Birmingham, Yardley and for Strangford (Jim Shannon) made powerful points in relation to justice, and said that justice needs to be done. They put forward many arguments for why the families need support.
I recognise that getting the inquest right for the families is incredibly important. Families who have suffered dreadfully are entitled to justice. I thank the hon. Member for Birmingham, Northfield and all hon. Members who have spoken and contributed to this important debate.
First, I express my appreciation to hon. Members from across the House who have given their support in the debate: my hon. Friends the Members for Birmingham, Yardley (Jess Phillips), for Birmingham, Selly Oak (Steve McCabe)—he could not stay for the entire debate but was here to give support—for Ealing North (Stephen Pound) and for Coventry South (Mr Cunningham); the right hon. Member for Meriden (Dame Caroline Spelman); the hon. Members for North Antrim (Ian Paisley) and for Strangford (Jim Shannon); and on the Front Bench for the Scottish National party, the hon. and learned Member for Edinburgh South West (Joanna Cherry); and for Labour, my hon. Friend the Member for Ashfield (Gloria De Piero). They all made powerful points.
I have to confess to being disappointed by the Minister’s response. She spent time discussing whether legal aid should be available and the circumstances in which it should be available for inquests. I think she was wrong in saying that any legal aid has been provided in this case—I do not think that a penny of legal aid has yet been paid—but she is right that legal aid has been granted for the inquest. The point that we are putting to her is that, if it is appropriate to provide legal aid for the families for the inquest, why does it become inappropriate to provide legal aid for those same families for an important point of law arising out of that inquest? It is simply illogical. I am afraid that the Minister did not answer that point.
The Minister says she cannot intervene in the Legal Aid Agency decision on whether legal aid can be granted, but has not said whether she feels it has discretion to come to a different decision.
I am sorry if that was not clear. The reason that it can be granted in the first two circumstances is that the means test is discretionary and can be waived, but in a judicial review, it cannot.
The Minister says that there is no discretion, and that the matter is being reviewed. I am glad that it is being reviewed, but frankly, this case will not wait. The families need a decision now. The decision that they have had from the Legal Aid Agency is not in the interests of justice. If there are no avenues through the regular legal aid system to provide them with the support that they deserve—support that the coroner himself says should be paid—in the interests of justice, either because the Legal Aid Agency does not have discretion or because it does not feel that the means test requirements have been met, the problem is still there. It therefore comes back to the Minister to say what she is going to do about that problem, which will not wait.
In the situation applying to the Hillsborough inquest, the Government eventually said that this was a matter of such fundamental public interest that a special fund should be made available to ensure that families have legal representation. We are simply saying that if that rightly applied in the Hillsborough case, it should also apply here. It is simply illogical that the families are denied equality of representation in the Court of Appeal, where representation is available to the coroner. That has to be put right. Only the Minister can do that, and I hope she reconsiders the points she has made today.
Question put and agreed to.
That this House has considered legal aid for families of the victims of the Birmingham pub bombings.