House of Commons
Thursday 24 April 2008
The House met at half-past Ten o’clock
Prayers
[Mr. Speaker in the Chair]
PRIVATE BUSINESS
Broads Authority Bill (By Order)
Order for Third Reading read.
To be read the Third time on 7 May.
Bournemouth Borough Council Bill [Lords](By Order)
Canterbury City Council Bill (By Order)
Leeds City Council Bill (By Order)
London Local Authorities (Shopping Bags) Bill (By Order)
Manchester City Council Bill [Lords] (By Order)
Nottingham City Council Bill (By Order)
Reading Borough Council Bill (By Order)
Orders for Second Reading read.
To be read a Second time on 1 May.
Oral Answers to Questions
Treasury
The Chancellor of the Exchequer was asked—
Tax Avoidance
“Protecting Tax Revenues”, which was published by Her Majesty’s Revenue and Customs alongside the Budget, sets out the progress made so far and how HMRC is responding to new challenges by further strengthening the strategy. Let me be clear: our approach is based on providing a modern and competitive tax system, which promotes opportunity and enterprise while ensuring that everyone pays their fair share.
I thank my right hon. Friend for her answer, but she will be aware of the recent TUC report, “The Missing Billions”, which identifies at least £33 billion of lost revenue per annum. If even a third of that money were collected, we could easily compensate the 10 per cent. tax losers, immediately restore the earnings link to pensions and pay for free long-term care for all, among other things. Does this not simply require a modicum of political will to collect the money?
First, I do not accept the TUC’s figures, which include reliefs from savings and enterprise and are based on a range of speculative assumptions. It is difficult to measure tax losses that arise from the use of avoidance devices. I hope that my hon. Friend accepts that all recent Budgets have included measures to close down avoidance schemes with a potential cost of between £1 billion to £1.5 billion a year. There have been notable successes, such as halving excise fraud. The measures have already reduced underpayments of tax by more than £5 billion a year compared with five years ago. I therefore hope that he accepts that there is a concerted effort to do exactly as he suggests.
I wonder whether, in our modern and transparent taxation system, we can look at the bonuses that are paid to City workers. Last year, it was estimated that the amount increased to more than £1 billion. Some individuals got a £50 million bonus every year. Such pay increases not only distort housing prices in London and the south-east, but distort society.
I hear what my hon. Friend says—it was more of a statement than a question. All such workers pay their taxes, as expected, and I believe that their enterprise and effort should be rewarded appropriately.
Despite what the Financial Secretary has said, there are many higher estimates for tax avoidance than the figure that my hon. Friend the Member for Luton, North (Kelvin Hopkins) suggested. In The Guardian this week, the estimable Prem Sikka estimates it to be between 20 and 30 per cent. of tax take. Is there not more that we can do? Will my right hon. Friend consider setting up a working party, including my hon. Friends the Members for Luton, North and for Great Grimsby (Mr. Mitchell), and advised by Prem Sikka? Perhaps then we could avoid some of the angst and heartache that we have seen this week in the days leading up to today.
I am not sure that that would mean that I avoided anxiety and heartache, but I am more than happy to meet any of my Labour colleagues to discuss those and other matters as they arise.
Energy Prices
High energy prices continue to affect all economies, and at the recent G7, International Monetary Fund and World Bank meetings, we called for urgent international action by those bodies to improve the functioning of the oil markets, including increasing transparency and investment, as well as supply of oil.
The Warm Front scheme has been welcome in reducing fuel poverty, but what efforts is my right hon. Friend making to reduce the costs of the preferred contractors, especially in light of the growing evidence that local contractors can do the same work for far less money? Has he also considered the criticism that the scheme is just not flexible enough?
I am grateful to my hon. Friend for his welcome of scheme in general. I think that about 7,000 households in his constituency have been affected by measures to help conserve energy through greater insulation. The point that he raises is a real concern, especially at a time when the industry is about to enter a major programme, through the carbon emissions reduction target, to insulate homes throughout the country. It would be a pity if contractors were to take advantage of that and charge more than ought to be charged. His other point was about ensuring adequate competition so that local contractors and others can get the work, which would also help drive down prices. He raises a real concern, which I want to look into, to make sure that all the work is not only done, but done as cheaply and efficiently as possible.
In the Chancellor’s reply to me on Monday, he stressed that rating agencies should not be relied on as a definitive guide in judging the stability of energy companies and other utilities. Given the high levels of leverage in energy companies, will he discuss with the regulator, Ofgem, what measures can be taken to ensure long-term stability, so that crises will not precipitate a collapse of those companies, due to the levels of debt that they are currently incurring?
I will certainly raise the matter with Ofgem. As my hon. Friend said, he raised it with me on Monday. Whether we are talking about a utility company or a bank, I am clear that a credit rating agency should be relied upon to give advice that will help inform directors’ decisions, but it should not be taken as the last piece of advice. In other words, the decision should not be taken by the credit rating agency; it must be one for the directors to take.
The other thing that would greatly help utility companies in this country, particularly in relation to energy supply, is for us to ensure that the supply of energy in the European Union is truly opened up so that we can actually see what is going on. The Commission has taken some welcome steps, which Neelie Kroes initiated a year or so ago, but frankly the progress is far too slow. It is important that we do everything we can to ensure that the market is more open, because that will help British energy companies and therefore, importantly, consumers, whether businesses or individuals.
Why is it that three months after the Chancellor’s high-profile intervention on electricity prices no action has been taken to refer to the big, vertically integrated producers that suppress competition the Competition Commission or to stop the blatant price discrimination against low-income metered consumers? Is that not another case, as with the banks, of powerful companies running rings round ineffectual regulators and Ministers?
No, I do not accept that. What is clearly the case, especially over the past year or so, is that the prices being paid by businesses and consumers have gone up. A lot of that is to do with very high oil prices, which have remained far higher than people forecast even a year ago. Oil prices are significantly higher than they were then. We have a competitive market, but as the hon. Gentleman knows, Ofgem is looking into the situation. I raised it with Ofgem at the turn of the year, because I want to ensure that our market is competitive and that there are no anti-competitive practices.
Since then, the Government have also engaged with energy companies to get them to increase the amount of money that they spend on customers with low incomes and, crucially, to do something about the unfair high payments that were imposed upon customers with pre-payment meters who, by definition, were on lower incomes than everybody else. Action is being taken, but rather like with the hon. Gentleman’s fairy tale on Monday, he might want to look at all the facts and not just some of them.
Although I welcome the interim and short-term measures that my right hon. Friend is taking, is he also considering alternative energies, such as those of the Energy Technologies Institute, which is based at Loughborough university, at the hub of a £1 billion investment? Those are the things that will reduce our reliance on oil in the long term, especially at $120 a barrel, at which it could remain for the foreseeable future. Will he ensure increased investment in those alternatives, not only for the long-term security of the nation’s energy, but for all of us suffering from the increased energy prices caused by changes currently taking place in the world?
I agree with my hon. Friend. Indeed, the thrust of the energy White Paper that I published last summer was, first, to reduce our demand for energy, through increased conservation and measures to ensure that businesses and we as individuals use less energy, which is critical. The second thing is that we need to reduce our dependence on carbon sources of energy. That is one of the reasons that the Government believe that we should rebuild nuclear capacity. However, my hon. Friend is quite right that renewable energy must play a crucial role. The renewables obligation helps the growth of renewable energy. Indeed, we have seen a huge increase over the past few years, although we have a long way to go.
The problem with renewable energy that we also need to tackle is that sooner or later people must face up to the fact that if we want renewable energy, we have to give the go-ahead to wind farms onshore or offshore. The problem, certainly in this House, is that there are people who say, “Yes, we want to be greener”, but who then go on to say, “But not anywhere near me.” That is something that we as a country are going to have to resolve. I agree with my hon. Friend, however, that conserving energy and getting more renewable energy must be two of the centrepieces of any energy strategy if we are serious about tackling climate change and reducing bills for consumers, whether they are businesses or individuals.
The Chancellor will know that the high price of energy is hitting those on fixed incomes particularly hard, especially older and more vulnerable people. When will he be in a position to give the House details of the extra help announced yesterday that is to be given to 60 to 65-year-olds?
I hope that I can do that in the reasonably near future, but I want to make sure that we have bottomed out exactly how these payments can be made and what mechanism will be used. It will almost certainly be done through the winter fuel payment mechanism, because it is already there and we would not need to legislate for anything different. The hon. Lady will recall that, in the Budget, I increased the amount of money going to people over the age of 60 by £50 for this year, over and above the winter fuel payment. That was partly to reflect the fact that, as she has pointed out, people over the age of 60 are often, although not always, on fixed incomes. That payment will help them and will be widely welcomed. Those payments will go out in the autumn.
Is my right hon. Friend aware that electricity bills in south Wales are 10 per cent. higher than in England, causing obvious problems to individual constituents and businesses? Has he made any assessment of the effect of those higher bills on the Welsh economy?
As I said earlier, the higher energy bills are affecting all parts of the UK, although I note what my hon. Friend has said about south Wales. They are also affecting every other country in the world. This is a matter of major concern, which is why we need to do three things. The first is to ensure that we have a genuinely competitive market. While we have made strides in this country—far more than many other countries, particularly in the European Union—we need to do far more to ensure that there is no anti-competitive behaviour. Secondly, we need to ensure that we take action to become more efficient with the amount of energy that we use. The third element, given that the root cause of the problem internationally is the continuing high price of oil, is that we need to take action to increase the production of crude oil, to increase our refining capacity, and to make those markets far more open than they are at present. All those things need to be done, because energy prices are crucial, particularly for heavy industry in south Wales as well as for consumers. I am very conscious of this issue, and we need to take action here as well as internationally.
When the Chancellor is considering alternative forms of energy, will he bear in mind his responsibility for the stewardship of the economy in general? Will he reflect that the erection of onshore wind farms can often despoil the countryside, deter tourists and have a bad effect on revenue as a consequence?
The hon. Gentleman amplifies the point that I made a few moments ago. Of course we have to balance our need to generate electricity, whether from coal-fired, gas-fired or nuclear power stations or from onshore wind farms, with the fact that we need to take environmental considerations into account. If we want more renewable energy, however, we have to put it somewhere—[Interruption.] Someone says from a sedentary position, “Offshore.” Yes, indeed. However, our experience is that there have been almost as many objections to offshore wind farms as there are to onshore wind farms—[Interruption.] Not from the fish, but often from people with quite legitimate concerns that need to be addressed. If we are serious about getting more renewable energy, we actually have to build it. I would say to some, although not all, Opposition Members who say that they want renewable energy that they will need to reconcile that with their often robust opposition to building any more wind farms.
The Government have an excellent record on tackling fuel poverty, but the challenging targets to eliminate fuel poverty by 2016 are now looking difficult to achieve. Energy companies are increasing the amount that they spend on social tariffs to £150 million. Is the Chancellor confident that the voluntary approach is going to work and does he rule out mandatory tariffs?
My hon. Friend is quite right that we have reached an agreement with the energy companies to increase the amount of money they spend on social tariffs. It is far easier to proceed on the basis of voluntary agreement because it avoids all sorts of difficulties, and I very much hope that electricity companies will recognise that people feel very strongly about this approach and that it is something that they want to see, and I want to see that agreement implemented.
Vehicle Excise Duty
Nissan produces a number of different models of Micra, which have a range of carbon dioxide emission outputs—from 125 g to 175 g a kilometre. Using 2008-09 rates of vehicle excise duty, the percentage change for Micras varies between minus 25 and plus 25 in 2009-10, and between minus 21 per cent. and plus 24 per cent. in 2010-11, reflecting the fact that there are a range of emissions choices with this model of car, as there are with many others.
While the smallest cars get a tiny benefit from the vehicle excise duty changes, even many Nissan Micras are subject to a rising band of VED rather than a smaller one. Is there any hope for these smaller cars?
The issue is that the VED rate changes are designed to increase the incentive for people to buy the least emitting—the best—car in a class, which is why they are designed to reward those who buy best in class with respect to emissions by giving them a reduction in their VED rates.
I call Sir Nicholas Winterton.
Micra man. [Laughter.]
Does not the Minister accept that a very large number of motorists believe that the changes to VED bands to be introduced from 2009-10 are merely yet another stealth tax on cars, that the duty increases are in the main excessive and that they take no account of those people in my constituency—the farming community of Macclesfield and those in the hill country of the area—who need to use 4x4s? Will the Government look again into the need for 4x4s in many parts of the country?
I know that the hon. Gentleman is the epitome of Range Rover man. What I would like him and his constituents to do is be able to drive Range Rovers that emit lower amounts of CO2. That is what the changes are designed to achieve.
We now know that the changes to vehicle excise duty announced in the Budget were not a green tax; in fact, they were more of a brown tax or an eco-stealth tax. The reality is that we now know that the changes will raise £4 billion over the next three years. The Treasury admitted in parliamentary questions that motor vehicle CO2 emissions will be reduced—by 2020, I should add—by one tenth of 1 per cent. That is a disgrace: it has nothing to do with saving the planet and everything to do with—
Order. Perhaps the hon. Lady should ask a question.
I will do. We also know—[Laughter.] I am coming to it, Mr. Speaker. Of the £4 billion raised, £2.5 billion will go on low-income families and £375 million will be paid next year. Will the Minister add the band A to J losers to the 10p compensation package review? The Government have reviewed capital gains tax and non-doms, so is it not time to review vehicle excise duty?
I am not sure quite how to categorise the emissions that we have just heard from the hon. Lady, so I had better not try. I can, however, tell her that as a result of these changes, in respect of 15 of the 30 best-selling cars of 2006 drivers will be better off, and in respect of nine they will be no worse off, while 55 per cent. of drivers will be better off or no worse off.
Northern Rock
During the period of temporary public ownership, Northern Rock will be managed on an arm’s length commercial basis. On 31 March, its board published a detailed business plan that meets the Government’s objectives.
In his recent ministerial statement the Chancellor said that the Government would hold the board accountable for performance against the business plan, but one of the commitments in the plan is that the bank will treat all customers fairly. In the light of today’s expected test-case judgment, can the Chancellor explain how the Government intend to hold the board to account over the bank’s fair treatment of its customers in respect of its charges?
As the hon. Gentleman says, we are expecting the result of that case today, and until we see the findings it would be premature to comment on how we will respond to them.
If the Chancellor cannot make his own bank cut its mortgage rate, what hope is there of anyone else doing so?
As I told the House on Monday, the measures announced by the Bank of England will take a great deal of pressure off banks. As I said then, they are a further step towards stabilising the financial markets. The benefits of the reductions in the Bank of England’s rate, and the other support that it has introduced, can be passed on.
As for mortgage rates, it is important for two things to happen. It is important for institutions to rebuild their capital position, and we want banks and building societies to be robust enough to be able to continue to do that. As I said, I should like the benefits to be passed on, but as the hon. Gentleman will realise when he has had an opportunity to sit down and think about it, it is important for institutions to examine their own capital positions so that they can strengthen them, especially at a time when we are undergoing so much turbulence and uncertainty. The measures that we announced on Monday, together with the other steps taken by the Bank of England, will help to reduce the pressure that we face, and help those benefits to be passed on to consumers.
During the recess, the Chief Secretary wrote to me admitting that the independent valuer should treat Northern Rock as though it were in administration. Has the Chancellor appointed a valuer? Does he expect ordinary shareholders to receive any value, given that they rank below £400 million-worth of preference shareholders? And does he now recognise that Northern Rock is effectively in administration?
It is not, and—as the hon. Gentleman knows, because he follows these matters—the compensation regime was set down in the Banking (Special Provisions) Act 2008, which Parliament passed in February. However, it is right for the valuation of the bank to be based on the fact that it owes rather a lot of money to the Bank of England. That was the reason for our proposals, which were accepted by the House. I believe that Members in all parts of the House accept that this is a bank that got into huge difficulties, and that if the Bank of England had not intervened it would have gone under. We must be fair not just to people who are involved with the bank, but to taxpayers as a whole.
May I take the Chancellor back to his answer to my hon. Friend the Member for Hammersmith and Fulham (Mr. Hands)? Why has a bank that he nationalised refused to heed his calls to reduce its mortgage rate and pass on the reductions in the Bank of England base rate? Why has a bank that the Government put into public ownership not listened to his advice?
At our last Question Time, the Conservatives complained that Northern Rock was offering rates that were more competitive than those in the rest of the banking sector. Today they are complaining that it is not. Right from the start, the Conservatives’ position on Northern Rock has been all over the place. They have had different positions for every week of the year, most of them contradictory.
As I told the House earlier this week, I believe that the Government have put in place, through the Bank of England, measures that will help to stabilise the financial markets. We are already seeing some evidence of that, but the financial markets are going through a period of unprecedented uncertainty and turbulence, and it is important that the banks—Northern Rock or any other—make sure that they have a secure base on which to proceed. As I have said, I hope that the benefits of both the reduction in interest rates and the additional money and support that the Bank of England has been able to give will be passed on, particularly to mortgage payers.
Welfare Tax Credits
The latest published figures show that in 2005-06, 91 per cent. of the money for child tax credit and 82 per cent. of the money for working tax credit has been claimed.
I thank my right hon. Friend for her answer. Will she confirm that since 2005 the Government have made changes to these tax credits which mean that there are far fewer reclaims of overpayment of child tax credit and far more childless workers eligible to receive working tax credit? Why cannot the Treasury and the Revenue make it automatic that people receive the tax credit to which they are entitled, and if that is not possible, will they engage with Members of Parliament, trade unions, employers, local government and third sector organisations such as Citizens Advice in raising awareness of the availability of these tax credits and campaigning for their take-up?
I am grateful to my hon. Friend for the first suggestion in his question, although I think he will find that legislation requires people to claim—to make an application for—their tax credits. I recognise that more needs to be done to boost take-up of working tax credit by those without children. That is a particularly hard group to reach. I hope I can reassure my hon. Friend by telling him that Her Majesty’s Revenue and Customs has been conducting a campaign aimed at this group. It plans to repeat it in the autumn, increasing its intensity so that it reaches more than 7.5 million households within the priority areas where it believes many people in these groups live, and about 3 million households will receive door-drop leaflets. In addition, HMRC is targeting employers in sectors where it expects there will be high eligibility, and we are also working with the trade unions. Promoting the take-up of tax credit is not a new interest of mine; we have been working hard on it. I am grateful to him for his interest, and I would be happy to discuss what further measures we might be able to take.
The Government have prayed in aid the use of tax credits in dealing with the removal of the 10p tax rate. Notwithstanding what the right hon. Lady has just said by way of an answer and the statements of the Chancellor and the Prime Minister yesterday, will she tell the House how many million people will still be losers by virtue of the removal of the 10p tax rate who will not be able to be helped by virtue of tax credits?
The right hon. Gentleman will have heard the comments yesterday and through this week of my right hon. Friends the Chancellor and the Prime Minister, and he will know that I have had a long-standing interest in improving the take-up of working tax credits—as, indeed, has my predecessor. More work remains to be done in this area and we are redoubling our efforts. I do not at present have the details to respond to the specifics of the right hon. Gentleman’s question, but that will be part of the work we will do going forward.
Does the Minister accept that some people on low incomes have in the past had difficulty in coping with tax credit overpayments and that that is acting as a disincentive to some for claiming tax credits? We need a strategy to deal with this matter, to make sure they claim what they are entitled to.
Absolutely, and I am grateful to my hon. Friend for raising that point. HMRC has developed a series of initiatives through the tax credits transformation programme, including increased support for those renewing their claims—particularly people who have had difficulty in renewing in the past—and enhanced assistance for those making new claims, which involves longer conversations with tax credit office support staff and better training and support for staff in tax credit call centres, to make sure that the customer experiences in renewing their claims and making new claims mean that customers get the tax credits they are entitled to as quickly as possible.
As well as aiming to reduce poverty, do the Government aim to reduce the number of people who rely on benefits to escape it?
Yes, we have said for many years that we believe the best route out of poverty is through work. The support that we have in place is designed to assist people not only to find jobs through our active labour market policies, which the hon. Gentleman will have noted have had considerable success, but to ensure that work pays and provides the benefits that one would expect once people are in work.
Is my right hon. Friend aware that a Library paper prepared for me shows that families who earn up to £520 a week where one adult works for 30 hours and there are two children gain £10 a week through the changes to the tax and tax credits system? There has been a lot of debate about this Budget, but what will she do to ensure that a large number of families who might not have thought about claiming tax credits know that they will benefit a great deal from it?
I am grateful for my hon. Friend’s question. She and I have discussed this subject, and I am interested in the further evidence that she has brought to the attention of the House. I hope that she will be pleased to learn that I am encouraging Her Majesty’s Revenue and Customs to do further work through the transformation programme, including work on new guidance for families, work on more accessible information and work with the national network of children’s centres that is now in place. I am grateful to the staff at the tax credits offices, who are so enthusiastically taking up these improvements in how they work in order to benefit the customers whom they serve.
In March 2007, the Prime Minister told the Select Committee on Treasury that take-up of working tax credits by households without children had increased by 100,000 since 2004-05 and that, partly as a consequence of that, it was incorrect to say that 5.3 million households would lose out as a result of the doubling of the 10p rate. Will the Financial Secretary confirm that the Prime Minister was wrong to say that working tax credit take-up had increased by 100,000 and wrong to deny that 5.3 million households were losing out from the scrapping of the 10p rate? Will she confirm that the problem in trying to use working tax credits for households without children to cobble together a compensation package for the 5.3 million households who are losing out is that the take-up rate is only 22 per cent?
No, the hon. Gentleman knows that the rate of take-up of tax credits is higher than that of any previous system of income-related financial support for working families. The take-up rate was 50 per cent. in the early years of family income support and only 57 per cent. for family credit, but it is 62 per cent. for working families tax credit. This system is successful, although I accept, as I have said repeatedly this morning, that there is further work to do in respect of households without children. HMRC and I are working hard to improve take-up—[Interruption.] He says 22 per cent. from a sedentary position. That fact is in the public domain and I do not quarrel with it, which is why I have said repeatedly to him, his colleagues and Labour Members that there is work to do and we are committed to taking it forward.
Hospitals (Expenditure)
Investment in the health service improves facilities and care, and it helps the local economy both directly, by providing employment, and through improving the health of the local work force.
I can confirm to my right hon. Friend that exactly that is happening in Blackpool. Is she aware that in recent years, £70 million of capital investment has been made in Blackpool Victoria hospital to create new cardiac care and haematology units and much more? Not only has that created new jobs in the economy for contractors and providers, and for 100 new nurses, but, of course, it has improved health care. Will she continue that investment and her good work?
I assure my hon. Friend that the Government intend to continue making significant increases; there is provision for a 4 per cent. real increase in health spending during this comprehensive spending review period. We recognise the benefits that health care investment can bring to the local economy. As she says, it means jobs for nurses, but it also means improvements in health. There has been a 17 per cent. drop in cancer deaths over the past few years as a result of much of the extra investment in the national health service, which has gone into providing new drugs and better treatment facilities.
Given that so much expenditure on hospitals in recent years has been through off-balance sheet private finance initiative and public-private partnership projects, is the Minister comfortable with the notion that, effectively, the next generation of taxpayers will have to pay for jam today in hospitals and other areas of public expenditure?
I am astonished to hear that the hon. Gentleman seems to be against new hospitals, PFI projects and the chance of investment in the future. It is often right to borrow to invest in the future and to deliver the kinds of services from which people will benefit for many generations to come. We are proud of that level of investment. I am sorry—I think his constituents will be sorry, too—if he is setting his face against the new and important capital investment in the NHS.
Welfare Tax Credits
I am so pleased that the hon. Gentleman could join us. He may not have heard me comment that the tax credit system is now working well for the 6 million families who benefit from tax credits, but I continue to look for opportunities to improve their experience. A revised version of the award notice, reflecting comments from the voluntary and community sectors, has, as he knows, been in use since April 2006.
I was here for the whole of the previous exchange, which I noted. I noted in particular that three quarters of people who are entitled to working tax credit do not claim it. I also know that nearly 1 million people were not given the amount that they should have received. Given that there are two four-page forms and that, as the Minister says, the target audience is the people who are most likely not to get the forms right, what will she do, rather than merely saying she is committed, which I do not doubt, to ensure that the system delivers, if it is meant to be the answer to all the Government’s new-found difficulties?
My apologies. I did not see that the hon. Gentleman was here for the earlier discussion. He certainly was not here at the outset of questions. He will have heard me refer to the fact that HMRC has—
Talk about Liverpool council.
I can talk about Liverpool if the hon. Gentleman wants me to. HMRC has already conducted a campaign aimed specifically at one group: families without children who should potentially be receiving working tax credit. I hope that the hon. Member for North Southwark and Bermondsey (Simon Hughes) will accept that this is a particularly hard group to reach and to encourage to claim. It is for precisely that reason that HMRC has focused its effort. It is working with three different groups in which it believes that we could improve take-up: new mums, some ethnic minority groups and the group that I just mentioned. HMRC realises that there is more work to be done.
It is not just a matter of words; HMRC is making a real effort. It deserves to be commended for its work. It is too early yet to see the outcome of that increased effort, but there is no doubt that the effort is being made not only through the leaflet campaign to which I referred, but through targeted radio promoting the use of tax credits to those groups. We believe that they listen to local radio programmes more than other perhaps more conventional methods of advertising.
It became clear from the correspondence that I received about the abolition of the 10p tax rate that there was still a large amount of ignorance about who could claim and who qualified for working tax credit. That might help to explain why take-up is so low. Another explanation is that people with disabilities find it difficult to get more than the number of hours that must be worked in order to qualify for tax credit, on top of the complication of filling out the form. Will my right hon. Friend reconsider the qualifications for working tax credit for those with disabilities, to make it easier for them to qualify without having to work the 30 hours, which they find a high hurdle to overcome? That would also help to address the group that is losing out as a result of the abolition of the 10p tax rate.
My hon. Friend makes a valuable point, which I am happy to consider. I will closely examine the whole area as we go forward to ensure that all those who are entitled to receive working tax credit, whether or not they are impacted on by the questions around the 10p tax rate, can do so. Equally, I want to examine how we can help people in the way that my hon. Friend has suggested. I will consider whether it will be advisable to do so through the tax credit system or perhaps some other means.
Savings Ratio
The savings ratio is affected by the macro-economic conditions, the financial market conditions and consumer attitudes at any one time. The Government are currently forecasting an increase in the household savings ratio, partly in response to current economic conditions.
Why did the Chancellor abandon prudence some nine years ago to increase dramatically the size and cost of Government and public expenditure, while discouraging saving by a combination of inflation and high personal taxation? Now that the housing market has gone virtually from boom to bust, and it is estimated that UK personal indebtedness is rising by £1 million every five minutes, what further action will the Chancellor take to improve the savings ratio, which is so important for stability in the economy?
I have to say that I completely disagree with the hon. Lady’s diagnosis of the economic situation. We have invested, it is true, in schools, hospitals, education, health care and transport infrastructure, and that has had a very big impact on things like standards in school and the number of deaths from heart disease and cancer. We have also seen big improvements in our economic prosperity. We have gone from being at the bottom of the G7 league to being second from the top in prosperity per head of population. That is a very big improvement in our economic wealth and well-being, and it is as a result of the investment and macro-economic decisions that this Government have taken.
Topical Questions
The core purpose of the Treasury remains to ensure the stability of the economy, to promote growth and to manage the public finances. Last week, the new figures showed that employment in the United Kingdom had reached a new record of 29.5 million people, which demonstrates the underlying strength and resilience of our economy.
In an earlier response, the hon. Member for North Ayrshire and Arran (Ms Clark) responded to a question about the rescue package for the 10p rate of tax by saying that she could not reveal, or did not know, all the details in that package. Given the sensitivities on both sides of the House, and given the fact that another member of the Chancellor’s Front-Bench team was reluctant to reveal other details last night in the press, will the Chancellor answer two very straightforward questions about the contents of the package? First, which elements of it will and will not be—
Order. A supplementary, especially at topical questions, should be brief, and certainly two supplementaries is just not on.
I bow to your point, Mr. Speaker. Which elements of the 10p tax rescue package will and will not be backdated?
I think that I am right in saying that my hon. Friend the Member for North Ayrshire and Arran (Ms Clark) asked a question rather than sought to answer it.
On the proposals, I set out in a letter to the Chairman of the Treasury Committee how I propose to proceed, both in relation to a specific group—people between the ages of 60 and 64, whose incomes do not change that much and for whom there is a readily available mechanism for additional payments through the winter fuel payment—and in relation to everybody else who was affected. I said that there were certain areas that I wanted to look at in relation to tax credits and the national minimum wage, and that I would be setting out proposals and would return to the matter in the pre-Budget report. That is what I said at the weekend and in the letter to the Treasury Committee, which set out quite clearly how I intend to proceed.
As I said in my letter yesterday, the first area in which we can take action is in relation to 60 to 64-year-olds. On the others, if my hon. Friend looks at the letter, she will see that I said that our focus is on allowing that the average losses from the abolition of the 10p band can be offset. I want to do that for this year. Because the groups concerned are diverse, and because the effect of any change to the tax system can be quite complex, it will take time—this is why it will not be until the pre-Budget report that I can come back to it—to work out in which way we can help groups. I suspect that there may be different ways.
I have made my intention very clear. It is all very well for the Conservatives to raise these matters, but they would have more credibility if they had a single proposal that might help.
I understand that I have been barred from more pubs than anyone else in the country, including pubs that I have never been in and many that I have never even heard of. It is the first time that I have ever come across that.
We raised the duty on alcohol primarily to finance what we are doing to increase the amount paid to people over 60 through the winter fuel payment, and to help families with children. I took account of the fact that the average price of a bottle of wine, for example, has fallen over the past 10 years. I know that pubs around the country face certain difficulties, although I think that the hon. Gentleman will acknowledge that there has been a change in people’s habits generally. However, constraints in the EU rules mean that it is not possible to have differential rates for beer that is bought as on-sales or off-sales. Of course, I have a great deal of sympathy for anyone running a business and trying to attract new customers, but I think that what I did in relation to alcohol was right, especially when one considers where a lot of that alcohol has been going. Finally, I can tell the hon. Gentleman that we are not proposing to change the Budget at all.
The most important reason why the Chancellor was able to come to his decision yesterday on the 10p tax band is that the economy is strong enough to pay out the money that people are going to get. The economy never allowed previous Governments to find the money to reverse a Budget proposal. On Black Wednesday, for example, the Conservatives did not have two ha’pennies to rub together.
As ever, my hon. Friend is quite right— the British economy is very strong and stable. As I said in response to the first topical question, unemployment is at its lowest since the early 1970s and employment is at record levels. Those facts make a huge difference. The situation is quite different from the one that we faced when the housing market in particular got into trouble in the early 1990s, because at that time there were more than 3 million people out of work. My hon. Friend is right that people will remember what happened when the previous Conservative Government got into economic difficulties that resulted in immense hardship for millions.
We are not prepared to allow that to happen, but we cannot be complacent. As I have said on many occasions, economies around the world are slowing and Governments will have to face up to the consequences. Even so, our economy is in a much better position and is more resilient than it ever was in any of the years when the Conservatives were in government.
What is becoming clear this morning is that this incompetent Government cannot organise even a humiliating U-turn without messing it up. Last night, the Chief Secretary to the Treasury was with me in the “Newsnight” TV studio and said that she could not confirm that the rescue package would be backdated. This morning, the right hon. Member for Birkenhead (Mr. Field) said:
“I think Yvette was badly briefed. The agreement—and this is an agreement that the Prime Minister actually put his stamp on—was that…the whole package would be backdated to April the first.”
Who speaks for the Government—the right hon. Member for Birkenhead and his conversations with the Prime Minister, or the Chief Secretary to the Treasury?
First, the hon. Gentleman’s position on this—[Hon. Members: “Answer.”] Well, he is the man who supported the abolition of the 10p rate 12 months ago. When my right hon. Friend the Member for Birkenhead (Mr. Field) tabled his amendment 12 months ago, far from supporting it, the hon. Gentleman abstained. About two weeks ago, the Conservative party’s policy was to reinstate the 10p band, and when confronted with the fact that that would cost him about £7 billion, he said that it was a holding position. Now, he has no position at all.
As I told the House just a few moments ago, I set out how I intend to proceed in the letter that I sent to the Chairman of the Treasury Committee, and I made it clear that, in relation to the first group—pensioners between the ages of 60 and 64—because their incomes do not tend to change that much, I am confident that we will be able to make a payment to them, probably by the same mechanism as the winter fuel payment is made, to cover their position for this year. I also said in relation to all the other people who are affected that this is something that I want to look at, and I will come back to the House in the pre-Budget report, as I said at the weekend and as I said yesterday. However, as my letter says, our focus is to ensure that we allow the average losses from the abolition of the 10p band to be offset for this year. That is something that I fully intend to proceed with, and I will come back to the House when I have specific proposals to make.
First, the Chancellor is in no position to lecture anyone about consistency, when he said on Sunday that he would not reopen his Budget and then did so three days later. Secondly, no one is interested in the letter that he sent to the Treasury Committee; what we are interested in is the conversation between the right hon. Member for Birkenhead and the Prime Minister. The right hon. Member for Birkenhead says clearly, and he said it again on the radio this morning:
“there is no mistake about this—the agreement will be backdated to April first.”
So will the Chancellor get up, stop all this waffle about the pre-Budget report and what the Chief Secretary did or did not say and make it clear that the agreement between the right hon. Member for Birkenhead and the Prime Minister, which the Chancellor was obviously not part of, is that the package will be backdated—yes, or no?
The hon. Gentleman should be interested in the letter that I sent to the Chairman of the Treasury Committee because it sets out the Government’s position. Like many others, no doubt, I heard my right hon. Friend the Member for Birkenhead on the radio this morning, and as he rightly said, because the people affected by the removal of the 10p band are disparate and are affected in different ways, it will be necessary for the Government to consider a range of measures to help them. However, as I say in my letter, my focus is to allow us to offset the average losses from the abolition of that band for this year. That is what I intend to do, and I fully intend to come back to the House in the pre-Budget report to set out precisely how I will do it. I have a commitment to do something about the problem. It is abundantly clear that the Opposition have absolutely no interest in it whatever and regard this as a political game.
My hon. Friend is right. Right from the start, we have been committed, principally through the work undertaken by my right hon. Friend the Prime Minister when he was the Chancellor, not just to take action here at home to ensure that we meet our international obligations, but crucially and additionally, to work with other countries to write off the debt that poor countries faced. Liberia is perhaps an excellent example of where the international community has, albeit after a bit of a struggle, come together to try to remove the debts from that country, to give it a chance to get back on its feet and to improve the living standards of its people. I believe that the action that we have taken in relation to development and writing off debt right across the world has been a model of what all Governments ought to be doing. I should like to see us do more, but my hon. Friend is absolutely right: that is something that any humane Government ought to be doing, and they should be doing it because it is the right thing to do, not just morally but economically.
Well, looking at the international figures, we see that in the 10 years up to 1997 the UK was the bottom of the G7, in terms of income per head. It is now the second highest, behind the US, as a result of the decisions that we have taken. The tax burden today remains lower than the average over the 1980s, when the right hon. Gentleman and members of his party were in charge.
I appreciate the point that the hon. Gentleman makes and, if I may show my usual lack of partisanship, I know that the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) would have raised the issue had we got to his question. Having filled my car up with diesel in Lewis just a couple of weeks ago, I am acutely aware of how high the petrol prices are. There are two things that I can say. First, I cannot promise to do so myself, but I am sure that one of my ministerial colleagues will be happy to meet the hon. Member for Orkney and Shetland (Mr. Carmichael).
Secondly, I am struck by the variation in petrol prices across the highlands and islands; they vary substantially. I noticed an excellent article in the Stornoway Gazette a couple of weeks ago—I like to keep informed—that drew attention to the fact that the price of diesel seems to vary quite a bit depending on which side of the Minch one is on. The hon. Member for Na h-Eileanan an Iar has, I think, raised the matter with the Office of Fair Trading, but the fact that there is such variation, when it is not abundantly clear why that is, is something that perhaps all of us ought to have a look at.
Absolute nonsense. The Conservative party ought to continue to reflect on the fact that on this issue, as on so many others, its positions are completely contradictory. The Conservative party has absolutely no coherent strategies for helping people on low incomes, for getting children out of poverty, or for helping older people and people on low incomes who do not have children. We do. We are determined to improve people’s living standards, and that is precisely what we will do.
Business of the House
Will the Deputy Leader of the House give the forthcoming business?
The business for the week commencing 28 April will be:
Monday 28 April—Consideration in Committee of the Finance Bill.
Tuesday 29 April—Conclusion of consideration in Committee of the Finance Bill.
Wednesday 30 April—Remaining stages of the Energy Bill.
Thursday 1 May—Topical debate: subject to be announced, followed by a general debate on child poverty in Scotland.
Friday 2 May—The House will not be sitting.
The provisional business for the week commencing 5 May will include:
Monday 5 May—The House will not be sitting.
Tuesday 6 May—Consideration of Lords amendments to the Criminal Justice and Immigration Bill.
Wednesday 7 May—Opposition Day [11th allotted day][First part]. There will be a debate on an Opposition motion, subject to be announced. After that, the Chairman of Ways and Means will name opposed private business for consideration. If necessary, that will be followed by consideration of Lords amendments. The House will not adjourn until the Speaker has signified Royal Assent.
Thursday 8 May—Topical debate: subject to be announced, followed by a general debate on defence in the world.
Friday 9 May—Private Members’ Bills.
I should also like to inform the House that the business in Westminster Hall for 1 May and 8 May will be:
Thursday 1 May—A debate on the report from the International Development Committee on sanitation and water.
Thursday 8 May—A debate on the report from the Health Committee on the National Institute for Health and Clinical Excellence.
I express my thanks for that information.
This morning, the Leader of the House issued a written statement on topical debates. Given the importance of those debates, an oral statement would be more appropriate, giving Members an opportunity to question her proposals. This morning the Prime Minister, too, issued a written statement to report on the NATO summit in Bucharest. To date, the Government have come to the House to make an oral statement following such a meeting. Why did we not have an oral statement this time? What is the Prime Minister trying to hide? Yesterday, the Chancellor announced a U-turn on the 10p tax in a letter to the Treasury Committee, instead of making an oral statement to the House. Will the Deputy Leader of the House give Members an assurance that her colleagues will start practising what they preach and treat Parliament with the respect that it deserves?
Last week, the Home Secretary said that police forces under pressure from migrants settling in their areas would get extra funds, but we now know there is to be no additional money, and that the fund had already been announced by the Home Office in February. We need a statement from the Home Secretary apologising for recycling a statement and for trying to gain cheap political advantage during the local election campaign.
On Tuesday, the Work and Pensions Secretary announced that poverty figures, due to be published in March, but then delayed until early May, have been delayed again until June. Given public concern over rising prices, particularly on food and fuel, that procrastination does little to allay people’s fears. The Secretary of State needs to explain the impact of soaring prices on Britain’s poorest families, and may I suggest that the subject of next week’s topical debate should be the cost of living?
On the subject of the cost of living, Ken Livingstone said that he would not put up tube fares, but it is reported that he has done a secret deal to do just that—another reason why the man is not fit to be Mayor of London. Can we have a debate on honesty in politics?
The Public Accounts Committee has said that the Government were “entirely unrealistic” when they made their original estimate of the cost of the 2012 Olympics. The massive rise in the budget was a result of their ignoring basic considerations such as contingency provision, VAT and security measures. The Minister for the Olympics has some serious explaining to do, and she should make a statement about costly incompetence in her Department.
The Office for National Statistics has announced that it will make house visits to interview nearly half a million people every year and ask a range of personal and intimate questions at an annual cost to the taxpayer of £3.5 million. There will be questions on salaries, 35 questions on contraception, and questions on former sexual partners—a subject on which we know the leader of the Lib Dems is more than happy to respond. Those questions are extraordinarily intrusive—
Why is the hon. Gentleman raising them, then?
I am raising them because of the Government’s incompetence in not allowing questions to be asked in the first place. Those questions are extraordinarily intrusive, and it is widely accepted that such surveys are inaccurate. The Secretary of State for Communities and Local Government should come to the House and explain this scandalous waste of taxpayers’ money.
Yesterday, on St. George’s day, we read in the papers that England has been wiped off a map of Europe drawn up by Brussels bureaucrats. The map makes no reference to England, or indeed Britain, and has even renamed the English channel the “Channel Sea”. It is all very well the Prime Minister putting up patriotic flags on top of No. 10 Downing street, but he needs to make an urgent statement to tell us what he is doing to protect Britain’s interests in Europe and Britain’s identity.
So, Mr. Speaker, there you have it. We have a Government who dither, who spend millions on sex surveys while millions of their people worry about the cost of food, and who betray their people by refusing to stand up for them in Europe.
Once again, the hon. Gentleman has gone completely over the top. Every week at business questions we have to listen to wild hyperbole. Last time I looked, England was still on the map.
The public will not be taken in by crocodile tears from a party which, while it claims to be concerned about the low paid, opposed the minimum wage, and which, while it claims to be concerned about economic insecurity, produced 3 million unemployed. I shall not delay the House further. Instead, I shall move on to the substantive points that the hon. Gentleman found time to make.
On topical debates, as the hon. Gentleman knows, we have instituted a review. We would be pleased to have the views of hon. Members on the way topical debates are going. Members are welcome to come and see the Leader of the House or to write to us.
With reference to the oral statement relating to the European Council—
Oh, it was NATO; I am sorry. I misheard what the hon. Member for North-West Cambridgeshire (Mr. Vara) said.
On the 10p rate, the hon. Gentleman asked why the Chancellor of the Exchequer had written to the Treasury Committee, rather than producing an oral statement. We have had ample opportunity and we will continue to have ample opportunity to discuss the matter. The Prime Minister answered questions yesterday. As the hon. Member for North-West Cambridgeshire knows, the Chancellor was standing at the Dispatch Box about five minutes ago answering questions on the matter. On Monday there will be a debate on clause 3 of the Finance Bill, when all the issues can be fully aired.
The Home Secretary’s announcement about policing was perfectly in accordance with the rules because it related to national, not local, issues. As I am sure the hon. Gentleman knows if he has read properly the written ministerial statement from my right hon. Friend the Secretary of State for Work and Pensions, the delay to the publication of the statistics about households on low incomes is due to a technical difficulty with the statisticians. The decision was taken by officials and had nothing to do with Ministers.
I accept the hon. Gentleman’s suggestion for a topical debate for next week. We will accept that alongside all the other suggestions that we receive.
The hon. Gentleman made a point about the candidates for the mayoralty of London. He failed to take account of the fact that Ken Livingstone has been at the forefront of developing public transport in London, unlike the candidate whom the hon. Gentleman supports, who did not even have time to make a speech when his own colleagues had given him an opportunity to do so yesterday in a debate on crime in London.
The hon. Gentleman raised the issue of the costings for the Olympic games. He should be aware that the costings were established not in the most recent National Audit Office report, but more than a year ago, in January 2007. The fact that we have a full NAO report and that the PAC has an opportunity to consider it shows that there is adequate parliamentary scrutiny. The hon. Gentleman knows perfectly well that the Office for National Statistics has now been set up as an independent body and that it is undertaking those surveys to produce statistics. However, I am sure that the head of statistics will read his remarks in Hansard.
Before I sit down, I should like to pay tribute to Gwyneth Dunwoody, who was a regular at business questions. More than that, she was a remarkable woman, a great parliamentarian and a formidable Chair of the Transport Committee. I am sure that the whole House will miss her greatly.
David Winnick.
indicated dissent.
My hon. Friend will be aware of the massive concern across the House about the situation in Zimbabwe. There is to be a Westminster Hall debate on the issue next week, but will my hon. Friend make sure that there is also a statement to the House about it next week, so that we get information on a fast-moving situation and so that we can press for measures such as tighter sanctions on Zimbabwe? In that way, we can try to get the regime to release the election results and let Zimbabwe move on to a renewed democracy.
My hon. Friend is absolutely right. She has taken a long-standing interest in the affairs of Zimbabwe. The Prime Minister made clear everybody’s total disgust at Mugabe’s treatment of the election results and the importance of standing by a proper democratic outcome that respects the will of the people of Zimbabwe.
As my hon. Friend says, there will be a Westminster Hall debate on Zimbabwe next Tuesday. I do not know whether she is aware that the arms shipment, about which many people were concerned, has been turned away from South Africa. I am sure that the whole House will welcome that news. She may be aware that the European Union has an arms embargo on Zimbabwe. The Government believe that it would be excellent if as many other countries as possible joined that embargo.
May I associate myself and my colleagues with the tributes made by the hon. Lady—and you, Mr. Speaker, earlier this week—to Gwyneth Dunwoody? She was a formidable, doughty and relentless parliamentarian, and by being so gained huge respect across the House and outside it. She also broke two great records. She was the woman who served for the longest continuous period in Parliament, a record previously held by Barbara Castle, and the woman who served for the longest period overall, a record previously held by Irene Ward. She was a phenomenal parliamentary contributor, and we send our condolences through the Deputy Leader of the House to her family and friends and her constituents in Crewe and Nantwich.
Through the Deputy Leader of the House, I should like to thank the Leader of the House for her letter explaining why she is not here today. She is at the funeral of Gloria Taylor, Damilola Taylor’s mother. We send our love and sympathy to the Taylor family, who have suffered two terrible blows in far too short a time.
May I ask the Deputy Leader of the House three questions about business, all of which are about the economy and matters about which we heard the Chancellor and colleagues speaking earlier? First, will the hon. Lady assure me that, on Monday and Tuesday, when we debate the Finance Bill, there will be time to debate adequately the working tax credit? In particular, if the Government are determined to use the credit as the method of giving back to the poor, may we debate how we can change a situation in which under a quarter of those eligible as working couples with no children obtain working tax credit, and under a third of those who earn less than £10,000 obtain it?
There is also the fact that 2 million people get working tax credit repayments that they should not get, and 1 million do not get the ones that they should. It is no good having a reliance on this system if it works so badly for so many people. I hope that the Deputy Leader of the House can assure us that on Monday or Tuesday there will be time to debate that issue instead of just saying that that is the mechanism for dealing with the Government’s recent difficulties.
On Wednesday, we have the debate that the Deputy Leader of the House announced on the remaining stages of the Energy Bill. She has heard before the exchanges about giving enough time for Opposition new clauses and amendments. May I ask specifically that we have time to debate why someone who pays their energy bills by direct debit may have fuel bills on average £400 lower than people who have prepayment meters? People who pay by prepayment meter are the poorest and those who pay by direct debit have the most stable incomes, bank accounts and the rest. If we are going to deal with the poor and energy bills we need to be able to help those people, who are clobbered most and can afford least.
One of the effects of the credit crunch appears now to be impacting on housing associations, which have to borrow in the private sector for the house building that they contribute to social housing. The Government have an ambitious target of 3 million extra homes by 2020, and an affordable housing target of approaching 100,000 homes a year by 2010-11. May we soon have a debate about achieving the objective of building the affordable homes that we need in London and across Britain? At the moment, the banks are less willing to lend, the housing associations therefore have less money to spend, and the risk is that the ambitious targets turn to nothing and people have additional housing problems in addition to all the other ones that we know about.
The Leader of the House will be most pleased when she reads what the hon. Gentleman said. She particularly asked me to mention the excellent work that is being done by the Damilola Taylor Trust for deprived young people in London, and I am sure that she will be pleased to see his remarks about that.
The hon. Gentleman asked about the handling of the Finance Bill in Committee of the whole House on Monday and Tuesday. As he knows, we voted last Monday to devote two days to those proceedings. As he also knows, the selection of amendments is a matter for the Speaker, not for the Leader of the House. I am sure that we will balance the importance of this issue against the other important tax measures that we are to discuss. I do not, however, fully accept his characterisation of working tax credits, which, in truth, have helped and continue to help 6 million households and 10 million children.
Turning to the hon. Gentleman’s questions about the Energy Bill, fuel poverty is of course one of the issues that can be raised in the debate next Wednesday. I am not sure from his remarks whether he is fully aware that the energy companies are now putting in £100 million, £125 million and £150 million to support vulnerable customers over the next three years. That has to be set alongside the perfectly legitimate questions that he raised.
I will take the hon. Gentleman’s remarks about the importance of affordable house building as a suggestion for a topical debate, if I may. I am not sure whether he knows that the target for building 200,000 houses includes 70,000 per year that should be affordable.
Does my hon. Friend agree that given the strong emotions, fears and opinions expressed by some about a few controversial aspects of the Human Fertilisation and Embryology Bill, additional time should be allocated to debate those matters on the Floor of this House, not just in Committee?
I do understand the importance of the issues in the Human Fertilisation and Embryology Bill. That importance is the reason why all parties have agreed to give their Members free votes on the ethical issues that are contained within it. We will take account of my hon. Friend’s point when we come to the timetabling, which will be announced in the business statement of the preceding week.
When Sir John Baker reports to the House in the next few weeks on Members’ pay, will that be the last word that will be said on the next settlement, or will it merely be part of a report on the process for the future?
As the hon. Gentleman knows, the last word will be had by this House when it debates the Baker report, which will, as I am sure he also knows, examine two things—not only the comparator and the settlement in the current year but how to establish an independent mechanism, which the whole House voted for in January. He can rest assured that he and all hon. Members will have an opportunity to come back before the summer recess to discuss that important issue.
Will my hon. Friend allow the House an early opportunity for an oral statement or a debate on the effectiveness of British humanitarian aid to Gaza? Those of us who were in that sad territory last week found that apart from food aid, no aid at all is being effective in that area because of the complete closure of the territory’s borders that Israel has imposed. That territory is on the verge of total collapse, and I do not believe the aid that we have promised is getting through and doing what it should, whether it is bilateral, European or United Nations aid.
My hon. Friend raises an important issue. I will pass on his remarks to my right hon. Friend the Secretary of State for International Development and ask him to respond.
May I revert to the question asked by the shadow Deputy Leader of the House as to whether there is to be an oral statement on the NATO summit, to which I am afraid we heard no answer? It seems irrefutable that on Sunday Russia shot down an unmanned aerial vehicle owned and flown by Georgia. Last week, Russia appeared to take legal steps to recognise separatists in Georgia. The Defence Committee has just produced a major report about NATO suggesting that there is a crisis of political will in NATO. What is happening in Afghanistan at the moment requires an oral statement on the Floor of the House. Why on earth is this the first time for decades that there has not been one?
The hon. Gentleman—
Right honourable.
The right hon. Gentleman raises an important point, and I will consider his request. However, I just announced that a week on Thursday there will be a general debate on defence in the world, and he will be able to raise those issues then.
Yesterday, the Prime Minister said that it was a matter of public debate as to whether St. George’s day should become a bank holiday, so as part of and in the spirit of that, may we have a debate in this House so that Members can express their support for that long overdue measure?
I will take that as another request for a topical debate. I am sure that my hon. Friend is aware that under this Labour Government people’s entitlement to take bank holidays has already been increased by four days, and in a year’s time they will get a further four days’ guaranteed bank holidays.
As diesel in my constituency costs up to £1.33 per litre, the Chancellor is probably getting more of that sort of revenue from my constituents than from anybody else. Could we have a debate on looking to introduce a system of fuel duty taxation in rural Scotland and the Scottish islands similar to that in rural France, where duty is cut by 3 per cent.? I hope that the Deputy Leader of the House will make time for such a debate. If such a measure were introduced, the Chancellor would still be getting more fuel duty from my constituency than anywhere else.
If the hon. Gentleman had serious proposals on the taxation of fuel, he should have tabled an amendment to the Finance Bill, and he could have had the opportunity to debate it properly next week. What he is saying is absolutely typical of the irresponsible approach his party takes to this matter.
Will my hon. Friend organise an early debate on the use—or possible misuse—of health service records? I am raising this issue because my constituents, Mr. Wood and Mr. Womble of Handsworth, Sheffield, received a survey asking for their views on the NHS. There is nothing strange about that, except that no one else in the area received it, and they had both recently had hospital appointments. My colleagues who are also Sheffield Members of Parliament have constituents who received the same survey, all of whom had recently had hospital appointments. I am asking for a debate and an inquiry by the Secretary of State because the surveys were produced not by any organisation connected with the health service, but by the Lib Dems in conjunction with their local election campaign.
My hon. Friend has raised an issue of huge concern. I know that the Department of Health is looking into the matter. It is absolutely vital that people’s personal information remain personal and that they can trust the NHS to look after it properly.
Has the Deputy Leader of the House or her right hon. and learned Friend the Leader of the House yet had time to reflect fully on the latest report from the Procedure Committee, which recommends that the House introduce a system of electronic petitioning? Does she agree that in order better to look after those whom we serve, we need to recognise that the internet is here to stay, and to amend some of our procedures accordingly? When can we expect a Government response?
Don’t give in to that.
I am not exactly going to give in to it, but I will respond to the helpful report from the Procedure Committee on this important question. Of course, it is vital that we maintain and strengthen connections between citizens and Parliament. Petitioning is clearly an important channel for doing that. We will study the matter seriously and come back with a response soon.
I would like to draw the attention of the Deputy Leader of the House to early-day motion 1391.
[That this House is alarmed by the proposal of INEOS to reduce the pension rights of the workforce at the former BP oil refinery and chemicals complex at Grangemouth, Scotland, from that which had been part of the terms and conditions of employment of the workforce when INEOS bought the BP site; acknowledges that the INEOS proposal is to create a two-tier workforce with all new employees being denied a final salary pension; notes that as a result of the new proposal 97 per cent. of trade union members in an 86 per cent. ballot return voted for strike action after exhaustive negotiations; expresses concern at the aggressive tactics of INEOS senior management in undermining the agreed consultative processes; and supports the efforts of the INEOS workforce and their trade union UNITE to sustain existing pension arrangements on this very profitable complex for the benefit of all current and future employees.]
I thank the House authorities for organising a statement on the situation at Grangemouth after this Question Time, but could my hon. Friend ask the Scotland Office to co-operate with the Select Committee on Scottish Affairs to set up an inquiry into the promises made when BP sold the facility to INEOS, including the pensions now being attacked, and into the closures that have taken place on that site since INEOS bought the plant? We need to compare the promises made with the reality of that company’s behaviour in Scotland.
My hon. Friend makes an interesting point, but he might produce a more significant result if he made it after the statement by the Secretary of State for Business, Enterprise and Regulatory Reform, which is to follow. Perhaps he would like to do that.
The hon. Lady has been very helpful with regard to the ongoing situation of Southwest One in the county of Somerset. I have subsequently learned something about it, so could we have a debate on the matter? The Government’s consultancy body, 4ps, was brought in to sort out the deal in Somerset. It was fired, and another company was brought in. That company made it clear that it was accredited by the Government’s consultants, 4ps, which is a blatant lie put out by the county council and the chief executive of the county. This matter has now cost the county of Somerset more than half a billion pounds and 1,400 jobs. Unless the situation is sorted out rapidly, through a debate in this House so that we can get to the bottom of the deal, it will rebound badly not only on the Government but on the taxpayers of Somerset.
I took up the matter when the hon. Gentleman raised it before, and I thought we had agreed that it was not a political matter. I do not know whether he has been in touch with the National Audit Office, as I suggested—I see that he has. To get to the bottom of the matter, we need to use the institutions available to us, and the NAO is excellent in such situations.
When can we have an educational debate in the House to inform the Conservatives about one of this Government’s best reforms? Probably one of the most serious reforms to go through this House in the past 10 years is the establishment of the UK Statistics Authority, which in its compilation and publication of statistics will be free from interference from political parties or any political narrative. Is it not disappointing that less than a month after it was set up, the Conservative party is trying to interfere with the work of the authority—
Order. That is a bit wide of next week’s business.
My hon. Friend is right in that the new independent Statistics Authority that we set up under legislation earlier this month will firmly guarantee the independence of statistics. He may also be aware that scrutiny of the authority will be carried out by the Public Administration Committee. I hope that it will be able to consider the authority’s work. As he knows, all Select Committee reports may be debated in Westminster Hall.
May we have an urgent debate on the activities of the Driving Standards Agency and its attitude to public service? The agency is about to close the driving test centre in Trowbridge, which means that my constituents will have to make a 46-mile round trip to Chippenham, not only to take a test but to practise for one. When the new enhanced motorcycle test begins later this year, they will have to go to Exeter. To put that into context for people who do not know the geography of the west country, that journey is equivalent to someone from central London having to go to Maidstone for a car test and to Eastbourne for a motorcycle test. Is that an acceptable standard of public service?
I will pass on the hon. Gentleman’s remarks to the Department for Transport and ask it to give him a response.
I add my tribute to my constituency next-door neighbour and truly remarkable colleague, Gwyneth Dunwoody.
I have tabled early-day motion 1363.
[That this House calls for an investigation into Newcastle-under-Lyme's Conservative- and Liberal Democrat-led Council's handling of the writing off of business rates owed by companies co-owned by Peter Whieldon, a Conservative councillor for the Seabridge ward; notes that on 28th March 2007, the Borough Cabinet agreed to write off amounts of £16,618 and £13,300 in business rates owed by two of Mr Whieldon's insolvent companies in respect of the Albion Pub in Newcastle; notes, too, that on 26th March 2008 the Cabinet agreed to write off a further £13,441 owed by another insolvent company, also co-owned by Mr Whieldon; recognises further that Mr Whieldon is still trading through new companies at several licensed premises in Newcastle and Stoke-on-Trent, including the Albion; notes that the Conservative and Liberal Democratic leadership of Newcastle Council has so far kept these write-offs confidential, notwithstanding his status as a councillor; regrets, therefore, the shameful failure of the council to bring this to the attention of council tax and business rate payers in the borough, and electors in Seabridge ward, through a public statement; believes that this failure exhibits a gross error of judgment by the Council, which also is to the detriment of local businesses that compete fairly for trade, pay their business rates and settle all their debts; and further calls, therefore, for an explanation in the public interest by the Conservative and Liberal Democrat leadership of the Council of its handling of this affair.]
May we have a debate on that motion and early-day motions 1364 and 1365, which I tabled this week? They concern the conduct of Newcastle-under-Lyme borough councillor, Peter Whieldon, whose companies have left a trail of debt across north Staffordshire, including more than £100,000 in business rates owed to Newcastle-under-Lyme and Stoke-on-Trent councils.
Does the Deputy Leader of the House agree that it would be entirely proper to have a debate in this place on what constitutes unethical behaviour by councillors, and on the importance of strong political leadership in exposing such conduct in the public interest, which has been sadly lacking in the case of Newcastle-under-Lyme borough council in this case? It knew about his conduct, and wrote off his business debts behind closed doors, making no public statement. Disgracefully, Mr. Whieldon is again standing as a Conservative council candidate in these elections.
I wish to congratulate my hon. Friend on raising that serious matter of quite disgraceful behaviour by the individual in question and the council. I will take his proposal as a suggestion for a topical debate.
Most of our constituents and most of us accept that we will need more houses in our country over the next 20 years. My democratically elected district council decided that we would need about 6,000 in Salisbury. The South West regional assembly said that we might need 8,000. The Government then imposed 12,400 without consultation. Last night, there was a meeting of 1,000 of my constituents in Salisbury city hall to express their outrage at this top-down planning imposition. May we have a debate on the local development framework and preferred housing options to see whether the Government really believe that housing problems can be dealt with by imposition from Whitehall, rather than by organic, sustainable growth from the bottom up?
The hon. Gentleman must appreciate that there is a serious housing shortage in this country and that, if we are to alleviate it, houses must be built. The Government’s targets for house building are designed to ensure that everybody can live in decent homes. The hon. Gentleman is perfectly free to apply for an Adjournment debate.
Last week, I was privileged to lead the Inter-Parliamentary Union delegation to Israel and the occupied territories, to which my hon. Friend the Member for High Peak (Tom Levitt) has already referred. The seriousness of the crisis is demonstrated by Shifa hospital—the main trauma hospital for the Gaza strip—which already regularly generates its own electricity. It pointed out that if its electricity supply failed, it would lose 80 patients in 30 minutes, and that if electricity failed for a week, an additional 250 dialysis patients would also die. The Quartet meets next week in London, where another important meeting will also take place of those who donate money to help Gazans and others in the occupied territories. May I echo my hon. Friend’s request for at least a statement after those two meetings, the week after next?
I will convey my hon. Friends’ requests to the Foreign Secretary because the position is about not only aid but political developments. It is important that some shift in the political situation occurs. I will therefore draw the matter to the attention of the Foreign and Commonwealth Office as well as to that of the Department for International Development.
May I observe to you, Mr. Speaker, that more than 20 minutes of business questions, which are important to the House, has been taken up by Front Benchers? I wonder whether that is normal and whether you might give advice.
My question to the Deputy Leader of the House is in support of that asked by the hon. Member for Northampton, North (Ms Keeble). Although there may be a debate on Zimbabwe and sanctions in Westminster Hall, the whole House should have an opportunity—as the Government have promised on so many occasions—to debate the uniquely disastrous situation in Zimbabwe, where an election has been held but, three weeks later, no one knows the result. Surely we want to support the view of a growing number of African countries and hold a debate so that we can influence what happens.
I think the hon. Gentleman speaks for the House when he says how appalled he is by the position in Zimbabwe. I will take his request as a suggestion for a topical debate next week.
Yesterday afternoon, in the Attlee suite in Portcullis House, the all-party group on sustainable aviation, of which I am an officer, was pleased to receive a report from Jeff Gazzard of the Aviation Environment Federation, which exposed the distortions, inaccuracies and heroic assumptions that underpin official policy on aviation and its impact on the environment and climate change. In the light of his startling figures and conclusions, may I make a submission to the Deputy Leader of the House for an urgent debate in the Chamber to examine that crucial matter, which affects so many people, especially those who live around the nation’s regional airports, including East Midlands airport in north-west Leicestershire?
My hon. Friend is right. Aviation is one of the fastest growing sources of greenhouse gases. That is why a more sustainable aviation industry is important. It is also why the Government have made negotiating an EU emissions trading scheme, which incorporates aviation, a priority. I will pass on his remarks to the relevant Department.
This week is national depression awareness week. It is an important fact that one in five people in this country will suffer from depression at some point in their lives. May we have a debate on what the Government are doing to tackle the problem and the wider issue of how good mental health can be positively promoted, just as we promote good physical health?
The hon. Lady is absolutely right. Mental health is important, and that is why the Secretary of State for Health announced a programme to increase the amount of psychotherapy that people can get on the national health service. I will consider her suggestion.
May we have a debate in Government time on the behaviour of HSBC? The bank has made a profit of £35 billion in the past three years, but it is closing its facility in my constituency and transferring the bulk of 164 jobs to Malaysia. That is not the only outrageous way in which the management has treated the staff: it has brought them in, one by one, and told them that they cannot speak publicly about the issue. I am sure that my hon. Friend agrees that behaving like 19th century pit owners is unacceptable.
My hon. Friend describes unacceptable employment practices. The House knows that he is a doughty campaigner for his constituents, and I am sure that HSBC management will hear his remarks about their handling of the matter.
May I tell the Deputy Leader of the House that on Monday No. 10 suggested that the Prime Minister would make an oral statement to the House on Wednesday about the outcome of the NATO summit? Clearly, he was blown off course by this week’s events. It is still not too late for an oral statement on that important summit. It is unprecedented for a Prime Minister not to make a statement to the House after a Heads of Government meeting at NATO. The Government regularly acclaim NATO as the cornerstone of our defence. The Prime Minister’s failure to make a statement on the summit’s outcome sends the wrong signal about the importance that the Government attach to NATO.
I do not think the hon. Gentleman should have any doubts about the Government’s commitment to NATO. I have heard his remarks and those of other hon. Members today, and I have said that I will reflect on them.
The Deputy Leader of the House will be aware that Monday is international workers memorial day, which commemorates those who have died as a result of work. Does she agree that it would be fitting for the House to mark that in some way, and to have a debate on what further can be done to prevent incidents at work that lead to fatalities?
My hon. Friend is absolutely right. It is important that we continue to make progress in reducing serious injuries and deaths at work. I will consider her suggestion.
May we have an urgent debate on cowboy and dodgy builders, especially foreign construction companies such as Bovale, which is based in the Republic of Ireland? That company is destroying large parts of Shropshire, not least Priorslee lake which is a designated county wildlife site. Is the Deputy Leader of the House aware of the—at best—dodgy reputation of the company’s owners, Tom and Michael Bailey? Is it not time that the Department for Communities and Local Government had a black list of companies so that it could warn local authorities not to deal with those that destroy wildlife and have disreputable financial backgrounds?
The hon. Gentleman makes a serious point about the construction industry. He will know about the Office of Fair Trading report on its behaviour. All those matters are under consideration in the Department for Business, Enterprise and Regulatory Reform.
Will the Deputy Leader of the House ensure that we extend the time on Monday so that Treasury Ministers can explain to the House in detail the way in which they are dealing with the 10p tax shambles? It is crazy that a Labour Back Bencher, however august, can appear on the “Today” programme to tell us about a discussion that he had with the Prime Minister about backdating the claim, yet the Chancellor of the Exchequer comes to the House knowing nothing about it. May we please have sufficient time on Monday to ensure that Treasury Ministers explain to the House how they will fiddle around with the national minimum wage, working family tax credits and the winter fuel allowances? Will they backdate the claim to 1 April? May we hear the answer from Treasury Ministers, not Labour Back Benchers on the “Today” programme?
As the hon. Gentleman knows, the Chancellor of the Exchequer was answering questions about that 45 minutes ago. The hon. Gentleman will have another opportunity to debate it on Monday, but he should not display this hypocritical, if I may say so—
Order. The hon. Lady must withdraw that without qualification.
I withdraw it without qualification. However, it is somewhat difficult to listen to Opposition Members raising the issue as their supposed priority, when they showed no concern about the low-paid and opposed the minimum wage.
Following that totally unacceptable reply to the question asked by my hon. Friend the Member for Banbury (Tony Baldry), may I point out to the Deputy Leader of the House that the right hon. Member for Birkenhead (Mr. Field) told the nation on the “Today” programme this morning that he had received absolute guarantees from the Prime Minister that all measures to offset the harm of the abolition of the 10p rate of tax would be backdated to April of this year? The right hon. Gentleman also said that the Chief Secretary had been ill briefed on “Newsnight” last night. However, that was countered by the Chancellor of the Exchequer at the Dispatch Box less than an hour ago. We have no idea whatever what is going to happen. If we are to reach a decision and vote on that aspect of the Finance Bill next Monday, the Deputy Leader of the House must now give us an absolute assurance that the Chancellor of the Exchequer will make the position completely clear before we do so. Will she do so immediately?
The Chancellor of the Exchequer did make the position clear 45 minutes ago. He referred to his letter that sets out the programme of work that is going to be carried out over the next few months. The Government have been happy to listen to those who are genuinely concerned about poverty, but there seems to be some inconsistency in the position of Opposition Members.
I hope that we can have a full day’s debate on Zimbabwe next week. So incompetent is Robert Mugabe that he could not even rig his own election properly and is now trying to steal it. While he is doing that, 4 million people have moved to live in South Africa and millions more are living with hyperinflation and starvation. Some African leaders have shown true leadership. Indeed, even in South Africa Speaker Mbete has spoken out, saying that the election results should be declared. Sadly, President Mbeki has not shown the same leadership. Please can we have an urgent debate next week on the issue?
I know that the hon. Gentleman is concerned about the situation in Zimbabwe, as is everybody. Everybody utterly condemns the reports of violence that are coming from that country. I will relay the requests that have been made to the Foreign and Commonwealth Office.
Further to the questions posed by the hon. Member for Northampton, North (Ms Keeble) and, more recently, my hon. Friends the Members for Macclesfield (Sir Nicholas Winterton) and for Ribble Valley (Mr. Evans), may I reiterate the request that we have a full day’s debate on Zimbabwe in Government time on the Floor of the House? Given that under the truly tyrannical and despicable leadership of the mass murderer Mugabe too many people have suffered too much for too long, with too little done to help them, is it not time that we debated on the Floor of the House how the Government will seek to persuade the United Nations to translate its commitment to the responsibility to protect from fine-sounding words into concrete action?
As ever, the hon. Gentleman makes his point most eloquently, and I have heard it.
May we have a debate on the Equality and Human Rights Commission? Cultural diversity is one of Milton Keynes’s greatest strengths. I am sure that the Deputy Leader of House will join me in commending the work of the Milton Keynes racial equality council. However, does she share my concern at the news this week that all funding for that organisation has been cut by the Government from 1 April this year? What message does that send to minority groups in Milton Keynes?
I am surprised to hear what the hon. Gentleman has to say. I will pass his concerns on to the relevant Department that oversees the commission.
My three local newspapers, the Bradford Telegraph and Argus, the Keighley News and the Ilkley Gazette, have all taken the regrettable decision to remove their “Court in brief” sections, not because they wanted to do so but because HM Courts Service has introduced excessive charges for the information. I hope that the Deputy Leader of the House will agree that that goes totally against the grain of open justice. I quite understand why the Government are embarrassed about the lenient sentences handed out to criminals in our courts, but surely it is a rather weasel tactic to implement excessive charges to stop newspapers reporting them. Can we have a statement from the Justice Secretary on how the matter will be resolved?
I think that the hon. Gentleman is exaggerating, if I may say so. It is important that the courts make proper charges for services. I know that colleagues in the Ministry of Justice have considered the issue carefully.
Industrial Action (Grangemouth)
With permission, Mr. Speaker, I should like to make a statement on the implications of the industrial action at the Grangemouth refinery, which, I regret to report, is scheduled to begin on Sunday and last for 48 hours. Throughout the past few days we have kept in close contact with Scottish Ministers, both parties to the dispute and the industry as a whole. I am particularly grateful to ACAS for its efforts to resolve matters between the parties.
Our first priority now is to ensure the maintenance of sufficient fuel supplies during the period of industrial action. Over the past few days, significant additional supplies of imported fuel have been made available in Scotland. I have been advised by the industry that there is sufficient fuel to resupply forecourts and other users ahead of the planned industrial action. The industry has also advised us that, at present, fuel stocks at Grangemouth, together with planned imports of finished product through Grangemouth to replace lost production, should be sufficient to maintain supplies through the period of industrial action and the consequent restarting of the plant.
We are already working under our established memorandum of understanding with industry to develop a jointly managed approach that allows fuel suppliers to work together to maximise available fuel. We also have available, if necessary, the national emergency plan for fuel, which can be used to ensure that fuel is available for priority groups such as the emergency services. Our best assessment is that there is at present no need for the Government to take action under their emergency powers. We are working closely with the Scottish Executive and the regional forums in Scotland to prepare for further action, should that become necessary. We will not hesitate to use the emergency powers if that becomes necessary.
The oil companies have reported significant increases in fuel uptake this week in response to concerns about shortages of fuel. Although this response is perfectly understandable, I want to emphasise that industry has made it clear that there is sufficient fuel available via imports and that any localised shortages will be resupplied quickly.
It is also essential to prevent the industrial action at Grangemouth from disrupting the flow of North sea oil and gas associated with the Forties pipeline system and the Kinneil processing plant at Grangemouth. There can be no justification whatever for any action that adversely affects production of oil and gas from the North sea. Continuing production depends on power, steam and cooling water being delivered by or through the Grangemouth site. Discussions are continuing this morning on ensuring the continuance of these vital utilities, and of course it is essential that they be maintained.
Finally, there is a need to protect critical equipment to allow a rapid return to normal operation following the period of industrial action. That will require the provision of safety cover for the INEOS refinery and petrochemical plants. It will also require maintaining the steam supply throughout the plant to ensure the integrity of steam lines, pipes and production units.
The dispute is one for INEOS and Unite to resolve as a matter of urgency. The Government’s view is that they both have a responsibility to minimise the impacts of their dispute on the public and the wider economy. I urge both sides to get back to the negotiating table as quickly as possible to resolve the dispute without any further harm being done to the public and the economy. We will continue to monitor the situation, working closely with the Scottish Executive, emergency services, local authorities and other key agencies.
My hon. Friend the Member for Rutland and Melton (Alan Duncan) apologises to the House for his inability to be here for the statement.
I thank the Secretary of State for advance sight of the statement on a matter which is of particular concern to people in Scotland. May I begin by agreeing with him that the parties should get back round the negotiating table as a matter of urgency? I would ask both sides to lift their horizons beyond their own immediate interests, and to show a maturity and responsibility which reflects the serious consequences that this dispute could have for the public and the economy.
I am pleased to learn that there has been close working with the Scottish Government, and I would grateful if the Secretary of State provided a little more detail on that. I do not know whether he has seen any of the headline-grabbing pronouncements from Scotland’s First Minister in the past few days, but it would seem that, for once, even his mythical powers have been unable to resolve this situation.
I welcome the proportioned tones of the Secretary of State’s words, as he will be aware that there has been much speculation about the impact that this shutdown could have on individuals, services and the economy. Does he agree that we need to maintain a sense of proportion in relation to these events and to ensure that all analysis is objective? That will be the only way to deliver reassurance to the public that there is no need for the panic buying of petrol or the stockpiling of supplies.
Will the Secretary of State join me in endorsing the view of the AA that if people act sensibly then there will be no shortages? Where fuel is being provided by contingency measures, will he confirm that it will be equitably distributed throughout Scotland and not just to major centres of population? Can he also confirm that, as this situation does not represent a more general shortage, he would not expect there to be any impact on petrol prices at the garage forecourt anywhere in the United Kingdom? Will he monitor what happens to petrol prices to make sure that no one tries to take advantage of the situation and to push their prices up unfairly?
The Secretary of State will be aware that the industry believes that a two-day strike is damaging but containable, but there is profound concern about the implications of a longer dispute, which would undoubtedly increase the risk of serious shortages. How is he monitoring that situation? At what point, for example, would he expect Cobra to meet to establish what further action might be needed? In the meantime, can he give the House more details of how his Department is working with the industry to secure fuel from other sources to make up for the shortfall while Grangemouth is out of action? To what extent does he understand that fuel has been stockpiled to minimise the effect of the strike on the public?
The Secretary of State will also be fully aware that huge costs are associated with ships that are waiting to load up with oil but cannot do so because of the industrial action. What is his understanding of the legal implications of this, and who will be liable for the extra costs incurred?
Finally, what is his understanding of the impact that the strike will have on plans to invest in the future of Grangemouth? What impact does he think a strike will have on INEOS’s ability to fund the £750 million investment programme necessary to modernise the plant? In that respect, does he agree that a strike will put jobs at risk and damage the interests of those working at Grangemouth and of a vital British industry?
I am grateful to the hon. Gentleman for the manner of his response and for his comments. I agree that there is no need for panic buying in Scotland or anywhere else, and I hope that hon. Members from all corners of the House will reflect that message in their comments today. I can assure him that the objective of our discussions with the industry in Scotland is to maintain fuel supplies for all consumers in Scotland, wherever they are. That is important not just in the central belt, but in rural areas and the highlands as well. It is also important for industrial consumers, including the airlines operating in Scotland, which need jet fuel and kerosene. There is absolutely no justification for profiteering, given the adequacy of the levels of supply in Scotland, and I condemn absolutely anyone who seeks to take unfair and inappropriate advantage of the current situation. We are looking carefully at that matter.
The hon. Gentleman has asked me a number of questions about what would happen if the dispute were to escalate. I am sure that he will understand that I do not want to speculate about hypotheticals today, but I can assure him and every Member of the House that it is the UK Government’s absolute and firm responsibility to ensure that there is continuity of supply, that the emergency services are protected first and foremost, and that we do everything in our power, if there were to be such an event, to minimise the wider impact on the community in Scotland and elsewhere in the United Kingdom.
It is rarely the case that industrial action advances a cause with the wider public, and I do not believe, in these circumstances, that it is fair or reasonable to expect the wider community in Scotland to be disadvantaged in any way by this dispute between INEOS and the Unite union. It is incumbent on all the parties to the dispute to find a way of getting back to the table as quickly as possible and to resolve the dispute, so that the Scottish public and Scottish industry can get on with their future.
I thank the Secretary of State for coming to the House to make this statement. I know that my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) has been trying to table an urgent question on this matter for some time, as it particularly affects people in Scotland.
I want to echo the Secretary of State’s observation that it is essential that INEOS and Unite get back round the negotiating table as soon as possible. I welcome his assurance that adequacy of fuel supply is assured for Scotland, particularly in rural areas. It simply cannot be the case that a piece of brinkmanship and a petty dispute about pensions should hold the economy of Scotland to ransom. Does he recognise, however, that his statement follows a week of panic buying? Many Scottish colleagues are already reporting localised—albeit, as he says, short-term—shortages of fuel. Does he think that an earlier, public intervention by the Government could have prevented that? Having said that, I welcome his statement today. It was extremely helpful.
The Secretary of State also mentioned profiteering, a matter that a number of Scottish colleagues have raised. He might be aware that there is a system in Western Australia called FuelWatch, which publishes tomorrow’s fuel prices today. Does he think that such a public display of information could be helpful in the UK in counteracting that unacceptable practice? He said that contingency plans were in place in case of need. Will he tell the House how close he believes this two-week stoppage could bring Scottish oil supplies to that point of need? I appreciate his point about not wishing to discuss the details regarding Cobra, but he will also be aware that the public find it reassuring to understand the extent to which the Government have planned for that need.
Finally, how confident is the Secretary of State that what he calls “well-functioning markets” are likely to deliver the investment in UK refinery capacity and function that the Wood Mackenzie report says we need? As the Conservative spokesperson has already mentioned, INEOS’s own briefing states that its investment programme is contingent on a resolution of this dispute in its favour. Does the Secretary of State believe that that demonstrates the vulnerability of the UK’s security of supply to unforeseen events?
I shall deal with some of the points that the hon. Lady has raised. We made our position clear on Tuesday in relation to this dispute and to the need for people to buy fuel normally during the run-up to any potential industrial action at Grangemouth. We felt that it was perfectly reasonable not to make a statement to the House of Commons at that time, given that discussions were continuing between ACAS, INEOS and the trade unions, and that there was a prospect that the dispute would be called off. Now that the dispute is clearly scheduled to take place, I believe that this is the right time for the Government to make a statement.
Let me correct one thing that the hon. Lady said. It is not a two-week stoppage; it is a two-day stoppage—[Interruption.] I am not trying to trip her up; she does not need to worry about trying to come back in. Because it is a two-day stoppage, and because of the action that the industry took in the run-up to the dispute, and the action that can be taken during the dispute, we are confident—and the industry has reassured us—that there is adequacy of supply in Scotland. That is why we are not activating any of the emergency powers. There is no need to do so, given the adequacy of the levels of fuel supply.
The hon. Lady has rightly asked about the planning that goes into all eventualities. It is comprehensive and extensive, and I would be happy to extend an invitation to her and to the hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) to have a briefing with my officials, to reassure them about the level of planning and the adequacy of those arrangements.
May I first, through you, Mr. Deputy Speaker, reprimand the hon. Member for Brent, East (Sarah Teather) for referring to this as a “petty” dispute over pensions? It is all very well for us sitting here with our final salary pensions—much higher than anyone’s in the industry—to call this a petty dispute when people’s standards of living are being attacked.
Is the Secretary of State aware that the breakdown of talks yesterday took place because although the trade union was willing to talk about the safety and integrity of the plant so that it could be started up very quickly, all the company seemed to be doing was talking through fancy public relations companies and bringing in very expensive barristers to threaten the trade union with action in the courts? In fact, the company did not try to negotiate at all. Oddly enough, it said that it wanted to return to the position of three months ago, yet this dispute, as we know, started eight months ago when the company brought new workers on site with different terms and conditions of employment from those already there—with no final salary pension scheme and contributions taken out of their salary, which was not the deal when BP sold the plant to INEOS.
May I suggest that the solution is to put it to Mr. Jim Ratcliffe, the owner of INEOS, that if the company is willing to return to the position of eight months ago, when everyone coming on to the site had the same terms and conditions of employment—a final salary pension that is non-contributory, as it was under BP—the negotiations could be resumed with good will? Mr. Ratcliffe was willing to come and see me when he was lobbying to buy BP, and I am willing to meet him privately at any time to talk about how to solve the problem.
I do not dispute for a second the importance of pension rights for the work force at Grangemouth, but my responsibility in all these matters is not to get drawn into taking sides in the dispute. There is a dispute between the parties and I have already said that I very much hope for a sensible settlement so that business can get back to normal at Grangemouth, which I strongly believe is also the desire of the trade unions there, as they will be the most immediate group to lose out. My responsibility to the House and the people of Scotland is very clear: it is to maintain essential fuel supplies, ensure that the economy of Scotland does not suffer as a result of the industrial action, and make sure that there is no ripple effect out into the North sea in respect of production from the Forties pipeline system.
My hon. Friend was right to refer to agreements that have already been secured in respect of safety at Grangemouth and to the ongoing provision of essential utilities on the site. I commend the unions for their willingness to ensure that there is no damage to the basic infrastructure at Grangemouth, but it is absolutely essential—it is impossible to exaggerate the importance of this—that there is also an agreement to ensure the safety and security of the Forties pipeline itself. It simply cannot be in anyone’s interest for any fundamental damage to be done to the long-term value of the infrastructure that links Grangemouth to the North sea. If that were to happen, it would be a tremendous own goal, which would serve no one’s interests.
I also welcome the Secretary of State’s statement and very much hope that he is right in his assessment of the situation. May I press him on the question of co-operation and communication with the Scottish Executive? Will he give an assurance that some thinking is being done about how priority can be given to the maintenance of supplies to vital public services—fire, police and ambulance services, but also ferry and air services that provide lifeline routes to communities that are heavily reliant on them—should that become necessary at some future date?
I am grateful to the hon. Gentleman for giving me the opportunity to give that assurance; it was remiss of me not to have dealt with the matter in my response to the hon. Member for Dumfriesshire, Clydesdale and Tweeddale. We have had discussions with the Scottish Executive; I spoke to the First Minister on Monday and again this morning, and my hon. Friend the Minister for Energy has had discussions with the Scottish Finance Minister as well. We will keep in close communication with the Scottish Executive; it is important that we do so.
On the question of the emergency services, my point is that there are adequate fuel supplies in Scotland, so we do not need to activate the national emergency plan, which rests fundamentally on the assumption that there is no adequate supply, thus highlighting the need to prioritise supply to the emergency services. Should the situation in Scotland change, we will not hesitate, as I have already made clear today, to use the powers that we have to prioritise the supply of essential fuel to vital emergency services. I also want to make it clear to the hon. Member for Orkney and Shetland (Mr. Carmichael) and other hon. Members who represent the remoter constituencies in Scotland that Caledonian-MacBrayne has clarified that no services will be interrupted and that we are sure that airline operators have sufficient jet fuel to maintain a regular service.
I fully support the Secretary of State’s comment about the need for a speedy negotiated settlement so that industrial action is averted. Does he agree, however, that this is yet another example of new workers being brought in to undercut the wages and conditions of the existing work force, and that we need to look at the employment law regime to ensure that we provide protections and do not have two-tier work forces in the private sector? Does he agree that we also need to look into the pensions issue, and that pensions should be treated as deferred pay and a pensions regime should exist so that people have security in their retirement? Clearly, the reduction of pensions entitlements is a major cause of concern for the work force at this time.
I agree with my hon. Friend about the importance of pensions to working people. Of course we recognise that, and we have a clear framework of law in the UK in respect of the protection and security of accrued rights in final salary schemes such as the one at Grangemouth—and they cannot be interfered with. There is also a clear statutory procedure if any changes are proposed to future rights under those pension schemes. I believe that our employment law framework is robust and appropriate and that it guarantees essential rights to workers while also allowing companies to manage change when they need to do that. Rather than get embroiled in a blow-by-blow account of what has happened or a post-mortem, I would rather focus on the importance of ensuring and maintaining fuel supplies in Scotland—they are secure and they can be maintained—and on bringing this industrial action, which will ultimately benefit no one and may hurt a lot of people, to an end as soon as possible.
Does the Secretary of State agree that the seriousness of the situation is underlined by the fact that if the walk-out goes ahead on Sunday, it will be the first of its type in any UK oil refinery for no less than 73 years? Indeed, the chief executive of INEOS, Tom Crotty, has described how the strike will
“cause chaos and disruption for the people of Scotland”—
irrespective of the best efforts of Governments either here or in Holyrood.
We have heard reports over the last few days of people queuing at petrol stations and forecourts in Inverness. Maintaining fuel supplies to the highlands does not mean maintaining them only in the populous centres such as Inverness, Dingwall and Fort William, but in Wester Ross, Skye and Lochalsh and the small isle areas, which are very much at the end of the line physically and require reassurance. Will the Government take up the suggestion of my colleague at Holyrood, Nicol Stephen, that in view of the anecdotal reports we have heard of prices being jacked up despite the reassurance and the fact that there are no immediate shortages, the Competition Commission may in due course wish to look at the activities of the oil companies over this period?
Let me deal with the last of the right hon. Gentleman’s points first. It is the role of the UK competition authorities to keep a close eye on the way in which markets operate. If there is any evidence of anti-competitive behaviour, we would expect the Office of Fair Trading and the Competition Commission to get stuck into it. We must not allow consumers to be ripped off in those circumstances.
As to the right hon. Gentleman’s main point, I agree about the importance of preserving fuel supplies across Scotland and to all parts of Scotland. That is absolutely what the industry, the Scottish Executive and ourselves are working to ensure. I take issue with the comments about causing chaos and confusion. There is no reason for chaos and there is absolutely no reason for confusion. The unions gave important undertakings yesterday and today about preserving the continuity of utilities operations on the Grangemouth site. Yes, we are in unchartered waters; this has not happened before. The complex technology at Grangemouth requires constant maintenance and utility provision, but I think that it is agreed that it is in no one’s interest to damage the essential infrastructure there. I certainly hope that common sense prevails in that regard.
I welcome my right hon. Friend’s statement and I endorse the view that the matter needs to be resolved as quickly as possible and that it can be resolved only by negotiation. I am concerned about how the threat to the processes and the plant is being discussed in the debate. My experience and involvement in industrial disputes, including in the oil and gas industry, suggests that the unions go out of their way to ensure that the integrity of health and safety services, as well as the production equipment, is upheld. Nobody has an interest in destroying the future of the place where they work. Everyone is well aware that when they return to work they must have a proper working relationship.
I am worried by what my right hon. Friend has said about the threat to the North sea oil and gas industry. I hope that the issue is not being raised by management without proper discussion with the unions to ensure that both sides are satisfied that the integrity of the system is being preserved by agreement.
My hon. Friend is right. As I have tried to make clear, it is in no one’s interest for any fundamental damage to be caused to the vital infrastructure at Grangemouth. However, there is real concern about the provision of utilities, particularly on the BP Kinneil site at Grangemouth. That is essential if production from the Forties pipeline is not to be disrupted. I do not think we are exaggerating the consequences of that. I am hopeful of a good outcome from the continuing discussions on maintaining high steam pressure for Kinneil, which is absolutely essential. As I have said, I am confident that good sense will prevail.
I welcome the statement, and hope that the Secretary of State’s contact with the Scottish Government will continue in the same constructive spirit. Although this is principally a Scottish problem, I understand that Grangemouth supplies parts of the north of England and Northern Ireland as well.
I welcome the Secretary of State’s assurance, which has also been given by the Scottish Government, that there are sufficient supplies. I hope he understands how important it is for politicians of all parties, and also the media, to do nothing that would cause the problems to escalate. It has been reported—and I know from experience in my area and adjoining constituencies—that there has been a run on petrol stations, some of which have run out of fuel, particularly unleaded fuel and diesel. That is causing difficulties in some rural areas.
The Secretary of State mentioned looking into the activities of oil companies. There is evidence, at least anecdotal, that some stations have jacked up their prices considerably during the dispute. While I appreciate that there may be an investigation at a later date, has the Secretary of State any powers to take immediate action if there is any evidence that that is happening?
It would not be appropriate for anyone to grandstand in relation to this dispute, and I hope that that temptation will be resisted. I think we should work together sensibly to try to resolve the problems. Certainly we envisage no difficulty: we have good working relations with the Scottish Executive, which we will preserve. It is in everyone’s best interests to ensure that fuel supply is as close to normal as it can be.
The hon. Gentleman is right to say that there have been some local shortages, but I understand that they were corrected as soon as possible. There could well be more in the next few days—I do not wish to pretend that such difficulties could not arise—but the essential point for his constituents and people throughout Scotland is that supply is sufficient, and there is no reason for people to start buying fuel other than in the normal way. There is enough diesel and petrol for Scotland, and there are enough industrial supplies. That is the most important message.
I share my right hon. Friend’s sentiments, and hope that the company and my colleagues in Unite reach a negotiated settlement quickly. He mentioned profiteering. Two days ago I was contacted by a business man in my constituency who wanted to purchase red diesel. He approached about half a dozen of his usual suppliers, and was told that the price of red diesel had increased by 5p per litre if he bought less than 1,000 litres, and by 10p per litre if he bought more than 1,000 litres. What is taking place is not just profiteering, but sheer naked exploitation on the back of a dispute. I hope that my right hon. Friend will send a clear message to those who are intent on exploiting the situation that that is not acceptable.
I strongly agree, and I have made clear that there is absolutely no excuse or justification for that type of sharp practice. If there is any evidence of collusion between suppliers on prices, it will suggest a potential violation of competition law. There is an appropriate mechanism for investigating and bringing about redress in such circumstances. I invite my hon. Friend to give me the details of his constituent’s experience.
I welcome the Secretary of State’s assurances about supplies, which I hope will be noted. As for what was said by the hon. Member for Dumfries and Galloway (Mr. Brown), is it not up to forecourt owners and managers to act responsibly and inform their customers that they can secure future supplies and manage them sensibly?
I am, however, concerned about the implications of the dispute for the security and continuity of production in the North sea. Many of us have thousands of constituents who work in the North sea, and who must fear that a dispute downstream could threaten their livelihoods and their long-term future in upstream activity. Can the Secretary of State assure us that he will investigate thoroughly the integrity of the system downstream and upstream, to ensure that no dispute of this kind can cause serious long-term damage to production capacity and delivery in the North sea and the future employment of people whose livelihoods depend on it?
Yes, I can give the right hon. Gentleman that assurance. I have spoken to Tony Woodley, the general secretary of Unite. Thousands of Unite members also work in the North sea, and it is in no one’s interests, including theirs, for the dispute to have a ripple effect on production upstream.
As with all events such as this, there are lessons to be learnt. I am sure that once the dispute is brought swiftly to a conclusion, as I hope it will be, we can all reflect on what should be done to ensure better protection of continuity of supply and vital infrastructure should a similar situation arise in future.
May I reinforce the needs of rural communities? I am glad that the Secretary of State is keen to protect the whole of Scotland, not just urban areas. May I also ask him to ensure that there is proper monitoring to prevent price exploitation?
What can be done about the impact on the North sea, short of exhorting people not to do anything that might jeopardise production? Has the Secretary of State any powers to intervene to protect production and vital infrastructure?
I have a number of emergency powers under the Energy Act 1976 and the Civil Contingencies Act 2004. The only questions concern when they can and should be used, and their extent and duration. I assure the hon. Gentleman that the Government are fully equipped with a range of powers to deal with emergencies.
Topical Debate
Supermarkets
I beg to move,
That this House has considered the matter of supermarkets.
Today’s debate provides us with an excellent opportunity to focus on the role of supermarkets, and to consider how their activities affect people, communities, the economy and the environment. Many of us have a peculiar love-hate relationship with our local superstore. We like the convenience of being able to obtain a wide range of goods in one place, at one time and at a reasonable price, but we want to ensure the hearts of villages and towns are not destroyed by out-of-town developments and our high streets are not cloned into homogeneous parades of shops selling the same products from the same stores in town after town. Many of us also care very much whether producers and farmers—whether they farm in Britain or in developing countries—get a fair price for the products they sell.
Whatever anyone’s stance on the issue, no one can deny that our supermarket chains have a unique place in this country. They exert an incredible influence over what we buy, how we buy, and where we buy. Their actions hold sway over many varied issues, and I am sure that a number of them will be raised today.
Although it is not in my brief, I am more than aware of Members’ concerns about the ability of supermarkets to expand their empires at the expense of local shops. Our “town centre first” policy has produced some real success. However, the Department for Communities and Local Government has now decided to conduct a review of planning policy statement 6, and to introduce a tougher impact test to give councils more capacity to refuse big developments that put small shops in town centres at risk.
World food prices are the latest issue to top the supermarket agenda. On Tuesday, recognising that the poorest would be hit hardest, the Prime Minister hosted a summit with leading experts—including the head of the World Food Programme—to discuss ways of tackling the problem. My focus in this debate, however, will be on the supermarkets’ role in climate change and waste.
Supermarkets have a key role to play on climate change. As large businesses, they need to reduce the carbon impacts of their operations. Many have secured real reductions through energy efficiencies and new technologies, but to drive down their emissions further we are introducing the carbon reduction commitment through the Climate Change Bill. That will create a domestic cap-and-trade emissions scheme covering all enterprises whose annual half-hourly metered electricity use is above 6,000 MW hours, which will include supermarkets.
What proportion of the world’s total carbon emissions are given out by supermarkets?
I regret to have to say that I do not have that figure with me. We can endeavour to get hold of it, however, and I will write to the hon. Gentleman if I have it. As I think he will know, we in the UK are responsible—in terms of our own productions here, as opposed to the goods we bring in—for 2 per cent. of total global CO2 emissions, but we have to take on our responsibility, as does every section of society, and I know that the supermarkets understand that.
As consumer-facing organisations, supermarkets also wield huge influence over the purchasing habits and lifestyle choices of millions of individuals. As they have expanded beyond groceries, supermarkets have given us cheap clothes and electrical and electronic goods. Like all goods, they come with a carbon price, which Government can no longer ignore. Supermarkets’ voluntary phase-out of incandescent light bulbs is already helping consumers to save money and reduce carbon emissions. Many organisations are now interested in the carbon footprint of individual products, so the Department for Environment, Food and Rural Affairs, the Carbon Trust and the British Standards Institution are working with retailers to develop a methodology that could lead to carbon labelling, and which will certainly lead to retailers being able to reduce carbon footprints.
The last time I and the hon. Member for Shipley (Philip Davies) were in the Chamber addressing a related topic, I was critical of ASDA Wal-Mart, but on this occasion I wish to congratulate it. Does the Minister endorse the initiative that it and Leicestershire county council launched some time ago of a packaging amnesty that allowed consumers to return excessive packaging, and, as part of an overall campaign, of encouraging shoppers to be alert to excess packaging and to try to select products that minimise their carbon footprint?
I thank my hon. Friend for his intervention, which anticipates something I intend to say later. I am happy to congratulate those in his constituency who have been active in trying to improve packaging issues.
DEFRA is working directly with supermarkets, retailers and manufacturers to reduce the energy consumption of products such as set-top boxes and stand-by mechanisms. Helping the consumer to acquire the least energy-consuming products by choice-editing is a vital part of our fight against climate change.
Fast fashion and cheap clothes are adding to our carbon footprints. Only last week, I read a newspaper headline quoting a shopper at Primark, who said:
“So cheap you can almost wear it and throw it”.
And throw it we do—more than 1.5 million tonnes of clothing waste per annum. Once again, however, the Government are taking action, by working with retailers and others on a clothing road map analysing the carbon impacts from seed-sowing through manufacture and sale to disposal of the clothes we wear. This, too, is designed to minimise environmental impact, including carbon emissions.
What, however, is top of the list in my ministerial postbag on supermarkets? As I am sure Members will guess, the answer is packaging. Surveys show that most people feel there is too much packaging on products on sale today. Packaging serves multiple purposes, of course. It is used to catch the eye of the customer. It can serve to keep a product fresh, or to protect it, or make it easier to store or move. People realise that they have to pay for packaging, however, and when the packaging is finished with, it occupies as much as a fifth of their household waste bin. As council tax payers, they then end up paying again to get rid of it. When it becomes waste, packaging also contributes to climate change.
As individual consumers, we have a responsibility and there is action we can take. We can opt for goods with less wrapping, buy loose goods and reuse and recycle more of the packaging we acquire. However, people also expect the Government to act.
No they don’t.
I assure the hon. Gentleman that surveys show very clearly that people expect the Government to lead on these issues—and lead we will.
Eighteen months ago, senior representatives from the country’s biggest grocers, the Government, and the Waste and Resources Action Programme agreed the Courtauld commitment. Courtauld is about reducing packaging and food waste, such as by keeping wrapping to a minimum and finding new means of “lightweighting” those containers with which we are all so familiar. The signatories to the agreement are responsible for about 40 per cent. of the packaging in this country. Their first target was to end the growth in packaging waste this year—to de-link growth in packaging from growth in GDP. I believe they are on target, and look forward to the report that is to come.
It is an enormous pleasure that the Minister is present to debate this subject—or any other. Will she at least accept, however, that the problems associated with the miles travelled by products, the products themselves and their packaging are not unique to supermarkets, but that they are more general problems across the retail sector? It is also of concern to me that the Government are addressing this issue from a very narrow perspective, when in fact supermarkets have a specific impact on suppliers, and their out-of-town activities siphon wealth out of town centres. It is an enormous disappointment that we are not able to address those issues as well in this debate.
I thank the hon. Gentleman for his contribution, but I must say to him that he is entirely entitled to make his own speech, and if he chooses to concentrate on the issues he mentions, I will most surely be willing to pass any points that are to do with other Departments to my colleagues. I alluded at the start of my speech to the fact that there are other such issues, so I feel that I have offered him that opportunity. In terms of what he said about goods, the miles they travel and embedded carbon, supermarkets are of course not unique; those issues affect the whole of the retail sector. When I refer to supermarkets and agreements, it must be remembered that other non-supermarket retailers are involved in those agreements, so we are trying not to single them out but to work effectively with them.
When we talk about miles travelled, especially in relation to fresh produce, we also need to have in mind the good that this does to developing countries that want to export to the United Kingdom. We can sometimes assist them by buying their produce. Trade is far better than aid in many cases.
I very much agree. That is why we work on whole-life cycles. It is impossible to make a judgment about a carbon impact without a whole-life cycle, and goods brought from further abroad can be less carbon-intensive than goods produced using a lot of energy in Europe.
I have talked about the Courtauld agreement and the fact that we are on target. Reducing packaging is the priority, but reusing and recycling it is also important. We have made real progress in that. Packaging recycling rates increased from 28 per cent. in 1997 to more than 59 per cent. last year. We expect to reach the packaging directive targets of 60 per cent. recovery, including 55 per cent. recycling, by the end of this year. However, that means that more than 5 million tonnes of packaging waste is still not being recycled, and much of it comes from supermarkets. I have therefore increased the packaging recovery targets for 2008 to 2010 and set new targets for 2011-12.
The public have also made it clear to us that they want action on plastic bags, and we have taken it. We will require that supermarkets charge for single-use bags, whatever they are made from, unless the voluntary agreement achieves a much more substantial reduction in respect of the 13 billion bags that will be distributed free this year. The best way to tackle waste is not to generate it in the first place, and that is where the retail sector can have its greatest influence.
It is estimated that supermarkets waste about 1.6 million tonnes of food every year, but, astonishingly, we householders throw away even more—more than 6 million tonnes. We bin one third of all the food we purchase, so we need to tackle the issue by starting with what we buy. We must know how much we need and, dare I say it, we must not be tempted by offers of buy one get one free, three for two or two for one. When it comes to cutting down on our food waste, such sales initiatives are deeply unhelpful. Let us help the poorer customer, but why not offer products at half price?
Last year I helped launch WRAP’s food waste campaign, “Love Food, Hate Waste”. Since then, as food prices have risen so fast, the campaign messages have become even more important. We should plan for, and buy, only what we need. We should also store our food wisely and cook only what we can eat. When some people in the world cannot afford to buy food to eat, it is a scandal that every year we waste £10 billion-worth of food that could have been eaten.
We are grateful for the supermarkets’ co-operation in pursuing our climate change and waste agendas. They may sometimes be irritated by my mantra, “Further and faster”, but I can only say that it is because I have confidence that they can do more.
Order. The Minister has used the time allocated to her in these topical debates.
Supermarkets dominate not only the retail sector, but the whole economy, and they colour and shape our daily lives. There are so many facets to the power and reach of supermarkets that it would be hard to debate them all in this short topical debate, so in the 10 minutes available to me I shall concern myself with the effect that supermarkets have on waste and packaging. That is the most topical point for me to address.
I am sure that the Minister was as disappointed as I was that the much-touted green Budget never really materialised. Instead of any new radical measures to tackle dangerous climate change, the only supposedly green measure we were offered by the Chancellor was the veiled threat of a plastic bag charge. The Budget announced that a Government tax on single-use plastic bags may be introduced next year if retailers have not already started charging for them by that time. Even by the standards of this lethargic, weak and dithering Administration, that was an astonishingly weak gesture. It is hard to credit any initiative from this tired Government on waste, however worthy, when it is set against the huge cuts inflicted on the Department for Environment, Food and Rural Affairs and its agencies, which will directly undermine the Department’s efforts to lead on waste reduction; 2008 will go down as the year Labour bottled on waste.
The business resource efficiency and waste—BREW—programme, which was set up in 2005 to support resource efficiency and waste projects, looks likely to have its spending cut by more than half, from £125 million in 2007 to £60 million in 2008, despite the fact that the BREW programme has been responsible for more than 2 million tonnes of landfill diversion, 1.8 million tonnes of CO2 reduction and cost savings that were estimated at almost £40 million last year. The Waste and Resources Action Programme—WRAP—which promotes recycling and measures to reduce the use of landfill, has confirmed that its funding is being cut by 25 per cent., and it has issued more than 30 compulsory redundancy notices in the past months. Can the Minister explain why her Government are undermining those effective and efficient emissions reduction programmes while putting nothing in their place? Where is the ambition? Where is the compelling strategy? Where is the on-the-ground implementation?
This Government are getting things wrong across the waste agenda, and the results are plain to see: the number of recorded fly-tipping incidents in this country has increased by a staggering 290 per cent. over the past two years; the UK has one of the highest levels of landfill in the EU; and 22 per cent. of the country’s emissions of methane—a gas that has 23 times the greenhouse effect of CO2—comes from decomposing landfill. We cannot simply blame the supermarkets for that.
As the waste agenda becomes wedded ever closer to the climate change agenda, and as legislation such as the Climate Change Bill, which is soon to arrive in this House, and various international frameworks push us towards greater reductions in greenhouse gas emissions, the irresponsibility of this Government’s record on waste becomes all the more glaring. It is simply not acceptable just to push the blame on to supermarkets.
The UK produces about 330 million tonnes of waste every year, and after 10 years of this Government we still find ourselves lagging woefully behind other European countries on recycling. The current approach to waste policy is propping up our throwaway culture and putting an unacceptable stress on our environment. The focus is on end-of-life management, while growing global consumption is having damaging ecological effects and contributing to climate change. Landfill accounts for about 3 per cent. of the UK’s greenhouse gas emissions, many more emissions are created through unnecessary new products, and waste threatens our wildlife and biodiversity, so an ambitious waste policy is essential for a sustainable future.
A regulatory approach is not enough. The current approach to waste, which is built around EU directives and environmental regulation, has been bureaucratic and sluggish. The packaging and packaging waste directive, for example, ensures that producers examine the environmental impacts of products, but it has had limited success. Enforcement is difficult, and purely aiming to make packaging lighter can have the perverse effect of making it more difficult to recycle.
The problem is much greater than merely dealing with packaging or supermarket packaging. The total number of specific product categories covered by EU directives establishes producer responsibility for only a small amount of waste, such as electrical and electronic equipment, vehicles and batteries. Furthermore, the drive to increase recycling is driven by the threat of hefty fines for failing to comply with the landfill directive, rather than by a fundamental rethink of how we look at waste. Instead of relying on penalties and bashing companies with further regulation, we need to use this opportunity to rethink our waste strategy and to find alternative solutions. Changing our approach to waste is vital to the health of our environment, to social well-being and to our economy.
It is always sad to see the Government veer off course when they are moving in the right direction—we have seen that happen a lot recently. A year ago, WRAP put together the Courtauld commitment, an agreement with all the major supermarkets and grocery organisations that aimed to develop new packaging solutions and technologies so that less rubbish ends up in household bins. Some 31 major retailers, brands and suppliers have joined the Courtauld commitment since its launch in July 2005. Under the agreement, WRAP works in partnership with retailers, brand owners, manufacturers and packaging suppliers to develop solutions across the whole supply chain. Such solutions include: using innovative packaging formats; reducing the weight of packaging, cans and boxes; increasing the use of refill and self-dispensing systems; collaborating on packaging design guidance; and increasing the amount of recycled content packaging used.
Retailers set themselves targets for 2010 and, reporting this year, have demonstrated impressive results. As a result of reward schemes, new equipment, technologies and supply-chain management, they are on track to hit their targets. The retailers know their businesses better than the Government and know how most effectively to make savings on emissions and waste. Government, in partnership with business, is the way to drive change.
On 17 March, the Leader of the Opposition announced new responsibility deals, which examine the issue of producer waste. The responsibility deal is a voluntary arrangement among producers to cut back on the production of waste and to improve its disposal. Such deals represent an approach that is non-bureaucratic, consensus-based and self-regulating, and it will help us move towards the goal of a zero-waste society. That aim was explored in some depth in the Conservative party’s quality of life report.
Archie Norman, former shadow Environment Secretary and chief executive of Asda, will develop the first deals of an incoming Conservative Government. We will go well beyond the Courtauld commitment, which also covers a small proportion of waste, and will tackle the whole spectrum of our resource management in retailing. This will present a huge opportunity to extend sustainable manufacturing and disposal of goods to other centres. We aim to ensure that anyone involved in designing or manufacturing a product will have to work out what will happen to it at the end of its life.
We have seen time and again that the solutions to climate change and sustainability are to be found in partnership with business, not by confronting business. It is only through engaging with UK plc to drive dynamic industrial change right across the economy that we can hope to be effective in finding solutions. So, why have the Government U-turned on the Courtauld commitment? The commitment had the whole-hearted support of the major retailers and industry groups, so that decision has left them angry and confused.
In response to the Budget announcement, Justin King, chief executive of Sainsbury’s, said that
“when our government jumps on the bandwagon of an apparently simple solution, forgetting the issues to be addressed, ignoring the evidence, and indeed an agreement reached with industry—as has happened recently in the debate on plastic bags—I think we all have cause to be concerned.”
I am afraid that the hon. Gentleman is confused. The Courtauld agreement remains in place. I met WRAP yesterday to discuss it and the possible results that we will get from it. There is no question of backtracking, changing direction or anything of the sort. He has confused that agreement with the single-use bags agreement.
It is a shame that the chief executives of major retailers do not agree with the Minister. People are concerned about the fact that the Government overlooked the Courtauld agreement and went for a gimmick in the Budget—a little bit of a greenwash—in the form of the plastic bags policy, rather than looking at the totality of the waste stream involved in the Courtauld agreement.
It is a separate agreement. There was an agreement that specifically concerned bags and that will run until the end of this year. We have said that we believe that we need to make greater progress in reducing the number of free give-aways, and that is what we are determined to do.
The Minister has to recognise that the comments from the chief executive of Sainsbury’s stand as a matter of record. He has accused the Government of jumping on bandwagons and forgetting the issues that need to be addressed. Those are not my words but those of the chief executive of Sainsbury’s.
Why has the Chancellor decided to meddle, hanging the threat of compulsory taxation over the consumer and greatly angering retailers—as the Minister discovered in person when she met Justin King on “Newsnight” last week?
Why are the Government being accused by the retail sector of chasing headlines and reneging on their agreements? Is it because the Chancellor squeezed a splash of greenwash into his flawed Budget? If it was, then it was pretty weak greenwash. His plan has been attacked by most non-governmental organisations, which have rejected a ban on plastic bags. The Green Alliance, a leading environmental NGO, pointed out that a ban would be likely not to reduce emissions and might in fact help to increase them. Or was the aim to satisfy the popular press? Perhaps.
I wholeheartedly agree that the scourge of bags that litter our streets and countryside and pollute our seas must be tackled, but the reduction of packaging and supermarket waste will be most effectively achieved hand in hand with retailers—through designing out waste and educating the consumer to recycle and dispose of their rubbish responsibly—not through gesture politics and fumbled greenwash.
Tackling our waste stream is an essential part of tackling climate change. Waste threatens our wildlife and biodiversity and an ambitious waste policy is essential for a sustainable future, but political gestures about plastic bags are a poor substitute for an ambitious and thought-through whole-life waste strategy. For that, we will have to wait for a change of Government.
I am delighted to take part in this debate. I thank my right hon. and learned Friend the Leader of the House, because I suggested that supermarkets would be an excellent subject for a topical debate a couple of weeks ago and, lo and behold, she actually listened to me. It must be a first.
I pay due respect to the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock), but I want to come to the issue from a slightly different perspective. I want to talk about the Competition Commission inquiry, which is coming to a conclusion. The hon. Member for St. Ives (Andrew George) will, I am sure, catch your eye, Mr. Deputy Speaker, in order to do likewise. He has been valiant in bringing the issue before the House—I always refer to him as the witchfinder-general of the anti-supermarket movement. It is about time that we questioned some of the practices of supermarkets.
My hon. Friend the Minister is right to say that waste and packaging are one aspect of the problem. The supermarkets could do much more, because they are responsible for creating so much waste. However, I want to talk about the Competition Commission inquiry. It is reaching a crucial point. We are expecting a final report; in fact, it might be out already. It certainly might be with the Government. I have not seen the report and I suspect that it has a few more weeks of going around the system before it is published.
We will get the final report and, if it is published on time, I assume that from May to September the so-called remedy steering group will finalise its mechanism for the new supermarket code of practice. The code of practice will be new, because the one that we have is fairly toothless. The group will also finalise the idea of the ombudsman. Some of us have had things to say about that in the past. There will be consultation on the subject, and no doubt the Competition Commission will have to talk to various supermarkets and look at how they will or will not respond. Later this year and early next year, we will see whether we need to legislate on the subject and, if we do, we will look at how we should do so. That will enable us to consider whether we can effectively judge and measure what the supermarkets say that they will do as against what they do. That is not before time.
I am rather proud to have worked last year with the hon. Members for Ruislip-Northwood (Mr. Hurd) and for Falmouth and Camborne (Julia Goldsworthy) on the Bill that is now the Sustainable Communities Act 2007. It was an important bit of legislation and it took a lot of effort to get it through the House, but now it offers local communities a chance to fight back against ghost-town and clone-town Britain and to put in place the remedies that we want in our local communities. It was an important piece of legislation that we can use to good effect to consider how to get some balance back into our high streets, our smaller communities and, indeed, our larger cities so that we do not feel that we are being monopolised by supermarkets.
I am not against supermarkets. I am a Co-operative Member, and we obviously have to declare, as we always do, that we derive money and support from the Co-operative retail societies. We have a number of supermarkets—not many compared with the big guys, but still some. We support those supermarkets and see the benefit of supermarket shopping some of the time. The reality is that many of our small shops have either gone already or are under serious attack. They are under serious attack because of the power of the supermarkets and the fact that no one is prepared to stand against them.
Does the hon. Gentleman not accept that supermarkets do not put small businesses out of business, but customers do? If a customer wants to keep shopping at their local shop, their local butcher or their local baker, that shop will not go out of business. The only reason why such companies go out of business is that people stop shopping with them. That is not the fault of the supermarket but the responsibility of the consumer.
I do not necessarily agree with the hon. Gentleman. If I did, I would not ever be able to campaign again to try to save some of my local post offices. I am sure that the Government could use exactly the same logic to say that it was entirely up to the customer, as it is a free market—[Interruption.] I am sure that the hon. Gentleman is saying from his sedentary position that he is largely in favour of that. I am not. I am in favour of community solutions and I do not believe that choice is the answer to everything. There is a degree of need for balance in the way in which we provide such services. It is always the vulnerable who lose out: not necessarily the ordinary customer, but those who do not have the choice.
I give way to my hon. Friend, who will come to my aid.
I am certain that I do not need to come to my hon. Friend’s aid. I agree entirely with what he is saying. The supermarkets have deliberately targeted high street shops by, for example, putting a Tesco Metro on the high street to compete with small shops. They have used pricing policies to undercut the small corner shops and try to force them out of business. That is why the consumer does not shop there—because it is cheaper in the supermarket.
The supermarkets are now targeting pubs, which is why alcohol can be bought in supermarkets for less than it costs the supermarkets to buy it. In a debate on Monday night I gave the example that on Budget day, when alcohol duties went up, the price of a pint of whisky in the supermarkets was reduced by £5. That is a classic example.
I cannot add to that. I totally agree with my hon. Friend, and I am grateful that he has helped me out.
One problem is what we mean by “competition.” If there were genuine competition, perhaps some of us would have fewer qualms about what is happening, but there is not genuine competition. There is not, to use a horrible term, a level playing field. It is a very unlevel playing field. That is why, in connection with the Competition Commission survey, I conducted a survey of the top 100 suppliers to supermarkets. I wrote to each of them in confidence, asking them three simple questions: first, whether they would be giving evidence; secondly, if they were giving evidence, whether they would share with me the basis of the points that they would make; and thirdly, whether they had any particular views on how supermarkets operate.
Perhaps it was me, but I got one substantive reply, although I had a few nice notes saying that unfortunately the suppliers could not respond in time or share their evidence with me. The one substantive reply explained why the supplier concerned would not be giving evidence to the Competition Commission inquiry, despite the fact that, as the hon. Member for St. Ives knows, they could have done so in confidence with no names and no pack-drill. They still would not do so, because suppliers are scared rigid. I am talking not about the small local farmer, who is unable to have any real traction over the process of the supply chain, but about the everyday producers and major wholesalers that we all know about. They are scared rigid by the supermarkets, although not necessarily in the way that we would think.
We all know what happens—the big supermarket would never touch the well known brands, but power is exacted when a supplier brings a new product to the marketplace. If the supplier has not played the game and done things as the supermarkets want, the supermarkets can exert pressure and make all sorts of threats that they will not put the supplier’s products on their shelves. There is a degree of malevolence in the process that is never really exposed.
In the end, to my shame, I did not give evidence to the Competition Commission inquiry because, my survey being the basis of my evidence, I had no evidence to give. Although those that gave evidence included some of the bigger suppliers, the number of suppliers that did not give evidence was overwhelming. They chose not to break ranks and not to say what they thought—the things that they say behind the scenes, and sometimes openly in meetings that the hon. Member for St. Ives and I have with them. They will not say it in any way that could change policy, which I find terribly depressing.
Not everything that supermarkets do is wrong, but the matter is not open and transparent. We cannot have much influence over it, because the great influencer—Parliament itself—cannot bring forth evidence, as people will not put on record what is going on and suppliers do not do enough. I make a plea to the Competition Commission to do what we ask and set up a proper process so that we can monitor supermarkets’ performance. We understood at the outset that the commission would be examining land banking, and it is good that it has moved away from that to consider some of the structural deficiencies in the marketplace, but the question is how that will work.
I do not see that matter as separate from what my hon. Friend the Minister said about the need for supermarkets to be more responsible in how they handle waste, packaging and so on. They also need to be more responsible in how they operate per se, and should perform as moral, corporately socially responsible organisations. If they are not able to do that even with their larger suppliers, one must ask where the customer and local communities come into it. We see the consequences too often, and Britain’s retail choice has declined because supermarkets have controlled the agenda completely, utterly and ruthlessly.
The topic of supermarkets is huge, and I am sure that many issues will be covered in a wide-ranging debate. I intend to focus my remarks on packaging, on which I have been campaigning for some time. Early-day motion 188 stands in my name, and I brought to the Liberal Democrat conference a comprehensive policy on reducing excessive packaging, which was passed. I also introduced a ten-minute Bill on the matter in the previous parliamentary Session. I was due to meet the Minister today to follow up on that Bill and discuss it further, but obviously that has been delayed owing to this debate. I welcome being able to discuss the issue here and then go into more detail in a few weeks’ time.
I welcomed many of the Minister’s comments, and at some points I wondered whether she was plagiarising the speech I made last October on my ten-minute Bill. I cannot really complain about that, because taking on board the ideas that I was proposing was exactly what I was inviting her to do. I was pleased to hear her words, although I have some questions about whether the actions are matching the words, and I shall come to that.
I cannot cover everything in just under five minutes, but I wish to touch on a few points before I deal with packaging. Given the huge power that supermarkets have in our society, I believe that they have a huge responsibility. Whether it is related to the fair trade movement, the impact on the environment of how their staff travel to work, the recycling that they do or their energy use, they need to take that responsibility seriously. We have just heard about the contracts for suppliers, which are important, and I would add to that the importance of involvement in the community. Often supermarkets are involved in a community but do not take the same interest as other, more local retailers, whether through local festivals or other such initiatives. I was surprised to hear that a group of traders in Milngavie, in my constituency, who are interested in a business improvement district, which sounds like an excellent idea, have heard that Tesco does not generally like to get involved with such things. To me, that seems a sad state of affairs. Surely we should encourage all retailers to be involved in the communities in which they operate.
I welcome the comments that have been made about planning guidance. It is important that we consider not just competition between supermarkets but competition with smaller shops. Local authorities need to have the power to ensure diversity of provision.
I turn now to packaging, and first to the Courtauld commitment. I am afraid that I do not quite share the optimism of the Minister or the hon. Member for Bexhill and Battle (Gregory Barker), the Conservatives’ Front-Bench spokesman, who seemed to say that it was on target and working well. Voluntary agreements are preferable to regulation when they can be proven to work, but I have asked a range of parliamentary questions about the Courtauld commitment and it still seems unclear where the benchmark is and how it will be measured. One answer that I received stated that each Courtauld signatory declares its total packaging use each year, but another stated:
“Information on the annual total packaging use of each of the signatories is not routinely collected”.—[Official Report, 12 July 2007; Vol. 462, c. 1652W.]
It seems that there is some confusion about the Courtauld commitment, which I hope we can get to the bottom of, particularly because packaging growth is supposed to be halted this year. We ought to know where we are and who is monitoring it. What will happen if the targets are not met? Will there be naming and shaming, and will that be an effective sanction? Will the Government consider legally binding targets if the voluntary approach does not work?
The Packaging (Essential Requirements) Regulations 2003 are another bugbear of mine. They do not work, because they allow any producer to have as much packaging as they like, as long as they can prove that it is acceptable to the consumer. Basically, if they can sell more products, it is all right.
I declare an interest, in that I was a marketing manager before I was elected to Parliament. Any marketer knows that the greater the amount of shelf space in a shop, the more products get sold. The incentive is to increase packaging, and there is no effective way to enforce the regulations.
The hon. Lady is right, and she knows that I used to work in marketing for a supermarket before I entered Parliament. Does she accept that the onus is on the customer to shun products with lots of packaging and to buy the ones with minimal packaging? If that happened, supermarkets and food manufacturers would reduce the amount of packaging provided. We do not need Government regulation, as it is all in the hands of the consumer.
That is the argument for enlightened consumerism, and we should encourage people to do what the hon. Gentleman suggests, but I want a level playing field for producers. Enlightened companies that take their environmental responsibilities seriously should not be penalised, with lower sales of their products caused by the fact that they are given less space or prominence. Regulations to which all companies must sign up would resolve the problem in a different way, while remaining perfectly acceptable from a market point of view.
At a Select Committee sitting in December, I questioned the Secretary of State for Environment, Food and Rural Affairs about the regulations. He said that the EU’s Directorate General on the Environment was looking at the matter again and undertaking a study, but I have not got very far with finding out more. I wrote to the DG Environment in January, but so far I have received no answer. I also wrote to the right hon. Gentleman in March to see whether he could assist in soliciting a response. I understand that the task was transferred to the Department for Business, Enterprise and Regulatory Reform, and that an answer is sitting on the relevant Minister’s desk there. I hope that the Minister attending this debate will help me to get the answers that I need, and to find out whether the regulations will be reviewed.
Last year, I conducted a survey of 200 trading standards officers. The ineffectiveness of the packaging regulations means that there have been very few prosecutions, and public awareness of them is low. I hope that the Government will consider raising people’s awareness of the fact that trading standards officers can deal with packaging problems, but we cannot expect wonderful results as long as policing packaging is not a priority for them.
Does my hon. Friend agree that supermarkets tend to insist on suppliers using packaging that is often much more expensive than could be achieved otherwise? The supermarkets are involved in driving up the costs of packaging and the extent to which it is used.
My hon. Friend is right. I hope that we will hear more from him about that later. The Local Government Association carried out an interesting study last year and found that markets used the least packaging whereas supermarkets used the most.
I am intrigued by the sudden interest in plastic bags expressed by the Prime Minister and the Government. I suspect that it may be driven in part by the media agenda and a certain campaign in the Daily Mail. Although it is important to cut the number of disposable plastic bags that are used, that is merely a drop in the ocean in the context of the wider debate about packaging. The effort may be visible, but it is not of the greatest importance in the overall campaign. The Minister knows that the evidence is mixed as to whether taxes reduce greenhouse gas emissions, and about whether there are negative effects of increased other bag use. I welcome the fact that the charge being considered will take into account what bags are made from. That is an important factor, as heavier bags lead to higher greenhouse gas emissions, but I still think that a voluntary approach is best.
In conclusion, consumers pay through the nose for excessive packaging, at the check-out and in their council tax bills—
Order. I am afraid that that is the conclusion of the hon. Lady’s time. I call Mr. Eric Illsley.
It is a pleasure to follow the hon. Member for East Dunbartonshire (Jo Swinson), as the final minute of her speech—on plastic bags—was quite interesting. I agree with the point that she would have gone on to make.
All of the various issues such as packaging and plastic bags that have been raised in the past hour or so are worthy of a full day’s debate. The Order Paper shows that the London Local Authorities (Shopping Bags) Bill will be debated at some date in the future, but many other environmental matters deserve to be debated too. It is therefore a shame that we have only 90 minutes for this important debate, and that attendance in the Chamber is not better.
The hon. Member for Shipley (Philip Davies) suggested that supermarkets would respond if people were to ask for products that had less packaging or which presented some other environmentally friendly quality, but I am sceptical about that. I believe that supermarkets supply the products that we buy, and that consumer choice ends there.
My hon. Friend the Minister opened the debate by outlining some of the environmental issues at stake. I agree with the hon. Member for East Dunbartonshire that we must be careful not to react to public opinion by introducing measures that science tells us are wrong. For instance, incandescent light bulbs are to be banned in favour of so-called low-energy bulbs, but people need to understand what such a bulb’s power factor means. I shall try to explain.
A low-energy bulb with a power factor of 1 demands as much power from the generating station as does a conventional bulb. Technically, therefore, a light bulb is not low energy unless it has a power factor of 0.9 or less. Most low-energy light bulbs on sale in this country have a power factor of about 3, which means that they use three times as much power as an ordinary bulb. Consumers need to know that information if they are to make the right choice, but it is not widely available. That problem is one that the Institute of Lighting Engineers is trying to highlight, and we should bear it in mind.
We had a good debate in Westminster Hall last year on packaging. The hon. Lady set out her thoughts on the essential requirements, and the arguments have been well rehearsed. We all want to reduce the amount of packaging used, but no one can say how much is excessive. Some packaging is needed to present information about the product inside. For example, people with a peanut allergy can make use of the traffic light system to find out about ingredients, and consumers are now asking for packaging to contain information about the obesity risks of a product, or its salt or fat content.
The hon. Gentleman asks what constitutes excessive packaging, but does he think that consumers should decide? Should not large retailers install places near the exit where people can dispose of packaging that they consider excessive? That would expose some of the culprits and even change retailer behaviour.
Such a system already exists in Germany, where people leaving a supermarket can leave the packaging behind. In fairness, it should be said that supermarkets here are looking at that model as a way of alleviating the problem.
indicated assent.
I take the hon. Gentleman’s agreement as confirmation that supermarkets are considering that approach. I should be happy to let consumers decide on all such matters, as long as they have all the information needed to make a proper judgment. Clearly, though, they do not have all the information on things like low-energy light bulbs. I am sure that the same is true for plastic bags, about which I shall speak in a moment.
Packaging is needed for reasons of hygiene. People ask why coconuts are wrapped in clingfilm, given that they have a hard shell. However, the shell is covered in fibres that can break off and get in other food products, with the result that people might choke. Some products need to wrapped for safety, others to facilitate their transport. For instance, why is a tube of toothpaste put in a cardboard box? The answer is simple: it is easier to stack the boxes than the tubes.
The main reason for the packing that we see in all our shops is that the consumer demands it because it is convenient. Consumers like to shop once a fortnight or once a week at their local supermarket or local hypermarket, and they simply want convenience. That is why a lot of our packaging is the way that it is.
The hon. Gentleman speaks with both knowledge and commitment on these subjects, but I hope that he will not become an apologist for unnecessary packaging. When my young children have their toys, which I am obliged to buy for them very regularly, they come packaged in paper, metal, plastic, wood and every other kind of thing that one can imagine. When we bought toys or when they were bought for us as children, they came very simply packaged. I am not sure this is about information; it is about unnecessary packaging. One could use many other examples of the way that packaging is, frankly, out of control. Surely the hon. Gentleman would agree with that.
To a certain extent, I would, but I do not think for a minute that packaging is out of control. Packaging manufacturers do not make packaging for the fun of it. They do not spend money unnecessarily. They want to get away with the least amount of packaging around a product that they can, because obviously the more materials they use, the more money it costs them. They have a vested interest in reducing packaging as well.
The hon. Gentleman gives a good example: toys. I believe that it is accepted that toys are perhaps excessively packaged, but most toys sold in this country come from China. Another classic example, of course, is the Easter egg. The egg is about 4 in long and the packet is 2 ft wide.
Has not the hon. Gentleman hit the nail on the head? This is not about information or safety; it is about marketing and about people making something that is very modest look very grand. That is why toys are dressed up in the way that they are, and it is why Easter eggs are packaged in expansive and rather grand boxes. So he is making my argument for me, is he not?
No, I do not think so. I shall go back to the beginning and start with packaging, information, hygiene and so on. The hon. Members for Shipley and for East Dunbartonshire can speak about marketing far better than I can—I have no experience in it. Some excess packaging is the result of marketing, but some packaging is essential. The glaring example is perfume. Quite often, more money is invested in the packaging and the bottle that the perfume comes in than in its contents. Another example is an alcoholic drink called Malibu—not that I drink it, but I have seen the bottles made in my constituency. Anyone who has seen a bottle of Malibu knows that it is a glass bottle, which is painted white. Orange and brown are then painted on to the white paint by an electro-magnetic process—positive and negative charges cause the paint to fly on to the bottle. Given the technology involved in making those bottles, they cost about 30p each. That is about twice as much as the value of the pint of alcoholic drink that goes into the bottle.
The hon. Gentleman is making an excellent speech and a lot of pertinent points that are often not made. He mentioned hygiene, but I am not sure whether he mentioned another factor: keeping products fresh. For example, packaged cucumbers keep fresh for longer. Does he agree that, given that we want to cut down on food waste as well, such packaging is a good thing, not a bad thing?
The hon. Gentleman makes an excellent point, which I did not mention. I am glad that he has raised it, because it is valid. A lot of consumers complain about seeing vegetables, particularly salad vegetables, wrapped in a thin layer of cling film and suggest that that is excessive packaging. Last year, there was a demonstration in the House by Marks and Spencer, which brought in two items of vegetables, both bought in the same shop on the same day. One of them was immediately wrapped in cling film; the other was not. They were brought into the House for a meeting, where hon. Members could see them, and it was obvious that the one without the cling film was deteriorating far more rapidly that the other one.
As the hon. Gentleman points out, there is a need for packaging, and it comes down to convenience and freshness. People shop in supermarkets for convenience weekly or fortnightly, or whatever. They want that food to last longer, so that they do have to go to the shop, as people used to do, every day or every other day and so on. I am speaking in defence of the industry; I am chairman of the all-party packaging group, so I would, wouldn’t I? I want to get across the point about balance. The industry is co-operating with the Government, through the Courtauld agreement and so on, to try to address these issues, and it wants to do so. However, the issue can become sensationalised.
Last year, we saw the campaign in The Independent newspaper that highlighted four issues over four days. The Daily Mail did the same thing. We experience the sensationalism of news reporters taking a shop load of stuff from a supermarket and depositing it on the counter to make a point. The danger is that the problem will be exaggerated out of all proportion. We need some balance and further debate to consider what is excess packaging and what we can reduce and lightweight.
Lightweighting is an important point. My constituency contains one of the largest glass manufacturers in western Europe. It manufactures a very popular beer bottle, and it has just taken 1.5 g out of that third of a pint beer bottle. As a result, the cost saving to the industry is remarkable and the amount of glass used in that product is reduced. That is a huge success, but the number of bottles that are broken when they are transported from the factory to the brewery has increased dramatically because the structure of bottle is not as solid; it has been lightweighted. We must be careful that we do not damage products in seeking to lightweight them. The hon. Gentleman also made the point that food waste is the biggest problem that we face in waste disposal at the moment. As the Minister said, we waste a third of all our food. That is an absolute disgrace, and we should address it before we even think about looking at plastic bags, packing waste and so on.
On food waste and recycling, the Minister pointed out that she has increased the target for the recycling of packing waste and other materials. Again, I make the plea that the quality of recycled material in this country is not good enough to be used in certain industries as recyclate. The glass industry is a classic example. The glass is mixed with other products—often paper and other materials that can be recycled—and is so badly contaminated that it is unusable. Local authorities have no real restrictions placed on them or proper targets for separating collected material and delivering it to recyclers in such a way that it can be reused. In fact, most local authorities have a different collection system from the collection authority next door. Some authorities collect some materials; others do not collect that material. We have got a mix and match, and local authorities are required to collect by weight. They simply have to collect and recycle a certain weight of material, not specifically separated materials.
Does the hon. Gentleman agree that the plethora of ways in which local authorities organise their recycling causes great confusion with consumers? Different areas a few miles apart have completely different systems. In my area, we have waste separation at the kerbside, but constituents are concerned and say, “But in Glasgow, it all just goes in one big bin. Why can’t we have that?” It is difficult to get such issues across. People assume that their recycling is being used again in this country. Perhaps having more guidance on the best schemes that local authorities could use would be help in getting a common scheme across more local authorities.
The hon. Lady is exactly right. I entirely agree with her. Some of the material collected does not get used in this country. Plastic bags are an example. We collect the plastic and ship it over to China, because it can use it and we cannot. We have nowhere that can recycle the plastic from plastic bags, so it goes abroad. Plastic bags make up about 0.05 per cent. of the landfill waste—a miniscule amount. The plastic is recyclable, but we cannot recycle it, because no one in this country can do it.
On plastic bags, my hon. Friend the Minister made a point about the voluntary agreement not working. She said that she wanted to reduce the number of plastic bags. Under the voluntary agreement, the number of plastic bags in use has fallen by 7 per cent.; that is against a target of 25 per cent. However, the amount of plastic being used has been reduced by 14 per cent. against that 25 per cent. target. We have to determine what the target is. Is it for a reduction in the number of bags, or a reduction in the amount of plastic that we use?
Ireland tried putting a levy on plastic bags. One briefing said:
“A levy on plastic bags in Ireland only made matters worse…people underestimate how many plastic bags are used to put out recycling or are substituted for plastic bin bags.”
The chief executive of the Government’s Waste and Resources Action Programme said:
“We have got to remember that taxes and levies can have perverse effects—such as making people use more plastic rather than less.”
The Department for Environment, Food and Rural Affairs said that the voluntary agreement to which I referred
“is working with retailers offering shoppers reusable bags for life. We don’t think a ban or a levy is the right way to go”.
It added that in Ireland, people just bought more bin liners to replace free carrier bags, so the volume of waste stayed the same. Tony Juniper of Friends of the Earth said:
“But until supermarkets reduce the energy used in their stores, minimise food miles and treat farmers better, saving a few plastic bags is just window dressing.”
When Ireland introduced a levy on plastic bags, the production of plastic increased dramatically. People got to the supermarket tills, realised there was a levy on plastic bags, went back into the supermarket and bought a roll of black bin liners, opened a bin liner and put their shopping in it to carry it to the car, so plastic production increased. I know that the Minister is well aware of all those arguments; she has been lobbied on the issue time and again, so I do not need to rehearse them. However, I want to say that we have to be careful not to demonise plastic bags wrongly. Only a very small percentage—0.05 per cent.—go into landfill. They can be recycled. In fact, plastic bags are made from a waste product. We have to ensure that we get the science right before we bring in levies, bans and so on. A further opportunity to debate the subject would be most welcome.
I had better start by declaring an interest. Sadly, I do not own a supermarket, but, as everybody knows, I own a convenience store in Swansea, Evans the News, which opens early in the morning until late at night. It is good value for money. That is advertising you can’t buy.
Do you do two-for-one offers?
We do, and I will come on to that, because it is an important point when we are talking about waste. I agree with the Minister that people have a love-hate relationship with supermarkets. Supermarkets get a lot of bad press and people get very angry about the subject. When we read about supermarkets, the context is usually that people want to put one on the edge of a town or city, and some local people are very angry about it, or that a local authority has turned down the application, or that the supermarket has won on appeal. Or the issue might be the plastic bags or packaging. Controversy is normally involved when we read about supermarkets.
Of course, supermarkets do a lot of good, and I am speaking as a small retailer. For instance, I am sure that many of us have been to Tesco to present our local youngsters with school computers or DVDs or whatever, because of the coupons that shoppers collect and give to schools. Sainsbury’s has a similar scheme for keep-fit equipment. Many supermarkets get involved in the community; certainly, Tesco in Clitheroe does. I do not think that supermarkets deserve some of the knocking that they get.
Hear, hear.
Having said that—I assure my hon. Friend that he will not enjoy all of my speech—supermarkets are seen as posing a threat to the smaller trader; there is no doubt about it. Supermarkets are increasingly moving on to the high streets and opening smaller stores there. In some cases, I suspect that that is done to get around some of the Sunday trading legislation, but it is also done because there is a lot of demand for shopping on the high street in towns and villages. Increasingly, we see such stores as a threat to small shops in the independent sector.
I agree that retailers have a responsibility, too. If consumers stopped going to the smaller supermarkets, turnover would decline, profit would disappear and the stores simply would not survive. I suppose that the next threat will increasingly be online shopping. It would be pointless for us to say, “This is dreadful; small stores are being put out of business because people are shopping online.” Consumers are busy people. They shop online not because it is more difficult, but because it is easier and they prefer that method. Give it another 10 years and we may see a huge change in the way in which people do their shopping. Some of the larger retail supermarkets may even go into decline as a result of people preferring to shop online.
Supermarkets seem to be in a no-win situation. If they open on an out-of-town site, people say, “They’re destroying the high street. It’s outrageous; it’s bad for the environment, because people are driving to these out-of-town stores.” When supermarkets open a store on the high street, they are criticised for going into head-to-head competition with independent retailers. People have to decide at some point where they want supermarkets to go. The out-of-town supermarkets are often successful because they offer convenient locations and free parking. Perhaps local authorities could do more for smaller retailers by stopping excessive parking charges and restrictions, which prevent people from using smaller high-street retailers.
My hon. Friend makes an important point. In many towns and cities, there are high car parking charges, yet parking is free outside supermarkets. I do not believe that the answer is to start charging shoppers to park outside supermarkets; that is ludicrous. Shoppers would not be too happy, and, funnily enough, shoppers are voters. It would be a brave political party that put such a measure into a manifesto.
Ours tried.
Yes, ours looked into the idea, and our leader showed deftness and speed in completely junking it. We have to be cautious about such matters.
I am grateful to my hon. Friend for giving me the opportunity to be the voice of sanity against the defenders of Mammon. My hon. Friend the Member for Shipley (Philip Davies) seems to suggest that convenience should necessarily triumph over quality, and that ubiquity should replace service. As a small shopkeeper, my hon. Friend the Member for Ribble Valley (Mr. Evans) knows that small shops do much more than supermarkets to inform and characterise communities. We need diversity for the consumer. We also need to recognise the aesthetic of small shops and what they do for our communities, and the damaging aesthetic of supermarkets. They are brutal, ugly things, and that needs to be said in this place and elsewhere.
I feel a bit like an umpire now. I am glad that I am between my hon. Friend the Member for Shipley (Philip Davies) and my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), just in case they try to get at one another during my speech. There are elements of truth in what both my hon. Friends have to say about supermarkets, but only elements. We have to look at the issue seriously. If we want the small trader sector to survive, it will take a bit more than sitting back and saying, “We’ll just see what happens.” I can tell hon. Members what will happen: give it another 10 years and small shops will carry on disappearing, and their numbers will decline. We have all seen specialist shops and stores such as mine being put under pressure in our constituencies.
When I was a kid growing up, there must have been 20-odd shops on the square where my shop stands, and across the road. First, the shops across the road disappeared, and then, one by one, the shops on the square started to disappear or combine. We are down to about four shops now in our area. There is a lot of pressure on the smaller stores: costs are always increasing, for example as a result of rising staff costs and the minimum wage. I am not making a point about that—I am just saying that that is the reality, and that there is a cost attached. Smaller stores have to pay bank charges, but they do not have clout with the banks. I am sure that supermarkets have a lot of clout in negotiations with the banks, but smaller stores do not, and bank charges are disproportionately high for the smaller trader. Insurance costs are high, and business rates can be extremely high. We have discussed packaging—indeed, I thought that I was attending a debate on packaging at one stage, not on supermarkets—and we should remember that all the goods that come into supermarkets are already packaged. There is a good reason why cigarettes, for instance, are packed in cardboard boxes: we want to protect the goods inside, although I accept that many of them are wrapped in cellophane, too. The worst thing for a retailer is to see the product smashed in at the corners during delivery, as it is very expensive for them if they cannot get their money back from the wholesaler or the manufacturer.
Rubbish costs for smaller stores are disproportionately high. Such costs used to be included in business rates but, all of a sudden, retailers were asked to pay a separate refuse charge on top of business rates that runs into several hundreds of pounds a year. If we want the smaller trader to survive we must look carefully at how we will achieve that, and it may require Government action. We have discussed a laissez-faire approach from Government to legislation on supermarkets, but if we want smaller traders to survive, Ministers must sit down, work out what the problems are for smaller traders and see what can be done to assist them.
I shall make just a couple more points, as I know that the hon. Member for St. Ives (Andrew George) wishes to make a speech. We should not go down the road of taxing plastic bags. I fully accept what the hon. Member for Barnsley, Central (Mr. Illsley) said about the Irish experience: we should learn from that experience, but we must be realistic. The same argument applies to low-energy light bulbs: if the hon. Gentleman is right, people are consuming more energy, or more energy is used by some low-energy light bulbs. That problem could arise in the manufacture of plastics, given the Irish experience. If we introduced a charge on plastic bags, I suspect that it would be regarded as just another stealth tax that had nothing to do with efforts to dissuade people from using plastic bags. Tesco encourages people not to use plastic bags by giving them green points on their club card if they use their own bag. We should use more carrots to encourage the reuse of plastic bags, but I accept that people use them for their rubbish. They are not always put in bin bags, and many of them are reused. We must, however, conduct proper research to make sure that biodegradable plastic bags are the norm: it should not take 1,000 years for them to disappear, but only a brief time.
Far more research is needed on that problem, and more must be done to encourage supermarkets to source products locally. Booths in my region sources 75 per cent. of its fresh meat and 42 per cent. of its bread products from Cumbria, Lancashire, Cheshire and Yorkshire, which is where its stores are located. It does a fantastic amount of work with local producers and, indeed, it helped local milk producers to form a consortium and, as a result, now sells Bowland milk. That is a superb form of marketing that has worked. There are many farming families where I live, and they support such initiatives, because they know how important they are.
I want to mention buy one, get one free, or BOGOF as it is known. The Minister talked about the need for less packaging, and she was right with regard to some products. However, we have heard the counter-argument that that may lead food to decay more quickly, and there are instances of that happening. For people buying single items of food, particularly fresh produce, that is an important consideration. Elderly people who live on their own, for example, do not want to buy large quantities of food, because it goes off before they can eat it, so it is wasted. The same argument applies to buy one, get one free. Some of those offers are fantastic, and I am as guilty as anyone else: I am happy to buy one and get the other one for free, but the second item goes off before I have a chance to eat it. I would much prefer to encourage manufacturers and supermarkets to get together and offer the stuff half-price: it would amount to the same thing, and there would be less waste. We do buy one, get one free in our store through our wholesaler—we have to do so, because all the advertising blurb is about BOGOF—but I would much prefer a move to half-price items if possible.
Finally, we must look again at the power of supermarkets in relation to suppliers. There is an underlying belief that some supermarkets have such huge power—this is based on what the hon. Member for Stroud (Mr. Drew) said, and his explanation of why he received so few submissions in his survey—and have such a hold over people that they can dictate the price at which products come into the store. They then say how much the product will cost on the shelves, and manufacturers do not have much of a say: if they do not play ball, their goods will disappear from the shelves, and a competitor who does play ball will put their goods on the shelves. We have to be realistic about the power of the supermarkets, and see what we can do to ensure that the balance is made fairer. At the end of the day, we want consumers to be the real winners.
This debate has been a case of déjà vu for me. When it began, I imagined I had a veritable banquet of time in which to make my comments, but I ended up with a meagre morsel.
I wish to leave the Minister enough time in which to address the many points that have been made in this important debate. However, I wish to express disappointment, not in her but in the restrictions of her brief: important concerns about planning and suppliers have been raised, but they are not her responsibility. She promised, however, in an intervention that she would convey those concerns to the relevant Ministers, and I certainly hope that she does so. I wish to concentrate on the points that the hon. Member for Ribble Valley (Mr. Evans) made in his conclusion but, in passing, I will make a few other points, if I have time.
The hon. Member for Bexhill and Battle (Gregory Barker) prefaced each of his references to the Government with an acerbic adjective, and he clearly did not want to persuade the Minister to accept his point of view. My hon. Friend—I think that that is probably the right expression—the Member for Stroud (Mr. Drew) described me as witchfinder-general: the Vincent Price of the Chamber, the witchfinder-general of the anti-supermarket brigade. I do not want to give the impression that I am some kind of deranged evangelical zealot; I have always wanted to present a calm, objective analysis of the issue, with a dose of healthy scepticism.
I want to address issues concerning suppliers and producers, and the impact of out-of-town supermarkets. I understand why the Government have effectively entered into a love affair with supermarkets. It seems as if the Prime Minister brought the supermarkets into his big tent, before the big tent was properly open. One can easily be seduced into believing that the supermarkets have helped to deliver the Government’s policy of low inflation. The latest food crisis has demonstrated that the Government need to give equal attention to producers who, with suppliers, can also contribute to the achievement of low inflation. It is not simply the supermarkets that do so, and they have had suppliers under the cosh in recent years.
I am not arguing and I never have argued that supermarkets are evil or that their chief executives are the product of the loins of the devil. Their actions to press their suppliers until the pips squeak and to gobble up their smaller competitors are merely the rational product of the climate in which they operate. If they did not push their suppliers against the wall and squeeze every last ounce of benefit for themselves out of them, if they did not gobble up their smaller competitors, and if their competitors in the supermarket sector were doing that, they would clearly lose market share and their shareholders would not be happy.
It is not that those organisations are fundamentally bad; they are behaving rationally. The question that we need to ask ourselves and the one that I have been putting to the Competition Commission and the Office of Fair Trading for years is whether we have reached a point where the supermarkets have moved from successful and appropriate use of market muscle to inappropriate abuse of market muscle. That is the issue which, I believe, the Competition Commission has intended to address as part of its inquiry.
We have passed that point. My farmers and growers have been telling me since I became their MP that we passed that point a long time ago. There is excessive muscle, and it is high time that farmers, growers—primary producers—got a fair cut of the cake.
That is a supportive comment, to which I do not need to respond.
My hon. Friend the Member for South-East Cornwall (Mr. Breed) produced an excellent report in 1998 entitled “Checking out the Supermarkets”, which resulted in the Competition Commission inquiry and the supermarket code of practice in 2000, since when there have been three other inquiries into the power of the supermarkets. The latest one started in May 2006 and the report from the Competition Commission is due out on 8 May this year. I attended an evidence session on 13 March, at which I, on behalf of a number of other sector organisations, went through some of the evidence and the preliminary recommendations in the report.
It is clear that the suppliers have not been satisfied. I made representations to the Competition Commission in an attempt to persuade it to extend the remit of its inquiry. A wide range of groups, including the Association of Convenience Stores, the NFU, Friends of the Earth and ActionAid, were represented on the Cross-Cutting group, which represented both brand names and other suppliers and those who were in competition with the supermarkets. We presented the Competition Commission last year with two submissions, one about an adjudicator, which it has called an ombudsman, and the other about planning issues. The findings so far are extremely encouraging. I do not have time today, but I would welcome an opportunity to debate the issues with Ministers in the Department for Business, Enterprise and Regulatory Reform when the report comes out.
If an ombudsman is to be effective—it is obvious that the supermarkets will object to the introduction of an ombudsman—it will probably require ministerial discretion to be used under the Enterprise Act 2002 and secondary legislation to be introduced. Important progress has been made by the Competition Commission, which should be congratulated. I hope the Minister will take these messages on board.
I shall respond briefly to the final points made in the debate, which echoed those made by my hon. Friend the Member for Stroud (Mr. Drew) and the hon. Member for Ribble Valley (Mr. Evans). A number of the points made by my hon. Friend the Member for Stroud were directed to the Competition Commission, and I am sure we will draw its attention to that. As I said earlier, I will take the other comments back to my colleagues and ensure that they are properly heard. Many important points, particularly about the responsibilities towards suppliers, were well made.
I thank all hon. Members who have contributed to the debate. In the few minutes remaining I cannot refer to all their speeches, but let me tackle a couple of issues, particularly the free use of give-away bags. At the start of the agreement, 13 billion such bags were in circulation. We understand that the reduction is 1 billion. It would take 12 more years to get rid of the remaining bags. We think that needs to be done. That is why we are addressing the issue. The public want it. It is a symbol of our wasteful society, and if we are trying to encourage behaviour change, as we are, we need to respond.
In Ireland the issue was one of taxation, but that is not the case in the United Kingdom. We are talking about charging. There has not been a proper analysis of the results of the Irish undertaking, except that 90 per cent. of the bags went. Biodegradable bags are not the answer. They produce methane in landfill. The hon. Member for East Dunbartonshire (Jo Swinson) raised questions about the packaging regulations. We agree with her. The essential requirements do not work. We have asked for a review, but progress is slow. We are pursuing the matter all the time because we want more to be done.
I pay tribute to the expertise of my hon. Friend the Member for Barnsley, Central (Mr. Illsley) on packaging. He gave us an interesting speech, particularly on Malibu. I agree with him about the quality of recyclates. I am looking desperately at the issue of better quality. He spoke about shipping to China. There are good reasons for doing that, as it saves the Chinese using raw plastic. My hon. Friend raised a number of other issues. On light bulbs, consumers should look for the Energy Savings Trust recommendation. That is the way to be certain that the bulb is low energy. Other points have been dealt with in correspondence. We have technical answers to his questions, to which I refer him again.
The hon. Member for Bexhill and Battle (Gregory Barker), who spoke from the Front Bench, made his usual speech, which was a central office handout—
It being one and a half hours after the commencement of proceedings, the motion lapsed, without Question put, pursuant to Temporary Standing Order (Topical debates).
Points-Based Immigration System
I beg to move,
That this House has considered the matter of a points-based immigration system.
I am grateful for the chance to debate in the House one of the most important pieces of the Government’s immigration reform programme for 2008. At the beginning of the year I said that this year would see the biggest changes that we have made to the immigration system and to our border security for 45 years. The House will know from the Prime Minister’s statements on national security earlier in the year that the Government are radically changing the way that we police our borders, with the creation of the UK Border Agency, with fingerprint visas abroad, compulsory ID cards at home and new systems that will replace those that were phased out in 1994 to count people in and out of the country.
Alongside the new systems to police the way people move across our borders, the points system will help us to decide in the first place who should or should not have the right to come through those borders to work or to study. We have published proposals to change the way in which we judge not only who can come to the UK, but who can stay in the UK. Those proposals were set out in our Green Paper on earned citizenship.
Amid all the changes coming into place this year, undoubtedly the points system is among the most important that we are making. I am grateful for the timing of today’s debate. It is especially fortuitous because although we have introduced the points system for highly skilled migrants—that started earlier this year—it will be after purdah that we seek to publish important statements of intent for the next stages of the points system. Today’s debate will allow me to reflect on contributions from right hon. and hon. Members before we finalise that policy.
In these introductory remarks, however, I should put on the record my thanks to my right hon. Friend the Member for Leicester, East (Keith Vaz), my hon. Friends the Members for Hendon (Mr. Dismore) and for Brent, North (Barry Gardiner) and the Chinese community organisations and those such as the Bangladeshi Caterers Association, who have all helped me to shape the policy that we will publish after purdah.
The statements of intent will not, of course, be the final word. The system introduced to replace work permits, a system that will sweep aside about 30 different routes into the UK, will come into effect a little later this year. However, I want to publish statements of intent so that we have as much time as possible to reflect on the changes that we are making and to subject them to public scrutiny to ensure that they are in the best possible place.
This afternoon, I shall confine my remarks to three points. First, I shall discuss the Government’s objectives in introducing the points system. Secondly, I shall mention a bit of the detail on how we see the next stage of reform working in practice. Thirdly, I want to allude—no more—to the nub of the debate, which I suspect will divide us this afternoon.
My starting point is to recognise and celebrate the contribution that carefully controlled migration can make to the United Kingdom. As the grandson of immigrants to this country, I could, of course, talk with feeling, if not eloquence, about the social and cultural benefits that newcomers bring. However, the House will be pleased that I do not plan to make that detour this afternoon. I will, however, underline the economic benefits that I think and hope are recognised on both sides of the House. Earlier this year, the House of Lords produced a report about the economic benefits of migration. I thought that it made rather better reading than the press notices and some of the commentary on the day. I was especially grateful that the report confirmed my own judgment that gross domestic product per capita should be the principal judge of the contribution that migration makes to this country.
I have paid tribute to the fact that the Minister has been all over the country meeting communities. What message has he received from them about the points-based system?
My right hon. Friend knows that I have the privilege of representing a constituency whose population is about 50 per cent. Pakistani. The messages that I have received in my meetings all over the country are very similar to those that I have received from my constituents for some time. That message is that people want the immigration system to change and our border security system to be toughened. However, people do not want us to cut ourselves adrift from the rest of the world and somehow seal the borders.
People think that immigration has a vital contribution to make to our economy and future place in the world, but they want the system to be carefully controlled and carefully balanced. People want us to put an analysis of migration’s impact on wider public services alongside the economic benefits that immigration can have, and to strike the right balance. However, we should be absolutely clear that theory and evidence both point to the positive contribution of migration to wealth, including wealth per capita.
In his journeys around all parts of the United Kingdom, has the Minister come to recognise and appreciate that its differing nations have very different and divergent population and immigration requirements? Will he recognise that in some of the proposals that he is bringing forward?
The hon. Gentleman is absolutely right. I shall not quickly forget the meeting that I had in Newcastle at the end of 2006. The civic leaders of that city made a good argument to me. They said that they wanted to grow dramatically the population of their city in the following 10 years and that, however hard they tried, they would not achieve that by encouraging their citizens to breed faster. They recognised that immigration would be an important part of their overall plans for regenerating and setting out a new future for their community.
Does my hon. Friend agree that one of the main benefits of migration has been to enrich substantially the culinary experiences of our indigenous population? I am thinking particularly of Chinese and south Asian restaurants. Does he also agree that the population at large—not just Chinese and south Asian people—would hate their ability to access those services to be restricted? Does he agree, further, that one of the particular concerns is the language test, which I suspect is the issue to which he alluded but did not fully refer in his opening remarks?
My hon. Friend is right. The evidence of ethnic minorities’ contribution to the richness of our culture, in London and elsewhere, is considerable and often first seen in cuisine. My hon. Friend touched on the language test, and I shall say a little about that later. To reflect back on the question asked by my right hon. Friend the Member for Leicester, East, I should say that wherever I have gone, the emphasis has been on English being the value that this country wants to put centre stage in immigration reform.
The Minister is, as ever, courteous and he is making a measured case. However, he made a point about the impact on infrastructure almost as though it was unrelated to the general point about macro-economics. That seems—I am choosing my words cautiously—misguided. We cannot separate the impact on housing demand, health and education from the economic benefit. Does the Minister agree that too often the macro-economic case has been argued without consideration of those economic effects on local communities, as the House of Lords report recently made clear?
This will not make me universally popular, but I should say that since I was asked to take up this role, I have consistently said that we have to strike a balance in immigration reform between the economic contribution that we know migration brings and the wider impact that we must know that migration has on wider public services. That is the balance that we seek to strike in introducing the points system.
We have to try to undertake that balancing act on the basis not of anecdote but of evidence. That is why we have the migration advisory committee, an independent committee set up to tell the Government where in the economy we need migration—and, crucially, where we do not—and why we have set up alongside it the Migration Impact Forum, which is not a great name for an important group of people. It is made up of front-line public service managers from all over the United Kingdom who are able to marshal and analyse the evidence on the wider impact of migration. It is important that that evidence should be published and transparent so that the public can see what evidence Ministers are balancing when they come to a decision about how many points a newcomer needs to come to this country. We are explicitly seeking to recognise the fact that both sides of the debate need to be taken into account.
Before all those interventions, I think that the Minister was about to say that he agreed with the House of Lords Committee’s consideration of GDP per capita. If he was, may I draw his attention to what is perhaps a rather nerdish or statistical point? That figure is derived from the division of one very large number by another, so it is really important when we use it as evidence that it should be set within a statistical context. I suspect that levels of migration would have to be hugely greater than at present for one to be able to say with any certainty whether migration was or was not statistically significantly affecting GDP per capita.
My hon. Friend has guessed the point that I was about to make. The House of Lords criticised the idea of using GDP per capita because it seemed to result in quite a small number. However, as my hon. Friend says, when one divides the GDP contribution of migrants by the total population of the UK, of course the number will be small because 87 per cent. of the work force is British. The one good report in this area, which was published by Dustmann et al in 2007, points to an economic contribution of GDP per capita through migration over the past decade of about half the total contribution to GDP per capita that has been made by upskilling the labour force. So yes, the number is small, but it is not insignificant.
I am sure the Minister knows that a great deal of the statistical basis that we use is based on sampling. However, under the electoral roll arrangements all local authorities are required to have available information on foreign nationals, with a penalty of £1,000 for failure to supply it. What is astonishing, however, is that the figures are not then passed on to the Office for National Statistics. Does the Minister agree that it would be extremely useful to be able to correlate the information in the local authority archives, without disclosing names and addresses and so on, to enable us to get a much firmer statistical base than under the current sampling arrangements?
We need to take several measures in order to ensure that we have proper statistics. That was a valid part of the House of Lords’ criticism. First, we must arrange systems for counting people in and out of the country. Parties on both sides of the House bear some responsibility for the fact that we are unable to do that. Exit controls were phased out in 1994, and this Government finished the job in the late 1990s. I have consistently said that that was a mistake. Reintroducing systems to count people in and out of the country, as we will by Christmas, is a vital first step. However, we then have to deal with the resident population who are already here. The Office for National Statistics is doing several things through reform of the labour force survey and other household surveys. However, I have to say to the hon. Gentleman that over the long term ID cards for foreign nationals will make a more important contribution because they will be compulsory for all foreign nationals living in this country. Under the terms of the UK Borders Act 2007, foreign nationals will have to register their addresses, and over time that will give us the best possible measure of where people are living and how they are moving around.
I have had difficulty trying to work out economic migration into this country since 1997. What is the Government’s estimate of the number of economic migrants?
The evidence that we gave to the House of Lords is that we estimated that there was some £6 billion in economic contribution. Some people have criticised that, but I think that £6 billion is a prize worth having and that our economy is bigger and stronger as a result. Moreover, as I think we all recognise, particular sectors of the economy have benefited immeasurably from immigration—the financial services sector is a good example, because it contributes about 24 per cent. of the corporation tax take. It is important to look at a basket of indicators, but if pressed I would say that GDP per capita is perhaps the most important.
Does the Minister accept that there is public disquiet about the statistics, partly, and perhaps unfairly, because it is assumed that the body responsible for collecting them is not fully independent? Does he agree that now that we are moving into a world where we will have a better statistical base, for the reasons that he set out, it would be sensible to centralise the statistical function under the Office for National Statistics?
I will resist the temptation to veer off brief. Suffice it to say that the starting point is for us to get in place systems that we phased out in the mid-’90s, because the ability to count people in and out of the country is fundamental to the calculations that hon. Members are pressing for.
I obviously did not make my question clear. I was asking not about the economic benefit but about the number of people who have come in. I have seen 1.1 million cited as the number of economic migrants who have come in since 1997. Is that the Government’s ballpark figure?
I have brought along the precise cumulative totals. The figures for 2006, for example, show that 529,000 came back into the country, of whom 452,000 were non-British. I would be happy to supply the hon. Gentleman with extracts from the report on cumulative totals that we published to the House of Lords and others.
I am grateful to the Minister for a second bite of the cherry. Before he moves on from his macro-economic analysis, will he say whether the Government have taken account of the opportunity cost of immigration? Since 1997, the number of NEETs—young people not in education, employment or training—has grown by about 15 per cent. Many of them are unskilled, and many of the migrants coming into Britain are doing unskilled jobs. Lord Leitch argues that the demand for unskilled labour will fall during the next 10 years or so. It is not really possible to square the situation, is it? There are fewer jobs, more migrants and more NEETS. What do the Government think about that?
That is a common argument. It is so common that economists have a name for it: the “lump of labour” fallacy, which is the idea that the number of jobs in an economy is fixed. We have to recognise that during the past 10 years, the employment rate among British nationals has gone up, which has happened at the same time as average wages have gone up each year, and while productivity has gone up. A rather good article in The Economist a few weeks ago showed that GDP per capita had gone up by something like 2.4 per cent. in each year during the past decade. That is well above the figure for the economies of the United States, Canada, France and Italy.
Where I agree with the direction of the hon. Gentleman’s question is on whether we should admit low-skilled migration from outside the European Union. I do not think that there is a need for low-skilled migration from outside the EU, but I shall talk about that in a moment.
On the point raised by my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), the Minister will know from his statistics that there are two measures of the total amount of inward migration into the country—not net migration, but total migration. The one to which he referred shows inward migration of 529,000 and the total international migration figure, which I think is the preferred statistic, is 591,000. When one subtracts the emigration figure from that, one is left with a very high figure for net migration of 190,000. Can the Minister tell us of any year in history when the total inward migration figure was higher than 591,000, according to the total international migration statistics or any others that he wants to produce?
I am not sure whether it ever has been higher, but I think that there is now a degree of consensus between us. I am doing this slightly from memory because although I am a keen student of the speeches and comments of the hon. Member for Ashford (Damian Green), I do not have a photographic memory. Many of us have come to recognise that it is the net balance that is important; we have to look at how many people are coming in versus how many are leaving. The net balance for the last year for which statistics are available was about 190,000, which is substantially down on previous years. In fact, it is about 23 or 24 per cent. lower than previous years. I see that the hon. Gentleman disagrees.
It is still a very high figure. The figure of 190,000, which is the long-term projection for net migration, is equivalent to a city the size of Milton Keynes, as the House of Lords pointed out in its report. The Government cannot control emigration—although they may drive people to want to leave the country—but they can control the total figure for inward migration through their policies. I put the question again to the Minister: bearing in mind the Government’s policies of issuing work permits, the policies they adopted towards the EU accession 8 countries and all their other polices, can he name a time in history when there has been a higher figure than 591,000?
I think that I have just answered that question. I draw the hon. Gentleman’s attention to the degree of consensus that the net balance is the important number. I know that he will disagree with that and I look forward to his remarks, in which I hope he will answer a simple question: if there is a magic number of people who should come into the country this year, what is it? The political debate is suffering from the fact that there is an allusion to a magical number, but to date it has been secret.
As a Back Bencher, I do not make policy. The Minister seems to imply that it is impossible to get the figure lower. I point out to him the figure that I have just cited, which he agrees with, of 591,000; that figure was 327,000 in the year that the Government took office. It would not be a bad thing if we got back to the situation that the Government inherited, but changed through their polices.
The hon. Gentleman lives in the real world, and I acknowledge his long interest in and the careful attention that he has paid to the matter. As a Minister, one welcomes people taking an interest in one’s work. However, he must accept that, around the world, people are on the move. Global migration has doubled since the 1960s. The net migration rate to the UK is pretty much the OECD average; there are several countries to which net migration is higher. There is a similar pattern of people on the move in industrialising countries. Indeed, in China last week I was told about the migration of people from western to eastern China—some people believe that that is the largest movement of people in human history. People move around. Over the centuries, they have moved for three reasons: love, work and war. If anything, the patterns are changing faster, but that comes with industrialisation. If the hon. Gentleman looks back over a couple of hundred years of economic history—the World Bank and others have produced good reports on that—he will realise that great patterns of globalisation are normally accompanied by big movements of people.
The Minister has been generous in giving way. However, the problem with his argument is that, in 1997, as in 2007, many people wanted to move from countries where incomes were lower to this country, where incomes are higher. However, as soon as his Government came to power, they substantially increased the number of work permits—the number issued in 1997 has trebled, as was said in the House of Lords. That is not to do with change in the world but the Government policy of increasing the number of work permits and their decisions about the A8.
I look forward to hearing the hon. Gentleman’s policy alternatives. However, he cannot ignore the fact that in the past 10 years the movement of people in the OECD countries and the industrialising countries has got faster. In the past 11 years, we have grown economically in every quarter, and that has gone alongside an increase in the employment rate. More jobs have been created in this country.
Let me move to my second point. All I wanted to establish in my opening remarks is that carefully controlled migration can make—and has historically made—an important contribution to this country. I shall not digress to comment on policies on family reunion and asylum, but concentrate on the next stages of the points system, which will be introduced later this year. I shall not dwell on policies on tier 1—the programme for highly skilled migrants—because it is now operational. However, tier 2, the system for work permits, and tier 5, the system for temporary workers, are still to come.
I believe that tier 2 will be the most important. It will replace work permits and is aimed at enabling UK employers to recruit individuals from outside the European economic area to take a specific job that cannot be filled by a British or EEA worker. Employers in that category can sponsor migrant workers for a visa application only if they have a licence that shows that we have checked them and confirmed that they are genuine organisations.
Tier 2 will operate according to five principles. First, migrants will be required to show some command of the English language. I will listen hard to the debate about the standard that we should seek. Secondly, all jobs that are not in shortage occupations or intra-company transfers will be required to fulfil a resident labour market test before a migrant can be recruited. If migrants wish to change employers once in the UK under the scheme, the job to which they want to switch will also have to fulfil a resident labour market test. Thirdly, migrants who are not filling jobs on the shortage occupation list will be required to earn points through their qualifications and prospective earnings. Fourthly, low skilled or no skilled migration from outside the EU will be ended. Fifthly, there will be a maintenance requirement to show that migrants have the ability to support themselves for the first month that they are here. Within the framework of those five principles there is of course an enormous amount of detail, on which I look forward to hearing the House’s views.
The shortage occupation list is so important that it is worth a few more words. The idea behind the shortage occupation list is that if particular jobs are extremely difficult to fill in the UK, we should make it easier for employers to fill them, with there being some kind of trump. A place on the shortage occupation list is therefore something of a prize. I am absolutely convinced that decisions about jobs that go on the shortage occupation list should not be made in a dark room in the Home Office, but debated in public and made on the basis of evidence.
Independent advice on such decisions is helpful, which is why the Migration Advisory Committee has started on the job. It has been asked to study three questions: what is a skilled job; what is a shortage; and what skilled labour shortages does it makes sense to fill through migration rather than domestic labour? The committee’s call for evidence has already been published. I would urge anyone who is interested to get hold of a copy of the questionnaire and send it back to the chair. I have written to all right hon. and hon. Members with a copy, but I shall write again after this debate. The study is important and the list will be produced around June. Getting that list right will be difficult, but the exercise will profit enormously from the contribution of right hon. and hon. Members.
Occupation No. 5434 refers to cooks and chefs, of which there might not be a shortage in the country as a whole, but of which there is certainly a shortage in ethnic minority restaurants, such as Chinese and south Asian restaurants. Is the Minister prepared to consider breaking down that category to reflect the shortages in particular sectors within that skilled occupation which might not exist more generally?
Absolutely. I congratulate my hon. Friend on his work not only on understanding the detail of the problem, but on bringing together the Chinese community in London and nationally to meet me and put across the arguments. He rightly draws attention to the problem in getting the policy right, which is that the evidence available to the Government from taking a top-down view will go down to only a certain level. However, shortages will quite often emerge in occupations that do not happen to have a Government statistic for them. Therefore, as David Metcalf, the chair of the Migration Advisory Committee, has understood and accepted, we need to solicit bottom-up information, too.
I would like to amplify what my hon. Friend the Member for Hendon (Mr. Dismore) said about the concerns among south Asian and Chinese restaurateurs. The Minister’s Department is telling them that they must recruit Polish and Latvian cooks—
indicated dissent.
No, that is what the Department is saying. Those restaurateurs are insisting that to have the delicious south Asian food to which the British people have become accustomed over the years, they must recruit cooks, of whom there is a desperate shortage, from that region.
I have not heard my officials or any others telling anybody that they need to recruit people from particular communities, whether they are from eastern Europe or elsewhere. If that has happened, it is wrong and I apologise.
Before I give way, let me make one point about the three questions that the committee has to consider. When we study those, we have to look at what is happening in our labour market, too. We would all acknowledge, for instance, that unemployment in the Bangladeshi community is 9 per cent., which is almost twice the national average. In the Chinese community, the figure is 5 per cent., which is a little above the UK national average. If we look at a specific region such as my own in the west midlands, we find that the employment rate in the Bangladeshi community is 40.6 per cent. That is nearly half the national average employment rate.
The Migration Advisory Committee has to balance some difficult questions. Are there sectors of the economy in which it makes sense to continue to draw in skills from abroad? Are there parts of the economy in which, with Government investment, it makes sense to train up those who are out of work? I make no prejudgments about the answers to those questions, but I want to highlight these points before the debate gets into gear.
I want to return to the point that my hon. Friend just raised about his officials not suggesting that Latvians or Poles should be employed as chefs in restaurants serving Chinese or other cuisines. If we say that low-skilled jobs must be filled only from within the EU—that often means eastern European migrant labour—the implication is that, although it might not affect the first or second tier of chefs, migrant labour from eastern Europe could be used to fill the jobs below that level, within the kitchen. That is the message that my hon. Friend’s Department has communicated, and it is the one that troubles people the most.
That would be a troubling implication, which is why I am deliberately drawing attention to the fact that, in some communities and cities in this country, levels of unemployment are remaining high, despite the progress that has been made over the past decade. That is why we have to look long and hard to find the right balance between bringing in skills from overseas and providing investment in training for those in our resident labour force, especially those who are out of work.
I give way to the hon. Gentleman.
The Minister makes an eminently reasonable point, but if the House—and, I suspect, many of his Back Benchers—are to be persuaded that this is a serious point, perhaps he needs to tell us what discussions he has had with other Departments about the training that might bring unemployed people in the Bangladeshi community, for example, into these kind of roles. Surely it is not enough for him merely to wring his hands and say no.
The hon. Gentleman is absolutely right. The work that we have to do in this area through our migration policy is inseparable from the work that has to be conducted in other parts of the Government on investment in skills and investment in getting people back to work. That is why immigration reform and the points system have to be seen in the context of a skills budget that will rise from £500 million in 2007-08 to more than £1 billion in 2010-11. The doubling of that figure will provide the investment that will take us from the position in 1994 when only 40 per cent. of people had level 2 qualifications towards our goal of ensuring that 80 per cent. of adults are qualified to level 2 by 2011. The hon. Gentleman is right to say that the questions are inseparably linked.
Does the Minister recognise that, to economists, the very concept of a shortage in a free market is a difficult one to grasp? If the wages for a particular skill are allowed to reach the market clearing level, the supply will, by definition, equal the demand. If demand changes, employers have to start paying more, but they might be reluctant to do so. They might prefer to employ cheap labour from abroad. In that sense, a shortage could persist only if a Government did not allow wages to rise to the market clearing level. When we kept nurses’ pay below the market clearing level, we had a shortage of nurses and had to import them from abroad. When we raised their pay—as I had long urged—we found that we had a surplus of domestic nurses.
The right hon. Gentleman is right in much of what he says, having studied the question in some depth. I have studied his recently published Centre for Policy Studies pamphlet and he is right to say that our view of this question is affected by the time frame that we are studying. It is also right, as our noble Friends pointed out in the other place, that any immigration reform has to go alongside much tougher enforcement around the low-wage economy. It was absolutely right for the House of Lords to point out that low wages legislation needs to be enforced much more robustly, particularly for those wages below the national minimum wage. That is partly why we have increased the number of working operations regarded as illegal by 40 per cent. over the last year. Where there is abuse at the lower end of the wage market, it is important to try to drive it out.
Does the Minister acknowledge that in discussing the ethnic minority restaurant trade, it is important to understand how diverse it is in the sense that although the bulk of these establishments may be small family businesses spread across the UK—many of my constituents benefit from them—there is also a significant number of Bangladeshi and, indeed, Chinese restaurants that are quite up-market and have a completely different clientele and different labour market conditions? Should not any points system recognise the diversity in business size, wage levels and work experience required across this sector?
I absolutely agree with that point, which is not unrelated to that raised by my hon. Friend the Member for Hendon. Relying on existing published Government statistics in this area is very difficult because those statistics do not go down to the level of specialism where shortages can emerge. We also need to acknowledge a geographical dimension to the question, as the availability of labour may be fairly sticky in some parts of the country. That is why the Migration Advisory Committee was asked to draw up a shortage occupation list for Scotland. There are two related problems: one is defining an occupation at a sufficiently detailed level in and of itself to understand whether it is skilled; but we also need to look, secondly, at bottom-up evidence for whether there is a particular shortage in a specific occupation. The chairman of the Migration Advisory Committee will thus need to look into movement in wage rates, as that might indicate a particular shortage in this area. The job cannot be done from a desk in the London School of Economics, where Mr. Metcalf is based. It is necessary to get out and compare the evidence in different regions in different parts of the country and in different industries.
Returning to the subject of ethnic restaurants, the Minister said that second-generation south Asian young people could be trained to do catering and cooking, but I have to say, with respect, that that is a real McKinsey consultant’s point of view. The point is that second-generation Bangladeshi young people do not want to be restaurateurs in the same way that second-generation Jamaican girls, of whom I am one, did not want to be nurses and second and third-generation Irish young people did not want to be labourers. Communities move on, which still leaves our ethnic restaurants requiring skilled labour to meet the demand for the delicious food we all enjoy so much.
I was never good enough to work at McKinsey, Mr. Deputy Speaker, but my point was not about second, third, fourth, fifth or sixth-generation people; my point was about people who did not have a job, and we have to accept that there are some city communities in which the unemployment rates are very high.
Will the Minister explain what analyses have been done so far? I have been told by restaurateurs in the Bangladeshi community in my constituency that there is a difference between working in the kitchens in their restaurants and working in those that deal with other forms of cuisine. They say that the pressures are higher, for example. Is there is a skills shortage and are there difficulties in recruitment in other restaurant sectors, or are they specific to the Chinese and what we tend to call Indian restaurants?
It is important not to prejudge. Having set up the independent Migration Advisory Committee to tell us where the skills shortages are and where it makes sense to fill those shortages from overseas rather than domestic labour, I do not want to prejudge that consultation and deliver my own answer this afternoon. We set up the Migration Advisory Committee because we recognised the problems caused by the Government’s plucking shortages out of the air. We wanted an independent study. The committee has been asked not simply to work on the basis of Government statistics, but to undertake proper field research so that the questions can be answered as accurately as possible.
I was a little disappointed by the Minister’s response to my point about local authority statistics. He said that he thought we would be able to solve the problem eventually when we introduced identity cards. The problem is that although the figures are available, there is still a huge information gap. On 9 May, I shall present my Foreign Nationals (Statistics) Bill to the House. Would it be possible for me to have a chat with the Minister about some of the issues on another occasion?
I always hate to disappoint the hon. Gentleman and should be delighted to have that conversation. I am mildly obsessive about statistics, and it would be good to set out the programme of work which—as I am sure he knows—the Office for National Statistics has in hand, and to discuss how it could be strengthened further.
The policy at the heart of the next stage of points reform relates to the principles that I have described, and I look forward to hearing the House’s views on it. Let me touch very briefly—because others will do it better than me—on the question that I expect to divide debate. I think there is a great deal more consensus on some of these issues than we would care to admit in public, but, in the spirit of the House, I shall dwell on the issue that divides us rather than those that unite us.
Before I do so, however, I will give way to the hon. Member for New Forest, East (Dr. Lewis).
I am not sure whether I anticipate the Minister’s next remarks correctly, but will he say a word or two about retrospection? He will recall the meetings that we both attended with representatives of the people who are already in the country on the highly skilled migrants programme, and who were so adversely affected by the retrospective changing of the rules that has now been overturned in court—much to the benefit of, for example, the Nair family, who are greatly respected in my constituency. Can he assure us that there will be no further problems involving the retrospective application of new points rules?
I shall certainly try my utmost, although I may not get it right on every occasion. In creating the points system, we are trying to remove a degree of the instability which has bedevilled changes in the immigration rules over the past 40 or 50 years. We want a system that is more open, transparent, predictable and stable, and an end to policy changes that are not anticipated and are often retrospective.
Although I believe that there will be a element of consensus on some of the basic policies, I also believe that we should be frank about the element that divides us. The cap which has been has been proposed does not constitute a limit on overall migration. According to the international passenger survey of 2006, 229,000 people entered the United Kingdom, about 77,000 of whom were returning British citizens. I am delighted that no Member so far has proposed to prevent British citizens from returning home. About 136,000 were European citizens. Again, I think that there is all-party support for the principle of free movement. It is a little-known fact that there have been some nine free movement directives since we joined the European Union. Seven were passed under Conservative Administrations and two under Labour Administrations. The 2004 directive was unopposed.
Of the people who entered the United Kingdom during the period covered by the survey, 114,000 were students. We are now educating people from all over the world, and it is an important part of our economy, worth some £8.5 billion. Another 74,000 of the people who came in were dependants—and there is now a degree of consensus that we should not reintroduce the primary purpose rule, which this Government abolished in 1997. That leaves the number of non-EU citizens coming to this country to work, which the Office for National Statistics says is about 101,000. If we were to add in a reasonable share of their dependants, that would mean that about 140,000 people will be affected by the proposed cap. That is, of course, only about 30 per cent. of the non-British people who came in. In effect, therefore, the proposed cap is not really a cap at all; it is more of a colander.
The number for the cap is a secret. The hon. Member for Mid-Sussex (Mr. Soames) has proposed that the net balance should be zero, whereas the hon. Member for Ashford (Damian Green) wisely said in The Guardian a year or two ago that it would be wrong to speculate too far in advance on what the right number might be; I acknowledge his caution, and he is probably right.
It would be helpful if Members of all parties made it clear that this cap would affect only, at best, 20 to 30 per cent. of the people who came into this country. When I look at these numbers, therefore, I see that there is probably more of a consensus in this House than a difference.
The Minister seems to be saying that we should rely on a points-based system to restrict immigration, and that we should not rely on a cap as that affects only 20 per cent. of those currently coming in. As the points-based system affects only 20 per cent. of those coming in, he is simply trying to pull the wool over Members’ eyes.
Not really, because the ambit of the points system would extend to the 101,000 people coming in for purposes of work and their dependants, and to about 114,000 students and their dependants. Therefore, the points system applies to about three in five people, whereas only one in five would be affected by the cap.
I think that the Minister might be slightly wrong on the EU issue. He said there could be no restriction on the numbers coming in from the EU, but there are restrictions for Bulgaria and Romania, of course. I believe that the Government have granted 40,000 work permits. Other EU countries, including France and Germany, have put restrictions on people emigrating from the accession nations. Therefore, what he said is not quite right.
No, I was merely alluding to the fact that under the free movement directive EU citizens can exercise treaty rights to come to the UK and spend time here, but there are, of course, restrictions on their ability to work.
Does the Minister agree that the key issue in deciding between a points-based system and a cap is that the former can respond to the needs of the British economy in a much more specific way? If we suddenly had a massive shortage of nurses, the points-based system could cope, whereas a cap is just a total number; therefore, it would not be able to respond to the needs of the economy.
My hon. Friend’s line of argument is absolutely right. The unfortunate reality is that we cannot truly know about anything because the cap is a secret—we do not know how big, or small, it is. She is right that one of the chief virtues of the points system is its flexibility. It is possible to move the points score up if we think that inflows are too high, or to move it down if we think the economy is suffering through lack of access to skills.
The key point that I want to make by way of introduction this afternoon is that migration can make a clear economic contribution, but that it is crucial to ensure that only those we need are able to come here to work and study. Controlling migration is therefore important. A points system has a number of virtues to recommend it, and there is a degree of consensus about those principles in practice. I have come to learn, however, that many hon. Members are more expert than I am on immigration law, so I shall now stop talking and start listening.
It is always enlightening to hear the Minister describe and defend the Government’s immigration policies; as ever, the imperturbable was defending the indefensible. Before I go on to investigate the gaping chasm between the world and the immigration system described by the Minister and the world in which the people of this country live, I should express some sympathy for him, because he has an impossible job. I say that not because it is impossible to run an efficient immigration system in this country, although I do not underestimate the challenge, but because he must claim, as he did at the start of his speech, that everything that the Government are doing on immigration, such as the introduction of the points-based system, is a radical, once-in-a-generation change. He must do that without admitting that the need for the change is the failure of his Government’s immigration policies over the past 10 years.
The Minister’s introductory remarks were the latest example of a faintly absurd level of hype that the Government attribute to every change they make in the immigration system. When the Home Secretary launched the points-based system, she said that it was
“part of the biggest changes to British immigration policy for a generation.”
This afternoon, the Minister, perhaps outbidding his line manager, said that over the next year the Government will deliver the biggest shake-up of the immigration system for more than 45 years.
I shall return to the detailed virtues and vices of the points-based system in a moment, but we must ask why this bad analysis is so prevalent. The problem is that in their early years, this Government adopted a policy based on a straightforward analytical fallacy: they said that immigration was good for the economy and therefore the more of it there was, the better it would be for the British economy. Many of the problems we face in immigration, strains on our public services and, worse still, community cohesion in this country, have their root in the faulty analysis that the Government adopted in their early years in power. The House of Lords report to which the Minister kindly referred pointed that out as well as anyone has done. It is worth this House remembering that the report was produced by a cross-party House of Lords Committee containing Labour ex-Ministers, distinguished economists, such as Professor Richard Layard, and, indeed, Adair Turner, whom the Prime Minister employed as his adviser on pensions.
Thus, the report cannot be dismissed. To do him credit, the Minister did not do so. He said that he thought that the analysis was good, but he took objection to some of the press coverage. I would be happy to ignore completely what the press made of the report, because the report itself was excoriating about the analysis that the Government apply to immigration and, in particular, about the policies that they have adopted. Indeed, rather gratifyingly, the distinguished cross-party Committee said that we needed precisely the cap for which I have been arguing, and against which the Minister has been arguing for the past 10 minutes.
As the hon. Gentleman is citing reports, I wonder whether he has had a chance to examine the Work Foundation report published this morning, which points to the success of migration and to the fact that high levels of immigration have helped our economy, and have kept interest rates and inflation down. Those facts were not analysed sufficiently by the House of Lords Committee.
We can all reach for our favourite reports, but I am quite happy to be on the same side as Professor Richard Layard, Adair Turner, Lord Moonie and many others, some of whom are right hon. and hon. colleagues of the right hon. Member for Leicester, East (Keith Vaz).
I shall make my position and that of the Conservative party clear to the right hon. Gentleman: immigration has benefited and does benefit this country, both economically and culturally. To ensure that we capture the benefits of immigration for those who are already here and for those who wish to come here, we need to ensure that the immigration system is under proper control and that immigration is at a level at which the population and our public services can be comfortable. It is wrong that the Government have failed to do that for the past 10 years.
I would not like to leave the subject of the House of Lords report without pointing out one fact. I agree with the Minister that the press reporting of the report was rather partial—I do not know why. The report contained some surprising quotations. For example, it stated:
“Significant gross immigration of highly skilled non-EU nationals may well be desirable”
and that there are
“important dynamic gains from the exchange and movement of people.”
There is a lot of evidence in the report, such as that given by Professor Steve Nickell, David Blanchflower and other distinguished economists, that suggested that there could be dynamic gains from migration. That evidence was quite possibly underestimated in the report’s conclusion, since it was cited after the recommendation on the conclusion was mentioned in the report.
Since we are all happily quoting the Lords report, I shall go along with the Minister and quote the report rather than the press reports. The report stated that
“we have found no evidence for the argument, made by the Government…that net immigration…generates significant economic benefits for the existing UK population.
Overall GDP, which the Government has persistently emphasised, is an irrelevant and misleading criterion for assessing the economic impacts of immigration on the UK. The total size of an economy is not an index of prosperity.”
The hon. Lady is now going to tell me that that is the difference between two large numbers and that we should therefore not take much notice of it, but I shall let her say it for herself.
As the hon. Gentleman clearly understood the first time around, I was going to make a different point, and, of course, he has now put me off. If he would remind me of what he was saying before I stood up, I could remember. [Interruption.] No, it is not about GDP. I remember now.
The hon. Gentleman is right to say that the report states that there is “no evidence”, but that is not the same as saying that there is evidence that there is no benefit. That was the mistake that was made in the press release. I am prepared to accept that the Lords said that there was no evidence, but they did not go on to say that they could therefore categorically say that there was no benefit.
That is completely right. I am glad that the hon. Lady thought of another point to make. It seems a slightly strange basis for an entire Government policy to have no evidence that that policy will be beneficial. The hon. Lady has just admitted that there might well be no evidence, and that does not prove the opposite, either. The Government have proceeded on that assumption for 10 years and so has the Minister, for all his statements that he prefers GDP per capita. Just as he is a student of my speeches and press releases, I am probably the world’s greatest student of his. In all conscience, no one would believe that he did not regard the expansion of GDP by £6 billion—a figure he cited again today—as extremely important evidence in favour of the economic benefits of immigration. If he is now claiming that GDP per capita is a better measure, that is a welcome advance on everything that he has said over the past few years.
The hon. Gentleman would accept, I think, that one of the best indicators of contribution towards GDP per capita is wages, so it is simply not true that there is no evidence that migration contributes to GDP per capita. When we look at wage rates, for example, we can see that on average foreign-born people earned £424 a week in 2006 compared with the UK-born, who earned £395 a week. There is clear evidence, both in theory and in practice, of a positive contribution towards GDP per capita. As my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) said, of course that contribution will be relatively small when the sums are done, because 87 per cent. of the labour force is UK-born.
All the evidence that I have seen—I am sure that the Minister has seen it too—suggests that, as one would expect, there is an enormous spread in the wages of those who come to this country to work. There are many at the very top end and many at the bottom end.
Oddly enough, that is one of the points of consensus between us. We do not reject the points-based system altogether. We think that it should be used as a base for the cap that we propose and the Minister rejects. It would be a useful tool within our overall, very different policy. One thing that we can do, and indeed that the Minister is trying to do, is ensure that people with the appropriate skills come into this country. By and large, one imagines that in most areas those appropriate skills will be at the high end. The truth about the level of wages is rather more subtle than the point that he tried to make.
May I take my hon. Friend back to the intervention on him by the hon. Member for Eastleigh (Chris Huhne)? Does my hon. Friend agree that it is important to correct the impression, which the Liberal Democrats may inadvertently have given, that some evidence was somehow not properly heard by the House of Lords Committee? The two gentlemen to whom he referred, Professor Stephen Nickell and Professor David Blanchflower, both gave oral and written evidence to the House of Lords Committee. They had the opportunity to consider their comments, and the Committee had the opportunity to consider the Minister’s arguments. The principal conclusion that it reached, in the round, was the one that my hon. Friend read to the House.
My hon. Friend is exactly right. Of course, famously, if one assembles two economists, one will get three different arguments.
I know that the hon. Gentleman is an enthusiastic champion of his policy of a cap, and he has probably considered all facets of it, particularly how it will apply in all the constituent nations of the UK. Can he therefore tell me how it would assist Scotland, which suffers from chronic depopulation and has very different immigration and population requirements?
The problem in Scotland is that for many years, it has been under the yoke of Labour Governments that have treated it badly, at both national and UK level. It is therefore understandable that many people have sought to leave Scotland, and that its problems are rather different from those of other parts of the UK.
The hon. Gentleman makes a serious point, and one thing that it will be sensible to analyse, whether under the Government’s points-based system or ours, is the impact that it would have in different nations, regions and areas of the UK. That seems perfectly sensible, and of course we would do that.
I would not like to move on from the House of Lords report without our dealing with the matter that the hon. Member for Hertsmere (Mr. Clappison) raised. The report does conclude, in paragraph 69, that
“we found no systematic empirical evidence to suggest that net immigration creates significant dynamic benefits for the resident population in the UK.”
However, further on, the report mentions the macro-economic impact—perhaps the connection was not realised. It cites Professor Steve Nickell as saying that immigration may reduce the equilibrium rate of unemployment
“if, for example, immigrant workers are more flexible and reduce the extent of skill mismatch, are more elastic suppliers of labour with higher levels of motivation and reliability…This effect may, however, decrease over very long periods of time as migrants become more like the native population”.
It seems to me that the report contains a lot of sensible material, but has not absorbed the key aspect of the dynamic potential benefits. Perhaps the hon. Gentleman underestimates that.
Order. Before the hon. Gentleman responds, I appreciate that these are complicated, detailed and interesting matters, but interventions appear to be getting longer and longer. A number of hon. Members are seeking to catch my eye and will be disappointed if we take up too much more time, on interventions in particular.
The way to stop that, Mr. Deputy Speaker, is for me to be more ruthless when it comes to refusing interventions.
In the past 10 minutes, I have come to realise that I am much more comfortable with the House of Lords report than are those who want to criticise what I am saying. We all agree that that Committee is full of very distinguished economists: it looked at the evidence, and by and large I agree with its conclusions. Like other hon. Members, the hon. Member for Eastleigh (Chris Huhne) is trying to find the bits in the 1,000 pages of evidence that he agrees with. He says that those bits are right but that, for the rest of it, the House of Lords does not agree with him.
I am happy to say that I think that it is an extremely good report. It took evidence from many distinguished economists with all sorts of differing views, and arrived at a perfectly balanced set of conclusions. The Government should read the report seriously, and act on it. Their key policy recommendation is extremely close to the one that we have made.
The House of Lords report, like all the other evidence, shows that immigration can and does benefit this country in economic terms—it does the same in cultural terms, although we are not debating that today—but only if it is properly controlled. The Government are making rather overblown claims about the PBS to hide their long-term failure to control the immigration system. They have lost public confidence, and thereby caused unnecessary anxiety.
The House of Lords report makes the general economic point that I have outlined, but also refutes the Government’s claim that immigration has generated fiscal benefits. It makes the good point that estimates of the fiscal impacts are critically dependent on who counts as an immigrant, or a descendant of one. The report therefore renders invalid the Government’s claim in that respect.
I think that the House accepts that the Government’s policy on immigration is rather confused, and that they are having to hide behind rhetoric. One reason for that is that the quality of statistical information on which Ministers base their decisions is lamentable. That is simply not good enough for such a serious and important policy area. I suspect that the Minister agrees, as he has tried to institute changes to how statistics are collected and analysed. It is too little and too late, but better now than never.
The Statistics Commission told the House of Lords Committee that about £100 billion a year is distributed to the public sector using formulae that are directly affected by migration estimates. That is a colossal sum, and hugely important to local government in particular, but it is based on figures that are pretty dodgy.
Indeed, Mervyn King, the Governor of the Bank of England, told the Committee quite straightforwardly:
“We just do not know how big the population of the United Kingdom is.”
That makes it difficult for the Monetary Policy Committee to asses potential output, predict inflation and set interest rates.
I agree about the problems that rapid population changes pose for the funding formulae, but does the hon. Gentleman accept that a major element of those changes is migration within the UK? His constituency and mine are areas where many people who move in come from elsewhere in the UK. That causes just as much of a problem, in terms of the funding formulae, as does the arrival of people from outside the UK.
It certainly causes a problem, although such movements are easier to capture. There are general problems in areas with rapid population change, and especially rapid growth, but our constituencies would be able to cope if the national formulae were working properly.
The hon. Lady makes a face at that. I completely agree with her, as I interpret that as an acknowledgement that both our constituencies have been badly treated by the local government funding settlement. I thought that I would take the opportunity to get that in.
Boston in Lincolnshire is often cited. Regardless of any of the other problems there, the underlying point is that the local council is funded for a population of 58,000. It estimates that the actual population is 72,000. The hon. Lady is right: it does not matter where those people come from, but the people who are trying to run schools and other local services for a population of 72,000 with funding for 58,000 will have problems.
Part of the general condemnation of the lack of control of the immigration system stems from the fact that, as in Boston’s case, the problems are caused not by migration from other parts of the country, but migration from other parts of the world. Earlier this week, Trevor Phillips made that point very starkly and very well. He said:
“We can see on the ground that the systems of funding for local services are not keeping up with the rate of change.”
That is the key point. The key failure has been that the rate of change has been too fast. The Minister mentioned those who might want zero immigration. I am not one of those—the Conservative party is not in that camp—but we very firmly believe that the rate of change has been too fast in the past few years.
I asked the hon. Gentleman this yesterday in a different forum, but will he tell the House what exactly is the level of the cap that the Conservative party is suggesting?
The Minister has been making that point repeatedly, and it took particular chutzpah for him to do so again today in the same speech that he refused to commit himself about whether he would let in any restaurant chefs—or, if so, what number. He must take that decision in the next few months after proper analysis, yet he and the right hon. Gentleman are asking me to say what our cap would be in, I assume, 2010. Of course, we will need to do the analysis before then. It would be ridiculous to give a figure now.
The number will be substantially lower than the net figure of about 200,000, which has subsisted for the past five years. Since the Minister will not give us a figure for a small sector of the economy, about which he must decide in the next two months, he in particular has no right to ask questions about a number that will be two years out of date. That is the equivalent of asking people to give Budget figures two years beforehand.
If my hon. Friend will contain himself for a moment, let me say that the Government are, of course, keen to do that because they cannot answer the question—perhaps they will not answer it—about whether or not the points-based system is designed to reduce immigration to this country. The system is up and running now. Is it intended to reduce immigration or not? Was that the point that my hon. Friend was going to make?
Rather than getting so excited about whether there is a cap, would not it be better for the Minister and his colleagues who are reflecting his views from the Back Benches to consider the fact that, if there is no change in the Government’s policy, between now and 2031 we will have an extra 10 million people crammed into England, with the consequences that that will have for housing, the environment, infrastructure and so on?
That is why I am happy to say that we cannot carry on with the rate of change and that we will therefore set the cap so that that rate of change will be substantially less than now.
The hon. Member for Hertsmere (Mr. Clappison) has usefully highlighted the contribution that net immigration clearly makes to overall population growth. Since the hon. Member for Ashford (Damian Green) has now responded by saying that we must consider that, what does the Conservative party believe the optimal population of this country should be?
That is the same question again.
What is the answer?
I do not want to weary the House by saying this, but we will give the answer at the appropriate time, when we have to take the decision. The right hon. Gentleman, who is the Chairman of the Home Affairs Committee, knows perfectly well that it is at least possible and, in fact, quite likely that circumstances may change between now and 2010. Can he tell me how many of those who have come from the A8 countries over the past three or four years will go home between now and 2010, when a Conservative Government will be elected to take the decision? I do not suppose that he can; I know that I cannot at this stage, but we will be able to do so by 2010.
The hon. Gentleman’s case is built on an overall cap that is not broken down in any way. It is somewhat disingenuous to compare his position with that of my hon. Friend the Minister, because my hon. Friend is looking in detail at the economic needs of the country on a case-by-case basis. That is rather different from simply saying, “We want a certain number of immigrants overall in one particular year; it doesn’t matter what jobs they do or where they come from.”
The level of analysis that we provide will be the same as—or, I hope, better than—that which the Minister is providing. I should point out to those who do not follow the Minister’s announcements with quite the care that I do that he claimed that the cap would affect only 30 per cent. of those coming here. The last time he put out a press release on the subject, the figure was 20 per cent., so I find his figures particularly flexible on this issue. Indeed, I note that he reached the 30 per cent. figure by guessing the number of dependants who will accompany those who come here to work.
Will the hon. Gentleman give way?
No, I have given way enough, and others will want to contribute.
The Minister has been more candid about the challenges than his predecessors were. In March, he gave an interview to The Daily Telegraph, saying:
“Immigration is a vortex issue, it sucks in other things—such as schools, hospitals or housing…In the past, people didn’t think Labour took immigration seriously. My job is to say, ‘the Government has got the message’”.
I thought that that was a significant Freudian slip; his job is not necessarily to get the message or to do anything about it, but to say that the Government have got the message. That is the essence of the current Administration’s approach to all politics.
As we all know, there is a serious undertone to the issue of the success or failure of immigration policy. That seriousness was amply illustrated earlier this week in a poll that the BBC commissioned, which showed that 33 per cent. of the population strongly agree, and 26 per cent. tend to agree, with the statement that there are too many immigrants in Britain. I am sure that the Minister and everyone else in the House thinks that it is deeply worrying if the British people think like that. We have to ask whether the points-based system will make enough of an impact to turn those feelings around. It seems unarguably to be the case that the answer to that is no. We have discussed the cap, which is one of the things that we need to introduce, but within that we need to ensure that people who come to this country are economically beneficial. In that respect, we agree with the principles behind the points-based system, whatever the stresses and strains in it.
As I have said, the problem is whether the system is designed to reduce the overall numbers; the Minister has not answered that. I was glad that despite the chutzpah that he displayed in his speech, he did not repeat a point that he often makes, namely that the points-based system is like the Australian system. Of course it is not like the Australian system; that system starts with a limit, which Labour Members do not want, and then selects people within that total. That is a point for the hon. Member for Hendon (Mr. Dismore) to note. Everyone accepts that the Australians appear to be doing well and running a dynamic economy with an immigration system on which a British Conservative Government would closely base their own. Indeed, the Australian system is so successful that the Government like to claim that the points-based system is like the Australian system, but it simply is not.
One of the reasons why the points-based system is not enough was brought up by my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), who mentioned people who are not in education, employment or training. The Minister rightly pointed out the existence of the lump of labour fallacy; like him, I have been a consultant, and I have done enough economics to know that that is a fair point. Of course, if somebody comes to this country to do a job, it does not necessarily mean that someone else loses their job. However, the Minister is in a slightly confused position if, while saying that the lump of labour fallacy means that we should not worry about unskilled migrants coming here, he is specifically stopping any unskilled migration from the rest of the world outside the EU. By doing that, he is implicitly accepting that there must be some short and medium-term effect on the British labour market, and in particular on the unskilled and probably least well educated members of our labour force. That is clearly something that we need to address. He is right that the issue of training and skilling is important, but it is not enough to say that there is no impact as a result of immigration, and he must address that confusion.
Let me move on to two areas in which there are serious problems with the points-based system. The right hon. Member for Leicester, East, who chairs the Home Affairs Committee, told me that on Sunday he addressed 15,000 restaurateurs and restaurant workers about the problems experienced by the restaurant industry, so I shall pass over them, as I am sure that the Minister has been made well aware of them by many Labour Members, and is about to be made even more aware of them if the right hon. Gentleman catches your eye, Mr. Deputy Speaker.
It is worth dwelling on the transition—here, too, the Minister has had problems—from the highly skilled migrant programme. The Government have changed the rules retrospectively and, as some of us have for a long time warned would happen, the Minister has ended up in court, and recently lost a High Court case. The judge judged the changes “unfair”, and said that there was
“no good reason why those already on the scheme should not enjoy the benefits of it as originally offered to them.”
I have written to the Minister about that problem, as it was absurd to close the holes in the system by applying that level of effective retrospection to highly skilled migrants—precisely the sort of migrants, everyone in the House agrees, whom we want in the UK, and a very peculiar group to pick on when applying draconian policies.
For Members who have read every last bit of evidence from the House of Lords report, may I recommend the report by the Joint Committee on Human Rights of evidence given by the Minister? The exchange between the Earl of Onslow and the Minister about whether the changes entail breaking a contract is not only illuminating but entertaining. I have to tell the Minister with all good will that the Earl of Onslow got the better of him but, to be serious, we have broken a contract with people whom we brought into this country. We have changed the rules half way through their time in the UK by introducing the points-based system, so the Minister should take the opportunity to ponder on the problems that he has caused.
I was totally baffled by the Government’s stance. As my hon. Friend has said, those people were clearly great assets to this country, so can he throw any light on the reason why the Government were prepared to do that? Was it simply an attempt to gesture that they were trying to do something to get immigration under control, even though their fire was directed at exactly the wrong target?
Yes, I rather agree with that, and I see it in other groups, too—not just highly skilled migrants but interns who come here to do university courses. The Minister will be aware that various parts of the immigration world are in ferment, because the rules have been changed in ways that make things that have happened for years illegal or impractical. The root of the problem is the Minister’s recognition that the immigration system has been out of control for a long time, causing terrible problems for this country and, more particularly, for the Government. He is trying to be tough absolutely everywhere, but there are times when he should exercise his judgment more, and say, “In this area, we should not try to cut the numbers as much as possible. Perhaps we can take a more sensible approach.”
On that issue, I should like to draw the Minister’s attention to the position of working holidaymakers. Given the nature of my postbag, I am sure that his postbag is full of letters from people who have come to the UK, often doing responsible and highly skilled jobs as working holidaymakers. They have all been told that if they wish to reapply for their jobs they have to go back home, often to countries such as New Zealand.
I have a set of e-mails from a New Zealander who is working in Scotland, the hon. Member for Perth and North Perthshire (Pete Wishart) will be pleased to hear, who has been told not only that he has to return to New Zealand to apply for a job that he has done for many months but that the Home Office cannot provide him with any indication of how long it will take for him to receive clearance to get his job back. By any standards, that is nonsense. By definition, working holidaymakers are coming to Britain to work—to do something productive—and the Government are sending them all home and saying to them, “We can’t tell you whether or when you can come back to carry on doing the job that you have been doing for some time.” [Interruption.] The hon. Member for Bristol, East (Kerry McCarthy) is chuntering, but I can assure her that there are many more cases than the one that I mentioned.
I am slightly confused. My understanding of working holidaymakers is that they are in the UK to have a holiday and have a good time, and they happen to be doing jobs to fund that. Is the hon. Gentleman saying that they should be given precedence in access to this country over others who might add some benefit to the economy and ease skills shortages?
I am not saying that such people should be given precedence, but those who are in the country and working, who are in the middle of a programme and have lots of time left on the programme, are being told, “We want you to carry on doing your job, but to do so you have to travel back half way across the world and apply for it again, and we are not going to tell you whether you can come back or not.” That seems to be administrative nonsense.
I have taken up enough time. I am sure that the hon. Lady will have a chance to make other points later in the debate.
In some ways, the points-based system is a step forward, but there are individual issues and it is nothing like enough to meet the scale of the problems. It will not be a particularly radical change. There will be many individual problems, but more to the point, the correct feeling in the country that there is a lack of control will continue. That is why we need an annual limit and a genuinely radical change in our immigration system.
Over the past 40 or 50 years we have seen that immigration is a big political issue only when it is felt to be out of control. It is not one of the issues, such as the economy or the health service, that is for ever at the top of people’s political anxieties, but it is at present, because it has been out of control for so long. It is possible to run an immigration system that is firm and fair, which allows into Britain those who will benefit our economy, without allowing our public services to be put under intolerable pressure by unplanned numbers of new arrivals, and which lets in the right people and the right number of people. That is what a Conservative immigration policy will look like.
In the meantime the British people will have to put up with the current failing Labour policies. The points-based system is a mild improvement on what came before and can be used as a base for the more sensible policies that we would introduce. However, it is not a radical improvement. Indeed, for some groups it is already making life worse. Most importantly of all, it will not transform the public’s correct impression that immigration policy has been and remains one of the great failures of the Government.
It is always a pleasure to follow the hon. Member for Ashford (Damian Green). He spoke for 40 minutes but did not tell us precisely what the policy of the Conservative party would be in respect of immigration. On the central point of the Conservative party’s policy—the cap—he refuses to spell out in the House or outside exactly what numbers he is talking about. If the Conservative party wishes to play the numbers game, it should be specific about what those numbers would be. It is sad that he was not able to be specific.
We learned something new today: the Minister carefully studies the speeches of the hon. Member for Ashford, and the hon. Gentleman carefully studies the Minister’s speeches. Between them they have spoken for an hour and a half. Perhaps they should send each other e-mails to reduce the length of their speeches in the House. However, I am grateful to the Minister for giving way on so many occasions. I do not wish to pick on him because he was so generous, as was the hon. Gentleman. This is a short debate, so I shall not give way as much as they did if anyone seeks to intervene on me.
The Minister began, rightly, in a measured way by talking about the benefits of migration. Although the hon. Member for Ashford has a particular attachment to the House of Lords report, everyone in the House recognises that the United Kingdom is a great country because of the arrival of so many immigrants throughout its history, including the Asian community over the past 30 to 40 years and the Irish community over a longer period than that. As we heard from the Work Foundation report, which was published today, the arrival of high levels of immigration has benefited us and the economy, and that has been good for the country as a whole.
I shall deal with the continuing problem that we seem to have in the immigration debate and that has now gripped the tabloid media. I am thinking of the arrival of the central and eastern Europeans in the United Kingdom. That happened under our treaty obligations, into which we entered in good faith. We originally signed up to those obligations when we accepted the principle of freedom of movement, which happened when the right hon. Member for St. Albans was in the Cabinet. The Maastricht treaty and subsequent treaties all enabled this country to honour those commitments.
I should say that I am the right hon. Member not for St. Albans, but for Hitchin and Harpenden. When we signed the accession treaty relating to the eight accession countries of eastern Europe, we were not required to grant unlimited and immediate access rights; we had the right to restrain those for eight years. The Government chose not to operate that right. The right hon. Gentleman is slightly—unintentionally, of course—misleading the House in suggesting that the commitment was made under the Maastricht treaty. It was not.
I was not misleading the House in any way, even inadvertently. The process began when we joined the European Union. The basis of our membership of the EU was the freedom of movement, although of course there can be transitional arrangements. Last year, the Select Committee considered the issue in respect of Romania and Bulgaria and the Government took a different view, feeling that the restrictions should remain. That has not stopped people from those countries coming to this country on work permits or as self-employed people and contributing to our economy.
Let us put an end to the nonsense about central and eastern European migration to the United Kingdom. It has benefited our country, whether in a town such as Boston, or in Leicester, Ealing or Brent. My hon. Friend the Member for Brent, North (Barry Gardiner) is here and could tell us what a contribution those communities have made.
The hon. Member for Ashford was right: I will concentrate on the shortage of skilled chefs from south Asia. That is not because that is the only issue as far as the points-based system is concerned, but because it is current and relevant. The migration advisory committee will meet in the near future to consider the list that the Minister talked about. It is important that we should express to the Minister our constituents’ concerns and those of the catering industry as a whole about the real problems in that industry.
As the hon. Member for Ashford said, in the past week I was in Trafalgar square, where 15,000 members of the south Asian community—not only the Bangladeshi community, but people of Indian, Pakistani, Turkish and Chinese origin—took part in one of the largest demonstrations, if not the largest, of the south Asian community that I have seen in my 21 years in this House. About 8,000 people signed a petition, which was handed in at 10 Downing street. Meetings to discuss the issue have been held all over the country.
I want to pay tribute to the Minister. I know that he sometimes feels that the Home Affairs Committee and others in the House are a little harsh on this issue. He has listened to the community and been around the country to hear its concerns. I welcome what he has done: he has been to Tower Hamlets and to the constituency of my hon. Friend the Member for Hendon (Mr. Dismore); he was due to go to Keighley and Manchester only yesterday, but was prevented from doing so by the votes in the House. That kind of first-hand experience is extremely important as the Government decide how to fashion their view.
I am pleased to tell the House that the Home Affairs Committee has decided to hold a detailed inquiry into the points-based system. It will begin in June, and we shall launch it in the constituency of my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck), who is a member of the Committee. We will travel to India and Bangladesh and take evidence from those who have been and will be affected. At a time when we have a global economy, with a company such as Tata—an Indian company—buying Jaguar, the need for the interchange of technology has never been greater. It is therefore important that we consider how the system operates. The Government are right to take it in stages—not to announce everything immediately but to consider the impact on each of the tiers. I welcome the fact that the Minister has done that. This is the largest shake-up of immigration policy, and we should be very grateful for his enthusiasm and willingness to consult.
The Minister should note, though, the comments of stakeholders—groups such as the Immigration Law Practitioners Association, which has already said clearly to him and to others that it is concerned about the changes to the right of appeal. He will know that in all the speeches on immigration that I ever make, I say that when the Government make a decision through administrative means there should always be the right of appeal. It is absolutely vital that the right of appeal is retained, whether for visitor visas, of which 50 per cent. of appeals are overturned, or for work permits and on issues surrounding the points-based system. I know that the Minister will bear that in mind as he goes through the system and analyses whether it is effective.
The Minister also needs to consider how information is made available to employers. I fear that despite his ambitions in this area and the good work that he is suggesting should be done, many employers are unaware of what is happening. He chooses to advertise in mainstream newspapers, but I hope that he will look at the flourishing ethnic minority media and the regional press. He represents a seat in Birmingham. It is important that the Home Office take out its advertisements in newspapers such as The Birmingham Post and the newspapers of the Asian, South Asian, Chinese, Bangladeshi, Indian and Pakistani communities, so that it makes employers aware of precisely what it proposes as regards these fundamental issues.
Last week there was a lot of talk—the Minister mentioned Trevor Phillips and others—about the fact that it is 40 years since the speech made by Enoch Powell in which he predicted for our country rivers of blood. Birmingham, Leicester, Manchester, Leeds, Bradford—none of those great cities conformed to the prophecy that he described. That is a tribute to the people of our country—a wonderful, tolerant country that has absorbed a lot of people with different cultures and identities and worked with them in partnership. That is what makes our country so special.
The hon. Member for Ashford is right to say that we should be concerned about the BBC poll and the disappointing statistic that two thirds of the people interviewed thought that there were too many immigrants. Those issues should not be ignored. It is important that we should feel free, not only in this place but outside, to talk about immigration openly and transparently without letting anyone feel that they are being prevented from having those discussions, which are happening in every household in every community in the country.
The real problem is not about legal immigration or people trying to stop chefs coming into this country, but about dealing with illegal immigration. I know that the Government have made efforts on illegal immigration, but I am afraid that they have to do better. The hon. Member for Hertsmere (Mr. Clappison) and I recently met the head of the Border and Immigration Agency because I was concerned, as Chairman of the Home Affairs Committee, that we were not getting the information that was required to make us better informed before we made decisions in the course of our inquiries. I would imagine that every week, on a Monday morning, the Minister would get a report on the numbers of people who have come in and gone out, who have been deported, and who are illegal immigrants who have been arrested and are subject to due process. Yesterday, however, there were newspaper reports claiming that one in three police forces tells its officers not to arrest illegal immigrants but instead to give them directions to an immigration office.
We need to look at enforcement, which is really what concerns the people of this country. There are those who come here illegally and remain illegally, those who do not contribute to the economy, those who do not pay taxes and those who stay for many years because the administrative system allows cases to go on for ever. In an answer at Home Office questions this week, the Minister said that 90 per cent. of cases were dealt with in three months. I do not know where he got that statistic from, but—apart from the Minister, of course—my hon. Friend the Member for Brent, North and I probably have two of the biggest such case loads, and I am sorry to say that I do not think that 90 per cent. of the Minister’s cases on applications for indefinite leave are dealt with in three months. I do not find that, and I write at least 50 letters to the BIA every week. I always get the same reply: “We are considering this. It has been allocated to a case worker. They have to wait because there is no timetable.” That is not acceptable, and frankly, it causes resentment.
I want to deal with two issues that concern the restaurant and catering industry. In Britain, 2.4 per cent. of all employment is in restaurants and other catering establishments. The amount spent on the industry is estimated to be £37.6 billion. In 2006, the Guild of Bangladeshi Restaurateurs estimated that about 9,500 Indian and Bangladeshi restaurants and takeaways in the United Kingdom employ 72,000 people, with an annual turnover of about £3.2 billion. Although those figures are estimates, they show the enormous benefit of this industry to our economy. The industry says that it is facing an unprecedented crisis that, if unresolved, will decimate it. Unfortunately, the crisis has been created by the Government through the points-based system. Each year, the restaurant sector has to recruit several thousand new staff to work in its kitchens. Once they were able to turn to the subcontinent to find talented chefs, brought up with the spices and cooking methods that made a great curry, but now, sadly, they have to fill the vacancies from the EU. As my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) pointed out, those skills are simply not available in the EU.
As I have said before, we welcome the enlargement of the EU; I was the Minister for Europe when those discussions originally took place and I am delighted by their success, but to be perfectly frank, the skills needed are not here. They are in the subcontinent. There is no great demand for second-generation immigrants, whether they are Irish, Indian or whatever, to go into the profession unless there is a family necessity for them to do so. When I was younger, I was given the choice of becoming a doctor or a doctor, which is why I became a lawyer. The expectations and the aspirations of the immigrant community change.
We want to ensure that the restaurant industry is maintained in this country, especially in our major cities. There are some terrifically great restaurants, such as Amaya, The Red Fort and Madhu’s Brilliant in Southall, which are some of my favourites. When I last visited one of them, I was told that under the new rules they would lose about 90 per cent. of their chefs. That cannot be what the Home Office intended. The Bangladesh Catering Association estimates that there are now 27,500 vacancies in Bangladeshi-run restaurants. Whenever I hear from them, I find that they are even more concerned about what is proposed.
I should declare an interest, not as a lover of curry because I think that applies to everybody, but as the co-chairman of the Tiffin Cup, which encourages right hon. and hon. Members to nominate their favourite south Asian restaurant. We have a launch soon, and I hope that the Minister will come along to meet some of the chefs in person. It is not just the big restaurants in London that will be affected, but those on every single high street. If the Minister goes back to his constituency, as he does every Friday, and visits any of the south Asian restaurants in Hodge Hill, of which I am sure there are many, he will find that there is a shortage of chefs.
The number of immigration raids on south Asian restaurants worries me, and I have raised the matter with the Minister previously. Let us imagine a Friday night in Brick lane, with the diners sitting in the restaurants, when, suddenly, a whole lot of immigration officers and police officers come through the door. They raid the restaurants in the middle of their busiest period to find illegal immigrants. They go into the kitchen, and ask people to produce their passports and papers, as if everybody goes to work on their Oyster card, carrying their immigration file. There is no evidence of any huge illegality in those restaurants.
I have tabled a series of parliamentary questions to the Minister asking him, as a result of the raids that he has authorised—they are authorised by Ministers—how many people have been caught in any of the restaurants. I also asked whether, as well as Brick lane, he chooses to raid some of the bigger establishments, such as the Dorchester. I was at the Dorchester—I am telling hon. Members all my eating habits—last night at a charity awards event. There were at least 50 to 60 waiters there. Let us imagine that the Minister authorised the immigration services to raid the kitchens, and the ensuing disruption. I ask him to think again.
The Minister talks about the language of the kitchen and the necessity for English. The language of the kitchen in some of those restaurants is not English, but excellence, because people go to restaurants for excellent food. If the Minister does not believe me about the language of the kitchen and the fact that some of those great restaurants will lose their chefs, I issue him a challenge. He is good at accepting my challenges—indeed, so far, he has always done so. I challenge him to spend a day at one of the restaurants and experience the language of the kitchen.
Will my right hon. Friend give way?
My hon. Friend may be about to invite the Minister to Hendon, but I made my offer first.
My hon. Friend the Minister has already accepted my offer to visit Chinatown and spend some time in the kitchens of a Chinese restaurant.
I am pleased to hear that. Whatever the kitchen, we do not have a problem. I invite the Minister to come to hear the language of the kitchen, whether Chinese, Indian, Pakistani, Bangladeshi, Arab, Lebanese—I cannot go through the whole list. I simply encourage him to go somewhere to see what it is like.
The highly skilled migrant programme victory was the right decision. I do not say that simply because it was made by a distinguished High Court judge, Sir George Newman. I agree with the hon. Member for Ashford that retrospective law is not good law. I do not know whether the Government will appeal against the decision, but I have many constituents, as do several other hon. Members—I note that the hon. Member for New Forest, East (Dr. Lewis), who intervened earlier, had a similar problem with a constituent—who are affected.
The Minister conducted a meeting with me last year at which he heard concerns about the 49,000 people who came here on the highly skilled migrant programme. We understand why the Government have to intervene in immigration law—we live on a small island and we cannot have unlimited immigration—but such intervention should always be fair and just, and not retrospective. I have been a Member of Parliament for 21 years. Every year, there has been an immigration Bill and new immigration rules. I know that the Minister grasps the issues—more than others do, to be frank. The key is not to keep changing the law and creating uncertainty. Let us consider the consequences.
Like the hon. Member for Ashford, I accept the points-based system in principle, subject to the inquiry that the Select Committee will tackle. However, the Minister should know that, last year, a delegation went to see his predecessor, my right hon. Friend the Member for Harrow, East (Mr. McNulty), who invented the points-based system—I do not blame the Minister for that—and pointed out precisely what would happen. We now have a chance to re-examine the process. I hope very much that the Minister will use this debate in his deliberations. I recognise his sincerity and the integrity with which he has held office. However, I urge him not to pass laws just because they help the Government’s case with the tabloid press, but to pass good and just laws that will not have an effect on the very communities on whom we, the settled community, rely and whose livelihoods are now at stake.
I am pleased to follow the right hon. Member for Leicester, East (Keith Vaz). He made a number of good points and reminded the House, for the first time in this debate, of the rather shameful anniversary of Enoch Powell’s “rivers of blood” speech and of how, because of the tolerance in this country, he was comprehensively wrong about the results of the policy about which he was complaining. He was also right on enforcement and absolutely right to remind the Minister of the importance of rights of appeal and due process, which we on the Liberal Democrat Benches thoroughly support.
We broadly welcome the points-based immigration system, as it will simplify the mess of different immigration schemes, which is all to the good. We also hope—although we do not yet trust—that the system will dramatically improve what can only be described as the chaos of the current arrangements. The increased public concern over immigration reflects a lack of confidence that the Government know what they want, understand what they are doing or are delivering what people in this country need.
The most damning example of that chaos was the decision, made also by Ireland and Sweden, to allow immigration from the new member states of the European Union after 2004. The Liberal Democrats supported that decision on the basis of the Government’s projections that immigration would be 13,000 people a year. In other words, on the Government’s projections, immigration from the eight accession states would total some 52,000 to the end of last year. However, we now know that actual immigration has totalled 766,000.
The hon. Gentleman is a Member whom I respect on such issues, but I urge him not to play the numbers game. So what if 700,000 people have come here? Have they not contributed to our country?
We should always be careful about the numbers game, and the right hon. Gentleman is correct to make that point. However, when an important projection that, after all, has so many consequences, which I shall describe later, is so wrong, the House and the Government have to take that into account.
Frankly, the scale of the error is breathtaking. Actual immigration was 1,373 per cent. higher than the forecast. In years of scrutinising Government projections, which I have to own up to as a former economist—I am sorry that the hon. Member for Milton Keynes, South-West (Dr. Starkey) is not here, as she is a great expert in the effect that differences between large numbers can have—I cannot remember another projection, even for difficult objectives such as borrowing, that was wrong by such an order of magnitude. As we know, Christopher Columbus thought that he had discovered India, when in fact he was in America. By comparison with the Home Office, he was a practitioner of pinpoint navigation.
The hon. Gentleman makes a powerful point. Is not one of the problems with the points-based system that it applies only to non-EEA countries and that huge influxes from the European Union therefore distort everything that we are trying to achieve?
The chances of our having a huge influx from the European Union in normal years are minimal. However, I shall come to that point later, when the hon. Gentleman will perhaps want to intervene on me if he disagrees.
It is bizarre that even when it became clear that the estimates for EU immigration were wildly wrong, the Government did not take rapid countervailing measures. Clearly they could not do much to affect the flow from the accession states; nor would it have been right to do so. We in this country benefit enormously from the free movement of people in the European Union. Indeed, more British people live in other member states than other member states’ nationals live here. That might have something to do with the sunshine or with other factors. Whatever the reason, pulling up the drawbridge on other EU nationals could cause a wholesale repatriation of British pensioners from Spain and Portugal, for example, which would be disastrous for our own public services and would deprive many of our citizens of an option that they clearly prefer.
However, it would be wise to use immigration flows from non-EU countries, over which we have some control, as a balancing factor. The Government have not done that. Therefore, net immigration—immigration minus emigration from the UK—of non-British people trebled from fewer than 100,000 a year in the early 1990s to more than 300,000 in 2006. That is a large, completely unplanned and unforeseen increase.
As I have said, the British people are a tolerant lot. We have been open to waves of immigration on a greater scale throughout our history than almost any other European country, and we have benefited enormously from that. Far from being an island fastness, our easy access to the sea means that we have always been more open than many other countries. However, one thing that the British people will rightly not tolerate is incompetence from their Government, but that is what we have seen in the mismanagement of immigration over the past 10 years.
Nor can the official Opposition escape responsibility in this regard, as it was the last Conservative Government who took leave of their senses and began the process of dismantling exit controls. Perhaps they thought that we did not need to worry about anyone leaving. However, their action ignored the disastrous consequence that we were no longer able to check whether non-EU visitors had overstayed their visas. An essential element of control was lost, and that is why the Liberal Democrats have argued that the Government must get a grip on the management of immigration through a national border force—an idea that has now been taken up elsewhere in the House—and the reintroduction of exit controls.
The results of the recent mismanagement were detailed by the hon. Member for Ashford (Damian Green). They include local authorities not having the resources to tackle the needs of new communities, health authorities being unable to plan for the needs of their populations, and police services being stretched because population projections have been so far out. There have also been parts of the country in which particular trades have been hard hit. It is not easy for a trained brickie to find that their skills now earn only a fraction of what they got a couple of years ago. If the points-based system gives us a better grip on these random impacts of immigration, that will be all to the good, and a balancing factor between EU and non-EU immigration seems to be an essential part of that, alongside a greater effort to predict and respond to local impacts and to ensure that local authorities have the means to make the necessary adjustments.
The official Opposition have called for a national cap on immigration, which suggests that they have forgotten their other commitment, to the market economy. The needs of market economies are not always easy to forecast, and they are certainly impossible to plan. There has to be a flexibility, which a rigid cap would belie. With great respect to the right hon. Member for Hitchin and Harpenden (Mr. Lilley), who intervened to give us instruction on what it means to respect market economics and the price level, I have to tell him that when I was employing people in the City, there were occasions on which I needed to hire someone with particularly unusual skills that I could find only in New York or elsewhere. The idea that there was going to be a sudden market clearing because the price would go up was absolute nonsense, because it takes a number of years to train someone and to equip them with an economics PhD, let alone some of the other qualifications required. If the official Opposition’s policy had been operating at that time, the impact on my business could have been devastating. We must not use excessively blunt policy instruments to score cheap hits in the tabloid headlines.
In addition, it is not obvious to me that all parts of the country have the same needs. That is a point that the hon. Member for Perth and North Perthshire (Pete Wishart) quite rightly made. It is another reason why a national cap might well be inappropriate. For example, there is a strong desire north of the border for Scotland’s population to stop falling and, if anything, to rise. Scotland has more than one third of the UK’s land area, but less than 10 per cent. of our population. Exactly the opposite situation arises in my own region in the south-east, where the density of population now substantially exceeds that of the most densely populated country in Europe, the Netherlands.
Moreover, we have arguably reached the limits of natural sustainability—for example, in water resources. We have had recent examples of the impact of drought in the south-east, and the UK as a whole—though primarily the south of England—has less available water per person than most other European countries. London is, in fact, drier than Istanbul, and Waterwise has pointed out that the south-east of England has less water available per person than the Sudan or Syria.
It may be strictly outside the scope of this debate, Mr. Deputy Speaker, but surely we as policy makers must have some view about the sustainability of our own population—and I challenge the hon. Member for Ashford to answer that point. In turn, that must have some consequences for how the Government adjust the tap of non-EU immigration. I accept that the logic of ensuring that immigration is appropriate in different parts of the country may be to adjust the points system to take account of the area in which the proposed immigrant wants to settle, perhaps making visas conditional on particular travel-to-work areas in the first instance. One may not want to apply conditions subsequently, but it is a policy option that we should put on the table and discuss since the points-based system would allow for some variation in the points awarded according to the proposed area of work within the UK—[Interruption.] Does the hon. Member for Hertsmere (Mr. Clappison) wish to intervene?
The hon. Gentleman is putting forward a ridiculous policy. People cannot be admitted to this country on the basis of a restriction on where they move within it. As he well knows, EU law as well as English law—certainly in the long term—would prevent that.
I am not sure that EU law would apply in this case, as we are talking about—[Interruption.] No, if we are talking about employment rights, it is already possible to restrict people on the basis of skills, for example, so it would also be possible to restrict people on the basis of the area and the needs of the economy. I am putting this argument forward because, as we heard from the hon. Member for Perth and North Perthshire, there is very clear evidence of substantial differences in the needs of different parts of the UK. Perhaps we should put that issue on the table for discussion.
I may be able to help the hon. Gentleman a little. One feature of the Australian system is that the state Governments have control of immigration policy and recruit immigrants on the basis of their particular population needs and requirements. People are given access to specific states, but if they venture outside them to work, they are deemed to be illegal immigrants and returned.
I am interested to hear that point. There is clear evidence that there are substantial differences from one part of the country to another, and the Minister referred to a point put to him by people in Newcastle, suggesting that there was a desire to expand the population there.
I also want to raise the issue of the potential impact of managed immigration on existing immigrant communities. I firmly believe that proper management and control of immigration is in the interests of all UK residents, and perhaps particularly of those who have arrived most recently. As some of the economic evidence suggests, new entrants compete most vigorously with those who have most recently arrived.
Clearly, however, some recent immigrant communities want others to join them, and it is important to the objective of successfully integrating our existing immigrant communities that the Border and Immigration Agency is sensitive in the exercise of its powers. I am not convinced that going guns blazing into Chinese or Bangladeshi restaurants at the peak hours on Friday or Saturday nights when they are busiest in serving their customers qualifies as sensitivity. Immigrant communities run businesses across this country, not least in the catering trade, which make an enormous contribution to our national life. I understand that the most popular dish in this country is chicken tikka masala, which I had not discovered during any of my visits to India, so it is very much an English innovation. Although enforcement of the immigration rules is crucial and does involve inspections, I plead with Ministers to ensure that people are treated with respect and consideration for their businesses and their reputations.
It would be remiss of me not to mention the frankly appalling behaviour of the Government with regard to the highly skilled migrant programme. Whatever the need to change the rules, there is absolutely no excuse for retrospection. There is no excuse for moving the goalposts in the middle of the game. If families have come here, uprooting themselves in the expectation of a set of rules that will allow them eventually to become British citizens, it is deplorable for Ministers suddenly to decide that those promises no longer need to be honoured. We abhor retrospective legislation. The Government must honour their obligations to the 49,000 people who have come here under the scheme. Some may have to leave under the new points-based system giving preference to younger people, although they have been the subject of a favourable court judgment.
Immigration has brought enormous benefits to this country, economic, social and cultural. We must continue to be an open and tolerant society that looks out at the world with confidence, and not turn in on ourselves, fearing the phantoms of xenophobia. But if we are to sustain that vision, which has been so much a part of our own history and success, it must be on the basis of two strong conditions. The first is the integration of immigrant communities in our society on the basis of our common language and shared values, and the second is management of the system that controls our borders in the interests of all of us. On both those objectives, the Government have fallen down lamentably. The Liberal Democrats merely hope that the points-based immigration system will be a step towards the remedying of past failure.
I congratulate the Minister not only on listening over the past few weeks to representations from colleagues and from many of the communities who have bent his ear over the points that we have been discussing today, but on his sound grip of those aspects of his Department’s policy, and the way in which he has taken that policy further since he has been in office.
Public perception of immigration is at variance with the facts. Surveys show that people believe that 20 per cent. of the population are immigrants. According to the statistics, the figure is 4 per cent. Surveys show that people believe that the United Kingdom takes one quarter of the world’s asylum seekers. The true figure is not 25 per cent., but 2 per cent.
I welcome the points-based system. I welcome its clarity and its emphasis on youth, professional skills and qualifications, but I caution the Minister about the drive to ensure that low-skilled job vacancies are filled exclusively by European Union nationals. I believe the evidence shows that it is not only Britons who are increasingly unwilling to do those low-skilled jobs in this economy. The tremendously hard-working groups of Polish and other eastern European communities who came here in 2004, and whom the Government expected to fill those vacancies, are also increasingly competing for higher-paid employment.
When the hon. Member for Ashford (Damian Green) spoke of his party’s desire to introduce a cap on immigration, he was challenged to give a figure. I think we should analyse what this talk of a cap actually means. Either the number is determined by the UK economy’s needs—in which case it is not an absolute figure, as those needs themselves are dynamic and will change—or it is absolute and fixed, in which case it is simply political posturing and dogma, which will act against the best interests of the British people and the British economy.
The fact is that the hon. Member for Ashford is not prepared to put a figure on the cap, because he knows that to do so would expose him to arguments that would challenge him on the basis of the economy’s needs. He can have it one way or the other, but he cannot have it both ways.
I listened carefully to my hon. Friend the Minister’s remarks on tier 2 requirements and the five principles on which they would be based. He said that only “some command” of the English language will be required. We originally understood that under tier 2 requirements people must have English language skills up to GCSE grade C standard before coming to the UK. I welcome the fact that the Minister has moved from that position—I take it that that is what he has done—and that he is now listening to the different points being put.
Many eminent British citizens, some of whom have sat on these Benches, might struggle to say yes if asked whether they have GCSE grade C in English language. [Interruption.] I am asked to name them; although that is tempting, I shall not do so. I know that most Chinese chefs are trained from apprenticeship at a very young age, and I am sure that that is also typical in other nations’ catering industries, such as in the south Asian catering community, about which my right hon. Friend the Member for Leicester, East (Keith Vaz) spoke so much. Most of these apprentices have little academic training or achievements, and many will have left school early, if they attended it at all. Most Chinese chefs do not therefore have a high standard of written Chinese, let alone a GCSE level C standard in English language. I hope that my hon. Friend the Minister will carefully consider whether the need for English language should be maintained within the sector.
Does the hon. Gentleman not share the concern that I and a number of other Members have that even for people who do not require English to do their job, an inability to speak the language and to communicate with others in this country leaves them vulnerable to exploitation? Therefore, I have some concerns about what the hon. Gentleman has just proposed, and I urge the Minister to continue to hold to the idea that an element of English is necessary for individuals’ protection.
The hon. Lady makes a fair point; in fact, she makes the Minister’s point—I am glad that a Liberal Democrat Member is agreeing with Labour. It is, of course, desirable for people to have a level of English that enables them to integrate into our society and to avoid being exploited. However, I ask the Minister to look very carefully at the needs of the industry, and to set that level of English taking into account the context that there is a community that can support people as they come in and that those people will be able to pick up and learn the language as they progress. Many Members—highly educated though we may be—might find it very difficult if there were a requirement that, before we emigrated to China, in order to fulfil our job requirements we had to know Mandarin or Cantonese. We might find it a good deal easier if we were allowed to go to that country and pick up the language by ear. The Minister and his officials should reflect on that.
I turn to the subject of low-skilled workers, and our discussion of that with the Minister during his opening remarks. The Department seems to believe that cleaning jobs, sous-chef posts and more menial jobs than first or second chef can be filled by low-skilled labour and that that low-skilled labour must be supplied within the EU context, by eastern European citizens. In practice, an eastern European operating in a south-Asian or Chinese kitchen would need a working knowledge of one of the south-Asian or Chinese languages. That would imply that, far from being low-skilled, such a person would need to have a very high skill level; they would need the linguistic skill to operate in that environment. That is one of the reasons why the requirements of the tier need revisiting.
I want briefly to reinforce the remarks made by my right hon. Friend the Member for Leicester, East about the raids on Bangladeshi and Chinese restaurants, most notably last October’s raid in Chinatown, and about the press involvement in, and high public profile of, the raids. The Home Office is responsible not only for immigration control, but for race relations in this country—indeed, it has passed laws against incitement to racial hatred. I hope that it is conscious that the publicity generated by those raids has resulted in many cases of racial abuse against the communities involved, and that it will be mindful of the need to ensure racial harmony in any further attempts to secure, quite properly, immigration controls in this country through reasonable checks on the credentials of people who are working here.
This is not simply a debate about the catering industry, although it has sometimes seemed that way this afternoon. Therefore, I also want briefly to discuss the 38,450 work permits for IT jobs in the UK that were issued to non-EU residents last year—the figure is more than double that of five years ago—some 82 per cent. of which went to the Indian community. India’s IT exports have been one of the startling success stories of India’s economic performance in the past two decades. India’s software and business processing exports are valued at about $40 billion a year, and the UK’s imports of computer and information services were worth about £2.7 billion in 2006, the last full year for which figures are available. I am confident that the Minister will be conscious of the remarks made by Kamal Nath, the Indian Trade Minister, about the new points-based system, and its possible impact on the software industry and on IT executives who travel backwards and forwards between India and the UK.
The hon. Gentleman rightly mentions IT consultancy’s extraordinary impact on and importance to the Indian subcontinent. If one visits some of the outfits in Bangalore, one finds highly skilled people with passports and visas to work in the US or in the EU at the ready; they are ready to go. He has not yet mentioned the enormous adverse impact on the UK if we were to stop such people coming in; they are highly skilled, and they often offer a service that is simply unavailable elsewhere and that can get businesses, in particular, out of a hole. I hope that the Minister does not underestimate the importance to our economy of ensuring that such services can continue to be provided.
The hon. Gentleman is absolutely right. Of course, I have not yet said that because he pre-empted me, not because I was not going to. I am very glad that he took the words out of my mouth, as that will shorten my speech.
I want to quote the remarks of Kamal Nath, the Indian Trade Minister. He said:
“‘We are not asking for more permanent immigration…We are talking about people coming in for a month or so to integrate software systems.’ An Indian software company that could not send executives or technical experts into the UK for short periods would be unable to service…warranties or sell new systems that would require on-the-spot maintenance in the future.”
As the hon. Member for Eastleigh (Chris Huhne) has said, that would damage industry not only industry in that country but in this country. The Association of Technology Staffing Companies refers to the practice as “onshore offshoring”. It is a vital service to UK industry and I hope that the Minister will bear that in mind.
Finally, I want to talk about the visa bond that has been proposed many times in the past and, I am pleased to say, has always been rejected. I hope that it will be rejected again. I hope that fervently on points of principle as well as pragmatism.
I find the idea that a visa bond should be available to somebody when they are seeking entry clearance for this country obnoxious. An entry clearance officer, in considering whether to grant a visa for entry into this country, must be satisfied that on the balance of probability the applicant will comply with the visa conditions—that is, that they will return to their country of origin within six months, or within whatever period for which the visa is granted.
If we allowed a visa bond system, when our entry clearance officer doubted whether someone would comply with our visa conditions, that person could come to this country if they were rich and able to pay £5,000 or £10,000—whatever the figure might be—but they could not if they were poor. That sticks in my craw and I hope that it sticks in the Minister’s. I do not recognise it as anything like a Labour policy. If an entry clearance officer has genuine doubts that somebody will comply with our rules and regulations, a visa should be denied. When those doubts exist, people should not be able to enter the country if they are rich but not if they are poor.
If entry clearance officers were considering a situation in which they could grant admission, and thought, “I am not sure in this case. Perhaps I will offer to allow the person in if they put up a bond,” that might start out as an exception, but I am confident that it would soon erode the decision-making ability and discretion of the officer. It would become not an exception but a norm. It is much easier to guard one’s back as an entry clearance officer by imposing a bond. The Minister must resist that erosion of principle.
Many other Members wish to speak, Madam Deputy Speaker, so I shall draw my remarks to a premature close.
It is a pleasure to follow the sincere remarks of the hon. Member for Brent, North (Barry Gardiner), although I do not entirely agree with all of them. I commend the tone that the Minister set and his willingness to engage in debate and take interventions. I shall not go all the way towards consensus with him, although I agree with him on a number of points.
The first point on which I agree with the Minister is that the timing of the debate is fortuitous, because earlier this month we had the report of the House of Lords Select Committee on Economic Affairs. It seems that in some quarters there are difficulties with the report’s conclusion. I invite those with such difficulties to examine the first paragraph, which my hon. Friend the Member for Ashford (Damian Green) correctly quoted. It states that the House of Lords examined the economic case for migration and found that net immigration did not generate
“significant economic benefits for the existing UK population.”
We cannot pick and choose from the arguments that were made in the report, and it is difficult to get away from that overall conclusion.
For their part, the Government—including the Minister, perhaps bravely—put to the House of Lords their case that economic migration was an economic benefit, and the House of Lords rejected it. It rejected more or less every contention that the Minister put to it. He said that economic migration was of benefit to the country; the House of Lords said that it was not. The Government said that economic migration increased GDP; the House of Lords said—this is not from a newspaper but from the report itself—that that was based on
“an irrelevant and misleading criterion for assessing the economic impacts of immigration”.
The Government said that economic migration was needed to meet skills shortages; the House of Lords said:
“We do not support the general claims that net immigration is indispensable to fill labour and skills shortages.”
The Government said that economic migration was good for the Exchequer; the House of Lords said:
“We also question the Government’s claim that immigration has generated fiscal benefits.”
One could go through the whole list. The House of Lords categorically demolished the Government’s case that migration is an economic benefit to the country.
It is interesting that that has been the Government’s case throughout their time in office, irrespective of the other issues that I have always believed are very important, such as population growth, population pressures and pressure on housing and public services. The Government have said that whatever was happening in those respects, immigration was in the economic interests of the country. Against that background, I shall put some brief questions to the Minister in an endeavour to establish what is now the Government’s position.
First and foremost, does the Minister expect the points-based system to bring about a reduction in inward migration, at least in the category of migration that is subject to it? We need an answer to that. Does he expect inward migration to be higher or lower? To put the matter in a wider context, is he content—some elements of his speech indicated that he might be—with the Government’s official projection of net migration for the years to come, running at a level of 190,000 a year? That is the official projection of the Office for National Statistics, based on the work of the Government Actuary’s Department. As the House of Lords pointed out, that number is equivalent to a city the size of Milton Keynes arriving in the UK every year. The vast majority come to England, and, as I think the hon. Member for Eastleigh (Chris Huhne) well knows, the vast majority, or at least a majority, go to the south of England.
Is the Minister content with the Government’s projection that the population of the UK will grow from 60 million today to 71 million in 2031, with most of that growth taking place in England and the population of England growing from 51 million now to just over 60 million in 2031? Is he satisfied with that level of population growth and the implications that it has for the quality of life in this country? We need an answer—is he satisfied with that prospect? That would be equivalent to putting the existing populations of Scotland, Wales and Northern Ireland into England by 2031.
The Office for National Statistics has said that 69 per cent. of that population growth can be attributed, directly or indirectly, to net migration. Will the Minister say whether the points-based system will alter those projections, or will changing the way that people are selected mean that the projections will stay the same?
Ministers claim that the points-based system will be more selective, but the more important question is how many migrants are admitted. Migrant workers might hold national vocational qualifications, bachelors or masters degrees, or doctorates—or, for the benefit of the hon. Member for Eastleigh, they might even be bankers. Regardless of the qualifications that they hold, however, they still need a roof over their heads, and that has implications for the numbers of households formed every year.
It is frankly amazing that the Government have drawn no connection at all between migration policy, which is controlled by the Home Office, the population projections derived from that policy, and the housing policy that is implemented by another Department and which requires counties in the English regions to accommodate very substantial extra households. My county of Hertfordshire has been told to find room for about 80,000 more houses in the years leading up to 2021. In the same period, the borough of Hertsmere alone must find room for 5,000 new houses. I understand that that will be very difficult to accomplish without losing at least some of the green belt in the area.
A significant proportion of the projected housing demand will arise from net migration, some of it covered by the points-based system. The Government have had to raise their estimate of that demand three times already since they came to office. The most recent estimate is that one third of household demand will come from migration, but that is based on an old figure and may have to be revised upwards in light of more recent population predictions. The House of Lords Select Committee was told in evidence that more than 200 new households per day will be generated by net migration in years, and one estimate is that more than 260 houses will have to be built every day. Is the Minister satisfied with that prospect? Does he plan to change anything to deal with it? Will the points-based system make any difference?
In his opening remarks, the Minister referred briefly to the resident labour market test. In their written evidence to the House of Lords Committee, the Government said:
“Under the new Points-Based System, Resident Labour Market Test will only apply to jobs below a certain salary, since it is here that there is most public concern about the impacts of migrant labour on the domestic labour market”.
That evidence was submitted in the autumn of last year. When he winds up the debate, will the Minister say whether it is still the Government’s intention to remove the requirement for a resident labour market test above a certain level of income? If so, at what level of income will the test be removed? How does the policy sit with the Prime Minister’s talk of British jobs for British workers?
For its part, the House of Lords concluded that the resident labour market test was important for the employment opportunities of resident workers. It suggested that such a test should be properly enforced under the points-based system. I do not have as much confidence as I should like that the Government will be willing—or able—to implement that recommendation, especially given that we are still waiting to hear from them on the question of illegal workers. A year ago, Ministers discovered that workers were being employed illegally in the security industry, some of them guarding sensitive Government establishments. We have still to hear whether the Government have issued those workers with national insurance numbers. If the Minister knows that today, I ask him to give us an answer. One year on from first discovering that, how many of those workers were given national insurance numbers? Were any of them given numbers? Does the Minister know?
A number of detailed questions arise from the Government’s proposals, but the most important question is simply the effect that they will have on the Government’s projections for population. Will more or fewer people be admitted to this country? The Government have presided over an unparalleled period in our history of population growth and, particularly, inward migration. The hon. Member for Eastleigh mentioned migration history. There has never been a period in history of such sustained and concentrated inward migration as that under the 10 years of this Government. Never before has inward migration reached the level that it has reached under this Government today. Well over 500,000 people are inwardly migrating every year. There is no time in history when that has been the case. If the Minister is aware of such a time, perhaps he will tell us. [Interruption.] If the hon. Member for Eastleigh knows, I would welcome hearing from him. I believe that the evidence from the Office for National Statistics shows that there has been no such time in the past 30 years. I do not think that there has been any such time in history.
The hon. Gentleman may well be right about the past few decades, but he might be disregarding previous episodes in our history. Certainly, the Huguenot immigration to this country was proportionately far greater than anything that we have seen since. That is quite astonishing, given that the Huguenots were French speakers.
I think that the hon. Gentleman would find, if he did some research, that certainly the Huguenots came to this country, fleeing persecution, and made a distinctive contribution, but it was not on the scale of the migration that we have seen in recent times. None of the previous migrations—whether Jewish, Huguenot or any other group—caused migration at the level of the past 10 years. I believe that the Government have a commitment to migration. They believe that migration is good; they are ideologically committed to high migration; they believe that there is an economic case for it. That case has been demolished, but the Government continue with migration nevertheless. That has been reflected in the migration that they brought about as soon as they took office, with the increase in the number of work permits that were issued to workers from outside the European Union. Since then, they have continued with high migration, sometimes through policy errors, as in the case of the accession eight countries, but more through the issuing of work permits and other means.
The interesting point about work permits—I would appreciate the Minister’s answer on this—is that, even when it became apparent that Ministers had got their predictions completely wrong in 2004 and that far more people were coming from the accession eight countries than the Government had predicted, they still continued to issue work permits to workers from outside the European Union at an increasing rate.
I will give way to the Minister if he is prepared to explain why he did that.
I will reflect in my concluding remarks on the points that the hon. Gentleman makes, but I intervened because I was intellectually curious as much as anything else. The thrust of his argument points toward a prescription of either zero immigration or, at best, a zero net balance. Is that what he is proposing?
I have no problem with immigration, still less with immigrants, and I respect the hard work and the contribution that they make. When I refer to immigration, I am referring to the unprecedented, exceptionally high levels that the Government have caused or permitted to take place into the country over the past 10 years. I believe that the Government have a bias in favour of high migration. It will be for historians to determine the real policy reasons behind that. As I say, the economic rationale for the Government’s case has been demolished in the debate. The Government have failed to take into account the housing and all the other implications. That view is held by not just myself; my hon. Friend the Member for Ashford was quite right to say that there is widespread public concern, which Ministers from time to time acknowledge and try to address. How has that concern come about? It is because the public can see what the Government are doing.
I shall draw my remarks to a close by saying that Ministers can pay lip service to those public concerns as much as they like, they can use whatever rhetoric they want, and they can pretend that a big shake-up is taking place in the migration system and that they will address those concerns, but the real concern of people is that the Government are not listening to their legitimate concern about the very high immigration, and that concern will not be allayed until proper and effective measures are taken to control that high immigration. I commend the measures that my hon. Friend has proposed in the debate.
rose—
Order. There is less than an hour left for contributions from Back Benchers. I ask hon. Members to bear that in mind when making their speeches, so that more of them are successful in catching my eye.
I want primarily to speak on behalf of the Chinese community. I speak as the chair of the all-party Chinese in Britain group, and as a Member of Parliament representing a borough that has the biggest Chinese community in Britain. In particular, I want to speak on behalf of the hospitality trade. Traditionally, 51 per cent. of the Chinese work force have been employed in that line of work. From the very constructive meetings that we have had with the Minister, I think he is aware of the strength of feeling on the subject. However, businesses face considerable unease and fear for the future, which I hope that he can allay.
I can tell my hon. Friend that, as of yesterday, 600 submissions had been sent to the migration advisory committee from people in the industry. The submissions contained a large number of very moving stories, although obviously there is not time to refer to them now. I hope that he will be able to reschedule his revisit to Chinatown, which was due to take place last night, so that he can see for himself what I am talking about, and particularly the impact of tiers 2 and 3 on businesses. The fear is that businesses will not be able to recruit the staff from China and Hong Kong required to keep themselves going.
Of course, the issue is not just the points-based system; there are already recruitment problems, and it is feared that they will get worse. The Chinese community is high achieving, both academically and professionally, and those who are second or third generation do not want to work in the business. They are happy to be customers, but not employees. I can sympathise with that, having grown up in the hospitality industry. I was the third generation in that trade, and I was very happy to be able to go to university and qualify as a lawyer, rather than work in the kitchens and bars.
The problems are evidenced by the fact that the cost of staffing has increased. I am told that in the past six months alone wages have gone up by between 30 and 35 per cent. Head-hunting and poaching are becoming real problems as people try to find staff from an ever-diminishing work force. Families are being called in to help. Children’s education is being affected, as they are called in to help in the takeaways. Parents and grandparents are enlisted. In Doncaster, I heard at the Emperor restaurant, owned by Mr. Yip, that his 80-year-old grandfather is now doing the cooking. In Chinatown, Mrs. Lee, whom my hon. Friend the Minister knows, says that her 75-year-old uncle is now the wok chef in the Golden Dragon.
People are working increased hours, and that inevitably affects the quality and range of dishes available. Businesses have closed, including the Furama restaurant in Chinatown and Dragon Springs in Doncaster. We are not talking just about catering establishments; the Loon Fung supermarket in Gerrard street closed because it could not find staff. A 10-year-old business in Doncaster, a noodle factory owned by Mr. Chan, has also had to close down. That is partly owing to the pressure on irregular workers, and the raids that have already been referred to. The real concern is the complete lack of respect for the businesses, the customers and others involved. I will not discuss the issue in detail, because it has already been referred to, but what has not been mentioned is that on 18 October—the week after the big raid in Chinatown—the whole of Chinatown closed down for three hours as a protest at the way in which people had been treated during those raids. Unfortunately, such raids continue; there have been six such raids elsewhere in the past two months. That has a significant impact on businesses.
Relations with the Border and Immigration Agency have improved; there is better co-operation, and there is education and training for employers, but I am told that employers can never get through on the helpline number that they were told to use. There is no answer. They have been told that that is the way to get advice, but it simply does not work. I hope that my hon. Friend will be able to resolve that.
One of the key issues is that of irregular workers. Frankly, they will not be sent home; they will never be caught, and the sensible thing to do is to find a way of regularising them under tier 2, otherwise they will remain in limbo. Occupation 5434, cooks and chefs, is a very broad category, and as I said to my hon. Friend earlier, it has to be broken down much further, particularly given the needs of ethnic restaurants, because there are significant differences between the western catering trade and Chinese and south Asian restaurants. That is why workers from China and Hong Kong are needed.
There is not a single catering college in the United Kingdom that offers formal courses for Chinese chefs. There are eight main styles of cooking—each requires separate skills and specialised knowledge of ingredients, cooking methods and presentation—including Cantonese, Peking, Szechuan and dim sum. We have all tried them, and they all require special marinades and sauces—even the vegetable preparation involves specialist training.
The Chinese community resents the fact that takeaways are regarded as on a par with burger joints and fish and ship shops under the system. Takeaways, too, require highly trained chefs, and provide dozens of dishes. There is rather more to Chinese takeaway cooking than flipping burgers or deep-frying chips. The language barrier is an important consideration. Cantonese is the language of the kitchen, and the lack of experience, skill and cultural awareness of indigenous and EU workers is a barrier to their employment. They do not have the knowledge of the utensils and ingredients, let alone the knowledge of what to do with them and which cooking methods to use. I saw for myself the special high-heat naked flame cookers specially imported from Hong Kong—they are like volcanoes. The kitchens have tried to use indigenous and EU staff, but that has simply not worked out: the work is unpopular, and the staff cannot stick it. The language barrier imposes physical demands in a pressurised environment.
Formal qualifications are not required to become a Chinese chef, but we should remember that in the indigenous population, only 26 per cent. of cooks and chefs have level 3 NVQ or above. The apprenticeship for Chinese cooking is long, and begins at the age of 15 or 16. The best guide to skills is references, experience and ability in practice, and that must be reflected in the system. Recruits from Hong Kong and China do not speak English. I have heard an apocryphal story that there are more people in China who speak English than in England, but the fact that Chinese chefs cannot speak English. However, they must be able to speak Chinese in the restaurants for health and safety and efficiency reasons. Indeed, most indigenous chefs do not have grade C GCSE English, so I am pleased that my hon. Friend the Minister is looking at that in more detail. There must be a relaxation of the rules on language. The best answer is to allow people to learn English when they are here, through the total immersion system of language learning, and test them when they try to renew their permit; otherwise the requirement will impose an insurmountable obstacle to recruitment.
Last night, I visited Chinatown, not just to have a meal, although I was pleased to do so, but to meet chefs and talk to staff. I visited the Golden Dragon in Gerrard street—an excellent restaurant; I will give it a plug—to see the differences between Chinese and western restaurants. I very much appreciate those differences, given my background in the trade, and I was surprised by how different that restaurant was. I met Mr. Wong, the manager, who said the restaurant serves 500 covers a day, although I think that that is probably an underestimate. Some 50 per cent. of the restaurant’s customers are Chinese, and it employs 15 waiters, two supervisors and two managers front of house. They all have to speak Cantonese, Mandarin and English. Mr. Wong is originally from Hong Kong, and has worked in the restaurant business in the UK for 30 years, 10 of them as manager of the Golden Dragon. He was worried about the impact of the new rules and their enforcement, as were many other restaurateurs whom I met last night.
Most interesting of all was my visit to the kitchens, where I met the head chef, Mr. S. H. Wong—no relation—who has no English to speak of, so I had to speak to him through an interpreter. He has 40 years’ experience in catering, and his apprenticeship in Hong Kong lasted five years. He had to do a further five years’ on-the-job training before he could be considered for the position of head chef, and he told me that he was still learning. He was hired from Hong Kong seven years ago, and he has worked in China and the Philippines. He had no problem obtaining a work permit, and has permanent residency status. However, as things are currently configured, the chances are that he would not qualify to come here under the points-based system. He is an expert in Cantonese cooking, but he said that he can only do “a little bit” of Szechuan cooking, which makes the point about the differences in cuisine. Indeed, the restaurant employs a different chef to make dim sum. There are 100 dishes on the menu that Mr. Wong has to be able to make, and he mixes marinades and sauces from his own ingredients, making them from scratch. He is in charge of a staff of 20 in the kitchen. He said he is four or five short—he cannot find the right number of people—so the staff have to work harder and longer hours.
I watched what I can only describe as a military operation. There was no shouting in the kitchen, and everyone was quietly getting on with their work—the only noise was the cooking sounds in the incredible heat. There was an incredible degree of organisation under Mr. Wong’s control, and it was very different from trying to cook a Chinese meal at home or the pastiches one sometimes find in western restaurants. Mr. Wong insists that his staff speak Cantonese, which is the language of the Chinese kitchen. He said that it would create confusion and be very dangerous from a health and safety point of view if people did not speak Chinese. His staff are mainly from Hong Kong—some are from China—with little or no English. He says that without basic communication in Chinese, it would be difficult to create a 10-course banquet, which is a team effort and requires maximum co-ordination. The orders from the restaurant are written in Chinese. The suppliers from whom he buys his ingredients use Cantonese as their language. He is a hard-working member of our community but would probably not qualify under the present system.
The customers expect authenticity. They expect to see Chinese staff in a Chinese restaurant. They want the quality, variety and distinctive Chinese character of the cuisine, which would be significantly under threat without migrant chefs, and the quality would suffer. The techniques and ingredients are important, but the range and methods of cooking distinguish one chef from another. The erosion of that distinctive character would inevitably result in a reduction in quality and impact on the business.
There must be a common-sense approach. We must recognise the serious problem of recruitment and regularise existing staff. The points-based system must allow some flexibility with respect to experience, qualifications and the language requirement, otherwise we will see our popular Chinese takeaways and restaurants across the country closing down. When people cannot get their favourite meal, or they see the range and quality in decline, my hon. Friend will get the blame. Irrespective of what people say about immigration numbers, if one asks them whether they want their local takeaway or restaurant to close down as a consequence of clamping down on immigration, they would probably all say no.
I had wanted to make one or two quick points on human rights as Chairman of the Select Committee, to follow up concerns about my hon. Friend’s evidence to us recently, but I shall have to write to him about that. I shall simply say, in relation to the highly skilled migrants programme, “We told you so”, and I hope we do not see those problems repeated.
Finally, an agency in Edgware which hires au pairs would like to know when tier 5 is to start, which countries it can recruit from, and how the scheme will affect au pairs’ free time and pocket money, bearing in mind that they are outside the existing tax, national insurance and minimum wage arrangements.
That is a little tailpiece added on at the end, but my main plea is that we should get real and use some common sense in the way that we approach our ethnic restaurants. We all enjoy Chinese and south Asian food, and if there are no changes or common sense, we will see those restaurants closing down, with a real impact on the wonderful variety of cuisine that we have in our country. The diversity will be lost and our regular Friday or Saturday night’s enjoyment will be spoiled. I do not want my hon. Friend to get the blame for that, and I am sure he does not want that either. I look forward to his coming down to Chinatown and seeing what I saw last night.
It is a pleasure to follow the hon. Member for Hendon (Mr. Dismore), who speaks with great knowledge about Chinese restaurants. He mentioned in passing that one of the problems, as he saw it, was that the pay of people working in Chinese restaurants had gone up by 35 per cent. I can see that that may not be welcomed by the employers, but I am rather surprised that on the Labour Back Benches it is considered deplorable that people in Chinese restaurants are seeing their pay go up to a level better reflecting that of the rest of the economy.
One distinctive feature of policy under the Government is that it is usually designed to create an impression, which is often very different from the effect that it is supposed to have on the reality. Nothing could better reflect that than the points-based system—the Australian-like points-based system to which the Government often refer—which is presented as though it will severely restrict immigration into this country. If that is its intention, could the Minister tell us his broad estimate of the effect that it will have on the level of net immigration into this country? Is that the Government’s intention? Is the policy in line with the arguments that they use to justify the large-scale immigration that we have had since 1997?
The Government use two kinds of arguments to justify that mass immigration. The first set of arguments imply that the economic benefits resulting from immigration are proportionate to the number of people coming into the country to work. Their argument, for example, that it contributes to the gross domestic product implies that the more people who come, the more the contribution to the GDP. The argument that there is a net contribution to the budget of the country implies that the more people coming in, the greater the net benefit for the rest of us. The argument that immigrants will be paying for our pensions implies that the more who come, the higher our pensions will be. Clearly, the implication is that we should not restrict immigration and that we should, in the words of a Home Office document, encourage, sustain and increase the level of lawful immigration into this country. The implication is that there should be no case for using a points-based system, or any other, to reduce immigration. I shall come back shortly to those specific arguments and how they have been demolished by the House of Lords report.
Another set of arguments implies that there is a finite need for immigration. I am thinking particularly of the argument that there are shortages of certain categories of employee. That is relevant and could, at least in theory, justify the Government’s proposals.
However, initially I want to discuss the first set of arguments—that net immigration adds £6 billion to the gross domestic product every year. The way in which the Government normally present the issue is to say that immigrants contribute £6 billion to the economy every year. The implication is that, generously, immigrants are giving us £6 billion, from which the rest of us benefit. That is a very false impression, because the Government are giving the gross figure. They do not say to us that immigrants, as well as producing added value worth £6 billion, expect—quite reasonably, in my view—to be paid for their work. They are paid a value that in the national income statistics shows up as exactly equal, at £6 billion.
According to how these things are calculated, those immigrants will consume, or remit to their home countries, exactly what they earn—£6 billion. So their net contribution to the economy is zero. Just like all of us, they put in what they get out. None of us gives things to other people for free; we expect to be paid for them. We do not make other people better off by making the economy a bit bigger by being here. Unless and until the Government are prepared to recognise that people are consumers as well as producers, they will not make much sense.
Is the right hon. Gentleman not forgetting the element of profit in the income measure? That could stay within the UK and would be attributed to other people.
I would have thought that the hon. Gentleman was a good enough economist to know that value added equals income equals consumption. There is not some loss by profit; if the people are earning profits, that is an income and they will consume it.
It is not an income to them.
Well, if they are not earning the profit, someone else is getting the profit from employing people, and they could employ other people instead.
indicated dissent.
If the hon. Gentleman is saying that a marginal element of the £6 billion is a net contribution that has somehow been given to us, let us cut the figure down to that small part of the £6 billion.
The House of Lords Committee rightly demolished the argument that I mentioned—the fiscal contribution argument and the pensions argument. No one could do that more authoritatively than Lord Adair Turner, the Government’s own adviser on the subject. He submitted a paper to the Committee, as well as being a member of it.
I had this exchange with the hon. Member for Ashford (Damian Green) earlier. The right hon. Gentleman is focusing on the House of Lords report. Has he seen today’s report from the Work Foundation, which says the opposite of what the House of Lords said?
No, I have not, but I will read it with great interest in due course. I doubt whether it is as authoritative or broadly based as the one produced by the House of Lords.
The shortages argument is plausible. It implies that we want a fixed number of people, should work out who they are and let them in, and that will be fine. Several years ago, Tony Blair, while Prime Minister, said that there were 600,000 vacancies in this country and that we needed net immigration to fill them. Since then, we have had several million people come into this country, and we still have 600,000 vacancies. Why? Because immigrants are not just producers but consumers—they consume as much as they produce. The essence of the fallacy on which the Government rely is exactly the same as the “lump of labour” fallacy that the British National party relies on when it says that immigrants take British jobs, implying that there is a fixed amount of work to be done and a fixed number of jobs, and that immigrants take them and therefore render the domestic population unemployed. That is a fallacy, and the Government recognise that. However, by the same token it is a fallacy to assume that when immigrants come into this country they will fill those jobs without creating an additional demand for more jobs, as all the evidence suggests that they have over time.
Another fallacy behind the “shortage” argument to which I drew the Minister’s attention—in his agreeable way, he simply accepted it even though it entirely demolished his own argument—is that in a free and flexible market, where the value of each skill is allowed to reach its market-clearing level, there will not be a shortage, because the market-clearing level is by definition the level of pay, salary or remuneration that equates demand and supply with that level of skill. For a while, we held down the value of nurses’ pay below the market-clearing level, and we had to fill the resulting shortage from abroad. When we started paying nurses a more realistic amount—as I had long urged that we should—we found that we did not have any intrinsic shortage, and indeed had a surplus. However, that has not stopped us in the meantime importing 60,000 nurses from sub-Saharan Africa at a time when the Government’s official policy was not to recruit any nurses from Africa at all. If we maintain pay below the market-clearing level, we have to rely on sources of supply from outside on an ongoing basis, and at the same time we fail to give employers or employees the incentive to acquire those skills domestically. That is one of the powerful arguments that the House of Lords uses when it says that
“there is a clear danger that immigration has some adverse impact on training…offered to British workers”.
Let me focus on the essential feature of this points-based system. The Government present it as a system of control, so how will they actually use it? We already know that, because they have introduced a points-based system—the highly skilled migrant programme. That was an innovation, because up until that point someone could come to this country with a work permit only if they had an offer of a job. In 2002, the Government set the level of points that were required for someone to come to this country under that programme looking for a job. It so happened that they initially set the level of qualifications required to get sufficient points to be allowed in at a level that led to very few people applying. Did they say, “Oh, that’s fine—there aren’t many people with the qualifications that we think are necessary, so we’ll just accept that that is the small number who are going to come here?” No; in June 2004, they promptly reduced the number of points required and reduced the skill level needed—still calling it the highly skilled migrant programme—and a year later they had been totally swamped by the numbers coming in under that programme. We must therefore have no expectation that in practice the Government will use this as a method of control.
Is there, therefore, no need for any immigration? No; there are certain categories of skill which by definition we do not have in this country and cannot simply acquire by offering a certain sum of money or making a certain training programme available. Above all, they are job-specific and firm-specific skills. A company such as IBM may have a specific accounting procedure, and when it is setting up a process here it will want to bring in its accountancy staff to set it up and train people to run it. After five or 10 years, they will probably go home again. Another firm, such as Nissan, might be setting up a factory and has its own way of running it. Initially its people will be brought in to set it up, train the indigenous people, transfer those skills, and then return home. That was the primary source of work permits until 1997. They were issued to those with firm, specific skills to bring to this country. We will always need that flow, and it is usually a two-way one in the long run. The suggestion, however, that skills that British people have, could acquire more of and should be trained to acquire more of should be provided by importing cheap labour from abroad is a fallacy that underlies the Government’s programme, meaning that it will not be used to control immigration but to maintain an unacceptably and unnecessarily high level of mass immigration into this country.
The Minister began his opening remarks by saying that his grandparents were immigrants to this country. I can go one better, as the daughter of an immigrant to this country who has returned to live in Ireland, although he is visiting at the moment. Perhaps I can embarrass him by saying that he joined in the toast to St. George’s day in the Strangers’ Bar last night, although that may have more to do with his fondness for a pint than any great patriotic fervour for the country he made his home for 40 years. Like my hon. Friend the Member for Hendon (Mr. Dismore), I chose to become a lawyer and a politician, rather than follow in my father’s footsteps, although the fact that he spent the best part of 30 years working for Pickfords removal firm perhaps explains why I did not go down the same path as he did.
I join my hon. Friends in complimenting the Minister for his work on the new asylum model and on the points-based migration system. He is one of the Ministers I tend to ambush in the Division Lobby more often than any other, and I have always found him to be on top of his brief, very thoughtful and willing to listen to the concerns that I raise on behalf of individual constituents and with regard to general policy.
I have been lobbied by restaurant owners in Bristol from the Chinese community and from the Bangladeshi community in particular. I met 20 representatives of Bangladeshi restaurateurs in Chilli’s restaurant in Bristol city centre. As a result of our conversation, after about two hours discussing the impact that the changes might have on them, I ended up in the kitchen, being shown exactly how to prepare a vegetable jalfrezi. The fact that I was treated to a meal afterwards has no bearing at all on my sympathy for the issues put forward. If anyone wants to suggest that I might fill the skills shortage by choosing an alternative career, I would say that my role in the kitchen was limited to stirring the pan while the chef put the spices and vegetables in. But that did demonstrate to me that it is quite a complex operation; it is not the same as working in a fast food joint, or in an Italian restaurant. Most of us would be able to rustle up a pretty decent pasta dish, but I have never been able to produce the sort of dishes I have had in Indian or Chinese restaurants. It is quite a skilled occupation.
The points made to me by the Bangladeshi restaurant owners have, for the most part, been put by my hon. Friends, particularly my hon. Friend the Member for Hendon, but I would just like to quickly skim through some of them. They said that they are already having to close restaurants because of staff shortages, and several people there were former restaurant owners who said that because they could not get the staff they had had to go out of business.
They expressed concern about immigration raids at peak times. Although they accept that the Borders and Immigration Agency has a right to find out whether illegal working going on, they thought that it could be done more sensitively, perhaps at the close or start of business. Concern was also expressed that when illegal workers were detected in the restaurants, there was no follow-up, such as deportation or any action against the restaurant owners. Obviously, they were not advocating that action be taken against them, but what is the purpose of those raids if no action is taken afterwards?
We have to consider the question of whether there are skills shortages in certain sectors of the restaurant trade in the short to medium term, and then in the longer term. The point has been made that people from the Bangladeshi community, in particular, do not want to follow in their parents’ footsteps by going into the restaurant trade, but not everyone from those communities can become doctors. Not everyone has the academic ability or skills required to become a doctor, lawyer or engineer. Some people will have to go into non-professional jobs, and there is an issue about raising the status of working in the restaurant sector. We have heard that there are no Chinese catering courses at UK colleges. If such catering was more professionalised and attracted proper qualifications, people might be persuaded to go in for it. We should also consider how well people are paid. However, that is for the longer term.
In the short term, it has been suggested to me that restaurant owners would be happy to pay bonds—perhaps up to £10,000—for someone to come over and work for one or two years, on the understanding that they would forfeit the money if the people did not return at the end of the time. However, they are adamant that that is needed to alleviate the short-term shortages in the industry.
I welcome the fact that the migration advisory committee will consider the matter in some detail. I hope that it takes account of the representations that have been made in the House today. I repeat that I know that the Minister is always open to being influenced by his colleagues’ comments, and I hope that he will take some of the concerns on board.
I shall be brief because I know that another hon. Member wishes to speak.
We have heard much today about the immigration system and the points-based system. One of the interesting aspects of the latter is that, before I came into the Chamber, I checked whether I would be allowed in under the first tier. Unfortunately, I was rejected—perhaps Ministers devised the system on that basis. I wonder whether the Prime Minister would also have been rejected.
The serious point that I wish to make—it has already been mentioned—is what happens out there in the country, at least in Northamptonshire. Wellingborough is a wonderful town. It is multi-ethnic, with large populations of Hindus, Muslims, Jews and Sikhs. We all work together and the town is a harmonious place. Long may that continue. Our problem is that we have been designated an expansion area. Fifty-two thousand new homes will be built in north Northamptonshire in the next few years. It is estimated that 30 per cent. will be for migrant workers. Those migrant workers come mainly from the European Union, and that is the crux of the problem.
I run the “Listening to Wellingborough and Rushden” campaign and we conduct a constant tracking survey so that I have at least an idea of my constituents’ concerns. A year or so ago, immigration did not appear on the survey. It has gone from nowhere to being the No. 1 issue, and people are talking about migration from eastern Europe. They are worried about the pressure that it will put on our infrastructure as we increase the number of homes in the area.
One may ask how that translates into a genuine concern. Two weeks ago, we had a council by-election in Wellingborough and, for the first time, we had a British National party candidate. We worked hard and the turnout was 43 per cent.—greater than that for the local elections. We won the seat, which was Conservative in the first place, but our vote went down. Much more worryingly, the BNP finished second, scoring more than 15 per cent. of the votes and pushing Labour, which traditionally ran Wellingborough council, into third place.
It is the responsibility of all mainstream politicians to discuss the issue. I am grateful for the debate today and pleased that the Government chose to hold it. However, we must tackle the issue fairly and get our message across. In that election, the BNP traded on the message, “Look, those politicians have been in power all this time and they’re doing nothing about it.” They presented their case reasonably and it attracted reasonable people to vote for them. That is a genuine danger, which we need to tackle.
In the usual last few minutes available to us in the minority parties, I will try to put a couple of points for the Minister to address.
I would like him to acknowledge that there are different immigration and population requirements in the different parts of the constituent parts of the United Kingdom. The population and immigration requirements of the highlands of Scotland are quite distinct from those of London and south-east England. In my constituency we have depopulation. We find it difficult to attract immigrants to come and work. That is quite different from south-east England, which does attract migrants, and which is overheating, with a growing population.
Until a couple of years ago, Scotland had the fastest-falling population in all Europe. We had depopulation on a bigger scale than Ireland, any Mediterranean country or anywhere else in Europe, including eastern Europe. That has been reversed, but only temporarily, because of immigration from eastern Europe. Scotland’s population is due to rise to 5.13 million by 2013. However, that is the beginning and end of the good news, because the long-term trend, as found by the University of Strathclyde among others, is that we will continue with our historic population decline. Depopulation will start once again in 2030 and in the second part of the century Scotland’s population will fall below 5 million for the first time in a century.
It is clear that we need different, Scottish solutions for distinct Scottish problems. The first thing that we need to do is acknowledge that Scotland is different. If the Minister could just nod his head to indicate that he is aware that Scotland’s population and immigration issues are quite different, that would be a start. Once we have acknowledged that, let us try to find the solutions. My solution is clear and elegant: Scotland should have the powers to determine its own immigration requirements. Scotland should be the same as every other normal nation in the world. We could determine the solutions that are in the interests of the Scottish people and the strategies and approaches that would address our particular population and immigration problems.
I know that the Minister will not agree with that proposal, so I will park it to one side for now. Can the points-based system help Scotland address its distinct population and immigration requirements? I will encourage the Minister by agreeing that it can. We have adopted the Australian system in practically every respect other than one: the ability to allow inter-state development, under which the individual states of Australia can determine their immigration requirements. That is a central feature of the useful Australian model, which is called the state-specific migration mechanism. That mechanism is designed exclusively for use by areas of Australia that are suffering from population decline, which is very much the challenge that we in Scotland face. The state-specific migration mechanism operates by allowing state governments to assess applications on their own and to allow them to live and work in distinct Australian states. Even though applicants might not meet the general Australian criteria, they may meet the state criteria. That is how the points-based system could be changed to accommodate Scotland’s distinct requirements.
If the Government are not prepared to do that, perhaps they will listen to Sir Trevor Phillips, who recently came to Scotland to speak about the points-based system. He talked about tilting the entire arrangement to favour Scotland, so that any prospective applicant appearing before a board to assess whether they should become a citizen of the UK who was prepared to live and work in Scotland would be topped up with extra points. We need some 25,000 immigrants a year just to stand still in Scotland. If we do not get them, we will start to suffer from depopulation again, which will have an incredible impact on our economy and our nation’s demography, and leave Scotland behind. We need a distinct and different approach. If the Government are not prepared to consider how the points-based system could be applied differently across the constituent parts of the nation, for goodness’ sake allow the Scottish Parliament the powers and the opportunities to do so. That is the sensible solution.
I have one more quick point. I am concerned about the fresh talent scheme, which was the one thing that gave us a competitive advantage in the United Kingdom. The scheme allowed talented graduates to remain in Scotland for a number of years once they had finished their course. It was a fantastically successful policy, which was outlined by the previous so-called Labour-Liberal Executive, with 8,000 people going through its doors, benefiting the Scottish economy and enhancing their careers. That programme is now to be deleted, according to the guidelines from the Home Office, and subsumed into the tier 1 arrangements. Scotland will therefore lose its competitive advantage in recruiting those talents.
My very last, quick point is a plea to the Minister, to whom I know many representations have been made, about my other great interest, arts and culture. The Edinburgh fringe festival could suffer serious restrictions from the suggested ending of the free permit arrangements, which allow people to come to events such as the fringe without the need of a work permit. The introduction of sponsorship will affect some 3,000 people, and real solutions are required if non-EU performers are still to be able to come into the UK to work at the festival. If those solutions are not found, Edinburgh could lose its dominant position as the greatest, biggest and best international arts festival in the world. We have serious concerns about this matter, and I hope that the Minister will have something encouraging to say.
We have no problem with the principle of the points-based system, and there are solutions that the Minister could use if he had the political will to help us to deal with our specific requirements and needs. I hope that he will tell us that he acknowledges that and that he is prepared to look at these issues.
I welcome the fact that we have been able to have this debate. I said at the outset that I thought I would learn a great deal this afternoon, and I have not been disappointed. I have learned a great deal. I am glad that almost all the speakers started by recognising the extraordinary social and cultural contribution that newcomers to this country have made. I am glad that the House has put that issue beyond question. We have also had a helpful debate about the economics of the subject. I hope that we shall have a further opportunity to deconstruct the House of Lords report in more depth. The Government will have to publish their response to it quite soon; perhaps that will be our next big opportunity.
I appreciated the position that the hon. Member for Ashford (Damian Green) found himself in today. He has done a great deal to try to moderate the immigration policy that he inherited from the 2005 manifesto, but he is none the less a member of the party that he represents. However, he did a good job—if a little churlishly at the edges—of accepting that there are economic benefits to migration, although that was disputed a bit by some of his colleagues. He and I traded quotations and statistics, and I cannot resist the temptation to pop in just one more quotation. Somebody once said that
“it is true that immigration contributes to a higher GDP”.
Those were, of course, the words of the right hon. Member for Witney (Mr. Cameron), who is not in his place at the moment, in a speech that he made on this subject last year.
The hon. Member for Ashford accused me of a lack of radicalism before refusing to lay out his own policy in detail. I accept that the questions will come to him, rather than to me, about precisely where the beef is in his policy, and that is a subject that he will have to contend with. None the less, he also said something extremely significant that I have not heard him say before. Indeed, I have not heard it said on his side of the House in the past couple of years. He said that he welcomed the points system and called it a step forward. That was a delayed confession, but a welcome one none the less, and it was echoed by the hon. Member for Eastleigh (Chris Huhne) as well as by my right hon. Friend the Member for Leicester, East (Keith Vaz), which I appreciate.
My right hon. Friend’s words were echoed, to some extent, by my hon. Friend the Member for Bristol, East (Kerry McCarthy). They have both been extraordinary champions for the arguments that they put across this afternoon. I say to my right hon. Friend that I note the comments that have been made by the Immigration Law Practitioners Association and by the Bangladeshi Catering Association. I, too, have heard the estimates that they have made of the importance of the industries that they represent in this country. Those figures really are a testament to the hard work, entrepreneurialism and flair of the migrant communities in this country.
I listened especially carefully to my right hon. Friend’s arguments about the need to retain rights of appeal. He will know that that is a subject on which we have a couple of consultations running at the moment and, before we conclude our responses to those consultations, I will reflect carefully on the remarks that he has made this afternoon. I hope that he will also be happy to hear that I have ordered a review of the way in which we use and work with ethnic minority media to get across the messages about some of our reforms.
I have also listened carefully to what hon. Members have said about the manner and conduct of enforcement operations. I very much welcome what they had to say about the need for enforcement operations. It is an area on which I think there is a degree of consensus throughout the House. Alongside a policy of stronger border protection, it is vital to have a policy for preventing illegal immigration. That means preventing illegal working, because it is illegal jobs which cause illegal journeys. That is why we have doubled the budget for enforcement and why we have stepped up operations to deal with illegal working by 40 per cent. over the last year.
My right hon. Friend may not know this, but raids are not authorised by Ministers; they are conducted on the basis of independent operational judgments and based on available intelligence. I listened carefully to what he said, some of which was echoed by my hon. Friends the Members for Hendon (Mr. Dismore) and for Brent, North (Barry Gardiner), particularly the need to be sensitive in the way in which we conduct those operations. I will ensure that that message is conveyed to the regional directors responsible for overseeing them.
The hon. Member for Eastleigh started off with an argument about projections of movements from east Europe that was not new. I always say, when that argument is made, that although the Home Office may have written the cheque for the report—enabling the House to question the value for money that the Home Office achieved—it was a university of London report. Indeed, when the Immigration Minister at the time—my right hon. Friend who is now the Secretary of State for Defence—was questioned in the House about estimates for the future, he assiduously refused, on the record, to make any projections of his own.
I welcome some of the other remarks of the hon. Member for Eastleigh. I welcome his welcome for the points system and I am glad that he said that enforcement operations were important—I think he said that they were vital. The vote against the rises in visa fees that will help us double our enforcement work over the years to come was made before he became the Liberal Democrat spokesman. I hope that he will feel able to change that policy.
I want to pick up particularly on one point that the hon. Member for Eastleigh made. It is about the need for English as a foundation for integration. I absolutely concur with that analysis. When I spent three months going around the UK, talking to people all over the country about the values that they thought we needed to put at the heart of the immigration system, the need for everyone to be able to speak English was absolutely the first value that they thought was important.
I say to my hon. Friend the Member for Brent, North that I do not think that officially we have stated the standard of English that we believe will be important in tier 2. All I would say to the House this afternoon is that I do not think that we should see command of English as an issue simply in the context of the workplace. People come to this country and do not just work. While they are here, they are also members of British society. It is therefore important if we believe in an inclusive society that people are able to function as members of it. I think that some command of English would help, so we see the policy as important not just in the context of the points system but to those who want to make the UK their long-term home.
The second set of points that my hon. Friend the Member for Brent, North made concerned the definition of skilled work. That was also very much the substance of the remarks of my hon. Friend the Member for Hendon, who is a powerful voice for the Chinese community in this House. He will be pleased to know that I discussed with the Chinese Government in Beijing last week the subject that he raised this afternoon. I have discussed it too with the Chinese ambassador in London. I am very much looking forward to our field trip to Chinatown, which I hope can be reorganised quite soon.
My hon. Friend the Member for Hendon underlined the key point: how do we define a skilled job in the points system? The House will not know this, but my cooking is terrible and my grip on English is shaky enough, never mind my grasp of foreign languages, but if I had the ability to speak another language and to cook well, some in the House might accuse me of having some kind of skill. The question is how we recognise that skill in the points system. We cannot do it on the basis of some macroeconomic analysis; we need a more granular picture, which I hope the migration advisory committee will give us.
The hon. Member for Hertsmere (Mr. Clappison) made some points about numbers, and the hon. Member for Perth and North Perthshire (Pete Wishart) injected a bit of nuance into the issue. We must take a national approach to the question of numbers. Although there may be pressure in some parts of the country, in others there will be a need for more entrants, not just for the benefit of society but for the benefit of the economy.
Overall, we have had a good debate. It is important that we continue to debate these matters, not least the points made by—
It being Six o’clock, the motion lapsed without Question put.
Resolved,
That this House has considered the matter of a points-based immigration system.
Petition
Anti-Social Behaviour
Irchester, which is an important village in my constituency, has been suffering from antisocial behaviour for a while. I recently attended a protest meeting there. Despite all the excellent efforts of local councillors, there are still problems. I wish to present a petition, which reads as follows.
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland assembled.
The Humble Petition of the residents of Irchester ward and surrounding area.
Sheweth that the village of Irchester is suffering from anti-social behaviour from groups of youths, causing grave concern to the law abiding citizens of Irchester. They recognise the significant efforts of both Parish and Borough Councillors to solve the problem. However they believe the proposed location of the skate park and graffiti board on the village green is wholly inappropriate.
Wherefore your Petitioners pray that your Honourable House urges the Secretary of State for Communities and Local Government to liaise with the Borough of Wellingborough Council, Irchester Parish Council, Northamptonshire County Council and Northamptonshire Police to 1) relocate the proposed skate park and graffiti board to a more appropriate location and 2) draw up a plan to eradicate the anti-social behaviour.
And your Petitioners, as in duty bound, will ever pray, &c.
[P000176]
Basildon Golf Course
Motion made, and Question proposed, That this House do now adjourn.—[Alison Seabeck.]
I welcome the opportunity to raise the issue of Basildon golf course. As Members may know, the Friends of Basildon Golf Course has secured the right to a judicial review of the council’s decision to grant planning permission. I appreciate that that places a constraint on what I can say, and will also constrain the Minister’s reply. I assure the House that I will not trespass on the areas covered by the judicial review, and that all the information that I shall give is already in the public domain.
I thank the Friends of Basildon Golf Course for the tenacity it has shown in its campaign, and for the forensic and professional way in which it has conducted itself—particularly Mick and Janet Toomer and John Toplis, although I do not mean to overlook the contributions of many others. I am also indebted to the well-known local naturalist Rod Cole for information that he has supplied. The nearest that I have got to playing golf is crazy golf on holiday, and friends who have seen me putt on a crazy golf site might well be amused by my choice of debate this evening; but I intend to illustrate why the development or, more accurately, the destruction of Basildon golf course as we know it has incensed more people than just those who play golf.
Basildon golf course has been a municipal course since 1967, and before that had been cultivated land for hundreds of years. When Basildon development corporation created Basildon new town, it respected this valuable asset and planned its long-term protection by creating a golf course on the site, and placing covenants on the land so that it could only be used as a golf course or for farming or recreational purposes.
Much of the 164-acre site is located within a mile of Basildon town centre. It really is a green lung. It is popular with golfers, walkers and dog walkers, as well as those who just enjoy it and value its biodiversity. It would be possible to make an entire speech about that aspect alone, but I want to single out a few valuable nuggets of helpful information.
This is one of the few places in the new town where birds of prey are regularly seen. It is widely used by wild birds, including some rarities. We see badgers, weasels, foxes and grey squirrels, and even adders and lizards are known to inhabit the site. There are three scarce species of bumble bee—which is remarkable in south Essex—two of which are UK biodiversity action plan species, and no fewer than 28 species of butterfly are known to be on the site or immediately adjacent to it. However, even for those who do not share this enthusiasm for nature, it has to be said that it is a beautiful site and it has retained its beauty as the town has developed.
Basildon district council decided that the course should be leased for 99 years to a new company that is part of the Jack Barker golf group. There was real public concern about that, but the council is certainly within its rights to do that if it believes that it would be in the interests of Basildon residents. That decision on its own, although not universally welcomed, is not the reason why there has been such a huge public outcry. Personally, I would have preferred to have seen greater efforts made to keep this facility public and in the control of the council, and accountable to residents.
The origins of the decision to lease the course appear to be financial, as income from the course was not meeting council targets. Following a competitive bidding process, the Jack Barker golf group was awarded the lease, and I am told that at no stage in the process did the company mention the importation of landfill, let alone in the quantities that have since been agreed.
In September 2007, planning permission was given for 120,000 cu m of landfill to—it was claimed—“improve” the site. I have to admit that I am not an expert on golf courses, and I have no doubt that it is perfectly possible that the course could benefit from improvements. I would have no objection to some landfill being used for those improvements and for re-profiling, but not 120,000 cu m. Depending on the size of the lorries carrying the waste, there would be between 8,000 and 12,000 lorry loads of waste over a six-month period. I should add that this is only phase one of the development, and that the total plans are for 321,000 cu m of waste.
Aside from the huge amounts of traffic thundering through Basildon streets, we must wonder what the implications of this will be. I have tried to visualise what 120,000 cu m of waste actually looks like. If we think about a wall being built that is 1 m high and 1 m wide, we could rebuild Hadrian’s wall, or there could be a wall from Basildon to Westminster and back again with some left over. That is the scale of the dumping there will be on this site.
Local residents and the wider community are understandably concerned about the impact of the proposed development on local traffic congestion, particularly outside Basildon university hospital, which treats 77,000 people a year and has one of the busiest accident and emergency units in the country. They are also concerned about the noise, dust and finer particulates that will be generated. Fine particulates are potentially carcinogenic and can be hazardous to those with respiratory problems. Older residents also fear a recurrence of the flooding that occurred in the 1960s, when homes were flooded by water running off the golf course after a storm. These fears may be unfounded, but what concerns residents is that there does not appear to have been a full assessment of all the possible implications, so residents have been unable to obtain the reassurances they need. For a number of homes overlooking the golf course, the view of trees and open space will be lost forever. Let us imagine what it will be like to see, instead of those trees and that green space, a 24 ft high wall of inert waste. It is no wonder people that are distressed. Basildon university hospital is located on a very busy roundabout close to the golf course, alongside St. Luke’s hospice and Thurrock and Basildon college.
Despite council claims that it, local schools and the primary care trust were consulted over the plans, it appears that that was not the case. Therefore, given all these concerns raised by residents, how did this development and waste dumping get planning permission? It should be noted that there was not a unanimous decision. The only two opposition committee members—Labour councillors Lynda Gordon and Danny Nandandwar—were unconvinced by the arguments and felt that not all their concerns had been addressed. They voted against planning permission. One councillor, Frank Tomlin, after voting in favour of the plans had a letter published in the local paper, the Echo. Somewhat surprisingly, he stated:
“Your report incorrectly describes me as a supporter of the scheme”.
He went on to explain that he had
“no great enthusiasm for the proposed development”
and also said:
“It is highly likely that there will be unsightly heaps of material during the construction process. It is highly likely Jack Barker will make money from the development. If we could and did refuse planning permission because an applicant would gain financially, nothing would ever be built. The law does not allow us that option”.
Does he really believe that those opposing planning permission do so only because there will be a mess during construction and the company will make money? In fairness, I think that if councillors had seen some of the information that I have now seen, there would have been more questions asked and greater examination of the detail, and permission might well have been refused.
I have made it clear that I am unable to discuss some issues today because of the judicial review. However, I can tell the House that the Equality and Human Rights Commission is investigating whether an adequate assessment of the impact on those with disabilities has been carried out and that the local primary care trust is considering undertaking a full assessment of the health implications, particularly those arising from dust and finer particulates.
A key part of the planning process is consultation. The result of the consultation with Natural England was reported to the committee thus:
‘“No objections in terms of legally protected species, subject to mitigation measures, but recommends appropriate measures be put in place to protect populations of glowworms and their grassland habitat”.
However, Friends of Basildon Golf Course has obtained a full copy of Natural England’s letter to Basildon council dated 17 April 2007. Its first paragraph states:
“The application site lies close to Basildon Meadows Site of Special Scientific Interest (SSSI). Based on the information provided, Natural England has no objection to the proposed development on the basis of impacts on Basildon Meadows SSSI, subject to the proposal being carried out in strict accordance with the details of the application. The reason for this view is that we consider that this proposal in isolation will not have a significant effect on the interest features of Basildon Meadows SSSI. However, we are aware that this application is linked to the developer’s aspiration to develop a much larger area of the golf course. The impact of this larger scale of development, including the proposals within the current application, would be likely to result in significant adverse impacts upon Basildon Meadows SSSI. These impacts would include significant hydrological change as a result of landscaping and air pollution impacts caused by increased road traffic, therefore, based on the currently available information, Natural England would object to such proposals”.
I accept that it is legitimate for councillors not to have information on a subsequent development that is not before them at the time; every application has to be assessed on its own merits. However, Natural England’s submission refers to:
“The impact of this larger scale of development, including the proposals within the current application”.
Furthermore, on page 9 of the planning application it is stated:
“The application represents the first stage of proposals for the Golf Course and a subsequent application will follow for the remainder of the site”.
I therefore query whether it would have been appropriate for this information to be formally reported to the members of the development control committee.
Another consultee was Sport England, and the result of that consultation was reported to the committee thus:
“Whilst not a statutory consultation, support for the principle of the planning application.”
In subsequent correspondence, Friends of Basildon Golf Course learned that Sport England was supporting only the principle of a new clubhouse and the principle of a new driving range forming part of the facilities, and no more. It was not endorsing the detailed design, the precise location, the importation of landfill, the cutting down of trees or any other aspect of the environmental impact. Importantly, it was also not endorsing changes to the design of the course. Again, it would have been helpful if councillors had been given that information.
Shortly after the initial agreement to lease Basildon golf course to Jack Barker Golf Ltd for 99 years, the Conservative administration on Basildon council agreed changes to the local plan and the removal of what were considered to be restrictive guidelines. The rules calling on councillors to resist the building of large-scale clubhouses and to scrutinise closely the installation of driving ranges in the district have been jettisoned in the latest local plan. The council’s cabinet member for regeneration, Stephen Horgan, freely admitted that councillors had had Basildon golf course in mind when deciding to scrap the guidelines. He said:
“It would be a bit silly to give the contract to a company who want to redevelop the golf course and then produce a plan that would restrict what they could do there.”
One of the changes deletes the following commitment in the plan:
“Proposals for golf driving ranges will be closely scrutinised to ensure that they have a minimal effect on the visual and residential amenities of the area “.
That goes back to the 24 ft-high wall that I mentioned. Although changes to the plan were drafted, they were not ratified by the time the planning application was considered by the committee. Councillors who were making the planning decision were not told about the local plan or the issues it raised about how the proposals should be assessed.
I am also quite clear about the fact that councillors and the public were unaware of the extent of the dumping and the impact it would have. That is not surprising, given that some proposals were never put online as the files were said to be too big. In addition, the plans showing the contours of the height of the driving range—the range will be directly adjacent to a residential area—were not submitted to the council until 15 May. The closing date for consultation responses from the public and those affected by this proposal was 18 April. That is almost a full month before things were submitted to the council. So those people whose homes look out on to trees and a green area—they will now be faced by a 24 ft bank that holds a driving range with associated lights and so on—were not given any opportunity to object to the proposed height of the driving range.
A further issue of some confusion at the council—although I do not think it was the council’s fault—was whether the waste being dumped fell under the terms of a paragraph 19 exemption or whether a waste management licence would be needed. It was finally decided that a no licence was required because the waste would not be stored but would be dumped where it would be used, so no landfill tax applied.
I disagree with my local council from time to time, although at all times I try to be co-operative and helpful and to work in the interests of local residents. Even in this case, I wrote to the leader of the council, and met him, to point out a number of my concerns. I asked him to delay progress so that the issues could be further examined and fully investigated. I assured him that he would face no criticism from me—in fact, I told him that I would praise him for being willing to consider some serious issues. He refused.
I have concentrated on Basildon, but it is not the only place where such dumping goes on. My hon. Friend the Minister made a welcome commitment in response to a question from the hon. Member for Romford (Andrew Rosindell) when she announced that the Environment Agency will look into the dumping of waste and will consult on the subject.
I appreciate that because of the time scales involved, and because of the opportunity for new legislation, it might take some time before any new policy comes into effect. Nevertheless, action is needed and I urge that there be no unnecessary delays. May I ask my hon. Friend the Minister to ensure that such a consultation involves not only consultation with members of the public and others who have been asked to submit their views? It should be a proactive examination of all the issues involved. Will she ask the Environment Agency to visit those areas that have already seen such works, such as Risebridge in Romford, and Nottingham, to get a fuller picture of what such dumping really means?
I realise that the hon. Friend the Minister cannot answer for Local Government Ministers on the issues I have raised regarding the decision-making processes, but will she pass on my comments to the appropriate Minister, so that we can see whether the current guidelines give sufficient clarity and advice?
I appreciate that although my hon. Friend the Minister is responsible for many things, I cannot hold her responsible for the decisions of Basildon council. However, given that such dumping on such a level is becoming more widespread, I would be grateful if she was able to answer the following questions—it will be perfectly satisfactory if she writes to me. How many waste licences have been issued since 2005? Is it possible to identify how many and which were for golf courses? How many involved paragraph 19 exemptions? What are the monitoring arrangements for ensuring that the licences and exemptions are adhered to? It appears that some local authorities merely give the DEFRA hotline number. Surely the local authority has some responsibility, too. How many licences or paragraph 19 exemptions have been withdrawn either temporarily or permanently? If a developer is granted a licence or an exemption for one purpose, can they change the reason once it has been issued?
My next point might be an issue for the Treasury, but I am sure that the Chancellor will welcome the opportunity to close any loopholes. Has any estimate been made of the amount of landfill tax receipts that would be generated if just a quarter of the waste exempted from the tax was not exempt?
Basildon council’s intransigence on the issue means that the only option for local residents has been to raise their own money to fight the case through the courts. The fear is that unless the issues are widely publicised, the same thing will happen again and again. The Friends of Basildon Golf Course now has a network across the country and can offer advice and support.
I am grateful for the opportunity to raise the matter today. I will continue to work with and support my constituents in opposing these appalling, damaging plans. Basildon council’s decision is utterly incredible and incomprehensible. It is just plain wrong. I regret that poor decision making has been allowed to go this far, causing distress and expense to the residents and council tax payers of Basildon.
I congratulate my hon. Friend the Member for Basildon (Angela E. Smith) on securing this important debate and on the excellent way in which she has presented her case. It is clear that despite her other onerous duties in the House she takes seriously the concerns of her constituents. She has obviously given great support to the Friends of Basildon Golf Course in their campaign. I fear, however, that she will find my speech rather less spirited than her own. This is one of those occasions on which I can say very little directly about the case in hand, but must explain the context and processes that surround its consideration.
As my hon. Friend explained, the development of sites involving the importation of waste, such as the Basildon golf course, is controlled by both the planning system and the environmental permitting system. I understand that Basildon council did not require the planning application for the development to be accompanied by an environmental impact assessment. Clearly, her quarrel is with the council.
It is a fundamental principle of the planning system that each application must be decided on its individual planning merits following consultation, as my hon. Friend said, with those potentially affected. The decision on the suitability of a site for a particular development rests with the relevant planning authority or, on appeal, with the Secretary of State for Communities and Local Government. As my hon. Friend said, proceedings for a judicial review on the planning decision have been issued by solicitors acting on behalf of the protest group. As a result, I am sorry to say that it would not be appropriate for me to comment on individual planning issues at the site. I am unclear about the extent to which Basildon council consulted the county council. However, I understand that Essex county council has expressed disappointment that it was not fully consulted on whether the development should be considered as a county matter.
I have heard with concern what my hon. Friend said about the position of Natural England, and as the Minister with responsibility for biodiversity, I shall undertake to look into that further. For all the other reasons stated, I shall draw the matter to the attention of the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hartlepool (Mr. Wright), who has responsibility for housing and planning.
Waste recovery and disposal activities are governed by a system of permits designed to protect the environment and human health. European legislation provides member states with the discretion to provide for exemptions from the need to have a permit for recovery operations. My hon. Friend the Member for Basildon asked how much landfill tax could be raised if a quarter of the waste that is currently exempted from the tax were not exempt, but we aim to reduce the amount of waste going to landfill and encourage the bona fide reuse, recycling and recovery of waste wherever it is legitimately possible.
To that end, the Government make extensive use of exemptions in order to apply a light regulatory touch and to encourage low-risk recycling and recovery operations. When the deposit of waste constitutes recovery, golf courses and other landscaping developments can benefit from one of the exemptions currently provided for, which my hon. Friend now knows are called paragraph 19 exemptions, after the relevant part of the regulations from which they derive.
The exemptions are valid only if the works in question are carried out in accordance with planning legislation, and it is limited to the types and origin of wastes detailed in the regulations. It is required that the operation be registered with the Environment Agency. Registration of an exemption is a much simpler system than permitting and does not in itself require consultation. A notification of an exempt activity at the site in question was received by the Environment Agency on 19 December last year. From the information supplied, the Environment Agency is satisfied that the proposal meets the terms of the exemption.
My hon. Friend asked how many such exemptions there are. There are currently more than 2,700 paragraph 19 exemptions registered with the Environment Agency. An exemption allows waste to be used for a range of purposes, not just the landscaping of golf courses. They include noise screens for major roads, foundations for new housing developments and the repair of roads and tracks using waste. I think that she might have wondered how many of the exemptions are for golf courses, but I am afraid that I am unable to tell her.
My hon. Friend asked a number of questions about the monitoring and enforcement of exemptions. The Environment Agency has a duty to inspect any site being managed under an exemption, to ensure that the terms of that exemption are being adhered to. It is also responsible for responding to complaints or allegations of unlawful activity. If the purpose of the activity changes from what was originally registered and does not fit with the allowed purpose of the exemption, the developer is required to re-register the exemption with the Environment Agency.
My hon. Friend asked about paragraph 19 exemptions that have ceased to apply, and I can tell her that just three have been deregistered in the past year. She asked about developments at other golf courses, such as the one at Risebridge park. As a result of concerns raised by the hon. Member for Romford (Andrew Rosindell), I have asked the Environment Agency to look into the activities at that site. I have also been advised that Environment Agency staff in the Thames, north-east area are in the process of setting up workshops with the relevant local authorities to discuss how they can work in partnership with regard to golf course developments.
I believe that work has not yet started at Basildon golf course, but I want to give my hon. Friend an undertaking that, should the project proceed, I will ask the Environment Agency to monitor the site closely and report its findings to me. If the activities are not being carried out in accordance with the exemption criteria, or if pollution of the environment or any risk of harm to human health occurs, the Environment Agency will remove the exemption registration and require the developer to stop the activity or obtain an environmental permit. I am confident that the Environment Agency has sufficient powers and that it will use them to take appropriate enforcement action against any unlawful operators, or against those causing harm or pollution.
This important debate and other communications from hon. Members have highlighted widespread concerns about the sometimes inappropriate use of the paragraph 19 exemption for “sham” recovery to avoid the costs of landfilling. As a result of that and other issues connected with waste exemptions, a review of the exemptions regime is already well under way—something that my hon. Friend suggested should happen.
The minimisation of abuses of the system is a key priority for that review, as is the need to encourage genuinely low-risk and small-scale recycling and recovery operations. A consultation is due to be launched this summer, with a new scheme of exemptions being delivered in October next year. My hon. Friend may want to make some representations to that review.
As part of the review, we have drawn on evidence from the Environment Agency, and on its experience of regulating exemptions in England and Wales. We have also made an assessment of the risks that those activities pose. As a result, our proposals will set out that the paragraph 19 exemption for the use of waste for construction purposes must be tightened significantly. There is currently no quantity limit on the amount of waste that can be used under the exemption—and it is clear that quantity is one of my hon. Friend’s major concerns—but the proposals include the implementation of a very low quantity threshold for the exemption. Projects that are above the threshold—that group would clearly include the sort of operation that she described—will be required to operate under an environmental permit, with the additional regulatory controls that come with it.
I have much more to tell my hon. Friend, such as the fact that we have introduced a mandatory system of site waste management plans that will require those running construction, demolition and excavation projects to draw up plans to reduce the waste that they produce, and to manage properly its recovery and disposal. We have many actions in hand that we hope will contribute to preventing operations that may turn out to be scams. We very much appreciate that there needs to be a better interface between planning and the granting of environmental permits, and work is in hand to produce a protocol for use by planning authorities and the Environment Agency.
I conclude by thanking my hon. Friend for securing the debate. Although I am not able to consider the specific planning issues, I hope that I have been able to make it clear that the Government recognise the problems that are occurring in the sector. They can cause the great distress, which she highlighted on behalf of her constituents, about an amenity that is clearly much valued in her constituency. I hope that I have also made it clear that we are addressing those issues. Legislation is in place to protect both the environment and people, and we need to be sure that it is doing so effectively.
Question put and agreed to.
Adjourned accordingly at half-past Six o’clock.