Commons Chamber

House of Commons

Thursday 8 June 2006

The House met at half-past Ten o’clock

Prayers

[Mr. Speaker in the Chair]

Oral Answers to Questions

Trade and Industry

The Secretary of State was asked—

Postal Services

Mr. Alistair Carmichael (Orkney and Shetland) (LD)
1. What recent discussions he has had with ministerial colleagues on the future of the Royal Mail and Post Office in Scotland.

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick)
Good morning, Mr. Speaker. DTI Ministers and officials have regular discussions with other Government Department colleagues on matters relating to Royal Mail and the Post Office network.

The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Brent, North (Barry Gardiner), who was previously Under-Secretary at the DTI with responsibility for postal services, met Ross Finnie, Minister for Environment and Rural Development at the Scottish Executive, on 6 March to discuss a range of issues relating to post offices.

Mr. Carmichael
I thank the Minister for that answer. Will he and his ministerial colleagues encourage the chief executive of Postcomm to engage better with communities on the future of Royal Mail and the Post Office? I recently wrote to her inviting her to attend a function in my constituency to discuss the future of postal services, and she told me that she felt that she could learn all that she needed to know by holding seminars in Edinburgh, Perth and Dundee. We in the Isles have some difficulty with that attitude, because there is genuine concern about the issue and people want to engage in the debate. We need better responses from Postcomm than that.

Jim Fitzpatrick
I hear what the hon. Gentleman says and I know that he will have a seminar in Orkney in due course. My understanding is that the head of the rural network in Scotland for Post Office Ltd will attend the Orkney seminar, and that it will also be represented at the Shetland event. The Department is keen to do what it can to maintain a sustainable network. We have committed £2 billion to Post Office Ltd, including £750 million up to 2008 to support the rural network in particular. We will be very interested in the outcome of his seminar.

Mr. Brian H. Donohoe (Central Ayrshire) (Lab)
The Minister may not know that the post office in Irvine in my constituency, which serves some 30,000 people, is to be franchised. One of my reservations about that proposal is that the franchise will include licensed premises. Many elderly people in the area are opposed to that concept and fear the whole idea. It is also almost bizarre that staff have only recently undergone a training programme to help to widen the scope of the business of the Crown post office, which will now be of no use whatsoever.

Jim Fitzpatrick
I can understand my hon. Friend’s concern, although I have to confess that I did not know about that initiative until he mentioned it to me earlier. The Post Office has to look at modern ways of working, and franchising works in other parts of the country. Having conducted a £25 million pilot to determine modern ways of providing services, we will examine closely anything that has a positive effect on the sustainability of the service. I am happy to hear more from my hon. Friend on the issue. If he drops me a line, I will look further into the initiative that he mentions.

Mr. Mike Weir (Angus) (SNP)
Does the Minister understand the fear in rural areas of Scotland when Adam Crozier, the chief executive of Royal Mail, talks about a “radical transformation” of the network as a result of the collapse in Government work, such as benefits payments? In the recent deal between the Government and the Royal Mail, it was made clear that

“the level of any support after 2008 will depend on decisions on the future of the post office network”.

Who will take decisions on the future of the post office network? Will it be Royal Mail or the Government, depending on the amount of money that they put in?

Jim Fitzpatrick
I hear what the hon. Gentleman says about the lack of Government support, and I hope that I have rebutted that by demonstrating the £750 million that we have committed to the rural network in particular. It is not the Government’s fault that people are not choosing to use the post office. Habits are changing and the internet is available: there are many reasons why people are not using the post offices—[Interruption.] Some 1,200 post offices have fewer than 60 customer visits a week and 800 have fewer than 20. The issue of sustainability has to be addressed, and I will be happy to engage with the hon. Gentleman in due course in respect of his local post offices.

Energy Review

Mr. Andrew Mackay (Bracknell) (Con)
2. When he will announce the findings of the energy review.

Peter Luff (Mid-Worcestershire) (Con)
3. If he will make a statement on the progress of the energy review.

The Secretary of State for Trade and Industry  (Mr. Alistair Darling)
The Government published a consultation document on 23 January this year inviting responses on energy policy issues. We expect to report to the House before the summer recess.

Mr. Mackay
The Secretary of State is aware that energy supplies were very tight last winter and are likely to be even tighter over the next couple of years. What is he doing to ensure that the lights stay on next winter?

Mr. Darling
The right hon. Gentleman is right: energy supplies were tight last winter, and they are likely to be tight again this winter. We expect a pipeline bringing gas from Norway to come online, and that will help, as will an expansion of the capacity to bring gas across from Belgium. We will also have the Rough storage facility back, but there is no doubt that we will have to take various steps over the next few months to ensure that we can get through the coming winter. That is all the more reason why we should take realistic action to ensure that we safeguard the security of our energy supplies, this winter and in the years to come.

Peter Luff
We urgently need investment in new generating capacity, but the single most important issue that the review must resolve is the development of a long-term mechanism for the pricing allocation of carbon. The current emissions trading scheme is welcome, but it does not give investors the confidence that they need to make very large investments. How confident is the Secretary of State that it will be possible to negotiate a mechanism that will apply for, say, 20 years? If that cannot be done internationally, what freedom of manoeuvre does he have domestically to develop a system that will bring forward that investment?

Mr. Darling
Again, the hon. Gentleman is right. The industry must have certainty, as many investment decisions will have to be taken over the next few years and the price of carbon will be one of the elements determining those decisions. As the House would expect, the Government have been actively engaged with our European partners. I attended a meeting in Brussels on Friday, at which we discussed the ETS and emphasised the need to fix a carbon price over a long period. That is very important, as the industry needs that certainty before it takes the decisions that we need it to take in respect of the provision of power supply in the future.

Miss Anne Begg (Aberdeen, South) (Lab)
In all the discussions about the energy review, will my right hon. Friend assure me that he will not get bogged down in the nuclear debate? The oil and gas industry still has a long-term future: Cogent, the sector skills council, has an oil and gas training arm called OPITO that is encouraging young people to go into the industry to fill existing skills shortages and gaps. It is seeking to convince them that the industry has a future and that they will still have jobs in 20, 30 or 40 years.

Mr. Darling
My hon. Friend is right that nuclear is only one element of our energy supply. It makes up 19 per cent. of our provision, and we need to consider the totality. I have said on many occasions—and I repeated the point when I was last in Aberdeen—that a lot of oil and gas remains in the North sea and that there is a lot of work there. The industry employs many people, and provides many highly skilled and good jobs. I certainly agree that we ought to be encouraging people, in the north-east of Scotland and across the whole country, to consider a career in the oil and gas industry. It has a very good future, and it is an industry that we want to encourage.

Helen Goodman (Bishop Auckland) (Lab)
Obviously, one part of the energy review will consider measures to reduce demand. In an important speech earlier this week, my right hon. Friend floated the idea of changing the role of electricity producers to suppliers of total services. How quickly might that happen, and what impact will it have on reducing demand?

Mr. Darling
My hon. Friend is right that we must reduce the demand for energy. A central question in the energy review is how we as a nation can reduce the amount of energy that we consume, and a successful resolution of that question could mean that we would not need as many new power stations as might otherwise be the case. Earlier this week, I set out my belief that we need to consider how we can incentivise energy supply companies to deliver ways in which demand might be reduced—such as through the use of insulation, smart metering or other technology, for example. That approach is radically different from the way in which companies at present are incentivised to sell as much heat and light as they can, albeit in a way that causes prices to be driven down. The process will therefore take some time, but the industry is willing to discuss it and it will be a central part of the review when we report in a few weeks.

Mr. Tobias Ellwood (Bournemouth, East) (Con)
In his reply to my right hon. Friend the Member for Bracknell (Mr. Mackay), the Secretary of State talked about gas distribution but failed to cover the price rises that were the real problem for people last winter. To a large extent, those rises were caused by the continued absence of the common gas market that Britain was supposed to pursue during our EU presidency. Will the right hon. Gentleman indicate whether we are going to go down that road, and whether it will be included in the energy review?

Mr. Darling
The right hon. Member for Bracknell asked me about distribution, which is why I answered the question as I did. The hon. Member for Bournemouth, East (Mr. Ellwood) is right that there is considerable concern about recent price rises. During the course of our presidency, we asked the Competition Commissioner to do everything possible to ensure a far more open and transparent market. The hon. Gentleman will doubtless have seen that over the past few weeks the Competition Commissioner has served notice that she will enforce the current rules and regulations. Recently, there have been raids on some electricity companies in different parts of Europe and I hope that, right across Europe, people are getting the message that if we believe in a genuine open market, everyone has to play by the rules so that we can see exactly what the prices are and exactly how much gas there is. That is essential if we are to bring down prices and we fully support everything that the Competition Commissioner is doing.

Colin Challen (Morley and Rothwell) (Lab)
Will the energy review have anything to say about providing more information to energy consumers? If we buy a tin of beans and can see how many calories are in it and every other food product has similar labelling, why cannot we see from our fuel bills how much CO2 we are emitting as a result of our consumption?

Mr. Darling
I agree that we should provide far more information on our fuel bills—not just about how much CO2 is emitted. It would also be useful to make comparisons so that consumers can see how much electricity or gas they consumed this quarter as opposed to the previous quarter. Smart metering would mean that people could see exactly how much electricity they were consuming and how much they were paying for it at any time. A range of measures can be adopted to help reduce the demand for energy, which has to be a good thing.

Mr. Alan Duncan (Rutland and Melton) (Con)
Only last week, I visited three intensive gas users in Yorkshire and found that the price that they have to pay for their gas is far higher than they would pay for the same gas in France or Germany. The punitive and unfair premium on their costs is destroying some UK companies and is undermining UK competitiveness. Further to what my hon. Friend the Member for Bournemouth, East (Mr. Ellwood) asked a few moments ago, when does the Secretary of State believe that the EU will have resolved its illiberal and selfish practices, which are currently protecting its own companies and severely disadvantaging ours?

Mr. Darling
As I said to the hon. Member for Bournemouth, East (Mr. Ellwood) a few moments ago, the Competition Commissioner is taking action. One problem is that, historically, companies in this country have bought electricity on a short-term basis whereas many of our European competitors have entered into long-term contracts. As I have said, it is important that markets operate openly, and part of the reason the price is so high is the uncertainty in the market, which needs to be resolved as quickly as possible.

Mr. Duncan
One of the main ways of resolving the exposure that intensive gas users face is to see just such an increase in long-term pricing contracts, but Ministers have been foolish enough in the past to recommend that companies forsake such contracts and buy on the spot market instead, which is rather like the Chancellor selling our gold. What prospect does the Secretary of State see for the creation of new and better contracts that can alleviate the volatility that industrial users of gas face in Britain today?

Mr. Darling
It is not for the Government to tell energy consumers how they should conduct their business; it is for companies to use their own business judgment. It might be useful to remind the House, if hon. Members are not already aware of it, that we set up a joint forum between Government and business to discuss some of these issues, but the main thing is to ensure that the energy market actually works.

Mr. Dennis Skinner (Bolsover) (Lab)
We heard on the radio this morning that there are large supplies of North sea oil and gas, and large supplies of coal sweeping out to the North sea and eastern England and large supplies in Scotland and Wales. The key to ensuring that we have more coal as part of the energy review is not to rely on foreign sources, but to ensure that we keep the continuity of the mining industry. That is vital if we are to exploit the reserves that still remain.

Mr. Darling
My hon. Friend is right that coal is a very important part of the energy mix in this country at the moment. Coal provides a significant degree of our security and supply. I can assure my hon. Friend that coal will be one of many aspects that will be covered in the energy review.

Mr. Edward Davey (Kingston and Surbiton) (LD)
Will the Secretary of State confirm that the Chancellor’s latest estimate of the cost of nuclear decommissioning is about £90 billion—almost double the Government’s estimate fewer than 12 months ago? When he announces whether the Government are to opt for nuclear power, how confident is he that estimates of future decommissioning will be accurate in any shape or form?

Mr. Darling
We must do our best to ensure that whatever estimates we have are as accurate as possible. Of course, we have the question of waste to deal with now, no matter what we decide in relation to the future. That is something on which we will get the advice of the energy review that is due to report in the summer. The hon. Gentleman is right: nuclear waste is one aspect that needs to be looked at. Nuclear has provided us with a base load supply of electricity. It represents about 19 per cent. of electricity generation at the moment. If we do not do anything, that will go down to 6 or 7 per cent. in the next 20 years or so, so it needs to be considered. We cannot simply turn our back on it, as I think—I may be wrong on this—the Liberal Democrats believe we should.

Mr. Denis MacShane (Rotherham) (Lab)
In theory, open markets are meant to reduce prices, but according to the Heren report—the international report on electricity prices for the steel industry—the price for the UK steel industry is £52.58 per megawatt hour for this year compared with €52.70 for the same megawatt hour for the same period in Germany. In other words, British steel makers have to pay the same price in pounds as their German competitors pay in euros. Will the Secretary of State write to me so that I can pass his letter to steel makers in Rotherham and explain why British electricity for industry is so expensive?

Mr. Darling
I will certainly write to my right hon. Friend. For the past eight or nine years, British industry has benefited from lower electricity prices. In the past year or so, prices have gone up dramatically for the reasons that we have discussed in the past five or 10 minutes. There is no doubt that some of the uncertainty generated by the lack of transparency in European markets has added an extra element to that price. We will continue the work that we started last year, and additional capacity should be available to us.  We will continue to support the European Commissioner in her efforts to achieve a more open and transparent market. All those things will help.

The other thing that we have to get right is the long-term solution. There are no easy solutions, but I hope that when we report to the House in July, we will have a constructive engagement with all parties in the House to achieve a long-term solution to this problem.

Ministerial Meetings

Mr. Stephen Crabb (Preseli Pembrokeshire) (Con)
4. When he last met the Chancellor of the Exchequer to discuss UK trade with major developing nations.

The Secretary of State for Trade and Industry  (Mr. Alistair Darling)
I am in regular contact with my right hon. Friend the Chancellor of the Exchequer on a range of issues. UK trade with major developing nations is an important way to lift millions out of poverty.

Mr. Crabb
I thank the Secretary of State for that reply. As he knows, in this year’s Budget speech the Chancellor announced plans for expanding trade with major developing countries and specifically to set new targets for expanding trade with countries such as China and India. When are those targets likely to appear, and who is responsible for setting them? As he knows, there is significant concern in the export community that the UK has not been capturing anything like a large enough share of the huge increase in international trade that countries such as India have seen in recent years.

Mr. Darling
The targets will be announced in due course. The hon. Gentleman makes a fair point. We need to do more to encourage trade between British companies and China and India and Chinese and Indian companies trading here. We should not overlook the fact that there has been considerable success in the past, but we need to do a lot more. They are important markets to this country, and we want to do everything we can to encourage that trade. My right hon. Friend the Chancellor put in place various ways in which we can encourage that trade and explore things that we can perhaps do better than we have done in the past.

Ann McKechin (Glasgow, North) (Lab)
I recently took part in discussions through the parliamentary network of the Royal Bank of Scotland with parliamentarians from both the Asian subcontinent and Africa. They expressed their anger and frustration at the EU position in the current World Trade Organisation negotiations on agriculture. Given the Chancellor’s warnings yesterday about the dangers of protectionism, does my right hon. Friend agree that if it is right to liberalise agriculture markets, we should not make it conditional on concessions from developing countries at the WTO talks?

Mr. Darling
As my hon. Friend is aware, we believe that we need radically to reform the system of agriculture support in Europe. However, negotiations are taking place at the moment and they have to conclude, to be realistic, by the end of July. It is clear that there are three main problems: the perception of the EU offer; support for United States agriculture; and access to manufactured goods and other services in countries such as Brazil and India. Movement will be required from everyone if we are to reach an agreement. The prize of getting that agreement in the current round is extremely great and we want to encourage it, but if negotiation is to work all parties must show sufficient flexibility, and they need to do it soon.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con)
The Secretary of State will be aware that the trade deficit with China has increased by more than 500 per cent. since 1997 and stands at a staggering almost £10 billion. When I asked how many trade deals the Prime Minister had signed in the last eight years, the reply was:

“The European Commission has competence for EU trade policy and conducts all trade negotiations on behalf of…EU member states.”—[Official Report, 15 May 2006; Vol. 446, c689W.]

So when did the Secretary of State last meet his friend Commissioner Mandelson? What was the outcome of those discussions, and what will he do about this disastrous and deteriorating situation?

Mr. Darling
As I said a few moments ago, we want to increase our trade with China. We are well aware of the situation and will do everything that we can. We also want to encourage the Commission to do what it can to increase trade and I am confident that the position will improve in years to come.

Company Directors' Responsibilities

Lorely Burt (Solihull) (LD)
5. What steps he expects company directors to take to ensure they have sufficient regard to the interests of employees and the impact of the company's operations on the community and the environment.

The Secretary of State for Trade and Industry  (Mr. Alistair Darling)
The Company Law Reform Bill, which we debated two days ago, will ensure that company directors must have regard to the effect of their company’s operations on the community and the environment in promoting the success of the company for the benefit of its members.

Lorely Burt (Solihull) (LD)
I am genuinely seeking guidance. Clause 158 of the Bill states that directors have a duty

“to promote the success of the company for the benefit of the members”,

but that in doing so they should have regard to other matters. How far should the company have such regard when there could be conflict for shareholders? For example, Tesco, South Africa, Shell—

Mr. Speaker
Order. I am sure that the Secretary of State can manage an answer.

Mr. Darling
The hon. Lady makes a good case to be a member of the Committee that will scrutinise the Bill’s 950 clauses. The Minister for Industry and the Regions, my right hon. Friend the Member for Barking (Margaret Hodge), is in Europe today, sadly—[Hon. Members: “Sadly?”] Well, I think she is happy to be in Europe, but sadly she is not in the Chamber. However, she will be keen to engage with the hon. Lady on her question. We discussed the matter at length a couple of days ago when we said that we believe it important that company directors should have regard to a variety of things, including environmental and social concerns, but at the end of the day they have to use their best judgment to come to a view about what is best for their company. Their loyalty has to be to the company and its members; it cannot be divided, as I said the other day.

Most people, including, I think, our party, welcome what we have done. I am sorry that the Conservatives are already showing signs of trying to undermine that. Despite what they say, the amendments they are tabling appear to be removing that environmental commitment.

Alun Michael (Cardiff, South and Penarth) (Lab/Co-op)
Does the Secretary of State agree that principles such as those of fair trade and sustainable development can best be pursued in a spirit of partnership, making use of the principles of enlightened shareholder value set out in the legislation? Will my right hon. Friend encourage campaigners, whether on environmental or trade issues, to take advantage of that opportunity and be part of the consensus, which is good for business, good for the environment and good for people?

Mr. Darling
I strongly agree with my right hon. Friend. As I said on Tuesday, the Government have struck a sensible balance, making clear what directors are supposed to do. Members would do well to remember that in another place many people opposed the Bill and would dearly like us to return it in a way that would allow them to get back into it. It is obvious that no matter what the Conservative leader says about the environment, his Front-Bench Trade and Industry team are tabling amendments to remove the environmental commitment—[Interruption.] One can go only on the amendments that have been tabled so far. Perhaps there will be another change of heart, so I look forward to hearing the Conservatives’ renewed commitment if that is the case.

UK Trade (India)

Dr. Ashok Kumar (Middlesbrough, South and East Cleveland) (Lab)
6. If he will make a statement on UK trade with India.

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick)
Bilateral trade and investment with India continues to grow. In 2005 exports to India rose by just over 25 per cent., making the UK the second biggest exporter to India in the European Union. The UK remains the preferred investment location for Indian headquarter operations in Europe.

Dr. Kumar
May I praise the Government for making a tremendous effort to try to strengthen our relationship with India as India emerges as a world power? [Hon. Members: “Yes.”] What progress has been made since the last joint declaration between India and ourselves in 2004, which was signed by our Prime Minister and the Indian Prime Minister, Manmohan Singh, regarding trade issues?

Jim Fitzpatrick
It is obviously clear that the whole House agrees with my hon. Friend’s kind words about the Government’s record. His supplementary question was about developments since the joint prime ministerial meeting. That meeting reinforced or began initiatives, such as the second conference in January this year of the joint economic and trade committee. The United Kingdom trade and investment group has the second largest staff complement in India, compared with other countries around the world, with 72 staff and a £9 million commitment. There is an inward investment summit due in London this year in the autumn—again for both Prime Ministers.

Miss Julie Kirkbride (Bromsgrove) (Con)
Is the Minister aware that the area with probably the highest positive trade balance with India is the British higher education sector, which now faces increasing competition from other countries that would like to attract Indian students? What further measures does he think we should take to get more young people from India to study in the United Kingdom in the hope that one day, when they set up their own successful businesses, they might want to trade with the United Kingdom?

Jim Fitzpatrick
The hon. Lady makes a fair point. The Government committed £10 million extra to bursaries as a result of the prime ministerial meetings to which my hon. Friend the Member for Middlesbrough, South and East Cleveland (Dr. Kumar) referred a moment ago. As well as a variety of other measures, a high-level trade group was set up to look at where we can further develop relations with India and the Indian Government, including in education. I look forward to progress, as she obviously does.

Mr. Lindsay Hoyle (Chorley) (Lab)
I wonder whether my hon. Friend is aware that one of the biggest exports to India is scrap metal, which I do not think should count. We ought to be seeing more manufactured goods. What can he do to ensure not only that British companies have a bigger presence in India, but that there is a good open market for finished British products?

Jim Fitzpatrick
I hear what my hon. Friend says. Clearly, we are committed to developing trade and economic contact with India. I know that the Trade and Industry Committee initiated its own inquiry in November last year and it is due to report next week. We are looking forward to that report and its recommendations, because obviously it will give us some directions on how the Committee thinks we should make further progress.

Manufacturing Industry

Dr. John Pugh (Southport) (LD)
7. What assessment he has made of the impact of venture capital firms on employment in UK manufacturing industry.

The Minister for Energy (Malcolm Wicks)
Modern manufacturing is critically dependent on investment for successful performance, growth and employment generation. Venture capital plays a key role in providing that investment.

Dr. Pugh
I thank the Minister for that response, but does he realise that venture capital firms are closing genuinely profitably factories in this country, such as the Chewits factory in my constituency, simply to relocate production to eastern Europe and maximise their returns? Does the Minister regard that as undesirable, or inevitable, or as representing a clash of interests between the manufacturing industry and the City?

Malcolm Wicks
I am aware of the sad news about Chewits, which could lead to the loss of 130 jobs in September. I am happy to discuss that matter, in terms of advice to those workers, with the hon. Gentleman if that would be helpful. However, the good news is that Southport has a buoyant labour market. Its claimant unemployment rate was just 1.9 per cent in April. That is well below the national average and the national average is historically low. However, as I said, I offer to discuss these particular matters with him.

Rob Marris (Wolverhampton, South-West) (Lab)
May I caution my hon. Friend against putting too many of his eggs in the venture capitalist basket? He and his Department should continue to support manufacturing in the heartlands such as my area in the west midlands. All hon. Members will be aware of the difficulties that we have had with Rover and Peugeot. Will he tell me what steps the Government are taking to change the mood music on manufacturing? Manufacturing has not been as high on the Government’s list of priorities as it should have been in the last few years. It is now starting to come up. Will he tell me what further steps might be taken, such as a manufacturing summit, to show that the Government care and wish to increase investment?

Malcolm Wicks
Of course we are aware that there has been a long-term decline in manufacturing industry throughout much of the European Union, yet manufacturing remains a vital part of the British economy and, in many respects, is still buoyant. Indeed, I note that for the three months ending in April 2006, there were more than 50,000 unfilled vacancies in manufacturing industry. My hon. Friend is right to say that, as well as the further development of the service sector, manufacturing is vital to the economy.

David Simpson (Upper Bann) (DUP)
Can the Minister tell us which regions of the United Kingdom have had the largest number of job losses in the manufacturing sector?

Malcolm Wicks
Yes, I can give the hon. Gentleman that information, but it is detailed, so I will not attempt to do so off the top of my head. I will be happy to write to him. Obviously, the overall picture is of the move back to full employment, with 2 million more jobs created since the spring of 1997—I pick out 1997 almost at random—but that nevertheless hides regional variations. I will be happy to supply the information, which is published, to the hon. Gentleman.

Sir Nicholas Winterton (Macclesfield) (Con)
May I warmly support the views expressed by the hon. Member for Wolverhampton, South-West (Rob Marris)? While venture capital firms can play a valuable part in the provision of investment for manufacturing, they too often dilute the ownership of a firm. The cost of venture capital is too high, because manufacturing industry needs long-term investment. What can the Government do to encourage long-term investment in manufacturing, which is the only way in which we will guarantee a manufacturing base in this country in the long term?

Malcolm Wicks
The best way is with the healthy and buoyant macro-economic environment that the Government and the Chancellor have provided, with low interest rates and inflation. Surely providing that is the role of the Government and the best thing that they can do, rather than making too many interventions and over-regulating. We are committed to manufacturing industry, which is a buoyant part of the British economy. Venture capital has a role to play, but that role is relatively small when put alongside other forms of investment. We share the view that is being expressed in the House about the importance of manufacturing industry. Our judgment is that the best way to stimulate and encourage the industry is through prudent—to coin a word—macro-economic management.

Postal Services

Mr. Philip Hollobone (Kettering) (Con)
8. If he will make a statement on the future of rural post offices in Northamptonshire.

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick)
The Government are committed to supporting the rural post office network, as I briefly explained a few moments ago. That includes support for branches in Northamptonshire, with annual social network payments of £150 million for the next two years. The Government will set out future proposals for the network in due course and after consultation.

Mr. Hollobone
Following the Government’s savage assault on the sub-post office network in urban centres, is it not the case that, in the next five years, every rural sub-post office in Northamptonshire will face the threat of closure due to the end of the Government’s support mechanism for rural post offices and the abolition of the Post Office card account?

Jim Fitzpatrick
The Government invested £210 million in the urban reinvention programme to do all that they could to ensure that a sustainable post office network was maintained in the cities. We will do all that we can to do the same for rural areas. I cited earlier some of the figures that make life commercially difficult for the Post Office. However, we spent £500 million on the Horizon project, which modernised computer systems for all post offices so that new products could be provided. The Post Office is now the UK’s No. 1 provider of foreign exchange and the largest individual provider of travel insurance. It launched its new instant saver account in March 2006. The Post Office is doing all that it can to ensure that it provides business as well as possible.

Mr. Peter Bone (Wellingborough) (Con)
Why has the policy failed so horribly in Northamptonshire, and especially in Rushden, where Avenue road, Bedford road, London road and Newton road post offices, which served the main town of Rushden, have closed? Clearly the Government’s policy has failed.

Jim Fitzpatrick
We do not believe that we have failed in our policy. The target for the urban network was to make sure that 95 per cent. of people were within a mile of a post office, but the figure is actually 99 per cent. We will look at the rural network in due course. The hon. Gentleman knows that, because of changing habits, the rural network is losing £3 million a week. We cannot force people to use rural post offices, but we will do all that we can to make sure that we maintain a sustainable network.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
The Minister says that the customers have walked away. The Government forced them away. They made it very difficult for people to get card accounts, but now that people have finally struggled over all the hurdles to get one, the Government are moving the goalposts and taking the accounts away. The Government are playing their part in taking business away from rural post offices.

Jim Fitzpatrick
I hear what the hon. Gentleman says. I said in a response to the hon. Member for Orkney and Shetland (Mr. Carmichael) that the Government are doing what we can and will look to maintain the most sustainable network possible. The Department for Work and Pensions is in discussions with the Post Office about the future of the card account, which is due to close in 2010. I mentioned the £500 million Horizon project. We also have a £150 million subsidy for the next two years. The Government are clearly committed to doing what we can to maintain a sustainable post office network.

Corporate Social Responsibility

Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op)
9. What steps his Department is taking to promote and implement the Organisation for Economic Co-operation and Development guidelines for multinational enterprises as part of the Government’s corporate social responsibility policy.

The Minister for Energy (Malcolm Wicks)
The UK national contact point—terrible jargon which refers to an individual official in the Department of Trade and Industry—works with business and non-governmental organisations to raise awareness of the OECD guidelines for multinational enterprises and to promote their use by companies in developing their own codes of conduct. The Government will shortly publish their response to a stakeholder consultation on possible improvements to the national contact point’s promotion and implementation of the guidelines.

Mark Lazarowicz
The Minister for Industry and the Regions, who replied to Tuesday’s debate on company law reform, referred specifically to the guidelines as an important means of addressing concerns about international corporate social responsibility. What steps will the Government be taking to ensure that the guidelines are given teeth, both at the UK level and, perhaps more importantly, at a European and wider international level?

Malcolm Wicks
As I said, we will shortly publish our response. We gave more time for the consultation because the working group established under the aegis of the all-party group asked us for more time to submit further comments. I am not sure that we have received them yet. We are anxious to tackle these issues and to publish our response as soon as we can.

Mr. John Redwood (Wokingham) (Con)
Has the Minister seen the excellent corporate social responsibility report of Tesco, showing how these guidelines are being applied to cut the carbon imprint, improve energy efficiency and undertake socially responsible actions with employees and in purchasing? When will his Department catch up with the best practice of companies such as Tesco, which seem to me to be streets ahead of many Departments?

Malcolm Wicks
It is true that, although carbon dioxide emissions from some sectors, including the energy sector and intensive energy users, are reducing, they are still increasing in the service sector, whether that is the superstore or the governmental system. When I visited the excellent Tesco branch in Thornton Heath, I was impressed that one staff official had responsibility for energy efficiency. That is a practice that we should adopt. Should Government do more? Yes, we should, and we are looking at that in the energy review.

Mr. Jonathan Djanogly (Huntingdon) (Con)
The Conservative party welcomes the OECD guidelines and, on the basis that corporate social responsibility should be set in the context of wider corporate governance, we also welcome the lead that the OECD has given with its continental corporate governance panels. But the question remains: why do the Government give so little time to promoting corporate social responsibility, particularly, as my right hon. Friend the Member for Wokingham (Mr. Redwood) pointed out, given the excellent, world-beating corporate responsibility practices that we find in so many British companies?

Malcolm Wicks
There will be joy in the heart of the OECD that the Conservatives support its work. That is welcome. I reject the notion that the Government do not pay due regard to corporate social responsibility. We pursue essentially a voluntary approach. We recognise that corporate social responsibility has many dimensions. There are the international ones that we are examining now. There are also the charitable efforts of many companies and how they treat customers and their employees. This is an issue to which we are committed as a Government.

Nuclear Decommissioning

Mr. Edward Vaizey (Wantage) (Con)
10. What assessment he has made of the potential impact of the restructuring of the UK Atomic Energy Authority on the safety of nuclear decommissioning; and if he will make a statement.

The Minister for Energy (Malcolm Wicks)
I am aware of the hon. Gentleman’s constituency interest in this matter. UKAEA needs to restructure to enable the Nuclear Decommissioning Authority to carry out its remit, under the Energy Act 2004, to complete the decommissioning of the sites for which it is responsible. We recognise that any changes on a nuclear site have the potential to affect safety and, for that reason, they are subject to scrutiny by the safety and environmental regulators. With that scrutiny, we are confident that the authority and the NDA will manage the forthcoming change in a way that will not adversely affect safety, and that the restructuring of the authority will not impact on its high standards of safety.

Mr. Vaizey
I have no problem in principle with the restructuring, but can the Minister help me with an inquiry that has been raised anonymously with me by a constituent, who makes the point that up to 300 senior managers will be part of the restructuring, and if the restructuring happens in that way and if the UKAEA does not win a contract, those senior managers will be removed from the site, which will compromise safety? My constituent contrasted that with the restructuring of the Atomic Weapons Establishment, which apparently involved only 40 or 50 senior managers. Is the Minister aware of that concern, and would he like to comment on it?

Malcolm Wicks
I was not aware of that. I do not receive the anonymous letters that the hon. Gentleman gets. I will examine the matter. If the hon. Gentleman writes to me and includes his signature so that I know from whom the letter is coming, I will take the matter up seriously with the authority, with which I have regular meetings. There is important work to be done, not least in nuclear decommissioning. While the process is resource-intensive, it needs to be as cost-effective as possible.

Dr. Brian Iddon (Bolton, South-East) (Lab)
Does my hon. Friend agree that the key to safe decommissioning of nuclear plants is the supply of the specially trained staff who are necessary? Does he recognise that there is a shortage of such staff and will he therefore welcome the emergence of the Dalton institute at Manchester university?

Malcolm Wicks
I not only welcome it, but I had the privilege of visiting Manchester university only a few weeks ago. It is clearly a centre of excellence when it comes to nuclear energy and other aspects of energy.  We discussed renewables there as well. It is a centre of excellence not only across the United Kingdom but internationally. It is a resource that we value and cherish.

Government Assistance (York)

Hugh Bayley (City of York) (Lab)
12. What assistance the Government have given to York as a science city.

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick)
The Government, through the Learning and Skills Council and the regional development agency, Yorkshire Forward, together with additional European funding and resources from the city of York council, have helped to provide just over £3 million to the city of York for investment. A further £2.63 million of Government funding has been allocated through Yorkshire Forward from its “Northern Way” project to support the development of York as a science city.

Hugh Bayley
The growth of science has turned round the York economy. When the Conservatives were in power, unemployment in York was twice the national average. It is now well below the national average. York is not only a science city for the local community, but a science leader throughout Yorkshire and the Humber and, indeed, the north of England. Will the Government’s commitment to York and funding for science in York be a long-term commitment?

Jim Fitzpatrick
My hon. Friend clearly outlines the success of science city York since 1998 and the ability of the city council and the university of York, with the private sector, to harness the world-class potential of business clusters in bioscience, health care, IT and digital creative industries. It is a model that the Government want to support. Three science cities were mentioned in the 2004 pre-Budget report and the 2005 Budget mentioned three more. I am sure that regional development agencies, as a result of the comprehensive spending review in 2007, will be looking to see what the Government intend to do then.

Miss Anne McIntosh (Vale of York) (Con)
While we all applaud York science city and the contribution that it has made to the local economy in North Yorkshire, does the Minister share my concern about the erosion of the green belt as the science city and York university intrude ever further into the remaining green belt in York?

Jim Fitzpatrick
The protection of the green belt against the development of the university and York science city is something that the regional development agency, the city council and the authorities take very seriously. Those decisions are not taken lightly, and I am sure that everything has been done to protect the green belt. The Government’s record on green belt protection since 1997 is exemplary.

Summer Time

Mr. David Kidney (Stafford) (Lab)
13. What recent representations he has received (a) in support of and (b) against the adoption of single/double summer time.

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick)
In the past 12 months, the Department has received 73 representations on the question of adopting single or double summer time throughout the year. The representations reflect the strong divergence of opinion on the issue, which suggests that the present situation is a satisfactory compromise between those who prefer lighter mornings and those who prefer lighter evenings.

Mr. Kidney
Do those representations disclose the fact that lighter evenings would cut deaths on roads, reduce industrial accidents and provide a massive boost for the tourism industry in the United Kingdom? If the Department cannot bring itself to agree to change the clocks permanently, will it look at the trial in the 1960s and Lord Tanlaw’s Bill in the House of Lords, which I have taken up in the Commons?

Jim Fitzpatrick
I recognise my hon. Friend’s strong support for that change. I heard what he said about road traffic accident statistics, but I must point out that there has been a significant reduction since 1998 in such accidents in the UK. The experiment on British standard time between 1968 and 1971 was adopted to test public support, but after a vote in Parliament the experiment was abandoned. A 1989 Green Paper floated the issue, but it was not pursued, and a debate in 1996 on a private Member’s Bill failed to secure significant support, so I do not think that the issue is making progress.

Women and equality

The Minister for Women and Equality was asked—

Gender Equality

Andrew Gwynne (Denton and Reddish) (Lab)
19. What policies to reduce gender inequality in the workplace the Government will promote at the Council of Europe’s ministerial conference on gender equality.

The Minister for Women (Ruth Kelly)
My hon. Friend the Minister for Women and Equality will attend the conference later today, and will promote our implementation of the women and work commission’s recommendations tackling job segregation and the gender pay gap, as well as the measures that we have taken to deliver a better work-life balance.

Andrew Gwynne
I welcome that answer and I welcome my right hon. Friend to her new post. She will be aware that a substantial number of women in my constituency of Denton and Reddish balance family life with part-time jobs, but they are often low-paid, low-skilled jobs, with many women working far below their skill level. What have the Government done to promote greater opportunities for women to undertake quality part-time jobs? The problem makes a significant contribution to the pay gap and is a waste of skills.

Ruth Kelly
I thank my hon. Friend for his kind comments. He is right to draw attention to the issue. Indeed, the facts show that women who work part-time earn almost a third less than women who work full-time, which is largely because, on their return to work after looking after children or elderly relatives, they are forced to choose lower-paid occupations in which their skills are not properly utilised. The Government, through, for example, the right to request flexible working and the provision of child care places, have made a huge contribution to turning that around. It is something that was taken up by the women and work commission, which has made practical proposals to which we will respond in the next few months.

Mr. Stewart Jackson (Peterborough) (Con)
Will the Minister give any special coaching or hands-on mentoring to her right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) about inequality and diversity in the workplace?

Mr. Speaker
Order. I will not tolerate personal attacks, or the use of the Minister to do so.

Human Trafficking

Ann McKechin (Glasgow, North) (Lab)
20. What recent discussions she has had with other EU Governments on alerting girls and women to the dangers of trafficking.

The Minister for Women and Equality (Meg Munn)
During our EU presidency last year, the UK initiated the development of an EU action plan on human trafficking, which was adopted in December 2005. The action plan addresses the areas of prevention, investigation and prosecution of trafficking offences, as well as provision of support and care for victims.

Ann McKechin
Does my hon. Friend agree that, as many of those young girls and women end up in prostitution in all parts of the United Kingdom, as well as in other parts of the European Union, we need to do much more to inform the men who use those services of the horrendous conditions that those women suffer and the state of virtual slavery under which they are held, very often with criminal force by criminal gangs? We must make sure that men are aware that, when they use those services, they are helping to perpetuate criminal gangs and slavery throughout Europe.

Meg Munn
I thank my hon. Friend for her question. She rightly highlights the fact that, wherever there is prostitution, there is also human trafficking. If there were no demand, women would not be trafficked into the United Kingdom. The inter-ministerial group that looks into prostitution and human trafficking takes the issue extremely seriously and we will be taking forward more initiatives. I welcome my hon. Friend raising the subject and hope that other hon. Members will take the opportunity to make people in their constituencies aware of what is happening in that regard.

Lorely Burt (Solihull) (LD)
Given that the Minister says that the Government are keen to remedy the dreadful problem of human trafficking, can she explain why they have not signed the Council of Europe convention on action against trafficking in human beings?

Meg Munn
I welcome the hon. Lady to her responsibilities on these matters. The Government agree with all the aims of the convention. The reason that we have not signed is that we have concerns about automatic reflection periods, which are the subject of the next question. We are concerned that they might act as further pull factors in relation to asylum and immigration. However, we have held a consultation on a UK action plan and, as part of the response to that, the matter is under active consideration.

Ms Sally Keeble (Northampton, North) (Lab)
May I praise the outstanding work being done by Home Office staff, especially at Gatwick and Heathrow, with trafficked children and women? Having interviewed quite a number of trafficked children myself, may I ask my hon. Friend to ensure that there are proper protocols in place in social services and education departments and schools throughout the country, so that trafficked children can be identified, dealt with appropriately and provided with the right support?

Meg Munn
I thank my hon. Friend for that question and praise her for her work in that regard. She raises enormously important issues. We are becoming aware of even greater numbers of children being trafficked than we had previously known about. There are multi-agency protocols in place to deal with the matter, but I will take it back to the inter-ministerial working group to ensure that we do that even more effectively.

Human Trafficking

Mary Creagh (Wakefield) (Lab)
21. What assessment she has made of the merits of granting automatic reflection periods and residence permits to victims of trafficking.

The Minister for Women and Equality (Meg Munn)
The UK currently assesses cases on individual needs. However, in our response to the recent consultation paper on a proposed UK action plan on human trafficking, we will be further considering the merits of granting automatic reflection periods and residence permits.

Mary Creagh
My hon. Friend is aware that the Human Rights Committee is investigating the trafficking into the UK of women and girls for domestic and sexual exploitation. These women suffer multiple rapes over long periods of time and should be treated as victims rather than criminals by the authorities. Many of them exhibit the physical and psychological characteristics of post-traumatic stress disorder. Can my hon. Friend use her influence to ensure that a reflection period is granted to those women so that they are protected by the laws of this country and can help to bring to justice the criminal gangs that bring them here?

Meg Munn
I thank my hon. Friend for that question and welcome the inquiry that the Joint Committee on Human Rights is conducting into this important matter. I reassure her that we do grant periods of reflection and that every help and support is offered to the women, both to help them deal with their experiences and to bring the criminals to justice.

Mr. Peter Bone (Wellingborough) (Con)
In Northamptonshire, we have a serious problem with sex slaves. The one thing that the police would like the Government to do is to grant automatic reflection periods, as that is their biggest problem. I urge the Minister to be bold and to sign the Council of Europe convention.

Meg Munn
I thank the hon. Gentleman for his continued interest in this important matter, which we are considering in relation to the consultation that we had on the UK action plan. However, there are competing issues. I am interested to hear that his local police are raising reflection periods as a problem, because they are granted—it is just that they are not automatic. I will be happy to have further discussions with him outside the Chamber.

Home Working

Ms Diana R. Johnson (Kingston upon Hull, North) (Lab)
22. What steps the Government are taking to encourage companies to allow women to work from home.

The Minister for Women (Ruth Kelly)
The Government encourage all types of flexible working by providing guidance, promoting the benefits, and sharing best practice. Employers are already required to consider seriously requests to work flexibly, including home working for mothers of young children.

Ms Johnson
I add my congratulations to my right hon. Friend on her new position.

This week, I spoke to women entrepreneurs at the Hull business expo. Does my right hon. Friend agree that encouraging more women to take up businesses for themselves would allow them maximum flexibility in the place where they choose to work—from home or from an office?

Ruth Kelly
I do. That is an option that should be seriously encouraged when women are looking for opportunities in wanting to go back to work having spent some time at home. If we could encourage women entrepreneurs so that the rate of female entrepreneurship increases to that of male entrepreneurship, there would be 500,000 new businesses, which would make a major contribution to economic growth and productivity.

Mrs. Eleanor Laing (Epping Forest) (Con)
I welcome the Minister to her new post. I am confident that she will show commitment to every aspect of the equality agenda. I am pleased by what she says about encouraging home working, which is an important part of flexibility in employment. However, does she agree that, in discussing these matters, we must consider not only women with small children but women with wider caring responsibilities for elderly, disabled or ill people, as well as—we are talking about equality here—men with family and caring responsibilities?

Ruth Kelly
I agree with the hon. Lady and thank her for her kind words. She knows of my commitment to this agenda; I am certainly committed to all aspects of  it. I draw her attention to the fact that, since we brought in the right to request flexible working in 2002, the number of fathers taking up that right has increased threefold. She is right that we have to extend that in stages to a greater range of the population. That has been considered during the passage of the Work and Families Bill, which is progressing through its stages in this House. From 2007, the right will extend to carers—a good next step that will be widely welcomed up and down the country.

Business of the House

23:32:00

Mrs. Theresa May (Maidenhead) (Con)
May I ask the Leader of the House to give us the business for the coming weeks?

The Leader of the House of Commons (Mr. Jack Straw)
The business for next week will be as follows:

Monday 12 June—Second Reading of the Fraud Bill [Lords].

Tuesday 13 June—Consideration of Lords amendments to the Work and Families Bill, followed by consideration of Lords amendments to the Electoral Administration Bill.

Wednesday 14 June—A debate on European Affairs on a motion for the Adjournment of the House.

Thursday 15 June—Second Reading of the Commissioner for Older People (Wales) Bill [Lords].

Friday 16 June—Private Members’ Bills.

The provisional business for the following week will be:

Monday 19 June—Second Reading of the Safeguarding Vulnerable Groups Bill [Lords].

Tuesday 20 June—Remaining stages of the Children and Adoption Bill [Lords].

Wednesday 21 June—Opposition Day [17th Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.

Thursday 22 June—A debate on defence policy on a motion for the Adjournment of the House.

Friday 23 June—The House will not be sitting.

Mrs. May
I thank the Leader of the House for giving us the business for the next two weeks.

I am sure that the right hon. Gentleman was interested to see yesterday’s Council of Europe report on rendition. The Prime Minister did not answer questions on it yesterday. When will the Government respond to it?

This morning it was announced that the police had been given more time in which to detain the suspected terrorists who were arrested in the Forest Gate raid last Friday. They can detain them for up to 14 days, although under the Terrorism Act 2006 the period for which suspects can be detained without charge was extended to 28 days. I think that Members will be surprised to hear that the period of detention in this case is only 14 days. When the Act was passed, the Prime Minister and the Home Secretary were adamant that an extension was needed. Indeed, on 9 November last year the Prime Minister said

“This is an occasion when it is important that we do what is responsible, right and necessary to protect this country’s security.”—[Official Report, 9 November 2005; Vol. 439, c. 299.]

However, under section 39 of the Act the Secretary of State must make an order to implement a particular section. That has not yet been done to implement the extended period of 28 days’ detention. The Home Office has not got around to it yet.

Is it not true that by the Government’s own standards, the incompetence of the Home Office is putting the lives of British citizens at risk? Will the Home Secretary make a statement explaining this further lapse by the Home Office?

We are, however, becoming rather used to the way in which the Government say one thing and mean another. The Home Secretary said that he had 100 days in which to sort out the Home Office; the civil servant responsible says that it will take two years. Ministers say that there are no job cuts in the NHS; yesterday we heard of work force reductions. And this morning we heard that despite the hosepipe ban, a hosepipe can be used in the gardens of No.10 because it is actually a bowser with a dowser.

Yesterday’s statement by the Secretary of State for Health revealed that the NHS deficit had doubled over the past year. Jobs will be lost, not just those of administrators but those of doctors and nurses. Dr. Paul Miller, chairman of the British Medical Association’s consultants’ committee, has said that there has been

“shocking incompetence… from the top”.

He says

“Care is suffering, jobs are disappearing, patients and staff are paying the price.”

He also says that the Government should stop reorganising the NHS,

“stop interfering… in… local planning of services”

and

“let staff get on with the jobs”.

Yesterday, in her statement to the House, the Secretary of State for Health said that primary care trusts that stayed within budget or made a surplus would have to give money to those that were in deficit. That means that they will have to

“postpone some of the improvements that they were planning to make for their patients.”—[Official Report, 7 June 2006; Vol. 447, c. 254.]

If a trust is in deficit, services will suffer. If a trust is in balance or surplus, services will suffer. How is that the “best year ever” for the NHS?

Back in 1997, the Labour party told us that it had 24 hours in which to save the NHS. Will the Secretary of State for Health now come to the House and tell us how long the NHS will have left if someone does not sort out the problems caused by the Government?

On 16 March, the Secretary of State for Work and Pensions dismissed the finding of the parliamentary ombudsman in her report “Trusting in the pensions promise” that the Government had been guilty of maladministration. The Government have said that it would cost too much to accept the ombudsman’s findings: £15 billion, to be precise. It has now been revealed that that was a gross overestimate of the cost. Yesterday it also became clear that the Government’s proposals for pensions reform would mean that about 1.5 million pensioners who had built up nest eggs for retirement would lose £450 a year. May we have a statement from the Secretary of State clarifying the Government’s position on both issues, and explaining how the Government have let down Britain’s pensioners?

The Leader of the House has made it known that he would like to be Deputy Prime Minister.

Mr. Denis MacShane (Rotherham) (Lab)
So would I!

Mrs. May
Ah, we have had another job bid from the right hon. Gentleman.

The Leader of the House has also said that he thinks the Prime Minister should step down “well before” the next election. Of course, the Prime Minister did promise that he would serve a full term. That means either that the Prime Minister is not going to fulfil his promise to the British people, or that the Leader of the House is clearly a Brownite now. Which is it?

Mr. Straw
I will deal with the right hon. Lady’s first question, about the Council of Europe and rendition, in a second.

The right hon. Lady asked about the order to be made under section 39 of the Terrorism Act. She said that if the order was not made shortly, lives would be at risk. I suggest that the right hon. Lady needs to be extremely careful about implying that lives would be at risk in this case; that comes close to pre-judging cases currently before the courts. She really needs to think about what she has been saying.

Secondly, the right hon. Lady knows very well that, under Home Secretaries of both main parties, there is always some time between the passage of an Act and the laying of orders under it. I do not remember that the Conservative Opposition, either here or in the other place, were helpful in getting the legislation in question through. If anybody is to blame for the delays, it is the Conservative Opposition—here and in the other place.

On the national health service, the right hon. Lady asked whether we were right to say—on 30 April 1997, I think—that there were only 24 hours to save the national health service. Yes, we were, because there is no question but that, if the Conservatives had got back into power in 1997, the inexorable decline of the health service—which had happened year by year by year, in my constituency and in hers—would have continued. We have more than doubled funding in real terms.

Mr. Graham Stuart (Beverley and Holderness) (Con)
By sacking nurses.

Mr. Straw
The hon. Gentleman may say that we have done that, but what we have actually done, including in his constituency, is increase the number of nurses by 85,000—by a third—and we have increased their salaries by a quarter in real terms. There has been an improvement in health care in every single constituency in the country, based on spending that we voted for and the Conservatives voted against. There has been a dramatic improvement in the number of both doctors and nurses in the right hon. Lady’s own constituency; she knows that. Indeed, just four years ago, 113 people in her area were waiting for in-patient treatment for more than nine months, and in addition, 311 were waiting for in-patient treatment for more than six months. Today, the figure in respect of both periods is zero—thanks to Labour’s spending and no thanks to the position of the Conservatives.

On the pensions debate, about which the right hon. Lady asked, my right hon. Friend the Secretary of State for Work and Pensions made an excellent statement just over a week ago, and there will be parliamentary questions to the Department for Work and Pensions next Monday. We have also promised—and there will be—a full debate on the pensions White Paper, when all the issues that she wishes to raise can be raised.

Mr. Graham Stuart
When?

Mr. Straw
Very shortly. [Interruption.] Before the summer.

The right hon. Lady asked about the Council of Europe, a body that the Conservative party sometimes wishes us to withdraw from, so that we can withdraw from all our international obligations under it, but I put that point to one side. She also claimed that my right hon. Friends the Prime Minister and the Foreign Secretary, and, by implication, I, have not answered any questions in respect of rendition. She knows that to be totally incorrect. My right hon. Friend the Prime Minister said that we have said everything we needed to say on that, and indeed we have. She knows very well that nobody could have provided more information to the House, either orally or in writing, about the issue of rendition—about the fact that there were four cases of requests for rendition, all of which occurred when I was Home Secretary, before 2001, and under the Clinton Administration. Two were granted, two were refused and there have been no cases since 2001. I have given undertakings to the House, and the simple truth is that if people read the report—the disreputable report—by Mr. Marty of the Council of Europe, they will see that he makes no substantive allegations. I hope that the right hon. Lady does not join that bandwagon.

I announced that there will be a full-day’s debate on 14 June to discuss the prospects for the European Council. I hope very much that the right hon. Lady and the shadow Foreign Secretary will use that opportunity to deal with what The Daily Telegraph described this morning as David Cameron’s broken pledge on Conservatives in Europe. First, we heard yesterday from the shadow Foreign Secretary that a clear pledge, debated endlessly in this House before the election—[Interruption.] They do not like it. The clear pledge, debated endlessly in this House before the election, to withdraw from the common fisheries policy has been torn up, and the clearest pledge to remove the Conservative party from the European People’s party and to join a barmy army of obscure right-wing politicians will also be broken.

Mr. Speaker
May I remind the House that we are discussing the business for next week?

Ms Sally Keeble (Northampton, North) (Lab)
Last autumn, oxygen was used to help revive a 14-year-old boy who had been restrained at a secure training centre. That followed an incident in which a 14-year-old boy died after being restrained at the same secure training centre. Does my right hon. Friend understand the fury that some of us feel about the inability to raise the issue and to have it properly debated on the Floor of the House because of the continuing delay in reconvening the inquest? Will he ensure that a statement be made or a debate held on the Floor on this very important matter—one boy has died, and another has required oxygen—to set out what happened and what is being done to end those practices, which are causing such damage to young people?

Mr. Straw
I certainly understand the deep concern of my hon. Friend on the issue; I am sure that it is shared across the House. She will know that there are always difficulties in raising matters in this House when court proceedings are pending. That said, I take full note of what she has said today and will, along with appropriate ministerial colleagues, do my very best to ensure that she and the families concerned are provided with as much information as possible, and an explanation, in advance of the inquest.

Mr. David Heath (Somerton and Frome) (LD)
I thank the Leader of the House for his prompt response following the last business questions on the issue of the Bichard inquiry; that was in marked contrast to the performance of the Home Office.

The Greater London authority inquiry into 7/7 threw up yet another unfulfilled recommendation of a major public inquiry. May we have a debate on the way in which we keep track of these matters and on how we ensure that when serious inquiries into disasters are held, the recommendations made are adhered to and implemented at the earliest possible opportunity?

Following the welcome news of the apparent demise of al-Zarqawi in Iraq today, no one would be naive enough to think that that spells an end to the violence in Iraq. This is the tenth time at business questions that I have asked for a proper debate on the foreign affairs aspects of Iraq. When he was Foreign Secretary, the Leader of the House indicated that he would have welcomed such an opportunity. The time is right for such a debate; will he ensure that we have one before the summer recess?

I also noted the fact that we are to have a debate on Europe on Wednesday 14 June. Given that some parties do still have friends and influence in Europe, will the Leader of the House suggest to the Minister for Europe—his predecessor—that he comes to the House on that day to spell out the Government’s position on putting an end to the absurd charade of moving the European Parliament to Strasbourg permanently, with all the costs to the British taxpayer that that entails. It is time we put an end to this nonsense once and for all, and this country should be setting a lead in the matter.

Lastly, may we have a debate on fixed-term contracts? I noted the attempt by the Leader of the House to enliven the Prime Minister’s monthly press conference today, and the Secretary of State for Health’s offer in her statement yesterday to be fully accountable for future failures in the health service. If we had fixed-term contracts for Cabinet Ministers, we could have targets, appraisals and tests for value for money. We could see whether premises were being used. Most importantly, we could ensure that people did not outstay their welcome in Cabinet posts.

Mr. Straw
The hon. Gentleman’s first question was in respect of the inquiry into the 7 and 21 July terrorist outrages last summer. Full account is always taken of inquiry reports and there was a meeting recently of the Cabinet Committee on international terrorism, which looked carefully at the conclusions of the GLA inquiry and discussed many of its findings. That will continue, because it is in everybody’s interests that we learn the lessons from what happened last 7 July, and indeed on 21 July.

On the issue of the death of al-Zarqawi, let me say that my right hon. Friend the Prime Minister has described it—on this occasion, I happen to think that it is entirely appropriate that it should be so described—as good news, because that man was an evil butcher who was killing Iraqis, as well as coalition forces, in large numbers. Nothing was going to stop him, I am afraid, until he was stopped in this way. I may say that I hope that we can put on record our admiration for all those in the Iraqi forces and the coalition forces, as well as others, who were responsible for his apprehension.

I understand entirely what the hon. Gentleman says about the case for a full debate on foreign policy. I am alive to that, as is my right hon. Friend the Chief Whip. Our only difficulty is finding the time, alongside many other requests. There is an opportunity to raise those matters in the debate on Europe next Wednesday, because Iraq— [Interruption.] Well, he makes a sedentary gesture—a polite but critical sedentary gesture, indicating that he does not entirely accept what I am saying. I have to say to him that before the European Council will be Iraq, Iran and the middle east, so there is every reason for him to use that opportunity, along with his right hon. and hon. Friends, to debate those matters next week.

The hon. Gentleman raised the issue of Strasbourg as the seat of the European Parliament. That arrangement is now friendless, except for those in the host country. I am sad to say that, as my right hon. Friend the Member for Rotherham (Mr. MacShane) has just reminded me, that was one of a number of errors made by the Major Government in 1992, because they set that arrangement in concrete. We all have to deal with that.

The hon. Gentleman also asked about fixed-term contracts. I do not think that there is a case for them, and I would put this request way below, for example, a request for a debate on the tax system. I hope very much that the Liberal Democrats will use their next Opposition day for a debate on it, because what is clear from the announcements being made today is that they are ditching higher rates for the rich for higher taxation for everyone.

Mr. Barry Sheerman (Huddersfield) (Lab/Co-op)
My right hon. Friend might have noticed the launch of the Commission for Global Road Safety report at the QE2 building this morning: eight nations are backing a call to take seriously the fact that 1.2 million people die every year on the roads, mainly in the developing world.

Many of us in the developed world have brought down the number of people killed and badly injured on the roads, but in the developing world that is one of the most common causes of death and serious injury. Will my right hon. Friend urge an early debate on that matter and its global implications? We cannot talk about global sustainability when we exclude what is probably the fifth largest killer in the developed world. Will our Government adopt a higher profile by pursuing the aim of bringing this dreadful, useless loss of human life to an end?

Mr. Straw
I commend my hon. Friend’s interest in that matter and in the conference. Many of us will have heard our friend and former colleague Lord Robertson speaking about the issue on the BBC “Today” programme this morning.

The campaign is absolutely right to highlight that issue. I can think of a country not in the developing world, but in Asia, with the same population as the UK and lower road usage, but with deaths on the road running at nearly 25,000, compared with 3,000 in this country. It is a major epidemic across the world, of both deaths and serious injuries. I know that my right hon. Friends the Secretaries of State for International Development and for Transport take seriously the need for us to evangelise in other countries on our experience of bringing down road deaths and injuries.

Mr. Iain Duncan Smith (Chingford and Woodford Green) (Con)
First, I associate myself with the paean of praise from the Leader of the House to the Iraqi Government over the death of that monster al-Zarqawi. I know that everyone else would join us in that.

No one beats me in supporting the forces in their determination to seek out those who would support terrorist acts in the UK, but a number of people in the Islamic community are now quite concerned that there is a deep game going on among the extremists to try to discredit those who are supportive of the British authorities in their search for such information. The raid in Forest Gate, just down the road from my constituency, and the continuing search, with nothing yet found, for those weapons was matched on Wednesday—48 hours ago—by a raid in Dewsbury and the arrest or, rather, lifting of an individual.

I understand that in the same street in Dewsbury and in the same house—the house of Sheikh Yacoub Munshi—on Saturday 3 June, the director of the Defence Academy, Lieutenant-General Kiszely, visited that family. That man’s grandson was lifted on Wednesday and taken by the police, supposedly in connection with the arrests in Canada. I think that the police are now weakening their position over him, and he may be released.

My concern is simply this: we have a delicate situation, and I am not criticising the police, but I wonder to what degree the various Departments are talking to each other, such that a senior general, for good reasons, visits a family to support those who have been supportive, only to find that same family subsequently targeted. I urge the Leader of the House to ask the Home Secretary to come to the House to make a statement.

Mr. Straw
I take seriously what the right hon. Gentleman has just said, and of course I understand the delicacy of that matter, not least with my constituency background, but I say to hon. Members that there is a dilemma facing not just the intelligence services and the police but every Member of the House: do the agencies and the police act on credible intelligence, knowing, of course, because that is the nature of intelligence, that it might not be fully accurate, or do they ignore it, knowing that it might well be accurate? If they ignored it, and a terrorist outrage followed, the opprobrium on them would be far greater than in the reverse situation. That is the dilemma facing the police and the intelligence agencies. I believe that they carry out their job phenomenally well, and they deserve our full support.

Mr. Andrew Smith (Oxford, East) (Lab)
What consideration has my right hon. Friend given to the prospects of any legislation further to deregulate Sunday trading? In view of the extensive opposition on the Labour Benches, and indeed in all parts of the House; the concerns of retailers, large and small, and the opposition of family and Church groups, as well as the Union of Shop, Distributive and Allied Workers, is not this something that the Government would be wise to drop sooner rather than later?

Mr. Straw
I well understand my right hon. Friend’s concern, and I recall that in 1991 and 1992 we shared a similar position on the free votes to amend the shops legislation. We take full account of what he and others have said on the issue and I shall ensure that his views are relayed to my right hon. Friend the Secretary of State for Trade and Industry.

Mr. Charles Walker (Broxbourne) (Con)
May we have an urgent debate on the consequences of unskilled immigration? While such immigration may benefit the middle and upper-middle classes, because those immigrants tend to work in restaurants or to clean offices and homes, that level of immigration is not so good for the less well off in our society, who end up competing with the newly arrived for scarce resources such as housing, education, health and jobs. That is creating some unnecessary and unwanted friction in our communities—I suspect not just in my community, but in the community of Blackburn, which is represented by the Leader of the House.

Mr. Straw
I am always happy to see these issues debated. Contrary to myth, there is a high degree of control over immigration, especially in respect of low-skilled workers who have no family connections here. The hon. Gentleman knows that, but he would know more if he talked to fruit farmers in Herefordshire, Kent and many other areas, and not just to people in what he describes as more prosperous areas. I could take him to a factory in my constituency that would not be operating without low-skilled workers from eastern Europe, because the owners could not recruit others to do those jobs. That is a reality, and we have to choose between maintaining employment at its current levels with all the protections, including the minimum wage, that we introduced and he voted against—[Hon. Members: “He was not here.”] Had he been here, he would have voted against them. He is not denying that. I know that he spoke out against those protections in his leaflets, so the fact that he was not here is, on this occasion, irrelevant. I understand the point that he makes, but I do not agree with it.

Sir Peter Soulsby (Leicester, South) (Lab)
Will my right hon. Friend join me in welcoming the announcement this morning by the water services regulator that he intends to fine Severn Trent Water for its appalling level of service to customers? Will my right hon. Friend also speak to my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs about making a statement to make it clear that it is the Government’s intention that the fine should be paid from the recently announced excessive profits of the company, rather than by the hard-pressed customers who have to suffer the poor service and unique record of leaking pipes, prosecutions for pollution and the fiddling of figures to inflate bills and overcharge customers, recently admitted by the company? It would be much more appropriate for the fine to be paid by those who own the company, not by those who suffer from its appalling service.

Mr. Straw
I certainly get the point that my hon. Friend is not very keen on Severn Trent Water and its record, and I will ensure that his concerns are passed on to my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs.

Mr. Andrew Mackay (Bracknell) (Con)
With the Home Secretary telling us that his Department is unfit for purpose, it is hardly surprising that some of us are very cynical about the fact that the order under the Terrorism Act 2000 to extend the period for which terrorist suspects may be detained has not yet been laid. That is a serious matter, and I ask the Leader of the House to insist that the Home Secretary come to the Dispatch Box early next week to tell us when the order will be laid.

Mr. Straw
With respect, I have already dealt with that matter. My right hon. Friend the Home Secretary is aware of the urgency of the matter, but it has been the practice of successive Home Secretaries from both parties to allow time to elapse between the passage of legislation—the Bill in question was delayed by the Conservative party—and the introduction of Orders under it.

Andrew Mackinlay (Thurrock) (Lab)
Will my right hon. Friend provide time for a debate on Iran? I am conscious of the fact that we have a debate on Europe next week, but a debate on Iran would cover the International Atomic Energy Agency and the delicate—one might say, grave—situation of that country’s nuclear aspirations. Other issues include human rights and the status of those exiled from Iran. It is time that the House took cognisance of the situation in Iran and the fact that the Inter-Parliamentary Union is sending a delegation there, which I am very uncomfortable about.

Mr. Straw
My understanding is that the IPU will send a delegation, but that is a matter for it to decide, taking account of any advice that my right hon. Friend the Foreign Secretary may have to offer. I understand the strong case that my hon. Friend makes for a debate on Iran: I am seeking a debate on foreign policy, which could range more widely. I hope to be able to achieve that before the House rises for the recess, but that depends on accommodating the multifarious requests.

David Simpson (Upper Bann) (DUP)
I am sure that the Leader of the House will agree that one of the major obstacles to stability in Northern Ireland is the ongoing situation with paramilitary activity and criminality. In the Northern Ireland Assembly, we have until 24 November to resolve all the issues. Will he consider putting some Government time aside to discuss the whole issue of paramilitary activity in Northern Ireland?

Mr. Straw
I will look into that idea, and discuss it with my right hon. Friend the Secretary of State for Northern Ireland.

Sarah McCarthy-Fry (Portsmouth, North) (Lab)
In the past few weeks I have visited two separate debt advice centres in my constituency, and both expressed concern about rising levels of debt among people who have been taken in by television adverts about debt consolidation and other financial products that were inappropriate for their needs and, far from solving their financial worries, actually made them worse. Will my right hon. Friend make time for a debate on the regulation of the advertising of personal credit products?

Mr. Straw
I understand my hon. Friend’s great concern about the issue. It would be difficult to find time for a debate on it on the Floor of the House, but it is an ideal candidate for a debate in Westminster Hall or an Adjournment debate. I wish her well in that.

Sir George Young (North-West Hampshire) (Con)
Is one of the tasks given to the Leader of the House by the Prime Minister that of resolving the impasse over House of Lords reform? If so, can the right hon. Gentleman make a statement before the House rises for the summer recess, indicating the progress that he has been able to make and how his approach differs from that of his predecessor?

Mr. Straw
That is one of the tasks that I have been asked to undertake, and I am doing so with some relish. The right hon. Gentleman will know that we had an interesting, if unexpected, three-hour debate in early May on the establishment of the Joint Committee on Conventions and the issue of Lords reform, so it has been aired. I am seeking to allow the Joint Committee time to reach its conclusions and I will bring forward an order to extend its deadline. I said that I would do so, and I hope that we can agree that. While that is going on, I will hold informal consultations with the other parties, Cross Benchers and bishops about the formula that would be appropriate. In view of that, I am not sure whether I will be able to make a statement to the House before we rise, but I will think about it.

Mr. MacShane
Can we find time for an early debate on relations between Britain and Germany? We will all be cheering England on to Berlin and victory in the World cup, and we want every English fan there to be an ambassador for Britain. In that context, does my right hon. Friend deplore the fact that the BBC has not yet apologised for Mr. Jeremy Clarkson having thrown up his hand in a Nazi salute, or this statement from a prominent personality, quoted in The Independent:

“If anyone’s got a history of making themselves feel at home in other people’s countries, it’s the Germans.”

That was said by the shadow Foreign Secretary, the right hon. Member for Richmond, Yorks (Mr. Hague). With such vile xenophobia expressed against Germany, how can we expect English football fans to behave differently?

Mr. Straw
We are all looking forward to the opening of the World cup and Saturday, including—please God—success for England, and to the opportunity to excise all the ridiculous parodies of Germany portrayed in the media and by some hon. Members.

Mr. Nigel Evans (Ribble Valley) (Con)
I hope that hon. Members who are not English will take the opportunity to sign my early-day motion wishing England success in the World cup—including the Deputy Leader of the House of Commons, the hon. Member for Edinburgh, South (Nigel Griffiths), who is in his place on the Front Bench.

The Leader of the House knows my constituency well, and he knows that the people of Longridge have traditionally looked towards Preston for their health care. Under the primary care changes, they are being asked to look towards Ribble Valley and Hyndburn, which many of them will find inconvenient. The GPs are up in arms about it and a petition on the subject has more than 3,500 signatures. Will the Leader of the House arrange for the Secretary of State for Health to come to the House to explain why she is not listening to the concerns of GPs and local people about health care provision in the area?

Mr. Straw
I welcome the hon. Gentleman’s early-day motion, which advises support for England even though he is Welsh. His constituency is next door to mine, and I know it extremely well. It is not remotely Welsh; it is as English as any, and I can think of no other career move open to him. I congratulate him on a minor act of survival. He will know that in his area there are 5,400 more nurses—

Michael Gove (Surrey Heath) (Con)
Oh no!

Mr. Straw
The hon. Gentleman says, “Oh, no!” and throws up his hands, but whether he likes it or not, the proper thing to say is, “Oh, yes!” The quality of health care in Ribble Valley, Longridge and elsewhere has increased and will continue to do so.

The hon. Member for Ribble Valley (Mr. Evans) asked a specific question about the PCT boundaries. I assure him that I will take the matter up with my right hon. Friend the Secretary of State for Health and ensure that he is given an answer.

Dr. Brian Iddon (Bolton, South-East) (Lab)
I am sure that my right hon. Friend will be interested to hear that there was an extremely well-attended debate yesterday in Westminster Hall on the question of securing peace between Palestinians and Israelis. However, most Back Benchers present were unable to make proper contributions, largely because the three Front-Bench spokesmen took up a third of the time available. Calls have been made already this morning for debates on Iran and Iraq, so should we not have a full debate in Government time on the middle east?

Mr. Straw
First, I shall pursue the issue that my hon. Friend raises about the use of time in Westminster Hall, which I know causes anxiety for many hon. Members, especially in popular debates. The Procedure Committee or the Modernisation Committee may wish to pursue that matter. Secondly, I understand the point that my hon. Friend makes, and I am doing my best in that regard.

Alistair Burt (North-East Bedfordshire) (Con)
May I ask the Leader of the House to take a personal interest in a matter about which I gave him notice this morning? For some months, those of us who depend on remote access to the parliamentary intranet from our constituencies have been affected by very poor service. Despite the efforts of our Parliamentary Information and Communications Technology department, the problems have still not been resolved. After five months the key fault, which may be external to the House, has not even been identified. My constituents have been inconvenienced by the amount of time that my office has wasted in dealing with this problem, and I am sure that many other hon. Members could make the same complaint.

Will the right hon. Gentleman inject some urgency into resolving the problem? In a commercial organisation it would have demanded a solution within hours rather than months. And when he answers, please will he not begin by telling me how many nurses there are in North-East Bedfordshire?

Mr. Straw
I shall not start my answer in that way. I am grateful to the hon. Gentleman for the notice that he gave me about a problem that I know has frustrated him and other hon. Members of all parties. I shall follow the matter up personally—and my hon. Friend the Deputy Leader of the House has just volunteered that he too will take a close interest in it. We shall pursue the problem together. Meanwhile, the hon. Gentleman will wish to know that in North-East Bedfordshire, there were 2,975 more nurses, and 659 more doctors.

Mary Creagh (Wakefield) (Lab)
Last night the House was locked down for the second time in less than a year—a fact that hon. Members and staff found out about from rumour, anecdote and the rolling news on the BBC and Sky. Will my right hon. Friend discuss security in the House with the relevant officials, and take an urgent look at how we can use new technology, such as e-mail and text and pager messages, to communicate the fact that an incident has happened? Will he also look at the training given to staff? The fire training in the House is excellent, but people need to be trained in evacuation procedures when other emergencies arise. Will he renew the guidance in respect of training and communication in this area?

Mr. Straw
I am sure that the House will take note of the points that my hon. Friend raises, but she will understand that security is a matter for you, Mr. Speaker, and not directly for me. I know that you have taken full account of what happened yesterday, and that you were concerned about it. I also know that the Joint Committee on Security—of which the Treasurer of Her Majesty's Household, my right hon. Friend the Member for Coventry, North-East (Mr. Ainsworth), is Chairman—will have the matter on its agenda at its next meeting.

Pete Wishart (Perth and North Perthshire) (SNP)
Does the Leader of the House think it acceptable that forces families who have lost loved ones in Iraq have had to wait as long as three years for inquests to take place? Will he get a Minister from the Department for Constitutional Affairs to come to the House and make a statement about why such an appalling state of affairs has been allowed to happen? Will he ensure that the necessary resources are made available to make sure that it is addressed properly?

Mr. Straw
The delay is not acceptable. Written ministerial statements were delivered earlier this week, both in this House and in the other place, that set out the process being pursued. My right hon. Friend the Secretary of State for Constitutional Affairs and my right hon. Friend the Minister of State in that Department are very concerned about the matter. I am sure that it is no comfort to the bereaved families if I point out that a Bill is before the House that is designed greatly to improve the administration and timeliness of inquests, but I emphasise that the Government understand that the situation is unsatisfactory. I apologise to those relatives for the delay, which has been caused by other factors. We understand their frustration, but I assure the hon. Gentleman that action is being taken to deal with the problem.

Chris Bryant (Rhondda) (Lab)
Will my right hon. Friend review the way in which Back Benchers can get business debated, both in Westminster Hall and on the Floor of the House? Will he look in particular at how early-day motions are treated? Hundreds of thousands of copies are printed, and are reprinted day after day. For example, early-day motions take up 200 pages of today’s Order Paper, but none ever gets debated on the Floor of the House. Similarly, every day we reprint other pages that are full of motions that will never be debated; the one that I am showing the House now has been printed 220 times. Should we not be more honest about how business from Back Benchers is brought to the Floor of the House?

Mr. Straw
My hon. Friend raises an important question about the balance of time on the Floor of the House. The hon. Member for Macclesfield (Sir Nicholas Winterton) has reminded the House that there was a period when we dealt on the Floor of the House not only with private Members’ Bills but with private Members’ motions, which were debatable and could be voted on here. The House gave up that facility when Westminster Hall was introduced, and it is for the House to decide whether that was a fair exchange. I shall not express my personal view, save to say that the Modernisation Committee will wish to look at the matter. However, I must also tell my hon. Friend—any party aspiring to be in government has to think about this—that only so much time is available to us. The debates on private Members’ motions used to take place on a Friday, so the House used to meet every Friday, not just on some Fridays.

The second consideration that must be borne in mind is that all hon. Members stand for election on manifestos that set out the legislation to be introduced by a prospective Government, and not by private Members. Government legislation, too, takes time, which means that the balance is quite tricky.

Bob Spink (Castle Point) (Con)
As we approach the wonderful season of garden parties, fetes and proms provided by communities, schools, churches and volunteers to raise money for good causes, may we have a debate that will allow us to expose the perverse interpretation of the newly implemented Licensing Act 2003 by some councils that want to discourage those good works? The Government need to provide clarity about the application of that Act.

Mr. Straw
The hon. Gentleman represents Canvey Island, which I know well. If he is saying that the fine people who live there are facing difficulties, I shall do my best to sort the matter out with the relevant Ministers. However, I do not recall that Castle Point has a Labour-controlled council. Some other party must be responsible for what is happening there, and I suppose that it could be the one represented by the hon. Members who sit below the Gangway—[Interruption.] Oh, is it run by the Conservatives? In that case, the hon. Gentleman needs to talk to his leader.

Mr. Edward Vaizey (Wantage) (Con)
There are regular debates in the House on energy policy, but has the Leader of the House had an opportunity to read the excellent report on water resources by a Select Committee in the other place? Is it not time that the House fully debated the water crisis facing the south-east—not least because it could result in a very large hole being dug in my constituency? Is not it time to debate our water strategy?

Mr. Straw
My hon. Friend the Minister for Climate Change and the Environment made a statement about the water shortages some two weeks ago, and I assure the hon. Gentleman that we keep the matter under close review. However, I know his constituency a little and believe that any proposals for reservoirs there are usually resisted quite strongly. There are large reservoirs in my constituency, and I remind the hon. Gentleman that we have to store our water somewhere.

Mrs. Nadine Dorries (Mid-Bedfordshire) (Con)
The unfortunate consequence of an ageing population is that many more people will suffer from dementia. In fact, the number of people being diagnosed with the condition is rapidly increasing. Unfortunately, the National Institute for Health and Clinical Excellence has decided to continue to restrict the use of drugs for Alzheimer’s disease in future. May we have a debate on the consequences and the wider health and financial implications of an ageing population?

Mr. Straw
That raises an important issue, but whether there is time for such a debate is another matter. On the issue of drugs to control Alzheimer’s and other dementias, I would say that NICE has not yet published its full guidance to the NHS. There is a formal appeals process and stakeholders have until 15 June, next week, to lodge any appeals. We acknowledge the importance of the appraisal and I hope that the hon. Lady does too, but NICE was established to examine precisely this sort of difficult issue, and it has the expertise and independence to enable it to do so.

Mr. John Redwood (Wokingham) (Con)
May we have an early debate on management of the likely consequences of climate change, which would allow us to look into the use of desalination plants, such as the one proposed for Beckton, for more water resources and better coastal protection? Otherwise, the welcome for the Olympic games in Britain will be, “Don’t shower while you’re here. These are the dirty games. There’s no water to wash—but be careful in case there’s a flood”.

Mr. Straw
The Olympic games will be a triumph for the United Kingdom—[Interruption.]—and for all the parties who have supported it over the years on a bipartisan basis. We have had plenty of debates on climate change, but I strongly take note of what the right hon. Gentleman said.

Mr. Alan Reid (Argyll and Bute) (LD)
May we have an urgent debate on the effect of VAT regulations on the construction of community swimming pools? I ask that because islanders on Mull have raised enough money to construct a swimming pool, but the project is in danger of collapse because of complications in the VAT regulations. Community recreational projects are supposed to be zero-rated for VAT, but Revenue and Customs is threatening to levy VAT in this case. If the Leader of the House cannot find time for a debate, will he at least draw the Chancellor’s attention to that matter? I am sure that the Government would not want this important community project to fail because of VAT complications.

Mr. Straw
As the hon. Gentleman has observed, there are many concessions within the VAT regime to take account of charities and other good works. I shall certainly raise the matter with my right hon. Friend the Chancellor the Exchequer.

Mike Penning (Hemel Hempstead) (Con)
On 11 December, just before Christmas last year, the largest explosion that Europe has seen since the second world war took place in my constituency. I praised the Deputy Prime Minister the following day for making a statement before the House. Since then, 4,000 jobs have been put at risk and our water table has been contaminated, but we have received no money from the Government. May we have debate in which some Secretary of State makes it clear who is in charge, as the Deputy Prime Minister has been moved from his position? I do not mean that in any detrimental way, but this is a very serious matter.

Mr. Straw
Of course I understand the profound seriousness of what happened and the importance of the long-term implications, which are too easily forgotten once the problem is no longer in the headlines. My right hon. Friend the Deputy Prime Minister was personally concerned about the matter, and continues to be so. I shall certainly raise it with my right hon. Friends the Secretaries of State for Environment, Food and Rural Affairs, for Trade and Industry and for Communities and Local Government. I will get the hon. Gentleman a response.

Mr. Desmond Swayne (New Forest, West) (Con)
A fortnight ago I asked the Leader of the House to place on the Order Paper a motion to enable the European Scrutiny Committee to sit in public. He said that he would think about it, so I would be interested to hear the product of his thoughts.

Mr. Straw
I am still thinking about it—I say that so that the hon. Gentleman knows that that process does not just take place on the odd Thursday. I intend to have an office meeting to attempt to resolve our  approach to European scrutiny. As I said to the hon. Gentleman before, I am in favour of the House having greater scrutiny of European matters, as we do not compare favourably in that with the other place. However, we must not embarrass ourselves by setting up systems that subsequently fall into disrepute because of inadequate interest on the part of Members on both sides of the House. That is the problem.

Tony Baldry (Banbury) (Con)
I draw the attention of the Leader of the House to early-day motion 2281:

[That this House expresses concern at the Department of Trade and Industry's decision to review advice on the use of mechanical parts in electrical components; notes that the decision to include mechanical parts under the European Directive on Hazardous Substances will in effect place a ban on most decorative lighting; further notes that no other EU member state is extending the ban to mechanical components in decorative lighting; further notes that the ban will not extend to mechanical components imported into the UK including from competitors from Asia; further notes that the lighting industry believes that 200 lighting manufacturers employing over 4,000 people face bankruptcy under the new guidance; and calls on the Government urgently to review the new guidance on mechanical lighting to exclude it from the EU Directive on Hazardous Substances.]

May we have an early debate on Whitehall’s obsession with gold-plating EU directives? Two hundred jobs in Banbury are at serious risk because the Department of Trade and Industry is interpreting an EU directive on the regulation of hazardous substances on decorative lighting in a way that no other member state is doing. It is a complete nightmare, as companies have had only three weeks’ warning of the change in the regulations. Frankly, it is crazy. This kit is still going to be importable from China and the far east, so the directive is anti-competitive, leading to lost jobs in the UK. It is mad.

Mr. Straw
I have seen early-day motion 2281—but we do not need a debate, because we are as against gold-plating as the hon. Gentleman is. As soon as I became Foreign Secretary, I initiated with other ministerial colleagues a major push against gold-plating. I know that my right hon. Friend the Secretary of State for Trade and Industry is equally opposed to it, and there is also the Better Regulation Executive to provide further scrutiny. I promise the hon. Gentleman that I will pursue the matter personally with my fellow Ministers, and I do not believe that there is a single Minister who wants an outcome different from the one that he would like. I hope that I am right.

Dr. Julian Lewis (New Forest, East) (Con)
May we have a statement from the Leader of the House, preferably within the next couple of minutes, on the opportunity afforded by business questions for hon. Members to raise issues on behalf of vulnerable members of society and for the Leader to give non-partisan replies, as he did to the hon. Member for Northampton, North (Ms Keeble) earlier today? That would allow him to revisit the answer he gave me on 25 May when I raised  the question of the closure of the emergency walk-in clinic at the Maudsley hospital. He said:

“I am sure that the arrangements being made in respect of the Maudsley hospital are more than adequate to meet the needs of those patients.”—[Official Report, 25 May 2006; Vol. 446, c. 1646.]

If that were so, Marjorie Wallace of SANE would not have said that there was

“nowhere for people to find refuge in crisis and emergency”,

and Teresa Priest of Southwark Mind would not have said that it was a matter of “life and death” for people with mental health problems. The situation is very serious, so I would be grateful if he reconsidered his response.

Mr. Straw
I do, where appropriate, try to deal with non-partisan questions in a non-partisan way. I hope that the hon. Gentleman will forgive me if I occasionally find it necessary to mention the increase in the number of doctors and nurses in different constituencies. I understand the hon. Gentleman’s concerns and I know of his profound interest in the matter, which I shall continue to pursue with the Health Secretary.

Points of Order

Michael Gove (Surrey Heath) (Con)
On a point of order, Mr. Speaker. I ask for your help in your role as protector of Members’ rights against the abuse of their privileges by the Executive. It was my understanding that when Ministers and other Members visited another Member’s constituency, they wrote to them beforehand to explain the purpose of the visit. Yesterday, the Prime Minister visited Frimley Park hospital in my constituency without giving me any notice of his visit. Earlier this week, the Chancellor of the Exchequer and the Minister with responsibility for veterans visited the constituency of my hon. Friend the Member for Eastbourne (Mr. Waterson), again without giving advance notice. It seems to me an abuse of the House when Ministers visit constituencies for party political and propagandist purposes without giving due notice, thereby denying Members the right to raise issues of pressing concern to their constituents such as the future of Frimley Park hospital and its upper gastro-intestinal unit. As you well know, Mr. Speaker, that is a matter of deep concern to me and to my constituents, and I would have loved to have the chance to ask the Prime Minister why his Department of Health was closing a world-beating centre. I was denied that opportunity by the arrogance of the Executive.

Mr. Speaker
I understand that the hon. Gentleman should have notification when another Member visits his constituency, but that does not give him the right to question any Minister solely because they are in the constituency. I must say, in defence of the departments of both the Chancellor and the Prime Minister, that they are very conscientious about notifying hon. Members. I know that from my own experience, but I will bring the matter to the Prime Minister’s attention and see what is happening in his office.

Mr. Philip Hollobone (Kettering) (Con)
On a point of order, Mr. Speaker. On the issuance of oral ministerial statements on Opposition days, page 358 of the copy of “Erskine May” in the Library states:

“Prior notice to the Speaker is necessary, but neither his permission nor the leave of the House is required. The Speaker”—

your good self, Sir—

“has, however, indicated that he would prefer it if oral ministerial statements were not made on Opposition days.”

In my brief time as a Member of the House, I think that an oral ministerial statement has been made on almost every Opposition day, including yesterday, which held up the very important debate on tax credits. I seek your guidance, Sir.

Mr. Speaker
It is normal for Ministers not to make statements on Supply days, but there are occasions when that is not the case. The hon. Gentleman will know that when a Minister seeks to make a statement I have no power to reject that statement. Of course the House has a dilemma: we must consider the importance of the Supply day, but Opposition Members in particular are very keen for Ministers to come to the House to make statements. So we have that difficulty as well.

Mr. Charles Walker (Broxbourne) (Con)
On a point of order, Mr. Speaker. During his response to my question, the Leader of the House invited me to visit his constituency. As I am a new Member, could you advise me how I could go about organising that?

Mr. Speaker
The hon. Gentleman should go to the Travel Office and get a British Rail timetable.

Mr. Oliver Heald (North-East Hertfordshire) (Con)
On a point of order, Mr. Speaker. Many hon. Members have been concerned to see the draft Coroners Bill. During business questions, the Leader of the House suggested that it might be before the House currently. It was my understanding that it would soon come before the House, but I do not know whether he can clarify that. I was expecting it early next week.

Mr. Alan Beith (Berwick-upon-Tweed) (LD)
Further to that point of order, Mr. Speaker. The matter will be before the House in one form, because the Select Committee on Constitutional Affairs will question witnesses on Tuesday on that Bill, having expected it to be available some time ago. We now know that it will not be available until Monday, and we may have to find some way to tell the witnesses whom we want to question what it contains. That is not a satisfactory way to proceed, particularly when the Minister of State, Department for Constitutional Affairs is offering to provide a completely alternative system of scrutiny in which she chooses the witnesses and the people who carry out the scrutiny.

The Leader of the House of Commons (Mr. Jack Straw)
Further to that point of order, Mr. Speaker. May I just tell the hon. Member for North-East Hertfordshire (Mr. Heald), who is the Opposition spokesman, and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) that I take note of what they say? I understand that the plan is for the Bill to be introduced very shortly indeed, but I will raise the House’s concerns with my right hon. Friend the Secretary of State for Constitutional Affairs and hope that we can find a quick resolution of the matter.

Meanwhile, may I tell the hon. Member for Broxbourne (Mr. Walker), who wants to come to my constituency, that all Tories are welcome in Blackburn, because there are so few whom anyone ever sees?

 Orders of the Day

Compensation Bill [Lords]

[Relevant documents: The Third Report from the Constitutional Affairs Committee, Session 2005-06, HC 754, on Compensation Culture, and the Government’s response thereto, Cm 6784. The Twentieth Report from the Joint Committee on Human Rights, Session 2005-06, Legislative Scrutiny: Tenth Progress Report, HC 1138.]

Order for Second Reading read.

12:33:00

The Parliamentary Under-Secretary of State for Constitutional Affairs (Bridget Prentice)
I beg to move, That the Bill be now read a Second time.

I am pleased that, after much debate and discussion in the other place, the Bill has finally come to the House. It is part of a much wider set of initiatives that we are promoting: we are determined to tackle practices that might stop normal activities, because people either fear litigation or have become risk-averse. We want to stop people being encouraged to bring frivolous or speculative claims for compensation, and the provisions in the Bill will help us to do just that. They will reassure people who are concerned about being sued that, if they adopt reasonable standards and procedures, they will not be found liable.

The Bill will also put in place the legislative framework needed to regulate claims farmers—people who encourage consumers to make claims—too many of whom are cowboys who have abused the system for too long, and we are going to put a stop to it.

Part 1 contains provisions on the law of negligence and statutory duty and on apologies, offers of treatment and other redress. Clause 1 relates to the law of negligence and statutory duty, and some hon. Members have had concerns about the need for that clause. We believe, however, that it is important and that it will have benefits.

The Better Regulation Task Force in its report “Better Routes to Redress” made clear its view that, although a compensation culture does not exist in this country, the perception that it does can have a real and damaging effect on people’s behaviour. That can be particularly significant in respect of activities provided by voluntary organisations and others.

Last autumn, Volunteering England found that nearly one in five organisations said that people had stopped volunteering for them because of fears about risk and liability and that nearly a quarter of organisations said that volunteers had been deterred from joining them in the first place by concern about those issues. Those fears might well be out of proportion and based on inaccurate perceptions, but they are very real. So there is a need to provide reassurance to those who are concerned about possible litigation—not only in the voluntary sector, but elsewhere too—and about how the law in this country works. That is what clause 1 will do.

The way in which clause 1 will work is that, in deciding a negligence claim or a claim for breach of a statutory duty that involves a standard of care, the court must consider whether the defendant owed a duty of care to the claimant and, if he did owe such a duty of care, whether that duty was breached, and whether the claimant suffered loss or injury as a result. In considering the second of those factors—whether the duty of care was breached—the court must consider the standard of care, and whether the defendant fell short of that standard.

In this country, the ordinary standard of care used in considering whether negligence is involved is that of reasonable care, and whether the defendant has met that test is a question of fact for the court to decide, having regard to all the circumstances of the case. Clause 1 is therefore concerned only with the approach of the court to assessing that question of fact. It does not concern or change what the standard of care should be, nor whether the defendant owed a duty of care to the claimant.

Mr. David Jones (Clwyd, West) (Con)
I hear what the hon. Lady has to say, but does not clause 1 go further than that by requiring the claimant to put together a risk assessment—in other words, to specify what steps should have been taken by the defendant in complying with the duty of care? Does that not go beyond what is required of the defendant at the moment?

Bridget Prentice
No. The hon. Gentleman is putting more into clause 1 than is actually there. Clause 1 provides that, in considering a negligence claim and deciding whether the defendant should have taken certain steps to meet a standard of care either by precaution or otherwise, the court may have regard to whether a requirement to take those steps might prevent an activity that is desirable from taking place or whether it might discourage people from undertaking functions in connection with that activity. That reflects the existing law and the approach that the courts have already taken and the view that they have already expressed, particularly in judgments in the higher courts.

Mr. Andrew Dismore (Hendon) (Lab)
Perhaps my hon. Friend might offer a definition of desirable activity as it is a new concept in common law, which, as far as I can see, has not been defined by any previous authority. Her comment that the provision simply restates the existing law, the Tomlinson v. Congleton borough council ruling, which is the most recent authority on the issue, makes it quite clear that the sort of exclusion to which she refers does not apply across the board, particularly with an asymmetric relationship—for example, the employee-employer relationship. Will she therefore undertake to table an amendment to correct clause 1, to put right the fact that it does not accurately reflect the law as it stands?

Bridget Prentice
The view that was expressed in the Tomlinson v. Congleton ruling, which is the most recent case, as my hon. Friend rightly says, is reflected in clause 1. The clause will have a range of benefits. It will reassure those who are concerned about possible litigation by making clear how the law works and it will help counter the view that people should cease activities for fear of litigation. I know that hon. Members will say that that will bring more cases to court. Any form of legislation brings the opportunity for people to bring a case to court so that the common law is established clearly. We should not be overly concerned in that respect. Clause 1 and clause 2, which has been added, make it clear that the law is clear, that people know where they stand and that the courts will use common-sense judgments in ensuring that people understand what desirable activities are and where the balance lies between the desirable activity and any precaution that individuals need to take.

David Howarth (Cambridge) (LD)
I fully accept that the Government’s intention is not to alter the law but to maintain it as announced by the House of Lords in the Tomlinson case. That gives rise to the difficulty that the hon. Member for Hendon (Mr. Dismore) mentioned. Another problem with the way in which the clause is drafted is the phrase “breach of statutory duty.” There are statutes that set up standards of care, breaches of which are less than full negligence. An example is the Consumer Protection Act 1987. Is it the Government’s intention to change the way in which that Act works by adding this new clause?

Bridget Prentice
There is a straightforward answer to that question. No. It is not our intention to do that.

Paddy Tipping (Sherwood) (Lab)
I am grateful to my hon. Friend the Minister for being willing to debate the phrase “desirable activity” at this stage. It may well be an issue to be discussed in Committee. “Desirable activity” implies a notion of public good. I am concerned about public services, say accident and emergency units or ambulance services, in which people may work with difficult clients. Does the phrase imply that their conditions of employment and their access to the civil courts will be less at risk than for people not engaged in activities involving the public good?

Mr. Deputy Speaker (Sir Michael Lord)
Order. Before the Minister answers, may I take up the point made by the hon. Member for Sherwood (Paddy Tipping)? I do not wish to hinder the debate today, but I am sure that the Minister and other hon. Members will bear in mind the fact that the Bill involves some complicated matters that are probably best dealt with in Committee. That aside, it is quite in order for the Minister to make her usual observations.

Bridget Prentice
Thank you, Mr. Deputy Speaker. You have rightly led us towards the way in which we should conduct the debate today. I am conscious that many hon. Members want to participate, so I will try to be as brief as I can in responding to my hon. Friend.

My hon. Friend makes an important point about emergency services. We have sought to capture with the term “desirable activity” the well-established concept of taking into account the wider social value of activities. The emergency services are a good example of that. If my hon. Friend will allow me, I will leave the matter there and perhaps we can pursue it in Committee.

Clause 1 will have a range of benefits. It will help counter the view that organisations should stop activities for fear of litigation. It will form a valuable part of the work that we are undertaking to tackle perceptions that lead to risk-averse behaviour. It will improve the system for those with valid claims. It will also ensure that the law is widely known and applied.

I mentioned in response to the intervention by the hon. Member for Hendon (Mr. Dismore) that clause 2 had been added to the Bill. It provides for an apology and an offer of treatment or other redress which shall not of itself amount to an admission of negligence or breach of statutory duty. That clause stemmed from an Opposition amendment, which the Government have been happy to accept. It reflects the approach that has been taken in clause 1 in that it does not change the law but provides reassurance on how it works and encourages the giving of apologies and other offers of treatment and redress. I hope that that is something that the whole House will welcome.

The clause also reflects the approach taken in the NHS Redress Bill, which was debated earlier this week, and should help to reduce the number of cases in which adversarial disputes about liability prevent early rehabilitation in cases involving personal injury. I am sure that hon. Members across the House have had constituents come to them in circumstances in which the length of time and the adversarial nature of proceedings have made matters much worse than they would have been had they been dealt with in a more simple and straightforward fashion.

Simon Hughes (North Southwark and Bermondsey) (LD)
In clauses 1 and 2 do the Government seek to codify—to put into written statute—the present law? Do the Government seek to take the law as the courts have defined it and put it into an Act of Parliament? If that is the case, there may be merit in that. The Government have a long-term plan, which many of us support to codify the law so that people have a clear view about what it stands for.

Bridget Prentice
It is not my wish to enter into a debate on the merits of common law and case law versus codification, although the hon. Gentleman is right to say that we have a long-term ambition, as most Governments do, to codify the law properly. What I am trying to say is that clauses 1 and 2 seek to clarify the situation so that people feel comfortable with the activities in which they participate. It does not reduce the protection available to claimants. It will be open to the courts, as now, to decide, for example, whether the terms in which an apology is given amount to an admission of liability in the circumstances of an individual case.

Lembit Öpik (Montgomeryshire) (LD)
Will the Minister give way?

Bridget Prentice
I will give way once more on this part of the Bill.

Lembit Öpik
In the context of what the Minister is saying, it is my understanding as a supporter of clauses 1 and 2, as far as they go, that they offer a form of protection to volunteers and volunteer organisations who are losing volunteers because of the perception that she discussed earlier. Is it the Government’s intention to make it clear to those voluntary organisations that those clauses will give them some legal protection against vexatious and spurious claims, which are having a practical and measurable effect on volunteering in the United Kingdom?

Bridget Prentice
I have sympathy with the hon. Gentleman’s position. I have spoken to voluntary organisations in my constituency, as he and others have done in their constituencies. I do not want to commit the Government to something particular on this, but I hope that I can develop some ideas by the time the Bill becomes law, we hope in or around October, so that perhaps we can send out a clear message to voluntary organisations, schools and, indeed, to the public in general, about what the position is as part of our general encouragement to volunteer and not to be afraid to come forward.

Mr. Julian Brazier (Canterbury) (Con)
Will the Minister give way?

Bridget Prentice
One more time, and then I must move on.

Mr. Brazier
I am grateful to the Minister both for giving way and for the helpful meeting a couple of weeks ago. May I suggest that that message also needs to go out to the lower courts. Post-Tomlinson, we are still getting bad cases and if I manage to catch your eye, Mr. Deputy Speaker, I intend to give the details of a particularly bad example of a case that took place while the measure was in another place.

Bridget Prentice
I understand what the hon. Gentleman says. The fact that the Bill is going through Parliament will send a clear message to the lower courts. It will reiterate what has been said in the higher courts about this issue.

Mr. Dismore
Will my hon. Friend give way?

Bridget Prentice
I will take one more intervention.

Mr. Dismore
Does not what my hon. Friend said in response to the previous intervention defeat her own argument? If the purpose of clause 1 is simply to clarify existing law, which of course the Lord Chief Justice told the Constitutional Affairs Committee could not be done in a single sentence, why does she need a great long pamphlet explaining what the law is? Is it not better simply to set out in detail in that pamphlet what the law is for organisations without tinkering by means of clause 1, which will create a whole batch of new defences and litigation?

Bridget Prentice
I disagree with the premise of my hon. Friend’s question. From time to time, it is a good thing for Governments to let the public know what the law is and how it applies to them. Indeed, it is a duty of Governments to do so. If there is a way of ensuring that people, whether in organisations or as individuals, are aware of the situation, it might give them time to consider whether they would like to be volunteers in various organisations.

Mr. Dismore
rose—

Bridget Prentice
I really must move on.

Part 2 of the Bill sets out a scheme to regulate claims management services. Some very reputable claims management companies provide a good service, but consumers are too often exploited by firms that provide a bad service and encourage false claims—[Hon. Members: “Name them”.] I cannot name them, but apparently about 500 companies operate in England and Wales. They are not subject to regulation and many of them abuse the system.

Mr. Oliver Heald (North-East Hertfordshire) (Con)
As the hon. Lady knows, trade unions are one of the largest groups of claims farmers. They make their money from referrals to solicitors—often at about £500 per referral—and take money from damages in some cases. Many unions do an excellent job, but does she agree that for trade unions to be completely unregulated in this field, while she is saying that the commercial sector should be completely regulated, is nonsense?

Bridget Prentice
The hon. Gentleman anticipates a later part of my speech. If he will allow me, I shall deal with trade unions later.

Judy Mallaber (Amber Valley) (Lab)
Does my hon. Friend agree that providing services to the membership of an organisation such as a trade union is completely different from the situation in my area, where there are completely unsolicited mail drops from firms trying to farm as many claims as possible, especially for miners’ compensation? That is wholly different from an organisation providing services for its members.

Bridget Prentice
I could not agree more. I am sorry that I did not bring with me an unsolicited letter that I received from a company offering me its services in making a claim, on the basis that I had at some point said that I had had an accident. I find such practices wholly abhorrent and I hope that the Bill will be part of our general scheme to ensure that they do not occur.

Mr. John Redwood (Wokingham) (Con)
Will the hon. Lady give way?

Bridget Prentice
I will, but I should like to develop the case for regulating claims management.

Mr. Redwood
I am grateful to the Minister for giving way. Does she yet have in mind a body that would act as regulator or is there to be a new regulator, and can she give us any indication of the cost?

Bridget Prentice
I point out gently to the right hon. Gentleman and to other colleagues that if they allow me to develop my speech I will come to that point.

The practices we want to stamp out fall into three main areas. The first is the encouragement of frivolous claims, by raising false hopes about the compensation available, through high-pressure marketing techniques, such as my hon. Friend the Member for Amber Valley (Judy Mallaber) described. Secondly, consumers are misled about the options for funding their claim; in some cases, companies do not let them know that there is a free alternative and, in others, they sell inappropriate additional services, such as loans to fund insurance premiums. Thirdly, we want to protect consumers against poor-quality advice where claims managers act directly for them.

Citizens Advice frequently has to pick up the pieces when claims farmers leave consumers high and dry. Its 2004 report, “No win, No Fee, No Chance”, referred to a woman who had tripped and suffered cuts and bruises. Three years later, she was offered £500 compensation from the company concerned, but on the advice of a claims management company she it turned down and was encouraged to borrow money to pursue the claim. She eventually won £1,200 but that was deducted from her loan, leaving a shortfall of £950, which is still accruing interest. Clearer information about the risks and the likelihood of additional costs that would have to be met from her own pocket might have led to a better outcome.

Which? has recently carried out research into claims management companies dealing with endowment mis-selling and found wide variation in the fees charged and services given. It also found evidence of scaremongering by some claims management companies, which suggested that claims brought by individual consumers themselves would almost certainly fail. The evidence is actually to the contrary.

My Department and the Advertising Standards Authority have recently funded comprehensive market research into the impact of claims advertising, which, among other things, confirmed that people have limited understanding of what is involved. Terms such as “No win, no fee” are often misinterpreted and the need for a third party to be at fault is not always apparent. The research is being presented to the bodies responsible for the various advertising codes, and they are considering whether changes to the codes are necessary.

Mr. Philip Hollobone (Kettering) (Con)
National Accident Helpline is based in my constituency and has a strong reputation in the field. The company has pointed out that the definition of financial services or assistance in clause 3(3) is far too broad and could capture such groups as before-the-event insurers, liability insurers and individuals passing on claims to solicitors. The company feels that the Minister should provide more clarity about who the Government actually want to be caught by that mechanism.

Bridget Prentice
We want to capture people who abuse the system and who do not give consumers all the information they need to make a clear and considered decision. Obviously, there will be costs and I shall talk about them later, but we estimate, for example, that the cost of direct regulation could be up to £1 million a year. However, that is not a huge cost in terms of ensuring that consumers get a fair deal. In some cases, people end up with massive debts as a result of bad, or no, advice.

I want to make it absolutely clear that we firmly believe that anyone with a genuine claim should be able to make it quickly and easily, but vulnerable people are being targeted so additional safeguards are needed. We want greater transparency, better quality control and a better service for consumers.

Mr. Kevan Jones (North Durham) (Lab)
Does my hon. Friend agree that it is important that claims handlers who sell after-the-event insurance should be caught by the regulation? Companies such as FreeClaim IDC—a scam organisation in the north-east—make most of their money not from the claim that they sell on to solicitors but from the “insurance” policy that they sell to claimants.

Bridget Prentice
I shall not comment on the individual company that my hon. Friend mentions as I do not know the details, but he is right to point out that it is scandalous, and a scam, when people think that their case is being made on the basis of their understanding of no win, no fee, but discover that because they signed up for an insurance premium they are paying back large amounts over a long period to companies that make large profits as a result.

Part 2 provides a proportionate and responsive framework for regulating the industry. Clause 3 defines claims management services and provides an order-making power to target the regulation in specific areas. Companies will need to seek authorisation only if they are providing a regulated claims management service. We intend to provide by order that the regulated services include personal injury, mis-selling of financial products, employment, criminal injury compensation and housing disrepair. The Bill is flexible. It allows new areas to be brought into the regulatory net as problems arise and it will allow areas to be removed from regulation if the problems subside.

Clause 4 allows a range of options for delivering regulation. We want an efficient solution that will be effective for the benefit of consumers. We are entering a period of considerable change in the legal services market. Last month I published a draft Legal Services Bill, which will reform the regulatory structure of legal services. I expect the regulation of claims management services eventually to be integrated into that structure. Another uncertainty is the impact of statutory regulation on claims management companies. I have to tell the House—in a sense this reflects the point raised by the hon. Member for Kettering (Mr. Hollobone)—that that is unpredictable. Recent analysis by Datamonitor predicts that the industry might shrink considerably, because once stringent regulatory standards are applied, false claims will, by their nature, disappear. In the short term, we need a flexible solution that can tackle the worst abuses. A longer-term solution can then be found once the landscape is more certain and we can have a more considered look at it.

Mr. Alan Beith (Berwick-upon-Tweed) (LD)
Is it not time that we knew what the Government’s preferred option is, given that the clause allows the regulator to be an existing organisation, a non-departmental public body or the Secretary of State. When will we know the Government’s preferred solution?

Bridget Prentice
I could hardly have handed the right hon. Gentleman the question, but the next line in my speech is: we have considered various options on the best way in which to proceed, including whether there should be a role for the Claims Standards Council. I can confirm that the Department for Constitutional Affairs will initially regulate the industry directly. My right hon. Friend the Secretary of State will be the regulator. The core elements of direct regulation will be: the Secretary of State as regulator, with day-to-day responsibility for regulation delegated to a civil servant with the appropriate skills and experience; a monitoring and compliance function, contracted out to a trading standards unit responsible for supporting the Secretary of State in carrying out authorisation, monitoring, complaints and enforcement; and a non-statutory advisory committee made up of representatives of the financial services and insurance industries, the legal profession, consumer groups and the claims management sector.

Our prime concern is to safeguard consumer interests. To that end, those wishing to provide claims management services will be required to seek authorisation from the regulator. The system will have teeth. As a condition of authorisation, authorised persons will be required to comply with strict rules and any person breaking the rules risks having their authorisation suspended or removed. There will be a clear mechanism for dealing with consumer complaints and authorised persons will need to have indemnity insurance. I hope that that covers the right hon. Gentleman’s question.

Mr. Heald
Does the Minister not understand that many of us are extremely disappointed that it is not a well established regulator in the financial field that is taking on the task? The Financial Services Authority or the Office of Fair Trading would be much more preferable, because they are experienced. We are just flying blind with a temporary lash-up solution. It will not be anywhere near enough, given the sort of people who run the claims farmers.

Bridget Prentice
The hon. Gentleman seems to be the only person in the House who does not know that neither the OFT nor the Financial Services Authority wanted to do the job. My right hon. Friend the Secretary of State will do it, with, as I have already pointed out, a senior civil servant and a trading standards organisation to oversee matters. Once the structure in the draft Legal Services Bill is in place, these things will all be part of that regulatory system.

Simon Hughes
I was smiling at the picture of the Lord Chancellor, as he gives up his speakership of the Lords, becoming the regulator with teeth. Following the Minister’s helpful answer to my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), will she just add one more comment about the Government’s thoughts on the future? At the beginning, the regulator will be the Secretary of State. Is that intended to be a permanent solution or is it intended that, in time, we will move on and that, for example, one of the regulators that comes out of the draft Legal Services Bill will do the job?

Bridget Prentice
The hon. Gentleman has got things absolutely right. This is intended to be an interim solution. In a sense, the Bill itself is an interim solution before the draft Legal Services Bill, and the structure that it provides, come into place. It is the intention that the regulation would come under the umbrella of the legal services board and the frontline regulators that will be in place.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab)
Will my hon. Friend ensure that the people who are going to be involved in the regulation liaise with the coal health team at the Department of Trade and Industry, because they have got innumerable examples of the scams that are being used? It would be good for the people who will be involved in the regulation to know how those scams work.

Bridget Prentice
My hon. Friend makes an important point. We are all aware of some of the atrocious behaviour that has taken place in some areas on the coal health scheme. I take his point and will make sure that the lessons are learned so that that is not repeated.

The regulation needs to be proportionate. Clause 5 gives the Secretary of State the power to exempt persons or classes of person. Our central focus must be to tackle commercial claims farmers. We therefore intend to exempt solicitors, barristers, legal executives and those who are subject to regulation by the Financial Services Authority. However, those exemptions will apply only to the extent that those concerned are already regulated in the provision of claims management services. A solicitor who offers claims management services through a business separate from his practice would still need to be authorised. That approach will avoid duplication in the regulation of claims management activities, although some organisations may find that they are regulated by more than one regulator for different activities. We have no wish to impose unnecessary burdens on those who provide valuable services on a voluntary basis. Individuals who offer advice voluntarily, such as those working on a voluntary basis in a legal advice centre, are specifically excluded from the scope of the legislation.

Tony Lloyd (Manchester, Central) (Lab)
Does my hon. Friend accept that, as with solicitors and voluntary organisations, trade unions provide a vital service to their members and members’ families and that, where those trade unions operate properly on a not-for-profit basis, there is a strong case for exemption, as long as there is a form of internal regulation? Will she say how the Government intend to proceed on the concept of the exemption of trade unions where they are not operating as claims farmers, as the Union of Democratic Mineworkers perhaps has done in Nottingham?

Bridget Prentice
Amazingly, my hon. Friend again brings me to my next point. He is quite right about not-for-profit organisations, voluntary organisations and the vast majority of trade unions. We intend, therefore, through secondary legislation, to exempt charitable organisations that provide claims advice and to exempt independent trade unions, where they provide services to their own members and their own members’ families.

I know of and agree with the genuine concerns about the activities of a small number of trade unions, particularly in relation to coal health compensation schemes. My right hon. Friend the Secretary of State and I take those concerns seriously. However, few would dispute the high quality of legal services provided by the vast majority of trade unions to their members. The power to exempt by secondary legislation will give us the necessary flexibility to exempt trade unions, but, where appropriate, that can be withdrawn for individual unions where the consumer is losing out.

Mr. Heald
I welcomed the second half of the sentence. Does the Minister not accept that there is concern that trade unions are completely unregulated in this area? If she is saying that solicitors, the majority of whom behave properly, and all other professionals in the area are to be regulated, how can she possibly justify exempting trade unions, especially given the concerns about the way in which some trade unions have behaved? Is that simply because the Labour party is funded by the trade unions and many unions are solvent only because of their claims management activities?

Bridget Prentice
Quite frankly, I will leave the last part of the hon. Gentleman’s comments for my hon. Friends to dismiss appropriately.

The exemption will apply to independent trade unions on the certification officer’s list. If the hon. Gentleman thinks that such trade unions are not already subject to a form of regulation, he misunderstands some of the legislation that the Conservative Government put in place. Trade unions that are not classified as independent will need to seek authorisation, as will those that provide regulated claims management services to non-members.

The Secretary of State will be able to attach conditions to an exemption. We will draw up a code of practice with the trade union movement that will provide a benchmark by which trade unions’ provision of claims management services can be judged. The Secretary of State, as the regulator, will take into account evidence of any breach of that code when considering whether to remove the exemption of trade unions.

Mr. Dismore
I wholeheartedly welcome part 2 of the Bill, unlike part 1. As a former trade union solicitor, I think that the trade union schemes are important, especially owing to the way in which test cases can be financed through unions’ legal systems. The last big case that I did before I was elected to the House was against the former Home Secretary, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard). It was supported by a consortium of 11 trade unions and led to the end of attempted reforms to the criminal injuries compensation scheme, which would have cost the victims of criminal injuries a sum in the region of £150 million.

Bridget Prentice
My hon. Friend makes his point well.

I should tell the hon. Member for North-East Hertfordshire (Mr. Heald) that I know from the numerous discussions that I have had with trade unions that they generally do not charge for their services when acting on behalf of their members. We have already condemned the practice of organisations that abuse the system and would thus be caught by the Bill.

The new framework for legal services regulation will provide a suitable opportunity to review the effectiveness of the arrangements. For firms falling within the scope of the regulator, we need to make sure that the regulation can be enforced effectively. The regulator will thus have the power to investigate breaches of the rules and the code of practice. He will be able to require the provision of documents and to obtain a warrant to enter and search premises. The regulator will also be able to impose sanctions, including suspension and withdrawal of authorisation.

Mr. Kevan Jones
Does my hon. Friend agree that the hon. Member for North-East Hertfordshire (Mr. Heald) was actually correct when he said that trade unions are not covered in this area at present? However, they will be covered when the Bill is passed because the vast majority of trade unions, given their high standards, will be able to meet the code of conduct that she is outlining, whereas the rogue elements, such as the UDM and others, will fall foul of it. Does she further agree that trade unions do not charge for their legal services at the moment because, since we have had conditional fee agreements, money that comes to the union, which allows it to fight the test cases, is brought back as a success fee from the other side?

Bridget Prentice
My hon. Friend is absolutely right. Labour Members understand the role of trade unions in looking after the interests of their members, although, in fairness, we should not expect a Conservative spokesman to do so. We will draw up a separate code of practice for trade unions under the exemption through consultation and discussion with the TUC. I am sure that all trade unions that wish to be part of the system and to look after their members’ best interests will abide by the code of practice.

Mr. David Hamilton (Midlothian) (Lab)
I thank my hon. Friend for giving way, as she has done many times. Will the code of practice reflect the amount of work that is done between trade unions and the voluntary sector—there is a cross-over every single day? I represent a Scottish mining area and, indeed, am a member of the National Union of Mineworkers. In my office, it is common practice to discuss every single day with the voluntary sector and citizens advice bureaux how we can get best practice in the area. That should be recognised in the code.

Bridget Prentice
My hon. Friend makes a good point. It is not surprising that Labour Members know and understand that vulnerable people, whether they are members of trade unions or individuals who go to citizens advice bureaux, need expert legal help. Trade unions, citizens advice bureaux and other organisations are freely available to give such help. We should commend them for doing that, rather than suggesting that they do so for their own profit.

Let me return to the regulation. If people carry on providing claims management services regardless of the regulation, the regulator will be able to apply for an injunction to prevent them from continuing to provide claims management services while he investigates and gathers evidence to proceed with a prosecution. If necessary, he can also request a warrant to enter and search premises. Anyone who is found guilty of the offence could face a term of up to two years’ imprisonment, a fine, or both. I think that I can say to the House that the cowboys’ days are numbered.

Mr. Hollobone
We would all support the end of cowboy practices in the sector. However, it is important to companies such as the National Accident Helpline, which is in my constituency, that the Bill create as level a playing field as possible. Given the good reputation of trade unions that has been mentioned by Labour Members, should not the burden of proof be the other way round? Should not the Bill cover everyone? If trade unions and others have a good reputation, they could then prove why they should be exempt.

Bridget Prentice
The very fact that we are having this discussion demonstrates that the trade unions, voluntary organisations, the Law Society and other bodies with different forms of regulation have shown that the exemption is an appropriate way of proceeding. I repeat for the hon. Gentleman’s benefit that anyone who is given an exemption, but breaches the code of practice, could be brought back into the regulatory framework. The beauty of the Bill is that it is sufficiently flexible to allow that to happen. The comments of Labour Members show that trade unions are doing excellent work in the vast majority of cases. We can have every confidence that that will continue under the exempted procedure.

The framework provides flexibility to respond to a changing market. It is proportionate and closes the regulatory gap, and it will provide similar regulatory requirements for claims farmers and solicitors. It will also send out a powerful message to those who attempt to evade regulation.

Mr. Nicholas Brown (Newcastle upon Tyne, East and Wallsend) (Lab)
I sense that my hon. Friend is drawing her remarks to a close. Before she concludes, can she tell us anything about mesothelioma and the recent case in the House of Lords? As she is aware, there is a substantial desire—certainly among Labour Members—to return the law to where it stood before the recent judgment. Is the Bill a suitable vehicle for doing that, and will the Government bring forward proposals so that the House can vote either to uphold the law as it is at present, or to put it back to what it was before? The House should make the final decision.

Bridget Prentice
My right hon. Friend makes an important point about a tragic, serious case. He knows that the Secretary of State and I have a great deal of sympathy with the concerns that he and others have expressed about the judgment in Barker v. Corus and that we are very sympathetic to the claimants. The judgment gives rise to a number of serious and complex issues, and it is important that we get the answer right. I know that several of my hon. Friends have had discussions not only with the Secretary of State but with the Prime Minister himself, and the Prime Minister said yesterday that we are looking carefully at the context of this Bill.

We hope to be in a position to make an announcement shortly. I would be happy if it were possible for something to be done through the Bill, but it may not be the appropriate vehicle—we have people considering the matter carefully. I can assure my right hon. Friend that the Government are committed to doing all that we can to ensure that the victims in these cases are properly looked after. I will ensure that discussions on the issues continue and that we come to a conclusion as swiftly as possible.

Paddy Tipping
I am grateful to the Minister for those helpful points. During her discussion and investigation will she look at another asbestos-related issue—pleural plaque? A large number of cases are currently stayed, awaiting a House of Lords judgment, after 20 years of paying compensation for pleural plaque. This, too, is an issue that deserves attention.

Bridget Prentice
I know of the work that my hon. Friend has done on this matter. He has been assiduous in raising the issue with me and with others. I do not know whether it is appropriate to include that in our discussions on mesothelioma, but I hear what he says and we will certainly consider the matter.

Mr. John Greenway (Ryedale) (Con)
The Minister has been extremely generous with her time, and I was reluctant to intervene, except that she has made a very important announcement: the decision that the Department for Constitutional Affairs will regulate the claims management industry. Given what she said about how that will fit with the legal services reforms planned by her Department, will she be a little clearer about the timeframe she envisages for the introduction of the regulatory framework? Given the mood of the House, does she agree that if in the meantime the unregulated claims management industry is to continue, there is a great deal more that the Law Society could and should do, through its code of conduct, to influence its members’ choice of who to work with in managing claims?

Bridget Prentice
It is not for me to second-guess the discussions of the business managers in the House about how the Bill will progress, but I think that it is our intention to have the regulations, which hon. Members will want to look at, ready by October. There will then be a transitional period during which applications will be made to the regulator, who will consider them. We hope to have the system fully operating by April 2007. I accept the hon. Gentleman’s point about the Law Society, and indeed others who already have a regulatory framework in place. They should now be looking to ensure that they take a more proactive stance on these matters. I should say that the Law Society is already taking a number of firms, particularly those involved in the coal compensation scheme, to its disciplinary tribunal. It is aware that the House takes a firm view on these matters.

Judy Mallaber
Returning to mesothelioma, I had a very sympathetic response from the Prime Minister at Question Time yesterday, and I appreciate the Minister’s remarks. I note that the Bill’s long title talks about specifying

“certain factors that may be taken into account by a court determining a claim in negligence”

and that Lord Rodgers in his strong dissenting judgment identified precisely the factor that was wrong in the Lords judgment in making liabilities several rather than joint and several, so I would have thought that it was perfectly possible to amend the Bill. Will the Minister let us know sufficiently early how the Government intend to proceed so that Members may decide whether we want to table amendments, if appropriate?

Bridget Prentice
I take my hon. Friend’s point. I know that counsel and others are looking at the decision and, as I said, if there was any way to include the matter in this Bill I would be very happy to do so. However we deal with the issue, what is paramount for the victims of mesothelioma is that we get it right. I will try to make sure that hon. Members have the advice that I am given in sufficient time for them to raise it, if they wish, later in the proceedings on the Bill.

John Mann (Bassetlaw) (Lab)
On the timetable, the Government have a unique agreement with a claims handler, Vendside Ltd, signed in January 1999, plus two separate agreements with the UDM. Should the Bill receive its Second Reading, will the Government ensure that action is immediately taken to build consumer rights into the agreement with Vendside, which can be defined in law only as a claims handler? After all, the Government, as a signatory to that agreement, have property rights over it.

Bridget Prentice
My hon. Friend makes a very important point. As someone who advocates the rights of the consumer and says that we need to put the consumer at the heart of legal services, I will certainly look at the issue he raised to ensure that we, too, are compliant with the principle that I have outlined today and on a number of other occasions.

Mr. Dismore
Will the Minister give way?

Bridget Prentice
I will give way one final time.

Mr. Dismore
I am grateful to my hon. Friend; she has been very generous. On mesothelioma, we have heard a shopping list that includes Barker v. Corus and pleural plaque. There is a third injustice: the impact of the Crown Proceedings (Armed Forces) Act 1987, which excludes liability claims for those who were exposed to asbestos prior to 1987 but whose symptoms emerged many years later. Will my hon. Friend look at that Act sympathetically to see whether those who were exposed to asbestos many years ago—perhaps during military service or during civilian work for the Army or, as is more likely, the Navy—may be able to bring claims if their symptoms arose after 1987?

Bridget Prentice
We want to look at mesothelioma cases in the round. That is why I have been unable to go as far as I might like today—we must make sure that we get this right. We do not want to discover that we have left loopholes. I take my hon. Friend’s point, and I am sure that it will be considered during that discussion.

We have worked constructively with the Opposition in the other place and amendments have been made as a result. We have already published a policy statement that outlines how we intend to use the delegated powers in the Bill, and model rules that will provide an indication of the standards that are likely to be applied to organised persons. Copies of both documents are in the Library. We will be consulting on draft statutory instruments later this month while the Bill is before the House. I will ensure that copies are available to right hon. and hon. Members as soon as possible.

We have undertaken targeted consultation on our proposals to regulate claims management companies and there has been widespread support from key organisations, including Citizens Advice, which has said that it is delighted with the Bill’s tough but flexible approach to protecting consumers.

The Secretary of State’s consumer panel on legal services reform has had its remit extended to advise on the development of the regulation. The panel was set up originally to ensure that wider reforms of the legal services market were focused on the interests of consumers. It, too, is fully behind the Bill, with the wider agenda of putting the consumer at the centre of the system.

As I have said, there are many reputable claims companies, but there are also cowboys. They need to know that we will not stand for shoddy service and poor advice. Consumers deserve better than that. Through the Bill they will get a better service. I commend the measure to the House.

13:31:00

Mr. Oliver Heald (North-East Hertfordshire) (Con)
We are all grateful to the Minister for setting out the details of the Bill and it aims. It was the subject of considerable scrutiny in the other place, and I pay tribute to Lord Hunt of Wirral, who made some important improvements to it through his constructive approach. I believe that his research team, under Andrew Parker, has done a great deal of work to help with the process.

We welcome the Bill because we recognise the need to tackle the perception of a compensation culture. It is perhaps more a perception than a reality, but it is, none the less, having an important effect, and the problem of risk aversion should not be understated.

It is important that the Government are issuing guidance to public bodies on what constitutes negligence. I disagree with the hon. Member for Hendon (Mr. Dismore)—he and I, as lawyers, understand these concepts. To educate people, particularly those in public bodies who want to run school trips and the like, is a sensible thing to do. The hon. Gentleman may wish to know that the Association of Personal Injury Lawyers—APIL—has advocated such education. I would have thought that the hon. Gentleman supported that.

Mr. Dismore
The hon. Gentleman has misunderstood the point that I was making. I said that we should do as the association advocates, but I said that we do not need clause 1, which gets in the way, because it does not accurately restate what the law is.

Mr. Heald
The hon. Gentleman is right to support me in saying that we need education, but wrong to say that we do not need clause 1. It has a declaratory effect so that people know what the law is, and know that it is set out in statute. I cannot imagine why the hon. Gentleman is trying to nitpick over the wording of the clause when it has been made clear from the outset that its purpose is to declare what the existing law is, and to spread that knowledge more widely. To read the clause as though it is supposed to be a complete codification of the law, or anything of that sort, is a complete mistake.

Mr. Dismore
As the Lord Chief Justice said, we cannot encapsulate the common law in one sentence. I can only assume that the hon. Gentleman has not read the entirety of Lord Hoffmann’s judgment on the Tomlinson v. Congleton borough council case. Lord Hoffmann makes it clear that discussions on what is now called “desirable activities” should not apply where there is no genuine informed choice, such as in the case of employees. There is no exclusion within clause 1 to reflect the important qualification that Lord Hoffmann applied to it. Therefore, it does not accurately represent the law.

Mr. Heald
The hon. Gentleman is at cross purposes with me on this matter. Is he seriously saying that we should make Lord Hoffmann’s speech in the Tomlinson case clause 1? If so, I cannot agree with him. Clause 1 is supposed to be a clear statement of an aspect of the law that needs to be declared so that people can go on school trips, enjoy their scout outings and the like. We do not need to try to second-guess the judges in the way that the hon. Gentleman is suggesting. The idea that a judge is not able to decide on and explain a “desirable activity” is preposterous.

Mr. Beith
Is it the hon. Gentleman’s view that clause 1 gives to a volunteer leader or a scout master any legal protection that he does not now enjoy following Tomlinson?

Mr. Heald
It explains to that person exactly what the law is, excluding the common misconceptions that might have been encountered as a result of the perception of a compensation culture, which the right hon. Gentleman’s Committee analysed in a helpful way for us all.

Mr. Brazier
As for the Tomlinson case, the plain fact is that the lower courts have not responded in the way that the House of Lords expected. I shall be setting out in some detail later this afternoon a case in a court in Manchester that was heard during the Bill’s proceedings in the House of Lords, which illustrates the point.

Mr. Heald
There might be cases that have been decided and have received a good deal of public attention, which should have been appealed and were not. APIL has made that very point. I am interested to see the hon. Member for Hendon (Mr. Dismore) nodding.

Having accepted the point that my hon. Friend the Member for Canterbury (Mr. Brazier) makes—we will all be keen to hear what he has to say because he has led the campaign in the House for a clear statement of the law in statute, and I congratulate him on that—we, like the Government want to see the balance struck correctly. That should ensure that people are properly compensated in genuine cases of negligence. However, we need to discourage a culture in which people are encouraged to pursue trivial or spurious claims in the belief that that will make them a great deal of money, either through awards by the courts or under out-of-court settlements.

We believe some parts of the Bill could benefit from greater clarity. I will table amendments to clause 1. I hope that we can proceed on a basis of consensus to try to produce a Bill that has overwhelming support in the House.

Mr. Greenway
Does my hon. Friend think that some clearer definition of what “desirable activity” means will be helpful or otherwise?

Mr. Heald
My view is that the courts are capable of deciding what is or is not a “desirable activity”. The expression comes from the very judgment to which the hon. Member for Hendon referred. The use of certain words in clause 1, including “particular” in several places, needs examining further. I shall table amendments on that point.

Mr. Dismore
Will the hon. Gentleman give way?

Mr. Heald
I think that I have given way sufficiently to the hon. Gentleman.

Lembit Öpik 
The hon. Gentleman will be aware that there has been considerable consultation with many voluntary organisations that regard clause 1 as materially beneficial to them. Does he agree that in Committee we need to examine in great detail the question that he has raised, in addition to other questions of definition that have been bouncing around the Chamber? As we all agree with what we are trying to achieve, the crucial question is whether a measurable difference will be made to the organisations for which the Bill has primarily been tabled. I hope that the hon. Gentleman feels that we can find consensus on that.

Mr. Heald
I agree. There is no doubt that we are getting to the point where we need clause 1, which is a clear statement of the law and something around which we can all rally.

Tony Lloyd
The hon. Gentleman has said that he, on behalf of the Opposition, is looking constructively to improve the Bill. In that sense he accepts the general spirit of what the Bill is designed to achieve. We have debated mesothelioma, and it is difficult for people to accept the Barker judgment. What is the Opposition’s position—will they support the Bill if an amendment is tabled to reverse that judgment? Do the hon. Gentleman’s colleagues in the House of Lords share that position?

Mr. Deputy Speaker 
Order. Before the hon. Member for North-East Hertfordshire (Mr. Heald) responds, I should say that we are in danger of reaching a stage where the Bill will not need to go into Committee. I appreciate that this is a detailed matter, but I should be grateful if he were not drawn away from the basic content of the Bill, and did not express a view on what it might include.

Mr. Heald
The Bill tries to deal with the way in which the law of negligence operates, as the hon. Member for Manchester, Central (Tony Lloyd) suggested in the case of mesothelioma. Mesothelioma cases should be dealt with rapidly, preferably out of court because, given the terminal nature of the condition, people with a diagnosis have only a short time—often, only 12 to 18 months—in which to act. A speedy out-of-court scheme is the best way forward. Many victims of mesothelioma cannot make a claim, because they do not know who was their former employer’s insurer. I am happy to hold discussions on Barker with the Minister once she has received legal advice but, in addition, we must try to improve the tracing service so that more people can make a claim. On the question of who pays, it is the people who did wrong in the first place and their insurers who should do so.

I accept that it is important to provide a simple, workable procedure, but one of the problems with Barker is that people have evaded their responsibilities—[Interruption.] Well, we must try to find ways of making insurance companies trace their records. Better insurance companies already do so, but we must encourage others to take action, too. We are keen to enter into constructive discussions with the Government on the Barker judgment once they have received advice, but more needs to be done.

Mr. Clapham
Is the hon. Gentleman therefore in favour of a no-fault liability scheme financed by the insurers and administered by Government to deal with mesothelioma?

Mr. Heald
The hon. Gentleman has got the facts wrong. The main liability does not fall on the insurers but on the Government, as claims are made against the Ministry of Defence, schools and so on. There is therefore a case for Government, insurers, and companies that cannot trace previous insurers to come together in a simple scheme. This is an urgent problem, because of the speed with which the condition progresses, but it will be with us for a very long time indeed. Most estimates suggest that mesothelioma cases will peak in 2020, which is a long way away so, for the future, it is important to introduce a simple system that works. I hope that the Government can act as an honest broker, but we should also bear in mind the fact that they have an interest, too. As I said, however, we are prepared to take a constructive approach.

In addition to the Constitutional Affairs Committee, which produced an excellent report, may I thank the Better Regulation Executive, which has served us well by publishing a very good report, “Better Routes to Redress”? That report cited a survey of 212 councils in England and Wales carried out by Zurich Municipal and the Local Government Association, in which 85 per cent. of respondents agreed that the

“introduction of conditional fee arrangements has increased the annual cost to my authority of handling compensation claims”.

In addition to the abolition of legal aid for personal injury cases, the growth of claims management companies has fuelled the development of a compensation culture. The Constitutional Affairs Committee concluded that introduction of conditional fee arrangements and a class of unregulated intermediaries acting as claims managers have

“adversely affected the reputation of legal services providers. The increased awareness of the public that it is possible to sue without personal financial risk, when combined with media attention to… unmeritorious claims being brought, has contributed to a widely held opinion that we do indeed have a compensation culture”.

My hon. Friend the Member for Canterbury (Mr. Brazier) and other hon. Members have cited many such cases, and I should like to make special mention of the examples provided by the scouts and the Field Studies Council. We have all seen headlines in the newspapers: a teacher won £55,000 after slipping on a chip at school; a boy received £4,000 after falling 1 ft from a tree; and a council tenant who had drunk 10 pints fell in the middle of the night as he tried to change a light bulb. I am sure that the hon. Member for Hendon would say that those are meritorious claims, but they give rise to questions, and they are certainly food and drink to the tabloid newspaper industry.

Mr. Dismore
I am loth to accept tabloids as a guide to what is happening in the law courts, because they rarely reported accurately the cases in which I have been involved. The most famous example is the McDonald’s coffee case, which was successful because, despite numerous warnings, McDonald’s super-heated its coffee to such a high temperature that the individual who brought the case suffered third-degree burns. Those facts were not reported properly or fully.

Mr. Heald
What people think is important, too. In “The Man Who Shot Liberty Valance”, it was said once a fact becomes myth in the west it is the myth that is printed. There is a perception that there is a compensation culture, and we cannot ignore that perception. I do not agree that we should ignore educational leaflets.

David Howarth
The hon. Gentleman began by accepting that in reality there was not such a problem, as the number of claims has fallen. Those of us who have doubts about clause 1 want to know how passing a law will solve a problem that relates to perception, not reality.

Mr. Heald
I know that this is not popular in the Cambridge law faculty, but we can deal with the problem by accepting a clause that declares what the law is and advertising widely what its effect will be. According to the Better Regulation Executive, tort costs in the UK, as the hon. Gentleman said, are low compared with those in other countries. The Law Society, the Country Land and Business Association and others say:

“The fact is, Britain spends less on compensation than almost any other industrialised country…the number of accident claims had remained static and in fact fell last year” .

Mr. Brazier
It is not inconsistent on the one hand to accept the fact that there is not a general compensation culture, and on the other, to argue that the attitudes of the lower courts towards sport and adventure training is deeply damaging. In the USA, there are five times as many compensation claims as there are in the UK, but most American states have a provision that protects sport and adventure training from the ordinary standard of negligence in court cases.

Mr. Heald
My hon. Friend makes an important point, and we all look forward to his speech.

Excessive risk aversion and the mistaken perception that it is caused by litigation are serious problems, and the reports that I cited provide various examples.

Jeremy Wright (Rugby and Kenilworth) (Con)
My hon. Friend speaks about risk aversion in the context of civil negligence claims. He will know that those of us who worry about clause 1 are concerned that it does not contain any provision affecting criminal prosecution by the Health and Safety Executive. Many of those who are risk averse are worried about the HSE taking criminal action against them. Does my hon. Friend agree that that should be dealt with in clause 1?

Mr. Heald
The matter needs to be reviewed but, given that the Bill deals with the civil aspects of compensation, I am not convinced that clause 1 is the place to do so. My hon. Friend raises an important point, which needs to be fully considered and reviewed. It would be interesting to hear from the Minister, perhaps later, whether the Government intend to do that.

When I was speaking to Norwich Union earlier this week, its representative explained to me that the current common law is clear and well established, and that Norwich Union questions whether new legislation on negligence is necessary. That was also the view of the Constitutional Affairs Committee, but we do not go that far. We believe that there is a case for clause 1, and that it is important to get the wording right. We have some comments to make about that in due course. As my noble Friend Lord Hunt made clear in the other place, the courts will have to build up their case law on the basis of the Bill if it is passed. I agree with the Minister that that is unlikely to create the huge difficulties that some claim.

Clause 2 recognises my noble Friend’s wish to support rehabilitation and early settlement of claims. The clause is one of his attempts to establish that if at an early stage an insurance company or an employer makes an apology and offers treatment, remedial works or whatever is necessary, that should not prejudice any later legal action.

My noble Friend achieved an important change in the law that will help to encourage mediation, boost rehabilitation and hopefully prevent cases from coming before the courts except where absolutely necessary. Citizens Advice and the Association of British Insurers are keen that such proposals should be pursued, as am I. We are pleased that in the other place the Under-Secretary of State said that she would not argue further about clause 2. I hope that the Minister will give us an assurance that she does not intend to remove or substantially amend it in this place.

One aspect that we intend to pursue is personal responsibility. It is an important issue and we shall press the Government to define the responsibilities of individuals and to consider whether in certain circumstances that might provide a defence of individual negligence. The matter has been considered in other jurisdictions. There is a problem for those who run leisure parks and other institutions where there is an element of risk. If someone is grossly irresponsible and negligent, it should be possible to defend a claim on that basis.

The Minister mentioned the case of Barker v. Corus, and I have set out our views and our constructive approach on that.

Have the Government any plans to deal with a problem pointed out by Citizens Advice? In hospitals the advertising of claims management services and legal services seems rather inappropriate. When the Minister reflects on the regulation of claims management companies, will she consider whether advertising is an aspect that needs proper attention?

Although we agree that regulation is long overdue, we believe, as I said earlier, that the trade unions need to be considered. I pay tribute to the work of many trade unions. I have worked as a volunteer in advice centres and undertaken cases for trade unions, and many of them provide an excellent service in the area of personal injury and employment law. However, if solicitors and all the other groups are to be regulated, is it possible to exempt the trade unions, which would be completely unregulated in this area?

It is mentioned that the Union of Democratic Mineworkers has had its problems, but that it is not the only trade union that has been criticised for making money out of referrals of this sort. It is said that many trade unions are solvent only because of this area of their activities. I notice that the right hon. Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown) seems to agree with me.

John Mann
Said by whom?

Mr. Heald
If the hon. Gentleman asks around among his trade union friends, he will find that many of them would not disagree with that.

John Mann
rose—

Mr. Heald
I do not want to get into a long argument on that. I have had a good go on it. It is certainly said by me, and if the hon. Gentleman disagrees, he can take it up with me some other time.

The Government suggest that the regulator should be the Lord Chancellor, but that is not adequate. People expect a regulator who will deal with organisations in the financial and insurance sector. Surely it is not beyond the Minister to persuade one of the economic regulators to take on the role. It would be better if the Office of Fair Trading or the Financial Services Authority could be persuaded. We agree that the Claims Standards Council is not the answer. We want a proper regulator with an established reputation who can put a little fear into those who have been running those businesses in a way that has not been ideal.

The question remains whether the proposed regulation is adequate. Our view at this stage is that it does not seem to be. On the breadth of regulation, will the Minister ensure that regulation does not interfere with legitimate practices, such as insurers offering treatment or vehicle repairs to insured third parties at an early stage? If that is to be regulated or even prohibited, as is suggested, that would interfere with the agenda of trying to encourage early settlement and rehabilitation.

We will want to explore these many matters in Committee. In general, we welcome the Bill. It is not perfect in every respect. It provides us with an opportunity to tackle the perception of a compensation culture, to ensure that some common sense and proportion are injected into compensation cases, and to ensure that unscrupulous claims management companies are unable to exploit the vulnerable. The Bill has our support this afternoon.

13:58:00

Mr. Nicholas Brown (Newcastle upon Tyne, East and Wallsend) (Lab)
I begin by congratulating my hon. Friend the Minister on her introduction to the Bill. One of the great pleasures of being in this place is to be able to follow an expert speaker speaking with knowledge on a specialist subject. Unfortunately, one does not always get the opportunity to do that, and on this occasion I do not. The knowledge of the hon. Member for North-East Hertfordshire (Mr. Heald) about the way in which trade union legal services work does not show hands-on experience. He seemed a little hazy about the real issue involved in the mesothelioma cases as well, although my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) tried to put him right about that.

I shall confine my remarks to part 2, which deals with claims management services. It is the Government’s intention, as my hon. Friend announced today, that the Secretary of State would be the regulator. That is, I think, intended only as a temporary expedient, and the Government’s long-term intention is that the mechanisms that form part of the new regulatory framework for legal services will encompass these arrangements as well. The Minister will correct me if I have got that wrong, but it seems to be the perfectly sensible direction in which we are heading.

I want to deal with three aspects: regulation in controversial areas, which essentially means personal injury cases; trade unions, which I know something about; and the mesothelioma situation. I should declare my interest as a member of the GMB trade union. I was an official of the union before I was elected to Parliament, I maintain close connections with it, and I am proud of my long-standing relationship with it.

Conservative Members have made much of the need to regulate unions, but the Minister made it clear that there will be a code of practice, and that if unions breach it they will lose their exemptions. In other words, if a union behaves like a claims farmer, it will be treated as such. As a Labour Member, I think that that is absolutely right, and I am pretty certain that my right hon. and hon. Friends agree with me.

Mr. Heald
One of the groups regulated under the Bill is organisations that refer cases to solicitors. Unions do that—but they are not regulated, are they?

Mr. Brown
The hon. Gentleman is correct to say that organisations that refer cases to solicitors are regulated by the Bill, and so they should be. The relationship between a trade union and its individual members is based on the rule book, which is itself a contract. The primary reason for joining a trade union is not to get access to its legal services; people join for a whole range of reasons, which are primarily concerned with work and bargaining between the employer and the employees collectively. Alongside that negotiating relationship, trade unions offer a range of services, one of which is the provision of free legal services at the time of need. It is a very different kind of organisation from the claims farmers that we are seeking to regulate, which go out to find whether there is a cause for action, and then, if there is something that can plausibly be made something of, pass it on to a solicitor. They are claims farmers, and should be regulated as such.

Tony Lloyd
My right hon. Friend is right to say that no Labour Member would want any union to operate as a claims farmer without being treated as one. Will he confirm that far from trade unions not being regulated, there is a whole host of legislation that determines how they can deal with their members, gives remedy to members when they are in dispute with their union, and so on? In fact, the Conservative Government brought in quite a lot of that legislation, which this Government have not changed.

Mr. Brown
I am reasonably certain that the hon. Member for North-East Hertfordshire was more enthusiastic about that legislation than I was. One cannot escape the fact that trade unions are highly regulated. They are governed by specific laws, and there is a specific certification officer.

Professional people are deemed to be regulated by their own professional organisations. The hon. Member for North-East Hertfordshire announced proudly that he is a lawyer. Lawyers are regulated by the Law Society. It is worth pausing to consider how well it does that. To help us, we have the report from the legal services ombudsman for England and Wales—incidentally, there is no analogous report about the TUC—in which she examines how well the Law Society has done as a regulator of the legal profession in the most controversial area that we are discussing: the miners’ compensation cases.

I do not have time to read out the whole document, but let me read some of the key findings. The ombudsman states:

“It became clear to me during my investigations that the Law Society had not put into practice their stated approach for dealing with these cases”—

that is, the miners’ compensation cases. She found that the Law Society had

“failed to obtain solicitors’ files or to ask them to provide relevant papers.”

It had

“failed to take account of the individual circumstances of each case…failed to adopt a neutral stance when seeking to conciliate the complaint”—

and—

“failed to put their conciliation proposals in writing to the miners’ authorised representatives”.

What makes this a lot worse, from my point of view, is that those authorised representatives include Members of Parliament. To behave in a high-handed way towards Members of Parliament in respect of individual cases is completely and utterly unacceptable to me, and I think that I speak for a great many Members when I say so.

The ombudsman goes on to say that the Law Society

“failed to consider whether solicitors should pay back in full the fees wrongly deducted from miners’ compensation settlements, and, in addition, compensate miners for any inadequate professional services identified.”

It had

“failed to examine a possible over-payment of the fee to the claims-handling agent…failed to examine the respective roles of solicitors and of the claims-handling agents in the processing of individual compensation claims and failed to examine the question of what advice, if any, solicitors had offered complainants about the claims-handling agents’ fees…failed to examine the relationship between solicitors and the claims-handling agents or to consider whether the relationship had resulted in a conflict of interest between their clients, the claims-handling agents and individual miners, or a conflict between the solicitors’ own interests and those of their clients”—

and—

“failed to consider whether solicitors may have acted in breach of the Solicitors’ Practice Rules…and in breach of the Solicitors’ Introduction and Referral Code”.

In summary:

“In all the Law Society failed to properly investigate the miners’ complaints.”

The ombudsman gives a list of recommendations and says:

“As part of the reconsiderations the Law Society itself should consider paying compensation to the miners whose cases have been inadequately investigated by them.”

That is pretty damning stuff. I am sorry to have read out all the failures, but there are a lot of them. Although the Government are right not to want to regulate twice over—we want only one regulator; I do not quarrel with that approach—the regulation must be properly done. It is clear that in this case it was very inadequately done. It is not for me to set out what the reasons are, but it is for me to assert that it has to be put right. That means that miners must get the justice due to them, and that the lawyers who have taken money that they should not have taken must give it back. We as a House should assert that as a principle, and we look to the Minister to do whatever she can through the powers that her office has to ensure that matters are put right as quickly as possible.

Mr. David Hamilton
My right hon. Friend is talking about the ombudsman for England and Wales. Will he encourage the Minister to have discussions with her opposite number in Scotland to ensure that the legal system in Scotland, too, applies to miners in their just cases?

Mr. Brown
I should emphasise that the report that I quoted applies to England and Wales, but it is not beyond reason that there would be similar circumstances in Scotland. A United Kingdom-based approach to this would be the best way forward.

Mr. Heald
The right hon. Gentleman is right to say that there have been scandals about the way in which solicitors and claims farmers have behaved—and, as we heard from the right hon. Member for Berwick-upon-Tweed (Mr. Beith), the way in which some unions have behaved. The Government are introducing independent regulation for solicitors and claims handlers, but what is happening to the trade unions?

Mr. Brown
Nothing. The relationship is different. Trade unions must adhere to the code of practice that the Minister mentioned. If they do not, and behave like claims handlers, they will be treated as such, as they should be. I should have thought that the hon. Gentleman and I could agree on that.

Mr. Heald
But there is no regulation.

Mr. Brown
There is regulation. The hon. Gentleman makes an anti-trade union point, which is not uncommon among Conservative Members—[Interruption.]

Mr. Deputy Speaker
Order. We cannot have interventions from a sedentary position, and I have a feeling that this argument is becoming somewhat circular.

Mr. Brown
Those are my thoughts precisely, Mr. Deputy Speaker. However, I would like to say a little about where the unions stand on the issue. Most unions do not behave in the reprehensible way described so effectively in that report. In most unions there is a rule-book relationship between the union member and the union as an institution. Legal assistance is available when members want it, not specifically when members have just joined the union. According to the Trades Union Congress, some 64,000 new personal injury cases were taken up on behalf of their members last year by TUC affiliates. It is important for us to do nothing to impinge on that relationship, and the enormous strengths that would not be there if there was a different structure. I know from my experience before I came to the House that trade unions can proceed with cases in difficult areas that become test cases, or vanguard cases. No individual solicitor acting for an individual claimant would have the resources to take on such ground-breaking cases.

I have been involved in settlements relating to industrial deafness and vibration white finger. There have been advances that are largely due to individual unions taking up test cases and funding class actions. I was a young official at the GMB when John Edmonds was the national industrial officer for the electricity industry. He went on to become general secretary of the GMB. We made an agreement with the nuclear industry to try to secure compensation for victims of radiation in the industry, given the possibility of their developing leukaemia. That agreement, gained partly through the law and partly through negotiation, has not yet been superseded in the courts. It has stood the test of time for 30 years. That illustrates the value to working people in difficult, even terrible, circumstances of membership of a trade union that can handle the law astutely and well, and has the financial resources to bring an action much too big for any individual claimant to afford. On the back of successes in the courts, the union was able to use its industrial muscle to negotiate a good, enduring agreement with the employers for people who did not deserve to be victims of the industrial injuries that they had suffered.

That brings me to mesothelioma, which, as most Members will know, is a horrible condition. There is no known cure, although there are palliatives. Alimta, a new drug, helps in some cases, but provides only remission. It does not reverse the condition, although it provides some comfort. Dying of mesothelioma is a horrible way to die, made all the more horrible when people see the sufferings of their loved ones as they go. I believe that we as a Parliament should stand in the victims’ corner, but in any event we should be able to vote on how cases are handled in the courts. It is a question of whether it is possible to join all the potential employers to the action and have the damages assigned proportionately, which used to be the arrangement, or whether it is necessary to identify the specific employer who caused the injury, which is what the new judgment means. It represents a substantial setback for a number of such cases.

The condition takes time to develop. We are talking about working conditions that prevailed in the past, notably in heavy industries such as mining, shipbuilding, heavy engineering, the railways and the merchant marine service. The condition might develop in any area where asbestos was used, perhaps sprayed, as a fire retardant, or a construction material. Those cases are emerging now, and there is nothing that we can do to stop the process. The hon. Member for North-East Hertfordshire was right to say that the number of cases would peak quite some way into the future.

Working practices in industry in those days meant that people would go to one job and carry out a task, and might then perform a similar task on a different project, perhaps for a different employer. It is difficult to identify the employer for whom a person was working at the precise point when he inhaled a specific fibre—not one that was too big to inhale, and not one that was so small that it was exhaled, but one that was just the right size to lodge in the lung and cause pleural plaque and eventually mesothelioma.

Mr. Heald
Will the right hon. Gentleman give way?

Mr. Brown
I am sorry, but I cannot. I am running out of time.

My plea to the House, and to the Government in particular, is for us to be allowed a vote at some stage on whether to return the position to where it was before, or to confirm the new judgment of the House of Lords. I for one would vote for the former, but there is a whole separate set of issues relating to pleural plaque and whether it constitutes an injury. I think that my hon. Friend the Member for Sherwood (Paddy Tipping) was absolutely right to raise the issue, and I agree with him, but the matter is still before the House of Lords and it is probably right for a decision to be made there before we reach our own decision.

14:16:00

Simon Hughes (North Southwark and Bermondsey) (LD)
It is a pleasure to follow the right hon. Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown). Let me deal first with his central point, because it concerns what could be described as a ring-fence issue. If it is possible for mesothelioma to be dealt with in the Bill, my colleagues and I would welcome that and would assist the Government. My honest assessment is that it will not be easily done, but I am sure there is consensus in the House that it is right and proper for us to move as quickly as possible, given the horror, pain, grief, suffering and uncertainty involved, to ensure that the legal position is adjusted and, if possible, redress is provided at the earliest stage. However, we may have to adopt the process suggested by the right hon. Gentleman rather than trying to amend the Bill.

Tony Lloyd
I am grateful to the hon. Gentleman for his clear statement of the Liberal Democrats’ position. Disappointingly, the hon. Member for North-East Hertfordshire (Mr. Heald) delivered a “maybe” rather than an assurance that the official Opposition would support a change in the legislation.

Simon Hughes
The official Opposition must answer for themselves, but the hon. Gentleman has our assurance that our colleagues—notably my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), who has constituency experience and practical knowledge—are committed to speedy progress. If that cannot be achieved here, as I suspect it cannot for drafting and other procedural reasons, I hope that it can be achieved soon. I hope that the position will be clear by the time of the Queen’s Speech in the autumn at the latest, but we may be able to move before then. In any event, we offer our co-operation.

Mr. Dismore 
There is another reason for the matter to be dealt with urgently. The Barker case did not end the story. The Barker decision remitted the case to the High Court for a decision on how risk should be assessed between the different parties, presenting an opportunity for a further chain of appeals leading to the House of Lords yet again. It could be many years before we see a resolution of the issue in the courts.

Simon Hughes
I understand that, which is why I think that we should cut the knot. The matter is before the courts, but there is no reason why we cannot intervene. The situation is paradoxical. We are having a substantial debate about whether a Bill states what the law is or what we think it ought to be in the cases of people who have suffered. Whatever the law is, I believe that Parliament is at liberty, indeed has a duty, to decide what should happen, because there are people outside—constituents and their families—who are waiting for us to do that.

Having heard the earlier exchanges, I suppose that I should make a declaration, although it is not a formal declaration. On the edge of my constituency is the headquarters of the Health and Safety Executive. I have an interest in looking after the interests of the HSE, but it did not lobby me before the debate. Having said that, I shall probably need to talk to it about the Bill fairly soon.

I want to make a couple of general points about the context of the Bill. I am grateful for having been given the opportunity to talk through with the Minister the Government’s approach when she took up her responsibilities and I took up mine. Although the Bill is small, it deals with what a lot of people consider to be big issues—issues that arise all the time. This is real politics that matters in the real world. I did not previously know the figures, but there appears to be no dispute that we are talking about a business that is worth £10 billion a year: in other words, 1 per cent. of our gross domestic product is circulating in the compensation industry.

There are two serious flaws in the current system. First, the various accidents and injuries that occur—collisions, incidents in the park, incidents on trips with scouts or guides—total some £2 billion a year in claimants’ legal costs. Much worse—this figure astounded me, but I have not seen it contradicted—more than 90p in the pound of the money that one gets back in damages is spent on costs. [Interruption.] My hon. Friend the Member for Cambridge (David Howarth) says that that is not right, but even if that figure is too high, this is still a significant issue. Pursuing what is a legal entitlement in civil law to appropriate compensation is often a hugely expensive exercise. So there are many issues to resolve and much work to do on the question of gaining access to justice in the civil world in a fair society.

Paddy Tipping 
Does the hon. Gentleman accept that this is an issue in coalfield communities and for textile workers? For example, women textile workers with conditional fees arrangements backed by a loan often end up owing more than the award that is made. So in that respect, he is quite right.

Simon Hughes
I represent people who worked in the docks and who lived in the old dock-worker community—although perhaps not to the same degree as other Members—for whom the same issues arose. There were significant knock-on effects.

I want to make two other general points. This debate is not unrelated to the great debates that we have had in this place on incapacity benefit, time off work and so on. Sometimes, even though people are physically able to go back to work, they are advised not to do so because the compensation has not been sorted out and the legal case has not ended. We want a healthy and working society, but we also need to get the balance right between people’s liberties and their duties to each other. There are some significant issues to deal with in that regard.

I was not doing this job when the Bill was launched last autumn, so I checked to see what my predecessor, my hon. Friend the Member for Somerton and Frome (Mr. Heath) said then. The title of the first page of his very brief notes was, “Compensation Bill modest but welcome—Heath.” [Interruption.] That was a description of the Bill, not of him, although he is probably both those things. He went on to say:

“We all agree that there is an urgent need to deal with and regulate no win, no fee ‘claim farmers’, but we need to look very carefully at the issue of duty of care…the idea that this Bill presents a massive set of plans to tackle the compensation culture is a huge oversell.”

To be fair to the Government, I am not sure that they said that the Bill was going to do all that. It clearly is in some ways modest, but it is none the less important.

Given that the Bill started its life in the other place, I checked to see what my noble Friend Lord Goodhart said when he kicked off our comments. The Bill—not least clause 1, to which I shall return—was considered in the other place for quite a long time. On Second Reading, Lord Goodhart said:

“This is undoubtedly a well meaning Bill, but being well meaning is not enough. Part 1, which is clause 1, is at best unnecessary and may well lead to confusion and still more litigation. Part 2 unquestionably has a useful and desirable objective”.—[Official Report, House of Lords, 28 November 2005; Vol. 676, c. 87.]

Following Second Reading, clause 1 alone was debated for some nine hours in Grand Committee, and for two hours on Report.

I join the hon. Member for North-East Hertfordshire (Mr. Heald) in paying tribute to colleagues from all parties—and in particular to the Minister in the Lords with responsibility for the Bill—and to the Conservative and Liberal Democrat Front Benchers, who worked very well together. Lots of amendments, and progress, were made. I also pay tribute to Lord Hunt of the Wirral, who did a lot of good work for the Conservative party. I looked to see what the general collective wisdom was at the end of the debate. Lord Goodhart said:

“Part 2 has now been both changed and improved to an unusual degree”

that is true; much progress was made—

“and it is now a very much better Bill than it was when it was brought forward…As for Part 1, I remain dubious as to whether Clause 1 will do more good than harm. It presents a real risk of causing serious problems. However, I am pleased that the Government have accepted Clause 2…Overall, I welcome the fact that this Bill will now go on to the other place.”—[Official Report, House of Lords, 27 March 2006; Vol. 680, col. 577.]

I could not quite work out whether Lord Goodhart was saying, “Thank goodness we’re not going to be preoccupied with it any more”, or, “There is a lot more work to do, and you guys have got to get on with it.” But anyway, here the Bill is, and we will seek to do just that.

As the Minister said in her introduction, we must deal with the significant issue of new unregulated businesses dropping leaflets through our letterboxes seeking business, unsolicited. As the Government said, it is sensible initially to deal only with what are the most live issues, of which personal injury is obviously the biggest and most important. Housing disrepair is another issue that is raised regularly in our surgeries, and others include employment, criminal injury compensation and the mis-selling of financial services, which is an increasing problem not just in London but elsewhere.

Having been in the House for as long as I have, I take the fairly robust view—I hope that colleagues of similar long service agree—that we need as little legislation as possible, not as much as possible, and that it should be as simple as possible. I approached this Bill on that basis. I also believe that we should regulate as little as possible. We are in great danger of having too much regulation, which is why the Better Regulation Executive exists. Governments understand that we are trying to whittle down the amount of regulation. That said, of course consumers need a degree of protection, and the Bill is about getting that balance right. If we are to have regulation—we Liberal Democrats are persuaded that we should—it should be effective and proportionate and go only as far as is necessary in dealing with the problems that have arisen. At the end of the exercise, the judgment is whether we have got that balance right.

So if we are to have regulation, we clearly need a regulator. Again, I take a fairly simple view. I am absolutely opposed to the idea that every time we see a new problem, we should set up a new regulator and new committees, and new structures and organisations involving new people and new costs. Rather, we should look around to see who else exists who can do the job. I share the Minister’s view, however, that the two potential candidates in the financial services world were not the right ones. I also share her view that the other existing bodies that appeared suitable to do the job were not the right ones, and that it would be better for the regulator to be a member of the family regulating legal and other services.

However, we have to have an interim stage. It might seem slightly bizarre to think of the Lord Chancellor as the regulator of claims farmers, but that job will keep him occupied in his post-Lords-speakership days and justify his saying to the Prime Minister, “I’ve got plenty to do.” It might even justify his salary being kept at the same level. Following that interim stage, we will need to move on. Once the draft Bill on legal services has been enacted, I hope that we will have a single, streamlined and minimalist regulatory system that costs as little as possible and occupies as few people as possible.

The much-heralded progress that everyone applauds is clause 2—I have heard very little criticism of it—which was not in the Bill at its outset. It is very simple, but it deals with a very important issue. We have all been there. I remember stopping suddenly in my vehicle one day—it was an election day—at a set of traffic lights and someone immediately behind me failing to stop. On another election day, exactly the reverse happened. I was looking over my shoulder and by the time that I turned round, the fellow in front had stopped and I had not. One then thinks, “Dare I say sorry?” Dare one apologise when in some cases, it is self-evident that the accident is the fault of the person behind, who has run into the stationary vehicle in front?

Mr. Heald
Did you ask, “Are you my constituent?”

Simon Hughes
As the hon. Gentleman, who also once fought the North Southwark and Bermondsey seat, says, that was exactly the question. The accident happened at The Blue shopping centre, and the person in question was a constituent of mine, so the response was slightly different.

Clause 2 states:

“An apology, an offer of treatment or other redress, shall not of itself amount to an admission of negligence or breach of statutory duty.”

It is very important for a courteous society that we do not say that someone will be liable for all the consequences financially just because they naturally said sorry. That is simple and welcome, and much easier than the great debate on clause 1.

We probably should not have started from here; we should have had a draft Bill, or we should have sent it to a Special Standing Committee where evidence could have been taken. Behind me sits my hon. Friend the Member for Cambridge, whose specialist subject in life is, as he will explain, this bit of the law; we have the best academic advice available. A kind of seminar is going on as to what the law should be.

I agree with the Government’s proposition as set out in the excellent Library research paper that

“we strongly should oppose any culture where people believe that if there is an injury there must inevitably be someone else to blame, and someone else to pay. And we oppose people being encouraged to believe that it is always worth ‘having a go’, however meritless the claim.”

I hope that there is consensus on that.

I hope that there is consensus also on something the Prime Minister said just after the last election; not about his future, but about the future of the Bill. He said:

“The Bill will also clarify the existing common law on negligence to make clear that there is no liability in negligence for untoward incidents that could not be avoided by taking reasonable care or exercising reasonable skill. Simple guidelines should be issued. Compliance should avoid legal action. This will send a strong signal and it will also reduce risk-averse behaviour by providing reassurance to those who may be concerned about possible litigation, such as volunteers, teachers and local authorities.”

All of us who did law know that the most famous such case is probably Donoghue v Stevenson, whose pre-eminent judge in the House of Lords was one of my Welsh secondary school’s great academic old boys, Lord Atkin. The principle that he set out still applies today;

“In English law there must be, and is, some general conception of relations giving rise to a duty of care, of which the particular cases found in the books are but instances…But acts or omissions which any moral code would censure cannot in a practical world be treated so as to give a right to every person injured by them to demand relief.”

The debate has focused on whether the law as set out in that case in 1932 and in the 2004 Tomlinson v Congleton borough council case is sufficient.

In the Tomlinson judgment, Lord Hoffmann and Lord Hobhouse made two simple things clear: first, that people must be allowed to take risks; and, secondly, that the landowner should not be worrying that he has to protect himself against people doing what they want to do on mountainsides and in fields. Lord Hobhouse made an important point about liberty, saying that it should never be

“the policy of the law to require the protection of the foolhardy or reckless few to deprive, or interfere with, the enjoyment by the remainder of society of the liberties and amenities to which they are rightly entitled. Does the law require that all the trees be cut down because some youths may climb them and fall? Does the law require the coastline and other beauty spots to be lined with warning notices?... The pursuit of an unrestrained culture of blame and compensation has many evil consequences one of which is certainly the interference with the liberty of the citizen.”

The test for the blessed clause 1 is whether it adds anything to the current law. I hope that we get a formulation that meets the concerns of the Select Committee chaired by my right hon. Friend the Member for Berwick-upon-Tweed and of those who say that adding “desirable activity” poses a problem and that making it a permissive rather than an obligatory requirement on the courts may add very little.

If a doctor does something wrong when operating on or treating a patient, the doctor is, by definition, carrying out a desirable activity. If a tattooist does something wrong, they may be regarded as not carrying out a desirable activity in the same sense. There is a danger that the liability for negligence of the doctor may then be lowered in a way that the public would not expect. I am not against seeking to codify the law, but, above all, I want to send a message that we must not discourage people from doing desirable things.

Mr. Brazier
The problem with the excellent Tomlinson judgment was that it related specifically to a very reckless individual. Most of the cases that provide the most problems for organisations such as the Scouts and sporting organisations do not relate to individual recklessness, but to exactly what clause 1 addresses: namely, the court suggesting that somebody should have carried out yet another safeguard to prevent something.

Simon Hughes
I understand that, which is why I am more sympathetic to clause 1 than my right hon. Friend the Member for Berwick-upon-Tweed and my hon. Friend the Member for Cambridge. We cannot pass a law that has no effect. Once we pass a new law, the courts must take account of it and of some of the explanatory notes and so on. We have to be clear: adding uncertainty will not be helpful.

Mr. Heald
I do not mean to trespass on the hon. Gentleman’s good will, but does he agree that we quite often declare in statute what the law is, with the idea not particularly of wanting to change it, but of wanting to clarify it? An example is the Constitutional Reform Bill. He and I were anxious that it should make it clear at the beginning that the role of the Lord Chancellor in protecting the legal system should remain his duty, so we said it in the Act for that purpose and to declare it.

Simon Hughes
And that is why I have not said that I am wholeheartedly opposed to seeking to get this right. But if we start to introduce phrases that do not have a legal definition, we might get into a new set of definitions, which might mean that the law becomes uncertain, not certain.

David Howarth
The central point here is, was the law unclear before? Was it unclear after Tomlinson? Was it even unclear before Tomlinson? [Interruption.] The hon. Member for Canterbury (Mr. Brazier) says yes, but the question is, in what way was it unclear? If there was a specific way in which it was unclear, that is the way in which it should be made clear in the Bill. So far as I can tell, there is no suggestion from the Government that that is what is going on with clause 1.

Simon Hughes
I think that my hon. Friend will not like the answer to that question. I take the view that if it is possible to encapsulate in one or two sentences in an Act of Parliament what the law is, rather than drive people back to reading five House of Lords judgments, we should do that. Therefore, it is better to write something down as the law of the land, if we can, than to have to go and read the words of the great legal minds of the country, because most people do not go there, it is more difficult and there is more than one judgment. So, if we can, let us do it.

The last point that I want to make is about the rest of the Bill, which is much less controversial. There is one controversial issue left in the regulatory system, which was touched on by the right hon. Member for Newcastle upon Tyne, East and Wallsend and others. It is how we ensure fair play for all who are involved in the business of dealing with claims and the rest.

As I understand it, clause 3 says that if somebody, as an individual, is involved, but not as part of their business, they are exempt, or potentially exempt. I want to ensure that, at the end of the legislative process, there is a level playing field so that members of trade unions—in the past, I acted for Thompson’s, which did a lot of trade union work as solicitors and instructed me and others—who expect that, once they have paid, they will get a service, are in the same position as those who join a political party, the Co-operative movement, a voluntary organisation or whatever and are also told that they will get a service. Provided that there is a level playing field and everybody is treated the same, if the organisations are of the same sort, that is reasonable.

Of course, we need to ensure that individuals are not under some great regulatory system if they are doing something voluntarily and in a way that everybody understands does not give them a legal relationship, with the liability that follows.

The Bill does not deal with a lot of issues, which will be left on the agenda and have been set out by the Association of Personal Injury Lawyers and others, and which we shall have to revisit to achieve better access to justice in the civil law. However, the Bill does some important things. As my hon. Friend the Member for Somerton and Frome said, it is modest, but it is none the less important for that. However, I fear that we still have quite a bit of work to do.

14:41:00

Tony Lloyd (Manchester, Central) (Lab)
I begin by welcoming the consensual tone of the hon. Member for North Southwark and Bermondsey (Simon Hughes). I also want to make a few brief points about the role of the trade unions and about the question of mesothelioma, which is enormously important.

I should perhaps start by saying that I have an interest as an active trade unionist and as chair of the trade union group of Labour MPs. I also have an interest in the asbestos industry, because I worked in an asbestos factory when people were systematically subject to risk that ought to have been criminal, not simply the subject of compensation. If I have some reasonably strong feelings on the subject, perhaps Members of the House will understand.

I was disappointed by the speech of the hon. Member for North-East Hertfordshire (Mr. Heald), in that he wanted to perpetuate a certain type of myth, which, I am afraid, goes back to the visceral view among some of those who occupy the Conservative Benches that trade unions are fundamentally a bad thing. The reality is that if most members of trade unions were asked in whom they had greatest trust in pursuing on their behalf an employment claim or a claim for personal injury, the trade unions would figure highly in terms of a relationship of trust.

That does not for one second ever absolve those trade unions—the Union of Democratic Mineworkers in the east midlands is one—that have behaved spectacularly badly with respect to their members and have operated, de facto, as claims farmers. However, it is important to establish that there is a position of trust between trade union members and their unions as their representatives.

In that light, the hon. Gentleman, who is absent from his place and who told the House that trade unions make their money by claims, did not give an accurate picture of reality. I wish that, when pressed, he had been prepared to justify his claims from the Front Bench and name the trade unions that he claims are abusing the position of trust.

It is important that, for example, lawyers maintain professional integrity and that their clients believe that most lawyers operate honestly and decently, even  though we accept that there are rogue lawyers in the system. In the same way, it is important that members of trade unions have the same trust. It is not reasonable to use the facilities of this House of Commons to make a generalised condemnation of trade unions in a way that is designed actively either to mislead or to pursue a partial point.

Mr. Heald
I thought that it was common knowledge that trade unions are paid a referral fee when they send a case to a solicitor and that, in many cases, they also receive success fees. Is the hon. Gentleman suggesting that I am wrong about that?

Tony Lloyd
I am not suggesting that the hon. Gentleman is wrong about that, but he knows that that is not what he said. I will make him an offer. If he reads exactly what he said in Hansard tomorrow and is prepared to come and apologise to me personally if he was wrong in what he said about trade unions making their income from referrals, I will also read Hansard and apologise to him if I am wrong about it. I would even be prepared to make a point of order to make that apology to the House. I hope that the hon. Gentleman will be big enough to do the same, because the problem is that his comments were not only an unfortunate misrepresentation, but a distorting misrepresentation. I am very disappointed that the new Conservative party should adopt its old position of hostility towards the trade unions.

No member of a trade union wants rogue trade unions that operate against the interests of their own members. Nobody seeks to justify the situation seen in the east midlands, of unions acting as claims farmers, and that should be condemned by every Labour Member of Parliament and by the trade union movement. We have to ensure that if a trade union operates as a claim farmer, it will not benefit from the general exemption offered to trade unions. The code of practice to which the trade unions will be expected to adhere must be sufficiently strong to regulate their role properly, in a way that is analogous to the regulation of the legal profession and others on this issue. That is an important part of the bargain for trade unions and would be accepted by most Members of Parliament as automatic, but more importantly it would be accepted by most trade unionists and their trade unions. The balance that my hon. Friend the Minister struck is important, because it establishes, not that trade unions have special rights, but that trade unions have a particular position of trust on behalf of their members and that has been respected. It is the rights of the ordinary members of trade unions that are protected by this legislation.

I am also concerned about the issue of mesothelioma and the capacity of the Bill to serve as a vehicle to change the law on Barker. As my right hon. Friend the Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown) has already said, that is an important issue. We know that those who are diagnosed with mesothelioma, sometimes many decades after they have left the company, industry or situation that exposed them to asbestos, face a grim prognosis. People generally live only a short time after diagnosis—between 12 and 18 months—and it is a particularly cruel and unkind form of cancer even among those cancers that still kill. The families involved experience enormous distress. What that means is that the period in which the individual has access to proper justice, at least in the form of compensation, is also short. It also means that those who are entitled to compensation often—

Mr. Brazier
On a point of order, Madam Deputy Speaker. I am sorry to interrupt the hon. Gentleman in making his important points, but there is a very irritating noise in the Chamber, which is making it hard to concentrate. Can somebody investigate whether it is the sound system or something else?

Madam Deputy Speaker (Sylvia Heal)
The matter is under investigation and I hope that it will be sorted out soon.

Tony Lloyd
I am delighted to know that I am not the irritating noise.

We need the Barker judgment to be reversed. The present situation—as my hon. Friend the Member for Hendon (Mr. Dismore) pointed out—is bad because it splits liability and therefore in the many cases in which the companies no longer exist the individual firm that contributed to causing mesothelioma will be able to avoid paying compensation.

In fact, the problem is worse than that. The allocation of risk process means that the accepted defence in many cases will be that non-existent companies bear a greater proportion of responsibility for the factors leading to mesothelioma. Claimants will get only tiny levels of compensation as a result, and that is simply unfair. The Barker judgment has no legitimacy, and a change in that respect is needed very urgently.

I very much welcome my hon. Friend the Minister’s clear commitment that the Government are looking to make a change. Many hon. Members have raised this matter in the Chamber—my hon. Friend the Member for Amber Valley (Judy Mallaber) did so with my right hon. Friend the Prime Minister yesterday—and elsewhere. We know that the Government are sympathetic to proposals for change, but we need to ensure that there is an urgency about delivery, and that it is consistent with our recognition of the damage done to people who are rendered very vulnerable by the condition.

I know that many other hon. Members want to take part in the debate, so I shall not use my full 15 minutes. However, I must tell my hon. Friend the Minister that efforts will be made to table an amendment to the Bill that would allow the Barker judgment to be set aside. I hope that such an amendment, whether it comes from the Government or the Back Benches, will do the trick, although I understand that it may not be possible or practical to devise an appropriate proposal in the time available.

I hope that the hon. Member for North-East Hertfordshire will reconsider his remarks. I am afraid that he gave me nothing better than a resounding “maybe” in response to my question about the Opposition’s support for a change in the legislation. I hope that he will go further, as the inclusion of such a provision might have aroused opposition in the Lords and caused the Bill’s passage there to be blocked. Progress will be easier if we can agree that the change is desirable and deserving of support by the Opposition in the Lords.

Mr. Clapham
My hon. Friend emphasises the urgency of this matter. Another factor is that claimants cannot now claim under the Pneumoconiosis Etc. (Workers’ Compensation) Act 1979, as was possible when the Fairchild case was being considered. Does he agree that that law must be restored as a matter of urgency?

Tony Lloyd
My hon. Friend is absolutely right, and I pay tribute to his long and consistent campaign on this issue. I hope that we are moving towards consensus about what the range of problems is, and their possible solutions. It would be very strange if any hon. Member were to regard those who suffer from mesothelioma as deserving of anything but the maximum sympathy. We must take every practical step that we can to compensate them.

I shall finish by saying that, if I had my time again, I would be far happier to see the people who managed the asbestos industry when I knew it sent to jail rather than required to pay compensation. They were not merely negligent about their stewardship of the industry: they were criminals.

I congratulate my hon. Friend on the Bill, and on the way she introduced it to the House today.

Madam Deputy Speaker
Order. Before I call the next speaker, and in response to the point of order raised by Mr. Brazier, I inform the House that an engineer is investigating the distracting noise that we can hear to see whether it has anything to do with the sound system.

14:54:00

Mr. John Greenway (Ryedale) (Con)
First, I remind colleagues of my entry in the Register of Members’ Interests. In warmly welcoming the Bill, I remind the House of the work of the all-party insurance and financial services group, which I have chaired since 1992. For many years, we have taken a close interest in the issues covered by the Bill. In anticipation of the draft Bill, we took evidence last year from a number of organisations and 11 witnesses in total, including various insurance lawyer trade associations, the industry and even the Claims Standards Council. We issued our report in November.

There are three features of the current compensation environment—I shall not be drawn into a debate on whether there is a compensation culture—against which to judge the likely effectiveness of the Bill: risk aversion, rehabilitation and the regulation of claims managers. Risk aversion is important because, as we all know, many events or activities do not take place because of concern over potential claims for negligence in respect of personal injuries. Public liability insurance costs have risen to the extent that many activities do not take place because there is no public liability insurance cover and the leisure industry has seen a dramatic increase in the cost of both employee and public liability insurance.

Secondly, rehabilitation is important because we are still not doing nearly enough to ensure that people who suffer major injuries as a result of a workplace or motor accident are treated quickly and got back to work quickly.

Thirdly, the regulation of claims managers is important because of the widespread malpractice by so-called ambulance chasers, run by some pretty  ruthless and unscrupulous people who are happy to sell on the introduction of a victim while contributing precious little towards the speedy and satisfactory handling of a claim. The no win, no fee basis of claims handling is confusing to claimants, often results in significant parts of their compensation being hived off to pay legal bills and has contributed to a situation in which legal fees amount to a staggering 40 per cent. of all personal injuries claims costs—money better used to rehabilitate and compensate victims and, I dare say, better used if we all had to pay lower premiums for the insurance cover that we have to purchase. In the end, we all pay; insurers have no money other than what we pay them in premiums.

I shall deal with the three items in turn. On risk aversion, the new definition in clause 1 is meant to enshrine in statute the current understanding of the law of negligence. We have already had considerable debate on whether that clause is necessary, whether it adds anything to existing law and whether, if it does not, it has any point. Back in November, the all-party group agreed with the lawyer associations that clause 1 should be dropped, but the Government have not been persuaded to accept that view. If, as looks likely, clause 1 remains, I hope that we will be able to examine it in further detail in Committee because it is critical to understand precisely what the clause means.

I am concerned about some of the new concepts, particularly “desirable activity”, that may require a new definition, but I sense from listening to today’s debate that there may already be something new in the definition and perhaps more in the Government’s intentions than they have admitted—though I do not say that in a critical way. If the new definition clarified what precautions might be disproportionate in persuading people not to go ahead with a desirable activity—that seems to lie behind what the definition suggests—it could have a positive aspect.

As other Members have suggested, it is important that the courts, including the lower courts with which my hon. Friend the Member for Canterbury (Mr. Brazier) has a bone of contention, fully understand Parliament’s intentions. It is wholly desirable that voluntary organisations, who obviously rely on volunteers and do not have access to an army of expensive lawyers, understand precisely the legal implications of what they do.

I want to make one other point about the insurance aspect. Many activities do not take place simply because people cannot afford the public liability insurance cover. The long-term test of the new definition in clause 1 should be what it does to public liability insurance underwriting. I rather suspect that, for quite some time, underwriters will wait and see what happens in all the court cases that I know the hon. Member for Hendon (Mr. Dismore) thinks are likely—we had an exchange about the matter one evening in one of the Dining Rooms recently. We need to keep that prospect in mind.

I turn next to rehabilitation. Just one issue has dominated our news for the past six weeks. It is nothing to do with politics, the state of the world or even Iraq. It is Wayne Rooney’s broken metatarsal. It has dominated every news bulletin and every newspaper. We all hope that he has been miraculously rehabilitated, but that experience is in stark contrast to the long delays experienced by people with workplace and motor accident injuries in getting the rehabilitation that they need to get them back to work.

Clause 2 is a hugely welcome addition because it can provide new impetus to efforts to get people rehabilitated quickly. That is better for claimants and for employers. It is also better for third parties—people who have caused accidents. We should not always think that they are being difficult because they do not have sympathy with the victim. Most of the time, they do. In the long run, quicker rehabilitation is better for insurers.

All the evidence points to the fact that the more quickly someone can be rehabilitated, the more likely it is that they will recover from the injuries that they have suffered in an accident, especially motor accidents in which people suffer whiplash injuries, back problems and so on, and the more likely it is that, for the good of them, of all of us and of their families, they have the chance to get back to work. So I welcome the addition of clause 2 and congratulate my noble Friend Lord Hunt of Wirral and his colleagues in the other place on introducing it.

The regulation of claims managers is a long overdue measure. Some right hon. and hon. Members have concerns, as I do, at the notion of yet more regulation, but currently we have the farcical situation in which the arranging and sale of an insurance policy is subject to statutory regulation, and the loss adjusters who assist the insurers in the handling and measurement of claims are regulated through their professional body—the Chartered Institute of Loss Adjusters—but claims farmers are not regulated at all. Yet it is in the management of claims that abuse and mischief lies. “The proof of the pudding is in the eating” is an old saying, but it is only at the point of claim that people understand whether the insurance policy that they bought provided them with the protection that they thought it did when they paid the premium. It is at the point of claim that the real value lies.

Undoubtedly, whether the individual policy holder claims for himself against his own policy is an issue about which we should be concerned, but it is far worse if we are dealing with the management of a claim in respect of a third party, who has a right of action under the policy as a result of what has happened, but has no relationship with the insurance company in the way that the policy holder does. It is critical that we get the claims management industry properly regulated.

For the regulation to work, it must be comprehensive. There has been much discussion about exemptions. I want to make two points about them. If there are exemptions, the bodies that regulate exempt organisations must have equivalence in their regulatory bite. I am reassured by the Minister’s comments that if trade unions, about which there has been much discussion, do not match up, they will be subject to tougher regulation.

The most critical thing is definition. I strongly urge the Minister to regulate the activity and avoid the danger of simply regulating the name “claims farmers”. My experience in the matter comes from the past 10 years—all the time I have been a Member—of my election to the Insurance Brokers Regulation Council, which was a statutory regulator, but we regulated the name “insurance broker”. If a firm used  the title “insurance broker”, it had to be regulated by the IBRC. Of course, many people practised, in effect, as insurance brokers but called themselves insurance consultants, so when we disciplined a broker and chucked them out of the profession they carried on in business under another name. We have to avoid that situation in respect of claims farmers.

It is also critical that the regulator has the power to exclude, and that there is no route back for the cowboys to whom the Minister referred several times. That means that we need strong codes of conduct, but we also need clarity about precisely what they can and cannot do in their presentations to claimants and possible clients and in the advertisement of their services.

The Government have made huge progress by specifying that the regulator will be the Department for Constitutional Affairs, even if only temporarily. I heard the comments of my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) and I understand his sense of disappointment that we are not being provided with a distinct regulator. However, we have to bear in mind the other side of the argument. There are probably only about 500 claims management firms and my hunch is that half of them could be driven out of business, which would reduce their number to 250. Even charging them reasonable fees would not give us a basis for funding a regulator to do all that I have suggested needs to be done. We may have to wait until the new regulator has been set up under the Legal Services Bill to bring all the threads together.

I am disappointed, however, that the Financial Services Authority has not agreed to undertake the regulation process. Claims management is related to insurance products. It is a financial services issue, so that is largely where the regulation should be. The intention is not to pursue a vendetta against claims managers but to ensure that they operate professionally and that we protect consumers from the unscrupulous. We must also ensure that the accident or event that is the subject of the claim, which is a bad enough experience for the individual, does not become a double whammy, due to bad advice about how to claim. All of us have heard about such experiences in our surgeries.

Madam Deputy Speaker, I hope that you and the House will forgive me for not staying until the end of the debate, as I have another duty to perform. I particularly wanted to take part in the debate and hope that my comments show that I am very much behind what the Government want to do. The Bill is long overdue and I wish it well. The regulation of claims managers and strengthening the possibility of rehabilitation are two developments that we can all warmly welcome, and from which all our constituents will benefit in the long run.

15:09:00

Mr. Andrew Dismore (Hendon) (Lab)
I declare an interest, as I was a personal injury lawyer for 20 years before I became a Member. I worked with trade unions and their members, not in an academic way but hands on, with real cases, helping real victims. I remain a consultant with my law firm, but I have not taken cases since I came to this place. I am a founder member of the Association of Personal Injury Lawyers, a former  member of its executive committee and a former Law Society specialist assessor for its panel of personal injury lawyers.

My job here is to represent constituents, not lawyers. If I were here to represent lawyers, I would probably welcome clause 1, because it will wave off not just a mere gravy train but a veritable Orient Express of rich cordon bleu sauces for the legal profession. It will create a tsunami of litigation that will flood the courts with cases of such complexity, and in such volume, that Jarndyce v. Jarndyce will look like a small claims debt recovery action in comparison.

Clause 1 creates confusion where there is settled law. It will jeopardise safety standards, creating a charter to kill and maim with impunity. It will deprive deserving claimants of their just compensation and will create a two-tier system whereby victims of identical accidents have entirely different outcomes. I chair the Joint Committee on Human Rights, which has expressed criticisms of clause 1. We were not persuaded that the clause accurately reflects the subtleties of the existing law of negligence. It restricts access to legal redress by claimants, including vulnerable groups. We believe that the clause will be applied in a manner that restricts claimants’ access to justice and runs the risk of being in breach of our country’s obligations under articles 2, 3 and 8 of the European convention on human rights.

It is claimed that all that clause 1 does is restate the law, but if that is the case, it raises the question: why do it? The common law has developed over the past 75 years in particular, starting perhaps with the Donoghue v. Stevenson principle and ending, most recently, with Tomlinson v. Congleton borough council. There have been many other cases in between. In no way does the clause accurately restate the law. The Lord Chief Justice made it clear to the Constitutional Affairs Committee that

“it is quite impossible to encapsulate the law of negligence in a single sentence.”

Despite the Government’s protestations and the Minister repeating herself until she is blue in the face, clause 1 manifestly fails to reproduce the common law as it stands. In reality, the clause is simply a reaction to the popular misconception of the compensation culture, which has been roundly rubbished by everybody who has bothered to look at it. The facts show a decline in claims, not an increase—so why reinforce prejudice?

Clause 1 is riddled with ambiguity, uncertainty and a lack of legal precision. It starts off by giving the court discretion about whether to apply it. That in itself will lead to many legal arguments about whether the judge should or should not have exercised his discretion in the first place. It refers to the need for the claimant to identify the taking of precautions—a positive case required from a claimant that was not previously required. This is about expecting a claimant to deliver a positive safety regime for the defendant if they are going to win their case. The clause introduces a whole new concept into common law of “desirable activity”, which the Bill fails to define. The Minister indicated earlier that she was not prepared to define it through an amendment.

Paddy Tipping
The Minister made it clear that there would be other cases before the court to test that out. Rather than clarifying the law, the provision is going to lead to debate.

Mr. Dismore
Exactly—my hon. Friend is right. We will have a plethora of cases interpreting the provision. The courts could, in the end, come to the same conclusion as the Minister and say that there is no difference between it and the existing common law. They may rely on Pepper v. Hart and say that that is what the Government said. However, I doubt that. Even if that were the case, it would happen only after extensive, expensive examples were tried in the House of Lords—or, possibly by then, the new supreme court. 

In reality, clause 1 creates a brand new series of defences, rebalancing the scales of justice against injured employees, travellers or schoolchildren and in favour of the multinational insurance industry. It does not replicate the key point in Tomlinson that willing consent to the risk is necessary, and that the principles laid down there are not appropriate when there is a real lack of informed choice or an imbalance of power, such as between an employer and employee, or a public authority as against children and vulnerable pensioners. I am truly appalled that a Labour Government should propose such a measure to weaken the rights of the small person against the mighty insurer.

The Government say that there is no need to exclude employment accidents from clause 1, but some jobs involve more desirable activities than others. Some are very desirable, but hazardous; some are less so, but safer. When I was in practice, for many years I represented injured firefighters. The principles of liability towards firefighters were well established in the House of Lords many years ago in the case of Ogwo v. Taylor. The clause considerably weakens those principles, and reopens some of the arguments that were put forward by the defence in the House of Lords and rejected. A seriously injured firefighter could well see his or her right to compensation undermined or even removed by the rebalancing of the law.

Of course, if the employment were a less desirable activity, perversely, the new defence would not work. There would thus perhaps be stronger protection for people with less desirable occupations. Journalists, estate agents or even Members of the House might thus attract greater protection than a firefighter, who does what might be considered to be a more desirable activity.

The situation becomes even worse when we find that clause 1 goes beyond negligence and covers breaches of statutory duty—exactly the sort of cases that Lord Hoffmann said should be excluded from the test in Tomlinson. Statutory duties underpin the health and safety regime, especially for some of the most dangerous occupations, such as those in construction. Contrary to the Government’s contention in the other place, very few of those statutory duties are absolute duties. There is a strong argument that we do not comply with EU directives in that respect already. The duties are circumscribed by conditions that use such phrases as “reasonable practicability”, “practicability”, “appropriate”, “suitable” and “adequate”. Some duties are already too weak, without watering down the protection still further through the desirability defence. All the duties apply without fail when there is an asymmetric power relationship, such as the employee-employer relationship, the relationship between a public authority and an individual citizen, or the relationship between an occupier and a visitor.

If we are thinking about the construction industry, should we consider whether some projects are more desirable than others? For example, people might think that it is rather more desirable to build Wembley stadium than it was to build the dome. What about the position of children? What of a school-run mum who crashes her 4x4 while ferrying her children and her neighbour’s children to school? Going to school is a desirable activity, which might weaken the case, but it could be argued that it would have been rather more desirable for the occupants of the vehicle to walk to school, instead of going by car. There could thus be an argument about which activity would be more desirable. In those circumstances, there would be a risk of there being a lesser standard for the passengers, and anyone whom the mum hit crossing a red light, than would be the case if the accident happened on the way home and the occupants of the vehicle had decided to call at McDonald’s for an unhealthy burger and chips, which could well be considered to be entirely undesirable. There is thus a paradox. It simply cannot be right that a less desirable activity gives the claimant a stronger case.

Helen Goodman (Bishop Auckland) (Lab)
Will my hon. Friend give way?

Mr. Dismore
I cannot, because I am on a time limit.

I suspect that the roots of the clause lie in the private Member’s Bill promoted by the hon. Member for Canterbury (Mr. Brazier). He seems to be proselytising the measure as a change in the law, but if that is the case, why are the Government saying that it simply restates the law? The hon. Gentleman is right to say that the measure does not restate the law; it dramatically changes it, and weakens it from the victim’s point of view. The Government should recognise that they withdrew their support from the hon. Gentleman’s Bill for good reason, because between 2000 and 2005, claims against local authorities, schools and voluntary organisations fell by 7.5 per cent., rather than increased.

Mr. Brazier
Will the hon. Gentleman give way?

Mr. Dismore
I cannot, because we are on a time limit—[Interruption.] I have given way already.

Of course we want to encourage adventure and volunteering, but the existing law already provides for that. If it is true that the clause simply restates the law, the Government must accept that argument. Contrary to the words that the hon. Member for North-East Hertfordshire (Mr. Heald) tried to put into my mouth, I warmly welcome the idea that we should issue guidance and publications to explain the law as widely and fully as possible—but frankly, I do not think that the clause is going to be the talk of school staff rooms, or scout leaders in the pub after a volunteering exercise. The fact remains that people will be far more interested in the guidance than what the clause might or might not state.

The real effect of the measure will be not to encourage volunteering, but to put young people at even more risk when they participate in adventurous activities. It will also discourage parents from allowing their children to undertake such activities. It will create different standards. For example, in relation to driving, a minibus of scouts going to camp would have less protection than a bunch of football supporters going to a match. The clause will lower safety standards, lead to fewer precautions and condone negligence.

What responsible parents would allow their children to go mountaineering, open-sea canoeing or sailing if they were told, “By the way, this is a desirable activity, so if Johnny or Jill is hurt badly, breaks a limb, becomes paraplegic, or is even killed, and if it’s our fault, there may be no compensation as a result.” Clause 1 stinks, and must be withdrawn from the Bill. It does not restate the law, but weakens the position of the average ordinary person in the street.

We should use the Bill to redress the balance. We should consider what needs to be done to improve the position of accident victims. There needs to be a clear exemption from clause 1 for employers’ liability cases, and from clause 2 for trade unions. We need to recognise that in the past the courts have, in many respects, failed accident victims, and we should take this opportunity to put right those mistakes.

We have already heard at length about Barker v. Corus and other asbestos cases; we have heard about the pleural plaque cases; there is the Crown Proceedings (Armed Forces) Act 1987, about which I made a point earlier; and there are many similar points to be made about asbestos. But that is only the start. If an insurer makes an admission of liability early in the case, why should that admission not be binding on it? The case of Sowerby says that it is not, and when a case is further down the track the insurer can say that it has changed its mind and does not admit liability after all. How does that strengthen the rights of claimants and avoid the need for litigation?

The Law Commission, in its 1999 report, made it clear that damages for personal injury claims were far too low. It recommended that in cases where general damages exceed £3,000 they should increase by between 50 and 100 per cent. The Court of Appeal considered that in the case of Heil v. Rankin, and did not do as the Law Commission recommended, but said that it was a matter for Parliament. It is a matter for Parliament, and we should take this opportunity to deal with it.

This Government rightly introduced the system of periodical payments to allow those who are seriously injured to have compensation assessed and paid out over the rest of their lives. However, the system for indexing those payments is drastically wrong. It simply refers to the retail prices index and does not take account of the fact that many of the elements in those compensation awards are tied not to the RPI but to much higher indexes, such as the index of average earnings. We should use the opportunity of this Bill to put right that injustice and ensure that claimants receive the compensation to which they are entitled.

The discount rate applied to an assessment of a future loss of earnings has been fixed at 2.5 per cent. since 2001. It is supposed to reflect the returns that a claimant can expect when investing his award, but unless it is reviewed regularly the discount rate does not accurately reflect market changes, which could put the claimant at a disadvantage. That, too, needs putting right, and the Bill is a vehicle by which we could do so.

I agree with the hon. Member for Ryedale (Mr. Greenway) that rehabilitation is a crucial process for any injured claimant. There has been considerable discussion between the Government and stakeholders about ensuring early rehabilitation for claimants. Where liability is clearly established, insurers should have a statutory duty to ensure that funds are released to facilitate early, appropriate and independent rehabilitation. That would provide the impetus needed to ensure that rehabilitation becomes an integral part of the compensation system. Again, we could take the opportunity of putting such a duty in the Bill, but the Government have indicated that they are not prepared to do so.

I was tempted to say that I would not vote for the Bill because of clause 1, which dramatically weakens the right of people in this country to compensation, thus pandering to the insurance industry, to the tabloids and to the myth of the compensation culture. But I shall vote for Second Reading because I passionately believe in the need for regulation of claims farmers, as set out in part 2. This is an opportunity to do some good in that respect, and the positive changes that I have advocated would take that even further. I first advocated regulating claims farmers many years ago, long before I came here, and I raised the issue at the very first meeting I had with a Minister in what was then the Lord Chancellor’s Department, back in 1997. Nearly 10 years on, I am very pleased that the Government have, at long last, recognised the problem and are dealing with it. This has been a serious problem since the 1980s, when claims farmers first got off the ground.

I hope that the Government will reflect on clause 1. It has little, if any, support beyond the tabloids, and even that is not clear. It is not supported by the lawyers, by the Constitutional Affairs Committee or by my Committee. I understand from the hon. Member for Ryedale that it is not supported by the insurance industry. Nobody has a good word for it—except the Government, the official Opposition and the hon. Member for Canterbury, who thinks that it does something entirely different from what the Government say it does. It is opposed by the TUC, the Association of Personal Injury Lawyers and the Law Society—just about everyone who has the interests of the little man or woman at heart, as opposed to those of the multinationals. We should not pander to myths; we should look at the evidence and at the harm that clause 1 will cause. I urge the Minister to look at the impact of what could be a useful reforming measure and to get rid of clause 1. Let us go ahead with part 2, which is badly needed.

15:24:00

Mr. Alan Beith (Berwick-upon-Tweed) (LD)
The Register of Members’ Interests contains a reference to an interest that I have in the holiday park industry and states that I am the vice-president of the North Northumberland scouts. I hope that that pleases my hon. Friend the Member for Montgomeryshire (Lembit Öpik).

I shall speak briefly about the work that the Select Committee on Constitutional Affairs did on compensation culture and on the Bill. As many hon. Members have said, we were not satisfied with clause 1. We said:

“It neither satisfies those people who wish for volunteers to be provided with a special defence against claims of negligence, nor does it clarify the law. Instead, it is likely to lead to additional litigation, as people turn to the courts to define the precise nature of the provision.”

I shall return to that point.

The Committee did not conclude that conditional fee agreements or litigation had created a compensation culture, but rather that there was a perception of such, with a variety of causes, that was not soundly based.

”We found no evidence that conditional fee agreements or personal injury litigation were a significant factors in causing risk aversion, and personal injury litigation has not increased in recent years.”

We said:

“Risk aversion has a number of complex causes, including advertising by claims management companies, selective media reporting, a lack of information about how the law works and, on occasion, a lack of common sense among those who implement health and safety guidelines. Risk aversion of this sort is a concerning modern phenomenon that has an adverse effect on individuals and on the economy as a whole. Instead of a statutory provision restating the law of negligence what is required is a clear leadership by the Government”

We went on to suggest that that

“should include an education programme making clear that risk management does not equate to the avoidance of all risk and active engagement by the Health and Safety Executive to ensure that it adopts an approach which is proportionate, does not over-regulate vulnerable sectors and instead offers appropriate advice and support”.

On balancing risk, the Committee was given a strong impression by the HSE that balancing different risks was not something in which it engaged. The classic example is the HSE stopping a commuter station from being opened because the platform was not long enough. Somebody might get out through a door, not obeying the guard’s instructions, and sprain or break an ankle. That is a lower risk and a lower injury than if all commuters got into their cars and drove on congested roads into the city. There is the balancing of risks from two different areas. The system is not equipped to carry out that exercise, which leads to the consequences about which hon. Members are concerned.

There is also the widespread and gross misuse of health and safety arguments, and sometimes on the basis of mere error. A lovely example of that is provided by the Lord Chief Justice, who was told when he went to a governors’ meeting at his old school that he could no longer take an early morning dip in the swimming pool because there was no lifeguard or qualified member of staff present to supervise his swim. As a modest man, he did not assert, “I am the Lord Chief Justice, and this would not stand a moment’s chance in my court.” If he had done so, that would have helped to spread greater knowledge of the law.

Perhaps more often health and safety arguments are used as an excuse when a public body does not want to spend some money or does not have a budget for something that is clearly necessary to enable an activity to take place. Health and safety is often loosely quoted when it is not the real reason for not doing something. 

On clause 1, most accepted authorities will say that the Tomlinson case got it right, and that there is no clearer and sounder definition of what the law says than what came out in that judgment. I will not quote them again because my hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) referred to Lord Hoffmann’s trenchant words on the subject. There are real dangers in trying to second guess, as is done in clause 1. That relates particularly to satellite litigation on, for example, what might be desirable activities. That is only one of the areas in which litigation could take place on the basis of clause 1, and examples of that have already been given.

If, as the Government concede, there is to be litigation to establish the meaning of clause 1, that immediately defeats its sole objective, which is to give people a clearer understanding of what the law is now. The moment that we get into fresh litigation, we have to wait for that understanding to exist.

Mr. Brazier
I have heard that argument several times. Can the right hon. Gentleman explain why providing an extra defence for an organisation that may be sued would lead to extra litigation?

Mr. Beith
It is not an extra defence. Indeed, the Government differ from the hon. Gentleman, because they have sought to make it clear that the provision does not add a legal protection that does not already exist. It is simply designed to remind the public and the courts of the basis of the law as it stands, and it will not create any new legal defence. The clause will be read by people from one end of the country to the other, so it must be clear. It must be clear, too, as he has rightly suggested, in the lower courts. The Lord Chief Justice said that he did not know who was going to read clause 1:

“The average man in the street is unlikely to be reading clause 1. As far as the judges are concerned, and judges and lawyers are the ones likely to be reading statutes, and the clause sets out to define the position…not to change it”.

We should make the position clear so that cases related to the Pepper v. Hart case have regard to the fact that Ministers have said that the law is not changed by the provision. Litigation will, however, arise from measures such as the desirable activities provision.

There are two other dangers. Public authority staff are at a disadvantage, because they engage in desirable activities. The Government state that the clause is not intended to effect a change in the law, but there is a danger that that will give false comfort to voluntary organisations. My Committee took evidence from voluntary organisations, including the Scouts, whose evidence impressed us, not least because they have made efforts to ensure that risk management was built into their systems and training. The problems are greatest for small voluntary organisations that do not have the facilities or experience built up by larger organisations. If we are not careful, the clause will give them false comfort.

Turning to other issues, I am glad that the Minister gave me a clear, precise answer about who will regulate claims handlers. I sympathise with the Government’s position, as we must look at what emerges from the proposed regulation of lawyers before we decide where responsibility should reside. In the meantime, the Secretary of State should do the job, so that he has something to do now that all his other responsibilities have been taken away. As a result, my Committee would have oversight responsibility for the claims handling process, and we look forward to making sure that it works.

Turning to the exemption provisions, anyone who, like me, represents a mining constituency will be concerned about the gross abuses of which claims handlers, trade unions and the Law Society, which failed to regulate lawyers, were guilty. Several firms of solicitors were deeply and disgracefully involved in that huge scandal, defrauding vulnerable people whom the Government had set out systematically to protect from any costs—indeed, they paid for that protection. The exemption provisions must be proof against such a scandal, while recognising that trade unions and voluntary bodies such as citizens advice bureaux do a great deal of work to direct claims and ensure that people receive appropriate legal advice. The Committee must look carefully at the exemption provisions so that they meet the objective of ensuring that people whose claims are dealt with by a trade union or a voluntary body are not at a disadvantage if they are defrauded or not provided for.

Most of the Bill is much needed, but clause 1 might prove to be a great deal more trouble than it is worth, as it might not satisfy genuine anxieties about participation in voluntary activity or the promotion of sports that involve an element of risk. Many of those anxieties are based on a misunderstanding of the law, on fears of prosecution by the Health and Safety Executive, on misunderstanding of the provisions required by the HSE and, indeed, on a series of things that the clause is not designed to address.

Mr. Brazier
I am grateful to the right hon. Gentleman for giving way once more. He took evidence in his Committee from Derek Twine of the Scout Association. The concerns of the Scout Association—we are dealing with the civil law here, not the HSE—are based on a series of court cases that it has lost, some of which, I know, were cited to the right hon. Gentleman in evidence, yet his report did not reflect that at all.

Mr. Beith
I am sure that the hon. Gentleman will refer later to one or two cases that do not even appear in the law reports. That will be helpful to us. If cases are not resolved satisfactorily in the lower courts on the basis of the law as we know it to be post-Tomlinson, it will be necessary for those cases to go to appeal and to go up the system to ensure that they are dealt with satisfactorily. If that places an unreasonable burden on some of the voluntary bodies involved, such as the Scout Association, we must address that. We will not necessarily help them if we put in a clause that they think provides them with a protection which, in fact, it does not.

I shall listen to the remainder of the debate with considerable interest, because I think that the hon. Member for Canterbury (Mr. Brazier) and my hon. Friend the Member for Montgomeryshire genuinely believe that this restatement of the law will provide an additional legal protection. It is not the Government’s view, as they have clearly stated, that the law is changed.

The Government are wrong, as the hon. Member for Hendon (Mr. Dismore) pointed out, on a different point. They are wrong that the Bill does not restate the law, because in relation to employees it clearly has that effect, but in relation to the defence that can be advanced by an organisation engaged in providing a voluntary activity or a risky sport, it is not intended to change the law. If it does, the House should know that it does. The Government cannot rely on two Back-Bench Members insisting that it does. In a Pepper v. Hart judgment later in the day, it will not be their view that is considered, but that of Ministers. At this point I shall rest my case, as I want to hear other views.

Madam Deputy Speaker 
Order. Mr. Speaker has imposed a 15-minute limit on Back-Bench speeches but if hon. Members could restrict their speeches to 10 minutes, more will be able to catch my eye.

15:36:00

Paddy Tipping (Sherwood) (Lab)
I am grateful for the opportunity to speak in support of the Bill. Claims handlers have been described as cowboys. If that is the case, coalfield communities such as north Nottinghamshire are the wild west. The activities of claims handlers have caused false hopes, false expectations and real concerns and financial difficulties, not just to people who work in the mining industry, but for the women in the textile industry who have been gullible enough to make deafness claims through claims handlers. I strongly support part 2. The regulation of claims handlers is long overdue.

My hon. Friend the Member for Hendon (Mr. Dismore) was hostile towards clause 1. I am agnostic. I would like to see the phrase “desirable activity” defined. It is not defined. In her opening remarks the Minister made it clear that there would be further court cases to test the scope of the phrase. Rather than clarifying the law, that may well lead to confusion and delay.

I am concerned about the position of public sector workers—people who work in difficult environments, such as the fire brigade or the ambulance service. They are undertaking desirable activities, but the level of protection that they have under the clause may be less than they have at present. I am with the right hon. Member for Berwick-upon-Tweed (Mr. Beith). His Select Committee has considered the matter. I am agnostic about the way forward. I do not think the clause moves us on, and I look forward to a rigorous debate on clause 1 and its significance.

Clause 1 is well balanced by clause 2. All bodies, particularly public bodies, ought to be prepared to apologise much more readily than they do. An apology is simply good practice. An early acknowledgement that things have gone wrong and that the institution is sorry could save a great deal of litigation later on.

Let me turn my remarks to part 2. As I said, claims handlers have ridden roughshod over coalfield communities, and the difficulties involving coal health claims are well documented. It is not only down to claims handlers but to solicitors and, I have to say, to trade unions. Hon. Members are right to question why trade unions should be exempted from the Bill by secondary legislation. I have come to support that view, but we must be very careful about what it says in the code of practice that the Government intend to introduce.

We must not be swayed by traditional allegiances to organisations such as trade unions. The unions have done, and continue to do, a tremendous job. They have brought test cases that have radically changed the law and have benefited working people—but at this stage, given recent events, we must ensure that claimants are at the centre of our concern. Where trade unions act as claims handlers—as they do; let us not kid ourselves—they must not be exempted. I am determined that the code of practice should make that clear. People who have been ripped off in north Nottinghamshire and other coalfield communities will be astonished and dismayed if a loophole is left open so that illegitimate, immoral activities can be undertaken by trade unions acting as claims handlers.

Another aspect that the code of practice will have to cover is that of a trade union acting for a member and his or her close family and for a wider group of people. Trade unions sometimes act for groups of people far extended from their traditional activities. For example, the south Wales branch of the National Association of Colliery Overmen, Deputies and Shotfirers acts for people in the Kent coalfield who are not members of that organisation. The code of practice must make it clear that there is a difference between acting for members and acting for a wider audience.

It is important that the code of practice is discussed with the TUC, which will, I am sure, be positive and helpful. It should not act as a sleeping watchdog but ensure that it intervenes heavily to stamp out abuse. Of course, some trade unions are not, and never will be, affiliated to the TUC. The code of practice must make it absolutely clear that trade unions, whether affiliated or not, operate legitimately within it.

Mr. Heald
As the hon. Gentleman knows, I am concerned about this point as well. Solicitors, for example, are also exempted but they are regulated in this field by the Law Society and, soon, by another regulator. The problem with the unions is that they have no regulator in this field. He will know that there have been some dreadful examples of union misbehaviour in this respect. Is he really satisfied with this exemption?

Paddy Tipping
I am making it clear to the Minister that I will be satisfied only if the secondary legislation and the code of practice really do the job for which the hon. Gentleman asks. When trade unions act as claims handlers, they must be treated as claims handlers. I do not, in principle, object to unions charging a reward fee for a successful claim. I know the benefit that will result if the money is used by the trade union movement for other activities, such as taking on test cases. However, I believe that it must be absolutely clear that the claimant understood the nature of the contract when he signed it. It is obvious from the whole claims scenario that that has not been happening.

The Minister is right, in the short term, to want to regulate claims handlers through the Department, but I hope that that is an interim solution. I should like there to be a regulatory framework separate from the Department. As others have said, a new legal services board will provide useful opportunities, but in the long term I should like to see more independence.

A number of my hon. Friends have mentioned the Barker case and asbestosis. I am impressed by what the Minister has said publicly today and privately to colleagues who have pressed her on the issue: that the Government will try to establish a process to resolve it. This is a matter of life and death. It is also a matter of simple fairness and simple justice. I cannot understand the House of Lords judgment, and I hope that we will act with equity and fairness to resolve the issue. Although I probably do not need to do so, I seek an assurance from the Minister that over the next few days, and certainly in the next fortnight, we shall be able to engage in discussions about the process or mechanism that is required.

I mentioned pleural plaque earlier. I accept that the litigation is now further down the road. The Court of Appeal has put many hundreds of cases on hold and the claimants are waiting for them to go to the House of Lords, but I know people who are suffering with pleural plaque, I know the history of payment over 20 years, and I know that—as with the Barker case—the law is changing fundamentally for working people. I hope that we will act with social justice again to resolve the cases of people who, through no fault of their own and through the fault of their employers, have been disadvantaged and put at risk.

This is a good Bill, which has been improved in the other place. It is concerned with the essential elements of looking after claimants and workers. I am conscious, however, that we must work hard to improve it even more. We are heading in the right direction. As we say, much has been achieved, but much more needs to be done.

15:48:00

Mr. Julian Brazier (Canterbury) (Con)
I welcome the Bill, especially clauses 1 and 2. I too congratulate Lord Hunt on his handling of the Bill, and in particular on his success in winning the vote on the splendid clause 2; and I congratulate the Government on their graciousness in accepting it.

I shall make four basic points. First, I shall explain how adventure training and certain types of sport are being severely damaged by the current culture. Secondly, I shall try to make it clear that this is not just a question of perception; it is based on a string of court cases. Thirdly, I shall touch briefly on what society is in danger of losing. I shall end with a few ideas for strengthening the Bill.

When I introduced my private Member’s Bill, which has been mentioned in both Houses in this context, I was touched by some of the letters of support that I received. The Children’s Play Council wrote:

“I have read with interest about your Private Members Bill on volunteering and risk taking…it is very common for playgrounds to be closed or removed because of local authorities liability fears”.

The Youth Hostels Association wrote:

“YHA welcomes the private members bill”.

Youthsport stated:

“I am happy to add the full support of Youthsport…As a training project for volunteers across London, Middlesex and Surrey we have been acutely aware of the growing trend towards litigation”.

After my private Member’s Bill was blocked, colleagues and I set up the all-party group on adventure and recreation in society. I am particularly glad that my co-chairmen, the hon. Members for Sittingbourne and Sheppey (Derek Wyatt) and for Montgomeryshire (Lembit Öpik), are present. We campaigned for fresh legislation, with the support of the Campaign for Adventure—whose remarkable director, Ian Lewis, has done much to keep us informed—and we are delighted that the Government have introduced the Bill.

The truth is that a huge amount of damage is being caused. In 2003, the Central Council of Physical Recreation and Sport England conducted the largest survey ever in the field of volunteering in sport and outdoor activities. It listed eight factors that were damaging volunteering, top of which came

“risk, fear of blame and the threat of litigation.”

More recently, the Scout Association carried out a survey of 1,100 scout masters. It stated that

“69 per cent. agree or strongly agree that the recruitment of new volunteers is made more difficult because of fears of being sued…a staggering 92 per cent. agree or strongly agree that risk-aversion is affecting the range and nature of activities being offered to young people”,

at a time when 30,000 youngsters cannot get into the scouts because they do not have enough scout masters, and when almost twice that number are waiting to join the girl guides for the same reason.

That leads me to my second point. Why does that state of affairs exist, or is it just a perception—an urban myth? I believe that it is a reality, given the large number of cases that have been fed to me. We sent a dossier of them to Baroness Ashton, who was very courteous about meeting us; however, we were told that, because her Department did not have law reports on those cases, even though we had given the dates, the courts and the names of the judges, it could not comment on them.

I then read the proceedings on the Bill in another place. Lord Goodhart, speaking for some of the Liberal Democrats—although not, it seems, I am relieved to hear, for the Liberal Democrat Front Benchers in the Commons—said:

“There are, of course, reports of cases where damages have been awarded to people who are the authors of their own misfortunes. It is difficult to find authentic texts for these judgments and I suspect that some of them are urban myths. Some of them are reported; some were decided before the law was clarified in the Tomlinson case; and some are simply bad decisions, which are unavoidable in any legal system.”—[Official Report, House of Lords; 7 March 2006, Vol. 679, c.647. ]

The question for Parliament is: is a pattern developing, or not?

Six days after Lord Goodhart’s speech, and while the Bill was still before another place, a court case took place in Manchester. It was one of many cases inflicted on the Scouts while the Bill was being debated in the Lords. The Scouts’ legal adviser said:

“I attach a note of a recent case in which the Scout Association lost following an injury to a brownie attending a scout panto...chairs were set out in the village hall and the brownie was injured on allegedly sharp piece of metal protruding from one of the chairs…Apart from individually inspecting every chair with considerable resource implications endangering the running of such an event it is hard to see what more the group could have done. To add insult to injury the Judge awarded the claimant twice our counsel’s valuation of the claim and 20 per cent. more than the claimant asked for!”

It cost the association £15,000.

Mr. Beith
Does the hon. Gentleman think that that claim would have failed if clause 1 had been enforced?

Mr. Brazier
Yes, and I will explain why in a moment. I am clear that clause 1 does change the law.

Judge Tetlow presided over the Manchester case that I mentioned. In summing up, he said:

“It follows there was a jagged edge which should not have been present in an area likely to be inhabited by children. Something had gone wrong. I do not think the defendant can avail itself by relying on the licensing officer’s inspection. The defendant set out the chairs and was in a position to remove any chair that was broken or defective. The system obviously went wrong for this chair to slip through the net.” Actually, the chair was never found but, on the balance of probabilities, it was decided that a defective chair was the cause.

“It presented a reasonably foreseeable risk of injury and should have been removed. I therefore find that the defendant failed to take reasonable steps to ensure the reasonable safety of the claimant.”

The point is that these chairs and the premises had been checked by the scoutmasters, and the licensing officer from the council had done a safety check, too. In the end, the judge’s view was that an additional and burdensome extra check should have been carried out; a check of every chair.

There could not be a clearer example of something to which clause 1 would have applied. The clause asks whether or not, by taking precautions against a risk, we could prevent a desirable activity from being undertaken or, more importantly, whether we could discourage persons from undertaking functions. The one thing about which the Scout Association, the Girl Guides and all the other groups to whom we have talked are clear is that anyone who has been hauled through a case like this as a scoutmaster, guide leader or whatever almost invariably leaves the Scouts or Guides and so do a lot of their friends.

David Howarth
First, for Lord Goodhart’s sake, will the hon. Gentleman place in the Library the documentation he has about the case so that, at a later stage, we can all read what the judge said in full? Obviously there is no time in a Second Reading debate to go through the whole judgment.

The test in clause 1 is the existing law; the precaution that it is said the defendant should have taken is tested against its cost and its benefits. There is no change brought in by clause 1 that would affect the case that he has mentioned. The problem is the way in which it was applied by the judge, but that cannot be changed by having a new statute.

Mr. Brazier
I half agree with the hon. Gentleman. Without exception, all the cases have come from the last 12 or 13 years; not a single case arose before 1993, and we have had a flood since. There has been a change of interpretation that has had nothing to do with anything that Parliament has done. That is true, but crucially, by spelling the point out—we can get into semantics as to whether it is a change in the law or not—there is a real chance that the lower courts will take this on board. Tomlinson was an excellent judgment but it dealt with a rather narrow point about an individual who was behaving extremely recklessly. I hope that this measure will embrace a wider range of cases, as I have tried to describe.

Lembit Öpik
Does the hon. Gentleman agree that it is evident that the individuals in the case he mentioned were not protected by the law? Something went wrong; the courts ignored all the guidance given to them. Some of my hon. Friends here do not completely agree with clause 1, but in Committee we must recognise that there is an imperative to put some legal protection in place to prevent the kind of outrage that the hon. Gentleman has just described.

Mr. Brazier
Exactly.

Let me give details of a second case, from a large dossier; the Gaping Gill incident. In summary, a scout troop visited a beauty spot and some parents were invited to come along as additional supervisors. On the way, a little boy asked a scoutmaster if he could investigate a cave in the side of a hill that they had passed. The scoutmaster said no, that it was dangerous and explained why. The boy asked his father, who said yes, took him to the entrance and gave him a lighter. The poor little boy walked over a 300 ft cliff to his death. His elder brother was serving in the troop.

Two years later, when the boy’s elder brother left the troop, the father sued the Scout Association. The scoutmaster was declared to be negligent in a British court of law on the grounds that having spotted an “urban parent”—a parent from an urban environment—the scoutmaster should have taken more active steps to prevent the boy from getting into the cave because he could not be expected to understand the danger.

Let me make it clear that not only the Scouts furnished us with cases. We have had them from the guides, the mountaineering community and the Royal Yachting Association, as well as one from a school.

We must understand how much is at stake and how much damage is being done to our country. The Duke of Edinburgh, who is the patron of the Campaign for Adventure, has said in public:

“The danger for society is not that people take risks, it is that they do not take risks because they see risk as entirely negative rather than the very positive thing it really can be and most often is.”

By coincidence, almost the same month, Lancashire education advisers issued a statement:

“Many Duke of Edinburgh Award Schemes and other providers of diverse educational opportunities are having trouble recruiting”

volunteers

“due to fear of unfair litigation.”

Sir Chris Bonington, who addressed the inaugural meeting of the all-party group, said:

“A sense of adventure is vital for children growing up and society as a whole.”

If young people are not offered opportunities to take risks and to learn to expand their horizons in a properly organised and structured environment, the less enterprising will turn into couch potatoes while the more enterprising will get out and make their own opportunities for risk. We see that in joy riding, people playing chicken on railway lines and a string of other unhappy events.

I rather agree with the comments made by the right hon. Member for Berwick-upon-Tweed (Mr. Beith) on balancing risk. Those are the risks we have to balance with the damage we are doing to voluntary organisations, and indeed professional ones, that provide adventure training and sport.

Let me spend my last couple of minutes looking at ways in which we could strengthen the Bill. I want to make four points, two of which, funnily enough, were put forward by the Field Studies Council. First, there is perhaps something to be said—this is the only part of the speech made by the hon. Member for Hendon (Mr. Dismore) that I agreed with—for a clearer definition of “desirable activities”. Lord Hunt made an excellent stab at this.

The basic point, if the House will forgive me for repeating it again, is that there is no contradiction between saying, on the one hand, that there is no compensation culture and accepting, on the other, that in this specific area—a tiny proportion of all cases, involving adventure training and sport—real damage is being done. The American experience proves it. America is the worst country in the world for a compensation culture, but there is specific protection for sport and adventure training in the law of many American states and a much higher burden of proof. I would be happy to have provision restricted to sport, adventure training, physical recreation and educational purposes, or something similar. I leave it to others wiser than me to draft the clause.

My second point is that, having restricted the provision, we really should say “shall” rather than “may”. I entirely understand the objection to that made by the Minister in the courteous hearing that she gave us, but that objection would surely be coped with if we had a more restrictive definition of “desirable activities”. As time is short, I shall move on from that point.

The third issue concerns landowners and farmers; there was a close vote in another place on it. The plain fact is that all organisations such as the Scouts and the Guides, as well as those that provide for schools that want to visit farms, can operate only with the good will of the farming community. I cannot see why—this does not have to follow the exact wording promoted in the House of Lords—we cannot have an element of clause 1, or indeed an extra clause, that specifically provides comparable comfort for those who make their land available for such activities.

The fourth and final point was also made by my hon. Friend the Member for North-East Hertfordshire (Mr. Heald). We must consider the possibility of including a specific measure to address the issue of those who disobey instructions or behave manifestly recklessly. As my hon. Friend pointed out, that is important for people who run leisure parks and provide opportunities for youngsters to do adventurous things professionally, but it is even more so for those who do so in a voluntary context. If somebody deliberately sets out to disobey an instruction and brings a serious accident on themselves, that should be a stronger defence than it appears to be now, as the Gaping Gill incident all too sadly illustrates. If somebody is drunk or drugged, the same point should apply. I am glad that the Field Studies Council supports that move.

This is a good measure—I have confined my remarks to the first two clauses—and it is one that most hon. Members support. I strongly urge the Government to consider strengthening the first clause so that it provides even clearer protection for those who provide opportunities, frequently on an unpaid basis, for young people to test the boundaries and grow as individuals in a structured way that is not necessarily safe, but is sensibly balanced in terms of risk. That is what they need if they are to grow up without feeling the need to take the sort of risks that none of us wants to see them take.

16:06:00

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab)
I shall confine my remarks to part 2 of the Bill. I take on board what my hon. Friend the Member for Hendon (Mr. Dismore) said about clause 1 and I note the controversy. I shall examine the results of the consideration in Committee of that clause, but overall it is a good Bill.

My hon. Friend the Member for Sherwood (Paddy Tipping) made the point about the exemption. One has to make a clear distinction between trade unions and claims farmers, and look at the legal services that trade unions have provided over time. They have pushed the boundaries of the law and in so doing have made society a fairer place. Trade unions and their legal services have made civil society a better society.

Part 2 will bring structure and regulation where there was none previously and it is essential that we are able to provide regulation of claims farmers. My hon. Friend the Minister suggested that there were some 500 claims farmers, and I suggest that half of them have come into being since the chronic obstructive pulmonary disease scheme started under the coal health scheme. At present, there are 582,000 registered claims for COPD, 170,000 registered vibration white finger claims and 15,000 posthumous vibration white finger claims. That is 767,000 claims, and many of the claims farmers saw the opportunity to exploit the community.

Mr. Heald
I agree with the hon. Gentleman about claims farmers, but I know that he is a member of the National Union of Mineworkers. It has been reported that a firm of solicitors acting for the NUM

“advised miners to sign an agreement letting the NUM ‘fund’ their legal claims—for chronic chest diseases and a crippling hand condition…in return for paying part of their eventual compensation to the union.

The miners were not told that in reality the Government, not the NUM, was paying the legal costs”.

How can the hon. Gentleman justify not regulating a union that behaves like that? It is disgraceful.

Mr. Clapham
I cannot justify the fact that the solicitors to which the hon. Gentleman has referred did not provide the expected standard of professional advice. They should have advised claimants that they did not need to make the payment that was requested when they signed the form.

Mr. Heald
The union was responsible.

Mr. Clapham
It was the solicitors who were at fault, not the union. Trade unions and their legal services have worked to provide a better society. I do not know which area of the NUM was involved in the case to which the hon. Gentleman refers, but I presume that it was in Yorkshire or the north-east. I maintain that the solicitors involved did not advise clients properly, and so failed to provide the proper service.

Mr. Heald
The firm of solicitors involved in the case was Raleys, and the NUM apparently took £10 million out of the compensation awarded to miners. How can that possibly mean that unions should not be regulated?

Mr. Clapham
As I said, there is a clear distinction between trade unions and claims farmers. The solicitor in the case that we are discussing failed to give the expected standard of professional service. Payments were made to the trade union, which had asked its solicitors to ensure that a form of authority was signed by claimants. I do not excuse that, but the solicitors should have explained that claimants could go to another firm of solicitors that did not seek payment. The fact that that was not explained makes the solicitors culpable.

There is a very big difference between claims farmers and trade unions, as I shall explain by reference to a couple of cases in my constituency. Lots of elderly people live there, and many are the widows of miners. One lady, Mrs. Leadbeater, was approached by a claims farming organisation using a name that gave the impression that it was linked to the trade union movement or to the Coal Industry Social Welfare Organisation. That is a common practice, and one of which I hope my hon. Friend the Minister is aware.

In this instance, the claims farmer called itself the Miners Welfare Compensation Agency Ltd. It approached Mrs. Leadbeater about her claim, and she thought that she was dealing with a legitimate organisation related in some way to CISWO. The agency took the claim and passed it to a firm of solicitors in Manchester called Lopian Wagner. When the claim was settled, Mrs. Leadbeater found that £9,000 had been deducted from her damages and paid on to the claims farmer.

When a claims farmer works with a solicitor, a very complex situation is created. I and my hon. Friend the Member for Barnsley, Central (Mr. Illsley) got involved in the case and, with the help of one of the BBC’s local political programmes, we forced the solicitors involved to pay back the money. We advised Mrs. Leadbeater to take her case to another solicitor, which she did. She took action against the original solicitors through the Law Society, and the matter eventually went before a Law Society disciplinary committee. As a result, that firm of solicitors was fined and had to pay £1,800 for the trauma that it had caused to my constituent.

Another example from my constituency involved a company called Zuco Legal Ltd. As often happens, that company came into being simply to exploit problems in mining communities. It garnered 5,000 claims, and then wrote to various firms of solicitors. One of those firms was Towells of Wakefield, which passed to me the letter that it received from Zuco.

Zuco succeeded in selling on the claims that it had gathered, although I emphasise that Towells would have nothing to do with the proposal. Zuco sold those claims on at £400 or £500 per claim, although we do not know the exact figure. It made £2.25 million and then disappeared from the scene. That is the sort of problem that has occurred in mining communities.

I hold to the point that there is a clear difference between claims farmers and trade unions. I accept that some trade unions may have behaved less well than one would have expected, but that does not alter the fact that, in the case mentioned by the hon. Member for North-East Hertfordshire (Mr. Heald), it was the solicitor who failed to provide the level of service generally expected of a solicitor.

Mr. Beith
I have great respect for the hon. Gentleman’s work, but he cannot escape the fact that, in respect of the money that arrived in the NUM’s accounts, it is not sufficient to say that the solicitor should have told union members about it. The NUM knew that its members were getting that money, so it should have told them as well.

Mr. Clapham
Let me deal with that point. The right hon. Gentleman may not be aware that, as my hon. Friend the Member for Bassetlaw (John Mann) has mentioned before, a deal was done with the Union of Democratic Mineworkers, which had a separate arrangement. It was not offered to other trade unions in the industry, though it was offered later when some trade unions had abandoned their in-house legal services. Consequently, certain areas of the NUM went into an arrangement with solicitors whereby a payment would be passed from them back to the NUM on the basis that a form of authority would first be completed. I would have thought that, in that context, the onus was on the solicitor acting for the trade union to advise the client that he could go down the street to a firm of solicitors that would not charge him. The fact that the solicitors did not do that makes them culpable. It is not the trade union, but the solicitors who are at fault. We must also understand why the problem came about. It happened, as I said, because of preferential treatment being given to some miners’ unions and not to others.

The purpose of part 2 is to bring some form of regulation to claims farmers. Where the claimant has a relationship with a trade union, we have been able to ensure that the Law Society acts for them. I have referred many complaints to the Law Society, most of which were dealt with, bringing redress to claimants who could claim back the money held by law firms to pay for the services provided by the claims farmer. I continue to hold to my point that there is a clear distinction between the trade unions and claims farmers. One or two trade unions may not have provided the service that they should have, but that should not be used to tarnish the whole trade union movement. In my estimation, the trade union movement has been a force for good.

It is essential to overturn the Barker judgment and to go back to the law as established in the Fairchild case. In that case, it was clearly established that the responsible employer or insurer had to pay full damages to claimants suffering from exposure to asbestos and mesothelioma. I believe that we must return to that principle and hope that the Minister will table a Government amendment in Committee to achieve it.

There has been a marked increase in mesothelioma claims over the last 40 years. For example, in 1966, there were just 153 claimants; today, there are almost 2,000 diagnoses of mesothelioma cancer each year, and the prediction is that the number will increase. The Health and Safety Executive’s latest projection is that it is likely to peak in about 2015, reach a plateau and then taper away by 2050. However, one authority—an investigative journalist by the name of Peter Martin, who wrote an article in The Sunday Times Magazine of 16 May 2004—has estimated from his research that 186,000 deaths are likely between 2000 and 2050, as a result of exposure to asbestos. So it is essential that we return to the law as set by the Fairchild ruling.

A little earlier in an intervention on my hon. Friend the Member for Manchester, Central (Tony Lloyd), I referred to the fact that, under the Barker decision, people could not make a claim under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, and I did so because of a legal opinion that I received by e-mail from a QC by the name of Allan Gore, who practises at 12 King’s Bench Walk. I shall read the pertinent part for the Minister:

“In Barker no answer is offered to the question. But if fair in Fairchild, why is it not fair now? Surely the answer cannot simply depend on what was argued in each case? Victims will now obtain only partial damages in many cases. This leaves cases outside the 1979 Act so that safety net is not available.”

That is why I have referred to the fact that redress under the 1979 Act would not be available, but the Minister has been advised that it would be available.

I have no doubt that the Government could say that redress is available under the 1979 Act for claimants to make such claims, but I can understand the logic that has decided that the 1979 Act is not available for that purpose. One of the planks of the Barker decision was that, if people were unable to identify one of the employers for whom they worked, their damages would be reduced accordingly. The 1979 Act provides for claims to be made where an employer has either gone out of business or cannot be traced, or there is no insurer. So it logically follows that, given the Barker decision, there could be no claim under the 1979 Act. If that is the legal decision, the Government must ensure that the route to redress under the 1979 Act stays open.

Overall, this is a good Bill. It will deal effectively with claims farmers and allow us to introduce some regulation and order, and by doing so we will avoid people being exploited in the way they have been exploited in mining communities.

16:23:00

Jeremy Wright (Rugby and Kenilworth) (Con)
I declare an interest as a non-practising barrister, although not in the field of personal injury or negligence. I want to say a few words about part 2, which I welcome, and then to say a little more about part 1. I am certain that part 2 is an entirely appropriate and necessary measure, which will introduce some consistency and ensure that claims farmers are treated in the same way as lawyers and insurers. That is entirely welcome. Like my hon. Friend the Member for North-East Hertfordshire (Mr. Heald), I hope that that there will be full consistency, and that trade unions will be included in the general consensus.

As the House has heard, the Constitutional Affairs Committee, of which I am a member, considered the Bill in some detail and concluded in its investigation that there is no compensation culture. There is broad agreement not only about that, but about the fact that there is a perception of a compensation culture. In my view, that is almost as bad. That perception is widespread and profoundly damaging, as other hon. Members have said. Claims management companies have contributed substantially to that perception, and that is one of the many good reasons for regulating their behaviour. The Government wish to go further to address the apparent perception that there is a compensation culture—and that brings me to part 1 of the Bill.

There is no doubt that the perception of a compensation culture must be challenged and changed, because it is doing a great deal of damage. Of course it is right that if somebody suffers injury or loss as a result of negligence they should receive compensation for their loss. That is clear, and it is the law, but it seems to me that a sense that there is no longer any such thing as a straightforward accident for which no one is to blame, and that someone is always to be held financially accountable, is corrosive.

It is clear that people are not rushing to the courts to pursue claims. That is what the evidence shows us, but it is also clear that many of those who operate voluntary organisations and the like still have a profound fear that they might do that, and that fear has to be addressed by the House. That fear is important because it inhibits activities that are not only enjoyable, as my hon. Friend the Member for Canterbury (Mr. Brazier) described, but can be extremely valuable for the economy. That is important, because clause 1 is about persuading people that the position is as the Government argue it to be.

The law does not prohibit someone from operating a voluntary organisation or running a scout troop or adventure training organisation or anything like it, but the law will consider someone’s behaviour, and if it is reasonable and they have taken appropriate measures to ensure that risks are limited, they will not be liable. However, that is not the perception. The perception is that if people run an event, they may be liable. That is important, because the effect is difficult to measure. When we look at the figures, we can see whether accident claims have gone up or down. That is quantifiable, but we cannot quantify the things that do not happen—all the decisions taken by teachers not to run a school trip, or by youth club organisers not to undertake a potentially dangerous activity that they fear may leave them liable to legal action. There is an area of undisclosed and undeterminable activity that is not happening, and that is the real root of the problem. 

There is no doubt that that non-activity is real. This is a genuine and far-reaching problem. I do not want, and I am sure that other hon. Members do not want, to live in a society where in some activities that our children pursue in their education it is made impossible for them to fail, while they are told that other activities are too risky for them even to try. If we pursue that sort of scenario, we will discourage our potential entrepreneurs and scientists from trying the type of activities that inevitably involve risk, but without which progress cannot be made in a competitive economic environment. That is the kind of Britain that I fear we are moving towards, not because of a reality but because of a perception.

I support wholeheartedly the Government’s intention and aspiration to address that perception, but I have severe doubts whether clause 1 is the way in which we should go about doing so. My basic principle is that if we can do something better without making extra legislation, we should do so. That is something that will be explored as the Bill progresses through the House. I wonder whether the Government can achieve what they, quite properly, want to achieve other than by constructing something like clause 1. Clause 1, as the Government have made perfectly clear, restates the law. In their view it does not change the law, although I appreciate that some hon. Members disagree with that assessment. The Government believe that clause 1 is about expressing the law more clearly and making clear to everyone who has an interest in this area of the law exactly what it says.

What the Government really need to do is to get that message across to the people likely to be affected by the law, but the way to do it is not with a clause in a new piece of legislation, which will hardly come immediately to the attention of people engaged in voluntary activities, or who run scout troops, adventure training or anything of that nature. Those people will want to hear directly from the Government what their responsibilities are and what they are liable for. That is a communication job; it is an exercise in getting the message across. It is—dare I say it?—a public relations exercise. If there was ever a job for the Government, that must be it. However, given all the problems that have been outlined about clause 1, all the difficulties of defining precisely what a desirable activity is and all the possible downsides that we have discussed, could we not do things in another way? I hope that in the course of the debate we shall consider that point more carefully.

To be fair to the Government, they have accepted that they cannot simply rely on clause 1 to get across the message that the compensation culture is a myth and that people should not change their behaviour as a result of that myth. There is clearly much more to be done. In an intervention on my hon. Friend the Member for North-East Hertfordshire, I referred to activities that are not covered by clause 1 and which relate to the Health and Safety Executive. There is much work to be done in that regard. If the Government are to succeed in persuading those who operate in the voluntary sector and elsewhere that they are not liable to penalties, in the form either of prosecution by the HSE or of a case brought by someone injured in an accident, they will have to consider not only the civil law but also the criminal law, and ensure that the HSE gives clear guidance about what people are safely able and entitled to do.

I hope that the Government will go further and consider the work of the HSE and make sure that the guidance it issues is clear, and does not change behaviour in undesirable ways.

Mr. John Gummer (Suffolk, Coastal) (Con)
The provision would need to be much wider than my hon. Friend suggests. A farmer in my village used to give up two days to display lambs to young children—one to raise money for the parish church and the other to raise money for the local hunt. He can now do neither, because the HSE warned him that the children might catch a disease if they touched the lambs. That has had a devastating effect on our small village, so how can we reach out to such people?

Jeremy Wright
I am grateful to my right hon. Friend, who makes a valid point. Part of the difficulty is that the HSE appears to operate on the premise that it must do whatever is necessary to reduce the prospect of an accident almost to zero. That approach is fundamentally flawed and, as many Members have said, although we should look for methods of reducing risk, we must always accept that we cannot eliminate it entirely. We must also accept that if we reduce to almost nothing the chance that people—especially young people—will engage in potentially risky activities, we shall damage their development far more than the risk of an accident would. The Government will have to look at the matter in a broader context than that presented by the Bill.

It is important that we recognise what is right about the Bill: it addresses the long-overlooked issue of how to regulate the claims farming industry. That is welcome and we shall make sure, as the Bill goes through Committee, that those provisions work as well as possible. To achieve that, the Government must avoid drawing attention away from their primary purpose by leaving clause 1 as it is, because it may simply act as an unwelcome distraction from what the Bill will, I hope, do effectively.

The Government can address the perception that we have a compensation culture, but they need to get their information transmission mechanisms right, and to send the right messages through Departments, through the HSE and through regulation of the claims farming industry that the compensation culture is not a reality, and never can be. It would distract us, and the individuals whom we are trying to help, to talk incessantly about the sorts of legalistic problems that clause 1 throws up. I hope that the Government will take those comments on board and that the Bill can be improved still further as it progresses through the House.

16:35:00

John Mann (Bassetlaw) (Lab)
I intend to ask a number of questions of the Minister and the House, and I hope that people will take them into consideration as the Bill progresses. I will address each question by illustrating what I am talking about with an example from the mother of all gravy trains, the scamming of money from miners. I pay tribute to more than 1,000 of my constituents who have already taken action—many of them successfully—against more than 35 firms of solicitors and a whole range of claims handlers.

The first example involves a claims handler called IDC. Many of my constituents signed a form that said that IDC would pay the costs of the claim. It even contained a clause about what would happen if the claimant deliberately misled the company. In fact, the opposite happened. A firm of solicitors called Gorman Hamilton got the claim from IDC and wrote to my constituents to say:

“You, as our client, are liable for our costs but, as you know IDC Ltd have agreed to pay them on your behalf.”

That was not true. The Government were paying the costs. It was a scheduled case. There were never any costs being paid by IDC. Here we have a conspiracy between a solicitor and a claims handler. My question for the Government is: what will happen with that conspiracy if there are different agencies regulating the claims handler and the solicitor? That is the nub of the issue.

I have some minutes from the national marketing meeting of IDC. Oxley and Coward solicitors, Park Hutchison solicitors, Marrons solicitors, Whittle Robinson solicitors, and Russell Young solicitors were all at that meeting. IDC went through the importance of knowing the needs of solicitors and what they consider “good referrals”, of looking at the screening processes and of the “personal touch”. Mention is made of “MTFS” or “make them feel special”. That is with reference to the clients. Mention is also made of:

“The introduction of a theme to build on in order to provoke a response and to attract and hold the favourable attention of the prospect whilst the selling message is being told.”

There is a discussion of whether to use a shotgun or a rifle approach to the marketing of the product.

The question of collusion between solicitors and claims handlers is at the heart of the issue. Under the heading of questions raised from the floor, the minutes state:

“With this strategy in place expect clients to cross from Union Solicitor to IDC.”

That was the aim of that marketing meeting. The question of the two culprits together is important.

The second example involves PR and Associates. Again, a number of my constituents signed a common law claim form, headed “Common Law Claims”. The offer was that the costs would be covered for a common law claim, and the claimant would pay 15 per cent. plus VAT in return. That sounds fair, but of course, those were not common law claims, despite the fact that Kidd and Spoor Harper said:

“In accordance with… your Agreement...we have deducted”

the fee to PR and Associates from the claim. Here we have the solicitor doing the work on behalf of the claims handler. There is a cast iron case against the solicitor, but how will that be affected in terms of how the claims handler is regulated?

The third example involves Union and General Services. It is the same old thing. The contract says that the company will pay the costs of the fee. This time the firm of solicitors is called Robinson King, and £3,284 was deducted in this case. The letter states:

“you are funded by Union & General Services…I enclose a copy of the signed agreement…I have forwarded this cheque on to Union & General Services who will deduct their…fee and provide you with a cheque”

for the rest. How will that be dealt with? Money has passed wrongly to a third party.

Separately, Union and General Services, which was a limited liability company, has gone into receivership. When we started to raise the issue, the company was closed down. How will the regulation affect such a scam company, which was set up by a Mr. Revell from Doncaster, a former union official? It was a pretence to call the company Union and General Services. Given that the company put itself into receivership, we would not be able to take a common-law case against it to the small claims court because it is no longer in existence. How will the ability of companies not to be pursued be dealt with?

Another of my constituents, Mrs. Beckett, went to Raleys, a firm of solicitors that I have already named. She was told:

“NUM funding is available only through this firm”.

However, Mrs. Beckett did not go through the NUM, but contacted Raleys directly by using Yellow Pages. Despite that, she was told:

“You are of course at liberty to explore other types of funding arrangements, however we cannot guarantee that they will protect you from the need to pay any expenses or from the amount that your solicitor may recover from your compensation”—

not true!

I have a copy of the kind of publicity that Raleys puts out from a brochure produced by one of the health authorities. Raleys says, “Millions won in compensation,” and asks miners to come forward, but the publicity makes no mention of the NUM. However, when one goes to Raleys, as did another of my constituents, Mr. Dunstan, the situation becomes clearer. He was told:

“If you do not wish to take up the option of Union backing then it will be necessary for us to consider alternative funding arrangements. If you are not eligible for legal aid then it will be necessary to discuss funding your case by either private funding or through a conditional fee agreement.”

However, we should not forget—the letter was written in 2000—that the Government were paying the fees.

The letter continues:

“If you choose to fund your claim on a private basis then you will be liable for the costs and disbursements of this firm in dealing with your claim. You will also be responsible for the opposition’s costs, should you lose”—

not true; it is a lie. The letter then sets out a statement on conditional fee arrangements and says:

“Please find enclosed a form of authority confirming the funding options which you would prefer.”

The TUC briefing for the debate makes the situation when dealing with unions clear. The vast majority of unions are decent organisations that deal with members who can get remedies in a range of ways. However, Mrs. Beckett was not a member of a union and Mr. Dunstan was a retired member. The situation was affecting non-members, not members, so remedies available for members, ranging from the certification officer to common law governed by statute, would not be available. Precisely how would that be addressed?

Of course, we have also heard about another union: the Union of Democratic Mineworkers. I have lots of similar forms that contain such phrases as:

“I will pay … a fee … to cover the cost of pursuing this Claim”.

However, that should not be the case. One of the dilemmas is that although the majority of people went through solicitors, so the Law Society would be involved, some did not. That is precisely why I intervened on the Minister to ask about the Government’s ongoing three agreements with UDM Vendside. There are no solicitors involved and no consumer right is available. The people involved have never been to court or had dealings with solicitors before. Many of them are in their 80s and 90s, and their only remedy is to go to court to get justice, but that does not appeal greatly to people of that age.

There is far more to the situation. I have a form from a Mrs. Cocker. The Vendside bit of the form has been covered by a sticker for Walker and Co., which is not known to my constituent. An individual employee of Vendside and the UDM had set up a different company. That company then took a cut. I know that because I have a copy of the minutes of a UDM meeting in January 2002 between Beresfords solicitors, the UDM leader, Mr. Stevens, and Clare Walker—Walker and Co. The minutes explain in graphic detail who gets what cut of the money. There is a range of information detailing what Beresfords, Vendside and Clare Walker will be getting. The minutes also cite a company called Melex that is being set up, 90 per cent. of which is owned by the Beresford family.

Letters between Beresfords and the Law Society have come into my possession. Beresfords has been asking, in essence, how it can get around the Law Society rules on referral fees. It asks, “Can we set up a third party?” It does not call it Melex, but Melex comes into existence. Who should get paid? Obviously, the Beresford family get some money, but so does Clare Walker. But it goes on, because then there is the conditional fee arrangement, and insurance. In some cases, Beresfords hands matters on to another firm of solicitors—its panel—which pays a fee back to Beresfords. In a hearing loss claim, there could be five or six different deductions. There is an amount for the ATE Insurance commission—the minutes say who is going to get a bit of that. There is the Melex money. There are the vetting, administration and marketing fees.

That leads me to my key point. It is very easy to set up new companies to get round the guidelines. In other words, people say, “It’s not a referral fee—that’s not allowed under Law Society rules. It’s a marketing fee.” It is only when someone manages to get all sorts of files that they see that lots of people are doing the same work. Walker and Co. was doing the marketing; Vendside was doing the marketing; Beresfords was doing the marketing. Oh, and there is another firm, Indiclaim, which was doing the marketing as well. There are lots of different people doing the marketing. We must ensure that these dodges are not allowed.

I understand that some of these companies are now charging money for training. Training has nothing to do with my constituents. There are different ways of skinning the cat and getting the money. Another firm of solicitors, BRM, is paying £500 plus VAT to Indiclaim. Another one, Wake Smith, has done a better deal, as it has to pay only £300 plus VAT to Indiclaim. My constituents have never heard of Indiclaim Ltd. They do not realise that it is owned by one of the people running Vendside, which is owned by the UDM. We must ensure that people cannot wriggle out of regulation. It is essential that the Government use the opportunity of their agreement with the UDM to look into the matter in graphic detail.

The Law Society is quoted in the legal services ombudsman’s report as saying that:

“it is not clear what (if anything) Vendside and/or the UDM did pursuant to the Vendside Agreements in respect of the fee paid”.

What they did was set up lots of other companies. My constituent Annie Robinson, aged 93, gets £352.50, which she struggles to get back either from the solicitor or from Vendside. That is simply not acceptable.

It is essential that we act now, and do not wait until the Bill comes into force. The scandal of the miners’ compensation is going on at the moment. These people need consumer rights now, because the Raleys, the Vendsides and the plethora of other firms who have been ripping people off should be held to account—and if solicitors who are claims handlers are struck off, the Government should cancel their agreement with the UDM.

16:48:00

Mr. David Jones (Clwyd, West) (Con)
I wish to declare an interest as a member of the Law Society. Like Members on both sides of the House I warmly welcome the Bill, particularly part 2, although I do have reservations about part 1, which I will touch on later.

Regulation of the activities of these so-called claims farmers—an expression that appears to have supplanted the traditional “ambulance chasers”—is long overdue. Whether or not there is a compensation culture in this country is a matter of debate, and it has been debated today. The Better Regulation Executive took the view firmly that it was a myth, and certainly it appears that costs in negligence actions in this country are considerably lower than those in the United States, France, Germany, Australia or other major jurisdictions. Nevertheless, there is, as appears to be widely accepted, at least a perception of a compensation culture, and that is having a significant and detrimental effect on the national life of this country.

The compensation culture, if it is not a reality, appears to be something that the claims farmers are aimed at creating. We have seen their marketing campaigns. We have seen also their slogans, such as, “Where there is blame, there is a claim”. These slogans are clearly intended, aggressively, to encourage the pursuit of actions for personal injury. Such advertising can frequently raise unrealistic expectations in the minds of vulnerable people.

Since legal aid was abolished in 1999 for personal injury claims, the no-win, no-fee regime that has replaced it has made it more difficult for potential litigants, particularly those who are less sophisticated than others and therefore more vulnerable, to obtain legal redress. It is unfortunate that it is precisely those people—more vulnerable potential claimants—whom the claim farmers seek to attract. Perhaps the expression “prey upon” might be more appropriate.

I am sad to say that the more vulnerable in our society find the prospect of approaching a solicitor intimidating. They find the prospect of making a free telephone call to a claims farmer a more attractive option. Once the potential litigant is in the clutches of the claims farmer, it is often difficult for them to get out.

The abuses of claims farmers have been catalogued this afternoon. As time is short and because other Members wish to speak, I will not rehearse them. There is no doubt that regulation of the industry is a matter of priority and one that is long overdue. I congratulate the Government on bringing legislation forward.

The activity of claims farmers has its consequences. Their pursuit of the creation of a compensation culture has created an increasingly risk averse society. We have heard the stories of school teachers and scout leaders who have been dissuaded from taking young people in their charge out on what would be valuable and character-building expeditions.

Many years ago, when I was considerably younger, I used to go rock climbing. I did it because I enjoyed the risk. When one is clinging 100 ft up on a rock face, it is difficult to think of anything other than maintaining that position on the rock face. I would not begin to pretend that I was in any sense a Chris Bonington, but I enjoyed the experience. I was taken into the mountains by a guide called Terry, but I wonder whether these days Terry would be so willing to take me to the mountains. He has probably heard about the culture of where there is blame, there is a claim and he might well be dissuaded from doing so.

I believe that that is happening. We have heard from my hon. Friend the Member for Canterbury (Mr. Brazier) of the experiences that have been related to him. This is sad. Risk is a fact of life; we take risks every day. Risk is good and it develops character. If we are being dissuaded from taking risks by the activities of claims farmers, we need to deal with the culture that they are generating.

I applaud the aims of the Government in part 1. I understand what they are trying to do. They are trying to deal with the risk aversion that has been built up. They are trying to provide what I imagine is a statutory defence, based upon what they say is common law as it now exists.

Clause 2 is an extremely valuable component of the Bill. I congratulate Lord Hunt on ensuring that the provision was introduced into the Bill. I similarly congratulate the Government on accepting Lord Hunt’s valuable amendment and incorporating it into the Bill. It achieves a number of things. It deals with the simple issue of courtesy. If someone has caused damage or injury to another individual, in a courteous society he should be encouraged to apologise. As we have heard, he is frequently inhibited from doing so, because that may amount to an admission.

The problem extends even further, as we have heard. The clause will give insurers the opportunity to pay for a certain amount of treatment for people who are injured. The fact that that treatment is paid for will give considerable solace to the claimants but, in due course, it will reduce the value of claims that are made and ultimately reduce insurance premiums across the board.

I am concerned, however, about clause 1. I applaud its aim of seeking to ensure that the courts pay regard to the question of whether certain steps should have been taken by defendants or whether it would be unreasonable to expect them to take them. However, it is poorly drafted and, if we are not careful, it will become a fertile source of litigation in future. The application of the clause by the courts when considering such cases is not mandatory but permissive. The word, “may”, is used, but “shall”, is preferable, because it would give the lower courts the guidance that they need, ensuring that they consider the matters dealt with in the clause. However, the drafting is loose—there are references to “particular steps” and “a particular way”, but the glaring omission is the nature of “a desirable activity”. What does “desirable” mean? There is reference to

“undertaking functions in connection with a desirable activity”.

What are those functions? The thrust of the clause is sensible and desirable.

Chris Bryant (Rhondda) (Lab)
What does the hon. Gentleman mean by “desirable”?

Mr. Jones
Indeed. The House has an opportunity to give the courts clear, unequivocal guidance about how they should interpret the law of negligence in personal injury cases. That is an extremely important issue: it must be addressed in Committee, as the clause requires significant improvement. Notwithstanding that reservation, I applaud the Bill, which is long overdue. I welcome its introduction by the Government, and I hope that, pursuant to its enactment, regulations will be adopted and made law. If the House passes the legislation—and I hope that it does so—it will do a great service to some of the most vulnerable people in the country.

16:58:00

Dr. Roberta Blackman-Woods (City of Durham) (Lab)
I welcome the Bill, as it tries to stem the development of a compensation culture and deal with risk aversion. It seeks, too, to discourage and resist bad or unwarranted claims while improving the system for people with a valid compensation claim.

I welcome the fact that the Bill will establish a regulatory scheme to control runaway claims management companies, but I share concerns with the TUC about clauses 1 and 2. I thank the Government for their recent statements acknowledging those issues, and I congratulate the Minister on her opening speech, which addressed some of my concerns. The TUC is worried that the wording of clause 1 requires a worker injured in a “desirable activity” to prove a higher degree of negligence than a worker who suffers the same injury in a different activity, leading to the creation of a two-tier system in which workers engaged in desirable activities receive one standard of care while other workers receive a different one. The Government have said that the clause will not alter the standard of care required of employers, and I should be grateful if the Minister confirmed that. As other hon. Members have mentioned, there are also concerns that it is not entirely clear what constitutes a desirable activity. It would be helpful if that could be clarified in Committee.

I support the measures to restrict the compensation culture. Over the past five years there have been many abuses by claims farmers. Many of those companies actively encourage frivolous claims, combined with misleading advertisements targeted at certain parts of the country—areas where there was heavy industry. I represent a constituency in Durham where such companies have targeted their activities at former miners. Still, even though we acknowledge that, we cannot and must not compromise the protections afforded to our workers.

I share the concern of the TUC that in clause 2 it would be wrong to group trade unions with the ferocious claims management companies. I declare an interest. I am a member of the GMB and have been very active in the union for some time. I wish to put that interest on record.

I have recently been reading some of the speeches from the first parliamentary Labour party a century ago. It is interesting that those early speeches in the House were in defence of trade unions. They also reminded Conservative Members of the advantages of belonging to a trade union. It is extraordinary that we have to do that today.

Mr. David Anderson (Blaydon) (Lab)
Does my hon. Friend agree that the main drive from trade unions is against a compensation culture? What we want is a culture at work in which people do not get killed, maimed or damaged for life. Trade unions want to stop that happening, which is the opposite of claims farmers, whose purpose is to prey on people who have been through those experiences.

Dr. Blackman-Woods
I thank my hon. Friend and agree that, of course, the primary activity of trade unions is to provide services for their members, not to pursue frivolous claims.

Mr. Heald
We all agree that trade unions do a useful job, but is the hon. Lady seriously trying to justify what the NUM was doing in the example given a moment ago by the hon. Member for Bassetlaw (John Mann) and in the example that I gave? The union was doing exactly what claims farmers do and taking a cut of the miners’ money. Is the hon. Lady saying that that is fine and that we should not regulate trade unions?

Dr. Blackman-Woods
I shall deal with that point in a moment. We should not forget that unions are constantly working to prevent the injuries that lead to claims in the first place. That is a very important distinction between trade unions and claims farmers. Whereas such companies choose to maximise profits, trade unions seek to maximise protection for their members and my constituents.

Trade unions represent more people making personal injury claims than any other body, so it is important that unions are not undermined in the eyes of their members by being lumped together with disreputable claims companies. Trade unions do need regulation, and I shall deal with that. The TUC has outlined a number of reasons why union legal services are usually completely different from claims farmers. First, unions are already heavily regulated. Secondly, when a member makes a claim, the union will work for a fair settlement, often to keep medical and legal costs to a minimum. Thirdly, as my hon. Friend the Member for Blaydon (Mr. Anderson) said, unions’ primary task is to protect their members. Fourthly, unions link the work that they do on compensation with work on prevention. Fifthly, unions do not automatically steer their members towards claiming compensation from their employer: many union claims are made to state compensation funds, which is an entirely legitimate task.

It is for those reasons that unions and certain not-for-profits need a specific exemption in the Bill. I applaud the Government’s statement that they will be afforded an exemption in regulations, but it is important that in drawing those up it is clear that trade unions have to operate within a code of practice, and that if they act like claims farmers, they must be treated as such. I am sure that all hon. Members would accept that.

I want to say a few words about the Barker ruling on mesothelioma victims, which has acted very much against their interests. The Government have called it “disappointing” and pledged to consider a response to it. I urge them to respond soon. In my opinion, the judgment fails to recognise the realities of the problems that the victims are facing. It is often impossible for them to show which employer caused the disease, so several previous employers are thrown into the frame. The former Association of British Insurers scheme dealt with that complexity, but that is no longer possible. It is impractical for the claimant to trace everyone concerned, especially because, as my hon. Friend the Member for Hendon (Mr. Dismore) observed, they often have only a short time to live after the disease has been identified.

It is important that the Barker ruling does not influence the judgment that we are awaiting on pleural plaques. Like many MPs who represent ex-mining areas, several people who come to my surgeries suffer from such diseases, and we must ensure that they are protected. I urge my hon. Friend the Minister to take action as soon as possible.

17:07:00

David Howarth (Cambridge) (LD)
I should start by declaring an interest, in that I still receive the occasional royalty for the books on this subject that I wrote several years ago. However, I am not a member of the Law Society or a barrister. I completely agree with the speeches by my fellow Constitutional Affairs Committee members, my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) and the hon. Member for Rugby and Kenilworth (Jeremy Wright). Perhaps my speech will be seen as a technical footnote to theirs.

I want to concentrate on my worries about clause 1. Part 2 has been entirely justified by the tales that we have heard today about the extraordinary cases of claims farming in the mining areas. The problem with clause 1 concerns the perception that there is a high risk of being sued when it is not justified. I hope that the people on the other side of the debate who support clause 1 will accept that there are circumstances in which it is justified for one person to be sued by another. When one person is injured and it is another person’s fault, there should be a high risk of the person who did the injuring having to pay compensation. That is just and right; it also serves the social purpose of reducing the risk of unreasonable action causing harm. 

The perception arises from two sources—legal error and excessive litigation. I will deal with legal error in a moment, but everyone now seems to accept that there is no compensation culture in the sense that the number of claims being made in any part of society is rising fast—it is not. In fact, in most parts of the legal world the number of tort claims is falling.

Interestingly, there is evidence that the number of claims must have risen rather dramatically between the late 1970s and the mid-1990s, when the figures became more widely available—between the Pearson report and the time when national figures became available through the recovery unit. Oddly, during the period when the number of claims apparently increased, no one seemed to complain about the compensation culture, whereas in an era when the number of claims is falling, complaints about it are common.

Mr. Brazier
Again, the hon. Gentleman is confusing the issue of an overall compensation culture with the specific concern of the public that worthwhile voluntary and sporting activities are being hit. During that period of increase, there was not one of the bad cases to which we have referred. All the cases that have affected the public in a big way have arisen since the mid-1990s.

David Howarth
That is an interesting point, which would benefit from further research. It is difficult to know what was going on across the board during that intermediate period. I have a different view: I believe that what is really going on is that the insurance companies want an excuse, or an explanation, for the vast increase in premiums that they have been imposing during the more recent period. Instead of pointing to their own problems in managing their investments, they point to various claims and start talking about the compensation culture.

The question is whether clause 1 by itself can deal in any useful way with the perception of excessive litigation. The Government repeated today that they are not trying to change the law, which raises the issue of how the clause can make a difference. There is a particular problem in respect of “breach of statutory duty”, which was added by the House of Lords and which poses a grave danger that the Bill will change the law, accidentally. “Breach of statutory duty” is a very slippery phrase, covering a wide range of types of legal action. It covers types of liability that do not quite constitute negligence. Reference was made earlier to the test of reasonable practicability. We are talking about something that is not strict liability. I fear that clause 1 will accidentally apply to such actions, and will reduce liability.

The clause attempts to bring statutory form to the law after Tomlinson. It came as no great surprise to most lawyers that the Tomlinson case went the way that it did. The law with which we are dealing dates back to 1946—to the Daborn case, which involved the use of a left-hand-drive ambulance during the war. I think that this answers the points made by the hon. Member for Canterbury (Mr. Brazier). The ambulance was involved in an accident, and the question that arose was whether the fact that we were at war and needed all the ambulances we could get, including American ambulances, could be taken into account in determination of whether the way in which the ambulance had been driven was negligent.

The Court of Appeal decided that there was no liability, because what could be taken into account was what Lord Justice Asquith called

“the importance of the end to be served by behaving this way or that”.

That has been the law for 60 years.

When judging whether a precaution is required by the law of negligence, we must judge whether the benefits of the extra precaution that it is claimed should have been taken—including the social benefits—outweigh the costs. There has been no change in the law in that regard. It seems to me that the case raised by the hon. Member for Canterbury is simply a case in which the established rule has been badly applied. The problem is that there is no way in which an extra law can be passed to stop judges from getting the existing law wrong in its application. We cannot make laws about the application of the law. That is trying to do too much; it is expecting too much out of statutes. The legal system is peopled by human beings, who make mistakes. Error is inevitable, which is why there are appeals. Error is inherent in a system where someone is allowed sometimes successfully to sue somebody else for damage caused by their fault. Occasionally the system will go wrong, and a case will get through in which damages are unjustifiably paid. The only way to prevent that is by having no liability at all.

Mr. Brazier
The fact is that these cases do not occur only occasionally—they keep on arising. The Scouts is one of the few voluntary organisations that have the resources to fight such cases. If clause 1 is strengthened, as I and others have argued, so that it states “shall” rather than “may”, and it is clear that Parliament wants to point specifically to sport and adventure training and related activities such as educational trips, that will at least send a signal to judges of the relevant calibre.

David Howarth
I was about to come to the point about signals. The claimed benefit of the clause is that it sends a signal, but the question is: to whom? Who reads statutes? Not members of the general public, but only lawyers and judges. If lots of lower court judges have been ignoring the course of the law for the past 60 years, including the most recent judgments of the highest court in the land, what extra benefit will we get by passing a statute? Such people are just as likely to ignore a statute as they are to ignore the House of Lords.

The other supposed benefit is that the clause will fix the law.

Mr. Heald
Does the hon. Gentleman not agree that combining the new declaration in clause 1 with the provision of educational leaflets to the entire public sector would be a useful way of proceeding?

David Howarth
I agree that leaflets would be very useful, but I cannot see what extra good having a new clause provides, apart from its being a starting point for a press release. My main problem with the Bill is that it seems to use statute as a press release; I would rather use a press release than a statute.

Clause 1 makes the law less flexible. The idea that there is a benefit in fixing the law is the opposite of the truth. The fundamental benefit of the common law is that it uses ideas, rather than specific formulae of words. Formulae can become out of date but ideas do not; putting things in statute can make matters worse, not better.

The risk on the other side of the equation is that there will be further litigation. The hon. Member for Canterbury asked: how can that be, given that this is supposed to be a protective clause? The answer is that there will be more appeals, and more cases will be fought in court in the first place, rather than settled, because the law will be unclear. It must be made absolutely clear why that is the case.

The phrase “desirable activity”, as contained in clause 1, is ambiguous. Because of how the law currently works, there are two ways in which an activity can be desirable. It can be desirable privately—people pay for it and therefore want it—and publicly, in the sense that it gives benefits to society as a whole that are not captured by individuals. The crucial question will be: does the new phrase include either or both those types of benefit? It will take a long time for that very basic point to get through the courts. The benefits of the new clause, which are very minor, are outweighed by its risks and costs. In terms of the law of negligence, putting forward this new clause is itself negligent in the classic sense.

I want to finish by making three points, the first of which has already been made but needs to be re-emphasised. The Health and Safety Executive is the bigger part of the problem of the perception of a compensation culture, and of the fear of organising voluntary events, than is the civil law. I do not know whether the Bill is the right place in which to deal with that problem, but it must be dealt with.

Mr. Dismore
The problem is not so much the HSE but the health and safety industry, which perpetuates the myths about what is and is not required by the law as a self-justifying raison d’être. The problem is not so much the HSE; it is all the people who feed off the misinterpretations of the requirements.

David Howarth
That is right, but the HSE does do some rather odd things in terms of its targets.

The insurance industry has a vested interest in claiming that there is a compensation culture and in trying to reduce the scope of liability. If that happens in a sudden and unexpected way, the industry gets a windfall profit.

Finally, central to my doubts about clause 1 is my view on statutes being used as press releases. I do not think that the clause can do any good, but I suppose it does do some good for the Government, who can say that at least they are trying to do something about a real problem. However, it will not change the real world. We are passing a law and I think the law deserves more respect than that.

17:20:00

Derek Wyatt (Sittingbourne and Sheppey) (Lab)
I have sent my apologies for not being here for the Minister’s opening remarks. I want to register that I am a trustee of TimeBank, the largest volunteer organisation in Britain. Before 6 July last year, we were asked to do a volunteering exercise for the Olympics. We registered over 70,000 volunteers before 6 July, when we won the games. We have registered substantially more since. We will have approximately 85,000 to 100,000 volunteers in 2012. What correspondence has there been between the Minister, the Department for Culture, Media and Sport and Lord Coe on whether clause 1 will cover more than 100,000 volunteers? The Olympics will be a high security event and we will be asking volunteers to give up their time. I am not absolutely certain that, as it stands, they will be covered.

I would also like to register that I am an ambassador for the Girl Guides—I shall return to the movement in a moment—and that I am co-chair, with the hon. Members for Canterbury (Mr. Brazier) and for Montgomeryshire (Lembit Öpik), of the all-party group on the matter. The noble Baroness Ashton has given the group exceptional time—more than four hours—to examine clause 1 in huge detail. The Minister also saw us recently and I thank her for that. We cannot complain about the time and access we have had, but we would like the Government to think about “will” and “shall”, which the hon. Member for Canterbury mentioned.

I want to mention the iceberg effect. A dear friend who gave evidence in confidence has a small castle. One particular American tourist went over a rough bridge in stiletto heels, and guess what? She twisted her ankle, and sued the owner of the castle. And guess what? Because the owner of the castle is a reasonably famous person, they did not want the law suit and settled out of court for £8,000. This is completely and utterly obscene.

The scouts, guides, yachtsmen and the Territorial Army are sick to death of going to court and spending £15,000 to £100,000 a case; that money is gone but they have had to spend it. The Chancellor has asked for a volunteer community; we want over 500,000 volunteers over the next 10 years. We have to secure the legal framework for these people.

When I went to Oxford as a very old man, a wonderful chap called Andy Widdowson broke his neck playing rugby. When he broke his neck, his parents did not sue the referee, the college, the rugby club or the Rugby Football Union; they were just concerned about the well-being of their son. We were, too, and we raised over £60,000 for him, in 1981 figures. In Wales recently, a boy aged 15 broke his neck playing rugby. Whom did the parents sue? Was it the Welsh Rugby Union? No; amazingly. Was it the Welsh Schools Rugby Union? No; extraordinarily. Was it the school? No. Was it the coach? No. It was the referee, and they won. This is ridiculous and absurd. We have to allow risk in life and we have to find a way in clause 1 to cover exercise.

We have all talked about obesity rates and there is 70 per cent. less activity among schoolchildren than there was 30 years ago. How on earth are we going to solve that if we do not solve the risk element of clause 1? That is fundamental.

The Girl Guides has 600,000 members, and there are 50,000 girls on the waiting list because it needs 8,000 more volunteers. There are not the volunteers to come forward for the Girl Guides, which is crackers—absolutely nuts. We must resolve this issue in clause 1.

Finally, the hon. Member for Canterbury and I have looked at the American states, Western Australia and so on. Philosophically, at some other stage, we must come back and redefine what we mean by national insurance. We established it in the 1940s, and it is inappropriate for a modern society not to take a legal position on insurance for covering volunteers.

17:25:00

Mr. Kevan Jones (North Durham) (Lab)
I rise to support strongly this important and long overdue Bill. In particular, I want to direct my remarks to part 2, which will regulate claim farmers. In my constituency, they are preying on the vulnerable and weak.

I also put on record my thanks to the Minister and her civil service team for engaging with me and other constituency Members who are dealing with chronic obstructive pulmonary disease claims and have experience of claim farmers in relation to the framing of the Bill.

I want to concentrate on three points. The first is the need to regulate claim farmers, and the second is who should be the regulator. The final point relates to the legislation covering, in particular, the reference to trade unions and solicitors.

Claim farmers are simple middle men and nothing more. In my constituency—my hon. Friend the Member for Bassetlaw (John Mann) has already referred to this—firms have been created simply for the purpose of raping the COPD scheme. People have been forced to sign agreements they do not understand, and claim farmers have also made bogus claims in advertisements. Also, when they have been talking to people, they have given the impression that they are solicitors or legally qualified when clearly they are not.

Some of the most disgraceful individuals are former National Union of Mineworkers activists, who are working for these claim farmers. They have tried to blur the edges with the implication that they are somehow still connected with legitimate trade unions. I deplore those former activists, who have thrown their lot in with greedy claim farmers and clearly have prostituted any principles that they had, simply to make a quick buck for themselves and their new employers.

I want to refer to two cases in my brief contribution. My hon. Friend has already referred to IDC, or FreeClaim IDC, as it is now called, which is a claim handling firm that was set up in the last 10 years and is based in Ashington, Northumberland. I want to refer to a case that involves Mr. Jobes, my constituent, who was approached by the firm and filled in an agreement with it. It did what all claim handling firms did, and passed his case on. It went to a Liverpool-based firm called Silverbeck Rymer.

At the conclusion of the case, Silverbeck Rymer deducted £3,600 of the compensation given to Mr. Jobes and passed it on to IDC to cover “IDC’s costs”. As my hon. Friend has already said, no costs were involved in the case because the Government paid them all. IDC and Silverbeck Rymer knew that at the time. My problem was how to address that.

I could not go for IDC because it is not regulated, so I went after Silverbeck Rymer through the Law Society. I pay tribute to the case officer who dealt with this. In a highly critical judgment, the adjudicator said of the case:

“I have concluded that they”—

that is, Silverbeck Rymer—

“did not explain matters to Mr. Jobes so that he could properly understand the funding arrangements and he was not, therefore, in a position to give informed consent to the deductions made”.

The key point, which my hon. Friend also made, is that those claim farmers could not have operated without collusion with solicitors. Mr. Jobes could not have been defrauded or robbed without the collusion of Silverbeck Rymer with a claims handler.

I challenge the Law Society to examine Silverbeck Rymer’s books, as well as those of every single solicitor who has had dealings with IDC, to see how much they have deducted and force them to pay it back. That is the only way to ensure that those people get justice. I will follow up that challenge and I hope that my hon. Friend the Minister can assist.

Firms are not being honest with people about the courses of action open to them, such as help from legitimate trade unions that do not charge anything or home insurance policies. Under the scheme, there is no reason why any legitimate law firm should charge clients a single penny.

I also welcome the removal of the regulation of claims from the industry. The Claims Standards Council was a joke, although it tried to claim that it was an independent adjudicator. FreeClaim IDC was on the council—the same company that defrauded and robbed my constituent, Mr. Jobes.

It has been argued that trade unions should be excluded from regulation by the Bill, but I do not agree. Most trade unions, which are ethical and well run, should not be constrained by burdensome regulation. However, my hon. Friend the Member for Bassetlaw has already pointed out that the UDM, which has been running a claims farm operation, would not be covered if we excluded all trade unions.

It saddens me to say that Thompson’s, a trade union solicitor, is doing the same thing, in league with the Durham NUM. The firm sent all MPs a briefing note this week asking us to argue for trade unions to be excluded, which states:

“Trade unions should be specifically excluded from regulation in Part 2. The suggestion that unions will be excluded as long as they can show that they comply with certain conditions is an unnecessary and overly complex formulation.”

But in Durham Thompson’s has been involved in a con. Individuals with COPD claims, many of whom have never been members of the NUM—such as widows or other relatives—have been asked to join as associate members for £20 a year. That money—and some cases go on for five or more years—does not give them many rights and they are not covered by the certification officer rules. People pay the £20, fill the form in and it is then passed to Thompson’s solicitors, so it appears to be a joining fee to access the scheme. Some people have been threatened that if they stop paying the £20, the action will be stopped.

In addition, and even more scandalously, people have been asked to sign a form allowing 7.5 per cent. to be deducted from the final settlement. That money is not kept by Thompson’s, because of course its costs are paid by the Government, but passed to the NUM. The agreement states that that is done to “indemnify” the individual against any costs, but we all know that there are no costs for the trade union or the lawyers, because the Government pay them. As in the Silverbeck Rymer case, the NUM is acting as a claims handler.

I congratulate my hon. Friend on his tenacious work on the Raleys case. The judgment a few weeks ago stated clearly that Raleys was acting as a claims handler and could not justify the deductions that it had made and passed on to the NUM in Yorkshire, and I think that that also applies to Thompson’s in Durham. I challenge Thompson’s to pay back every penny that it has deducted from my constituents.

One of the reasons given for deducting the money is that the NUM needs the money to pursue further claims and continue its activities. But under the scheme Thompson’s alone has received £92 million in fees, £2.5 million of which was for constituents of mine. If further test claims are necessary or the NUM in Durham needs money to keep going, Thompson’s should pay, instead of poor claimants, such as some of my constituents, who have struggled to understand the complexities of the scheme and been bemused by some of the sharp practices involved.

I expect better from a company such as Thompson’s. I dealt with it in my time as a trade union officer, and have the highest regard for it, but its actions in Durham are nothing short of a disgrace. The TUC should take steps immediately to ensure that the money is paid back.

I welcome the claims handling regulations, as anyone who does not conform to the code of conduct will be classed as a claims handler. The hon. Member for North-East Hertfordshire (Mr. Heald) asked whether trade unions should be covered by the Bill if they act as claims handlers. I believe wholeheartedly that they should be.

17:35:00

Helen Goodman (Bishop Auckland) (Lab)
I strongly support the Bill, because I believe that an increasingly litigious culture is destroying voluntary and community activities in this country. In particular, I want to speak in favour of part 1 of the Bill.

I worked in the voluntary sector before I came to the House. My experience there, and with the community initiatives that my constituents in Bishop Auckland have tried to take, demonstrates to me that the fear of litigation and punitive levels of insurance deter small-scale but worthwhile activities.

Many hon. Members will know that the annual miners’ gala—the “Big Meeting”—has been going for 121 years. Indeed, many will have taken part in that wonderful cultural festival, which is rooted in the history and traditions of mining in Durham and across the north. It begins early in the morning, when people in villages across the county march behind their own banner and band and listen to the miners’ hymn. Then they get on the bus and go into Durham for the Big Meeting.

This year, there will be a parade of 100 banners and bands. It will end at the race course, where people will listen to speeches and enjoy the fairground. The whole day is an affirmation of the human spirit. Life and leisure are not about shopping—they are about history, music and the values of solidarity and community.

The event is highly valued. In my constituency, the people of Spennymoor this year raised money for a new banner, which will be taken to the cathedral and blessed by the bishop. I am sure that the House will join me in congratulating my hon. Friend the Member for Bolsover (Mr. Skinner), whose portrait is on the banner.

However, local village events are threatened by the dreaded compensation culture. A so-called health and safety expert belonging either to the county council or the police—I do not know which, because both organisations blame each other—has said that, although the village parades last only 20 minutes, they must fulfil the appropriate requirements. That means that they must put up notices of road closures two or even three weeks before the event. Moreover, the notices must be made to a particular specification by a traffic management company, and they must be put up by trained operatives because of the alleged risks that crossing the road poses to ordinary citizens.

The cost is proving to be astronomical. After last year’s gala, I received a list of complaints from people throughout the county. The County Durham Association of Local Councils carried out a survey, which found that the costs sometimes amounted to hundreds of pounds. For example, they came to £294 in Shildon, and to a staggering £1,580—plus value-added tax!—in Peterlee. As a result, 10 per cent. of villages have said that they have cancelled events already because of the problem, and 70 per cent. have said that the costs involved might dissuade them from holding an event in the future.

There are many rural villages in the west of my constituency. They hold carnivals along traditional lines, and are facing the same problem. For example, at last year’s remembrance service in Middleton in Teesdale, a veteran was told that she could not carry the Union Jack because she was over 60 and would not be safe in the traffic.

The Bill will be helpful because the present situation is unbalanced. Costs, problems and risks are taken into account, but not benefits. We are destroying not only enjoyable days, but communities. Communities are like families: they need to do things together—they need to meet to maintain social cohesion. We are in a crazy situation where we are paying people to set up community development offices and to run initiatives, while we are destroying the home-grown ones with that ridiculous culture.

Given that other hon. Members want to speak, I will not talk about my other experiences—I will write to the Minister—but I hope that, despite the blandishments of my colleagues, she will hold fast to the content of clauses 1 and 2.

17:40:00

Mr. David Anderson (Blaydon) (Lab)
It is a long time since we came in here. I was going to mention part 1, but I will not now, except to say that the phrase “desirable activity” could well include playing croquet, so a lot of issues need to clarified there. Indeed, it is a thriving sport in my area. I will focus very much on part 2 and want to say up front that I am proud and pleased to be standing here as someone who has been a member of the National Union of Mineworkers for 20 years. [Interruption.] Yes, hon. Members can cheer—I do not mind. I am also an honorary life member of Unison.

I welcome the fact that the Minister recognises that there is a serious difference between genuine trade unions doing their jobs for their members and claim farmers. To treat them the same would be little short of an insult, because the work done by trade unions in supporting their members in legal cases is in many ways the best example of voluntary work in this country.

The vast majority of cases—believe you me, I have been involved in literally hundreds of individual cases and thousands on a collective basis—are begun by shop stewards or other local officials who carry out their roles professionally, without payment or reward, and they do so by being properly trained and accredited. Without their knowledge and skills, they could not do that job. Their work is part and parcel of the day in, day out work of representing their colleagues at work to the best of their ability. Most of them would be over the moon if they did not have to do that work, because that would mean that their members were not getting killed, maimed, injured or stressed out. Their members would not face a life of penury, illness and injustice Those people would not have to worry about how they will provide for their partners and children, about how they will pay their mortgages or about what the future would bring.

As was said earlier, more than 64,000 new claims were laid through trade unions—that is 64,000 men and women who face an uncertain future, and 64,000 cases that may not have been taken up, for the reasons given earlier by my hon. and good Friend the Member for City of Durham (Dr. Blackman-Woods), if local trade unions had not supported those people through those very traumatic times.

I am certainly not suggesting that those claims should go through a system with no control—I would never suggest that. Indeed, I believe that the present trade union legislation strictly controls the behaviour of trade unions in many ways. That is exactly what we are trying to do today. In those claim cases it is clearly necessary to use the legal profession. Those legal people are controlled by their professional society. If their society is not doing its business, as has been said today, perhaps that is the real issue that we should be debating in the House, not what trade unions are doing.

There is a fundamental difference between people whose job in life is to rip people off and other people whose job in life is to represent people. Trade unions do not want to be involved in rip-off work; they do not want their members to be treated negligently or their lives to be ruined. Genuine trade unions do not want to play any part in the get-rich-quick operations that some of the rip-off merchants engage in. That is why trade unions put so much emphasis on health and safety legislation—red tape as it is often disparagingly called in the House—and why they campaign long and hard to get proper protection for their members at work.

Trade unions do not want to do such work on behalf of their members—to be honest, they do not really need it—but they will keep on doing it to defend their members as long as they are being abused at work. Legal cases are time-consuming, usually costly and drain resources, and they are in many ways a sign of failure—the failure of the employer to look after the worker properly, the failure of the unions to negotiate proper health and safety legislation and the failure of hon. Members to ensure that we provide a safe working environment for people.

Union reps could spend their time and effort on much more productive and rewarding work, but they accept their responsibility and they do whatever it takes to help their members. There is no pleasure in winning compensation cases for members, except the knowledge that those members should be financially secure for the rest of their lives. But all the money in the world will not give workers their lives back.

People who have lost limbs, people who have suffered from asbestos-related diseases or people burnt out with stress and workers with back problems or any of the multitude of problems that are dealt with day in, day out by trade union reps cannot turn back the clock just because a cheque drops through their letterbox.

Unions are representatives acting for the collective good. They are a world away from get-rich-quick cowboys who are little better than ambulance chasers. They have experience in the workplace where their members work that lawyers will never be able to replicate. They know first hand what life in the workplace is like. They do not have to be drawn a map or told what is going on: they know. If we insist on lumping trade unions into the legislation, that knowledge will be lost. It will give greater clarity if the clear exemption for trade unions is built into the Bill as laid out. They are not claims farmers in any way.

The Barker ruling is a disgrace to the House. Trade unions and their legal services teams should be able to work through us in this House to overturn that disgraceful decision taken in the other place. It is about real people. I support our work with the asbestos mesothelioma support groups. It is a disease that lies dormant for 30 years and then sparks off. People suffer horribly and then die—nothing else, that is the story. Okay, drugs like Alimta may help and let us hope that we can make progress with that, but if we do not overturn the Barker decision, the reality will be that of a man facing a firing squad armed with five guns. A bullet pierces his heart. Nobody knows which gun fired the bullet, so nobody is found guilty, but the truth is that they should all be found guilty.

17:46:00

The Parliamentary Under-Secretary of State for Wales (Nick Ainger)
This has been an interesting debate. We have covered a range of issues, not necessarily all directly connected with the Bill before us. It has been a good debate for that. Several hon. Members have raised points related to the Bill, to which I shall shortly respond, but first I shall reiterate the benefits that it will have.

I should declare an interest, as everyone else seems to have done. From 1978 until 1992 I was a branch secretary of the Transport and General Workers Union, and in 1986 I received £1,500 in compensation for an industrial injury, which was negotiated for me by the union.

The provisions on negligence and statutory duty will provide much-needed reassurance for the voluntary sector and for others who are concerned about possible litigation. They will ensure that all courts, including the lower courts, are aware of the guidance given by the higher courts. They will serve a valuable purpose in improving awareness of this aspect of the law and ensuring that normal activities are not prevented by the fear of litigation and excessively risk-averse behaviour.

All hon. Members have agreed on the importance of regulating claims management services and putting in place vital safeguards for consumers. My hon. Friend the Member for Blaydon (Mr. Anderson) and others, especially those representing coal mining constituencies, have described some of the problems—to put it mildly—that arise with those intermediaries and the way in which they mislead people who make claims. The regulatory framework that we have set out is both proportionate and targeted at the areas where there is the greatest potential for consumer detriment. It is consistent with the Government’s better regulation agenda, and will ensure that standards are raised in the industry.

The regulation of claims management services is a necessary step for protecting consumers. The safeguards that we propose will ensure that bad practices stop and the era of unregulated claims management companies misleading consumers and leaving them out of pocket will be brought firmly to a close.

A number of hon. Members have raised the Barker decision in the House of Lords relating to mesothelioma. I reiterate what the Under-Secretary of State for Constitutional Affairs, my hon. Friend the Member for Lewisham, East (Bridget Prentice) said: it is the Government’s intention to address this issue as soon as possible. Hon. Members have stressed the importance of speed, because of the nature of the disease. My hon. Friend the Member for Hendon (Mr. Dismore) made the good point that unless new legislation is introduced, if we leave it to the courts, it could be years and years before the matter is properly resolved. Colleagues will be reassured not just by my words but by those of my hon. Friend the Under-Secretary of State for Constitutional Affairs in opening the debate, and those of the Prime Minister the other day.

In the same vein, we await the decision of the House of Lords on pleural plaque—a subject that was raised by my hon. Friend the Member for Sherwood (Paddy Tipping). It is not appropriate to say what we will do until we have heard the final decision.

Mr. Heald
One concern is that it is not only insurers but the Government, too, who have substantial liabilities. Is the hon. Gentleman aware of the estimated costs of those liabilities in respect of the Ministry of Defence and the Department for Education and Skills, both of which could have significant liabilities for mesothelioma?

Nick Ainger
The hon. Gentleman is right. Other Departments have, or will have, significant liabilities, but the fact remains—[Interruption.] The judgment is not that old, but all Departments are considering it. Our position is that we want to try to assist claimants who are, rightly, arguing for joint and several liability.

Several Members spent time on clause 1, and I shall try to address some of the many points that were raised. The Government do not believe that putting a definition of desirable activity into the Bill is appropriate. The provision gives the court the flexibility to consider all the relevant circumstances in the case, to reach a fair and just decision. Including a definition of “desirable activity” could imply that certain types of desirable activity had more weight than others.

Clause 1 addresses a misperception of how the law works, which has taken hold to such an extent that it affects behaviour. It is a legitimate function of legislation to address such matters. The law may be familiar to lawyers and insurers, who deal with it on a daily basis, but it is not familiar to people and organisations concerned about possible litigation. The clause will show them the importance that the Government attach to the issue and will make the law more widely known.

My hon. Friend the Member for Hendon and the hon. Member for Cambridge (David Howarth) believe that the inclusion of clause 1 will lead to a tsunami of litigation—I think that was the phrase that my hon. Friend used. The Government do not believe that will be the case. The clause reflects the existing law and the guidance given by the higher courts, and should not fuel any increase in litigation. It will discourage the bringing of claims based on the proposition that reasonable care involves all steps required to prevent accidents in any conceivable circumstances, regardless of the effect of requiring those steps.

Mr. Dismore
A few moments ago, my hon. Friend said that the interpretation of the phrase “desirable activity” would be a matter for the courts, thereby implying that the courts would have to try cases to decide what it was. He has now said that there will not be more litigation as a result of the clause. How can he square those two arguments? If the courts have to interpret the phrase, more cases will go to trial and there will inevitably be more litigation.

Nick Ainger
Every court that has to settle a claim will have to decide on the facts. The provision will not increase the number of cases; it merely notes that desirable activity is an important factor.

David Howarth
The point we are trying to make is that there will be more appeals, and more cases forced to trial rather than settled. That is where the extra costs will arise.

Nick Ainger
I appreciate that point, but the Government do not take that view. I am sure that the matter will be debated in Committee. I hope, for the sake of my hon. Friend the Minister who will be there, that it will not be debated at quite such length as it was in the House of Lords, but I am sure that Members will spend some time on it.

Mr. Brazier
The point that the splendid legal adviser to the Scouts, Andrew Caplan, made to us is not only that he welcomes the clause, but that it may encourage other organisations to show the courage that the Scouts showed in fighting those wretched people when an unjustified vexatious claim is put forward.

Nick Ainger
The hon. Gentleman makes his case very well.

The concept that we have sought to capture by the term “desirable activity” is the well-established one of taking the wider social value of activities into account. That reflects the existing law. The courts are already able to—and do—take these matters into account when considering all the circumstances of an individual case. 

My hon. Friend the Member for Sherwood raised his concern, and the concerns of the TUC, in relation to the impact of clause 1 on certain employees. May I try to reassure him? It is suggested that clause 1 would change the law so as to put at a disadvantage those who are employed in public service occupations that are arguably desirable, such as firefighting, compared with those employed in commercial operations such as retail sales, which may not be seen as desirable. However, that is not correct. It appears to be based on a misconception, first, as to the purpose and meaning of the term “desirable activity” and, secondly, as to the existing law. That is to say that the approach of the courts is to balance risk and the effect of preventive measures on an activity. On the first point, “desirable” was expressly chosen by parliamentary counsel as a term wide enough to encompass the wide range of existing case law—in contrast to terms such as “socially useful”.

Mr. Dismore
Will the Minister give way?

Nick Ainger
I have covered the point that my hon. Friend made in his speech.

The hon. Member for Rugby and Kenilworth (Jeremy Wright) raised the need for a good communications strategy. The Government recognise that. There is a ministerial working group, together with a stakeholder group, which is developing that communication strategy with the idea of using champions in the volunteering sector. Volunteering England is involved. There will be that communications strategy in relation to part 1.

I am grateful that colleagues have endorsed the usefulness of clause 2 and the benefits that it will bring. I can assure the House that we have no intention of removing or amending that clause in any detrimental way. On the point made by my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt), I am assured that clause 1 will apply to volunteers working during the Olympics.

All Members welcomed part 2. The only dissenting voice that I could hear was from the Opposition Front Bench in relation to the exemption for trade unions. I reiterate that trade unions will be subject to a code of conduct, and that if they are found to be acting like claims handlers, their exemption will be removed and they will be subject to the same regulation as a claims handler. In relation to the abuses of the coal health scheme, as chairman of the coal health monitoring group in Wales, may I reiterate the call of my predecessor that the parasites living off the back of what is undoubtedly the biggest industrial claims scheme ever—we have paid out £3 billion to miners and their relatives—should return all the fees that they have claimed from the claimants?

I am sure that there will be further, and perhaps lengthy and interesting, discussion in Committee on the provisions in the Bill. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

COMPENSATION BILL [LORDS] (PROGRAMME)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6) (Programme motions),

That the following provisions shall apply to the Compensation Bill [Lords]:

Committal

1. The Bill shall be committed to a Standing Committee.

Proceedings in Standing Committee

2. Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to conclusion on Tuesday 27th June 2006.

3. The Standing Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.

Other proceedings

7. Any other proceedings on the Bill (including proceedings on any message from the Lords) may be programmed.—[Mr. Cawsey.]

Question agreed to.

COMPENSATION BILL [LORDS]  [MONEY]

Queen’s recommendation having been signified—

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connections with bills),

That, for the purposes of any Act resulting from the Compensation Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of expenditure of a Minister of the Crown attributable to the Act.—[Mr. Cawsey.]

Question agreed to.

COMPENSATION BILL [LORDS]  [WAYS AND MEANS]

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with bills),

That, for the purposes of any Act resulting from the Compensation Bill [Lords], it is expedient to authorise the charging of fees by the regulator appointed under the Act.—[Mr. Cawsey.]

Question agreed to.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Criminal Law

That the draft Serious Organised Crime and Police Act 2005 (Amendment of Section 61(1)) Order 2006, which was laid before this House on 3rd May, be approved.—[Mr. Cawsey.]

Question agreed to.

NORTHERN IRELAND GRAND  COMMITTEE

Motion made, and Question put forthwith, pursuant to Standing Order No. 115(1) (Northern Ireland Grand Committee (delegated legislation)) and Standing Order No. 116(1) (Northern Ireland Grand Committee (sittings)),

That—

(1) the draft Budget (No. 2) (Northern Ireland) Order 2006 be referred to the Northern Ireland Grand Committee;

(2) the Committee shall meet at Westminster on Tuesday 20th June at Four o’clock; and

(3) at that sitting—

(a) the Committee shall take questions under Standing Order No. 110 (Northern Ireland Grand Committee (questions for oral answer)), and shall then consider the instrument referred to it under paragraph (1) above; and

(b) at the conclusion of those proceedings, a motion for the adjournment of the Committee may be made by a Minister of the Crown, pursuant to paragraph (5) of Standing Order No. 116 (Northern Ireland Grand Committee (sittings)).—[Mr. Cawsey.]

Question agreed to.

petition

Overseas Aid

18:00:00

Helen Goodman (Bishop Auckland) (Lab)
I wish to present a petition on global justice, trade, aid and debt on behalf of the residents of the Bishop Auckland constituency and others.

The petition states:

Declares that the campaign for global justice on trade, aid and debt must continue in 2006 even more strongly than in 2005. The Petitioners further declare that it is vital that the Government continue to increase aid for developing countries in order to Make Poverty History and reach the UN Millennium Development Goals.

The Petitioners therefore request that the House of Commons pass the International Development (Reporting and Transparency) Bill 2005-06 which would enshrine a target of 0.7 per cent. GNI for spending on overseas development aid and create a requirement for an annual report to Parliament on the UK’s international development assistance.

And the Petitioners remain etc.

The petition was initiated in fair trade week. Churches, citizens and the Oxfam in Barnard Castle were instrumental in collecting the signatures.

To lie upon the Table.

Manor Hospital (Walsall)

Motion made, and Question proposed, That this House do now adjourn.—[Huw Irranca-Davies.]

18:01:00

Mr. David Winnick (Walsall, North) (Lab)
I am pleased to have the opportunity to talk about the Manor hospital. I should explain that I applied for the debate because of the urgent and pressing need for major development work at the hospital, which is in my borough of Walsall. Until recently, it was expected that a private finance initiative contract would be agreed and that the work would begin early next year. Unfortunately, that has turned out not to be the case and there has been some delay. It is because it is essential for the work to be agreed so that it can begin in early 2007 that I thought it necessary to apply for a debate on the Floor of the House.

As I am sure the Minister knows, the three Members for the borough met the Secretary of State on 3 May. We briefly explained the situation to her and, of course, strongly urged that the work should be allowed to proceed. I should point out that the Manor hospital, which is the only acute hospital in the borough, provides a full range of hospital services for a population of some 253,000. It has 620 beds. The last major work took place 12 years ago when a new maternity unit was built, which was welcomed since it was essential. However, the rest of the site was built on a piecemeal basis from 1830 onwards. Given the deficits that some hospital trusts have experienced in recent times, I am sure that the Minister will be pleased to know that the Manor balanced its budget in the past financial year.

I am pleased that my right hon. Friend the Member for Walsall, South (Mr. George) is in the Chamber. He will be emphasising the same point as me. At present, 40 per cent. of the buildings on the hospital site are—to use a phrase that has become familiar in the past few weeks—not fit for purpose. It is a tremendous job maintaining those buildings and, obviously, a very expensive one as well.

I give the example of the hospital’s east wing, which was built in the late 19th century. It houses children’s services, women’s surgical wards, dedicated theatres and diagnostic facilities. The wing has a fire certificate until next year, and all the indications are that it is unlikely to be renewed. The three Members of Parliament, my right hon. Friend the Member for Walsall, South, the hon. Member for Aldridge-Brownhills (Mr. Shepherd) and myself, have seen for ourselves wards on the first floor of the east wing that can no longer be used because of their defects and lack of safety. It is most unfortunate that such accommodation lies empty for those reasons.

Coming to the present, much detailed work has been carried out by the hospital management in drawing up a scheme in line with PFI requirements. That was done so that, as I said, major investment work can start next year. Unfortunately, in the last few months, the hospital has learned that Treasury rules have been changed and that the contracts that everyone expected to be agreed have been delayed. That has, understandably, caused much anxiety. Will the work go ahead? Will we go into next year with no contracts signed and with the east wing as I described? One can understand the strong concern in the borough.

We are a borough known to some extent for our quarrels and difficulties—which sometimes reach national level—not only between political parties but, in some cases, within them, but we are unanimous in our view that this work should be carried out. We are very devoted to the Manor hospital. Even if this was not the case I would be saying the same, but I happen to be a former patient. When I suffered a heart attack in 1995, the hospital helped to save my life. I speak now as a Member of Parliament for one of the three constituencies in the borough served by the hospital, but I just put that on the file, so to speak. I know that my right hon. Friend the Member for Walsall, South has been an out-patient at the hospital on various occasions.

A hopeful sign—no doubt the Minister will deal with this—is the visit on 22 and 23 May of officials from his Department’s PFI unit. My understanding is that the hospital has proposed some variation in the scheme that would reduce capital cost, and some of the proposals discussed by the unit and the hospital management would mean that some of the work due to be covered by the PFI contract would be outside it. That is welcome. I should add that I am not a devotee of PFI contracts. I would rather things were different, but I am a realist, and if the only way major work can be undertaken is through PFI, so be it.

I hope that the Minister will be in a position today if not to say yes—it would be too optimistic of me to believe that—then to give some reassurance to the people in the borough that there is every possibility that the PFI contracts will be agreed to, with the fact that some of the work will be outside the contracts making the whole scheme more affordable. That is a hopeful sign, and I hope that the Minister will be able to take up what I have just said.

There is a wish that the matter should be finalised before Parliament goes into the summer recess, which will be in about five to six weeks’ time. Perhaps the Minister will be able to indicate whether the information, one way or the other, will be known to us by that time.

The three Members involved have met the Secretary of State, this debate is now taking place and we will continue to do whatever we can to sustain the pressure so that this vital work—I repeat myself deliberately because it is essential—can be started next year. No further delay can possibly be justified. I look forward, with some optimism, to the Minister’s response.

18:11:00

Mr. Bruce George (Walsall, South) (Lab)
I am grateful to my close colleague, my hon. Friend the Member for Walsall, North (Mr. Winnick), for introducing this short debate. Our colleague, the hon. Member for Aldridge-Brownhills (Mr. Shepherd), has sent his apologies. This is a cross-party endeavour to ensure that a proper decision is made.

I know that the route towards PFI is strewn with delays and side-tracking. I can understand that. There is a history of rather difficult negotiations. I hope that at the end of the day, and pretty soon, the Department will acquiesce to the scheme proceeding. It is pretty obvious that there have been some disastrous PFIs. I understand why the Minister must be cautious. However, the problem is acute. As my hon. Friend the Member for Walsall, North has said, there is a crisis. Half of the buildings currently in the hospital could be annexed by the black country museum. They are part of the black country’s history. Yet the fire department has stated clearly that these buildings, despite new buildings over the past decades, will not be granted a certificate. It will be impossible for the hospital to continue to be occupied with buildings that could be open to being sued or brought to court. It has been put on a warning.

Not long after I was elected to this place in 1974, I recall beginning a campaign for a new Walsall hospital. In 1975, I think that it was David Ennals, who was from Walsall—the late Lord Ennals—who said that there would be a hospital. About 12 years later a new building was put up. It was an incredibly good addition to the site, which was getting rather elderly. Now, there is a crisis. The primary care trust and the hospital have got together on a number of important projects. It would be remiss of me not to say clearly and with pleasure that enormous improvements have been made since 1979.

However, there will be a crisis. The Government and the Treasury have changed the rules, in my view. Where Walsall hospital thought that it was on target to meet the Government’s requirements, now it is not. I spoke to Lord Warner a month or so ago, and I spoke also to the then Minister, my right hon. Friend the Member for Liverpool, Wavertree (Jane Kennedy). I was led to believe that my right hon. Friend would offer to meet not a delegation of Members putting an emotional case—the Secretary of State has already met the three Members involved—but a small delegation of specialists. I was told that there was a distinct possibility of that happening. There was to be a delegation of specialists—the chairman of the hospital, the chief executive, someone from the primary care trust and someone from the region—who could argue the case in detail for what we hope will happen.

We urge the Minister to use all the influence that he has with his colleagues to ensure that there is a continuation of negotiations with the hospital—there is an excellent team of people—to ensure that whatever is necessary is done, however rearranged, so that building work can begin. There is relatively high unemployment in the area and every index of poverty and deprivation is present in different wards. It would be appalling if the good work that the Government have been doing so far to enhance health provision in Walsall hit a brick wall—a brick wall that I believe has been put up unnecessarily.

I know that my hon. Friend the Minister has been well briefed. I hope that the pleas of two Members, together with those of our Conservative colleague, are seriously heeded and that the Minister, will make arrangements for a senior Minister, together with officials from the Department, to meet a delegation from Walsall, minus Members, to discuss the technicalities. I know that there have been meetings in Walsall with officials from my hon. Friend’s Department.

I hope that the promise that I believe was given by other Ministers will be kept and that we will be able in the few months that lie ahead to say that the building is on target. I hope that we shall see the good work of the Government enhanced even further, and that finally we shall have, for the first time ever, a hospital network and health services that are fit for purpose and meet the requirements of our constituents. I once again thank my colleague, my hon. Friend the Member for Walsall, North, for permitting me to participate in the debate.

18:16:00

The Parliamentary Under-Secretary of State for Health (Mr. Ivan Lewis)
May I begin by congratulating my hon. Friend the Member for Walsall, North (Mr. Winnick) on securing this debate? Both he and my right hon. Friend the Member for Walsall, South (Mr. George) have a long track record of promoting the proposed private finance initiative scheme for the Manor hospital site. As they said, together with the hon. Member for Aldridge-Brownhills (Mr. Shepherd), they recently met the Secretary of State to discuss the latest developments—a subject to which I shall return.

First, however, may I reiterate my Department’s continuing support for the modernisation of the Manor site? That support is not in dispute. The Manor hospital began life as the local Poor Law Infirmary, and it retains key buildings such as the east wing, which houses women’s and children’s services, and St. John’s block, both of which both date back, as my hon. Friends said, to the 1850s. The remainder of the site has been developed piecemeal over the decades, resulting in poor clinical relationships and functional unsuitability. More than 40 per cent. of the building stock is in an unacceptable physical condition and fails to meet health and safety requirements.

As my hon. Friends pointed out, West Midlands fire service has told the trust that it is unlikely to be able self-certify fire safety arrangements on the east wing after December this year. Even now, the wards on the first floor of the building cannot be used because of concerns about structural safety. The situation has increasingly hampered the trust’s efforts further to improve patient services and efficiency. Walsall Hospitals NHS Trust has an impressive track record of maintaining low waiting times for out-patient consultations and elective surgery. Indeed, it has the lowest waiting times in the west midlands, which should be a source of pride to my hon. Friends. The trust has had its busiest year ever, treating 20,000 more patients. As my hon. Friend the Member for Walsall, North said, it is financially stable and broke even in 2005-06 after it repaid some of its brought-forward deficit.

As everyone agrees, the key to further improvements lies in the more efficient working practices that have been designed as part of the new scheme, but they are unlikely to be realised until the new facilities are in place. That is why, in early 2001, the Government approved the initial strategic outline business case for the redevelopment plans that will be taken forward under the PFI initiative. There was a delay in moving to the next stage—approval of the outline business case—as the scheme had to be reconsidered as part of a wider Wolverhampton and Walsall joint service review. As a result, a revised proposal was submitted, which was approved by Birmingham and The Black Country strategic health authority, resulting in the scheme going to the market in October 2004. Despite further detailed service development work, the trust was able to issue invitations to tender and received two successful compliant bids just over a year later in October 2005 from the major consortiums Skanska Innisfree and Carillion. Following further evaluation and negotiation, the trust was poised to appoint its preferred bidder just before Christmas.

As my hon. Friends mentioned, at the beginning of this year we announced a review of all the major PFI schemes currently in procurement, which included Walsall. We did this in spite of the proven track record and success of PFI to date, because we wanted to make sure that the latest schemes properly took account of the current reforms to the NHS, such as the choice agenda, the movement of services into primary and community care settings, the new financial regime—the national tariff—and assumptions about efficiency gains and long-term affordability. A team from the Department has therefore been visiting every relevant trust to work with it on this task. As hon. Members know, the team first visited Walsall in early April and a follow-up visit, as we heard, took place at the end of May.

That brings me back to the latest developments. The trust had concluded that, as previously configured, the scheme was unaffordable. It thus undertook a root and branch review to ensure maximum flexibility and, wherever possible, to reduce costs. As my hon. Friends know, the outcome has been very encouraging, as the trust’s new proposals significantly reduce the annual payment to the private sector partner, with minimal disruption to the core service elements of the scheme.

It is worth reflecting what the key savings are. They arise, first, from postponing the permanent replacement of wards in the south wing and instead, using a high quality modular building to provide a short-term replacement for a minimum of five years, which will allow the trust to make further efficiencies in bed numbers or totally review its requirement at phase two; secondly, from working with the primary care trust with the aim of the PCT contributing to the funding of the diagnostic and treatment centre element of the scheme or delivering some of this activity in the community; and thirdly, from removing some of the support work and services from the scheme, such as the managed equipment service and ancillary services, which will continue to be provided in-house by the trust.

It is important to emphasise to my hon. Friends and to the House that these are only proposals at this stage. More work is needed on finalising costings and seeking agreement with key stakeholders such as the PCT, as I have mentioned. The success of the proposals also depends on securing an alternative source of capital for the new modular building and the demolition of the south wing—a total of £13 million, to be specific.

I am delighted to be able to announce in the course of the debate that the Department yesterday agreed to make £13 million available for this purpose, and we have written to the trust and the SHA this morning to that effect. Release of this funding will, of course, be conditional on the submission of a robust and affordable business case. I know that my honourable Friends will be very pleased to hear this news, as it also addresses a matter about which I know they are concerned—the urgency of the situation, which they mentioned in their contributions. I know that uppermost in their minds is the condition of the east wing, which, as I said earlier, the trust may not be able to self-certify for fire safety beyond the end of this year. The aim is for the women’s and children’s services to decant from the east wing to the new modular buildings replacing the south wing. That can now go ahead as part of the main PFI works programme or separately and sooner, should that be necessary.

The fact that the money has been released owes much to the advocacy of my hon. Friends and their championing of the cause directly to the Department and to Ministers in recent months. I know that the community in Walsall, which cares passionately about the hospital, will be pleased with the early good news.

Under the PFI review we expect the more advanced schemes such as Walsall to have finalised their revised proposals within a month or so. Those will then be considered by the Department of Health and the Treasury, alongside the progress that trusts have made in securing the best commercial and contractual terms with their bidders, which of course influences the overall cost of a scheme. We expect to be able to announce our decisions before the end of the summer.

In conclusion, as a consequence of the debate this evening, I will log the request by my hon. Friends for a meeting of representatives of the hospital with Ministers and officials in the Department, but we want that meeting to go ahead only if it is absolutely necessary. The ideal scenario, in terms of the progress that has been made in recent weeks, would be for the local partners to continue doing exactly what they have been doing and to finalise a bid with the Department, with all the necessary component parts, as quickly as possible.

Mr. Winnick
My right hon. Friend the Member for Walsall, South (Mr. George) and I are very pleased by the Minister’s announcement of the £13 million. It goes without saying that that is good news much to be welcomed by the hospital and the wider community. The Minister referred, as expected, to the east wing. While the £13 million is useful, and we are very pleased, grateful, and whatever other words are appropriate, it is essential that the major investment—about £160 million in total—starts next year. When are we likely to have the information? What does the Minister mean by the end of the summer—the beginning of the summer recess, a little later, or what? Can he give more precise details?

Mr. Lewis
I should make it clear on behalf of the Government that we would not wish to establish a precedent whereby whenever hon. Members ask for an Adjournment debate, £13 million is made available within 24 hours.

The serious point is that I would like this matter to be resolved before the summer recess. That is my hope and objective. We want to respond positively to the representations that my right hon. and hon. Friends have made on behalf of their communities and constituents, and we will do everything possible to make that happen. However, we depend on the local partners playing their part in ensuring that all the required work is done appropriately. If that happens, I assure my hon. Friend that we will do everything possible to ensure that we can give my hon. Friend the news that he requested before the summer recess.

I believe that the news for Walsall is very positive. There is a little way to go, but a lot of progress has been made in recent months, and there is every cause for optimism.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes past Six o’clock.