That Helen Jones, Mr Frank Roy and Mr John Spellar be discharged from the Committee of Selection and Mr Alan Campbell, Mark Tami and David Wright be added. -(Mr Randall.)
The Secretary of State for International Development (Mr Andrew Mitchell): The new UK aid transparency guarantee will deliver a step change in the transparency of British aid. Under the guarantee, we will publish full and detailed information on our projects and policies, strengthen accessibility and feedback, and press international partners to follow our lead.
Andrew Selous: Hard-pressed British taxpayers will be pleased to have heard what my right hon. Friend has said, but could he tell us how transparency will be assured for the fairly large part of the British aid budget that is spent through the United Nations, the World Bank and international development charities?
Mr Mitchell: My hon. Friend is right about this, because there are some 44 international and multilateral aid agencies through which we spend British taxpayers' money. All of them are being looked at under the multilateral aid review, which we set up immediately after this Government took office. The review will report by the end of January next year and we will decide upon our spending allocations in accordance with the results that we are achieving, which will be examined by that review.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): Given the positive response to the annual report arising from the International Development (Reporting and Transparency) Act 2006, will the right hon. Gentleman use his influence to ensure that the report goes directly to Parliament and that we have an annual debate on the Floor of this House?
Mr Mitchell: The right hon. Gentleman has some credit for having masterminded and pioneered the Bill that became that Act through the House of Commons. He is right to underline the importance of the transparency that the Act ushered in and the importance of the House of Commons being able to discuss it, with Ministers being accountable to this House for that. So I can assure him that, through the usual channels, I will underline the point that he has made.
Malcolm Bruce (Gordon) (LD): The Select Committee on International Development warmly welcomes the Secretary of State's initiatives to make aid more transparent, and will co-operate with him and with Parliament to ensure that we give effective voice to that. Does he acknowledge that there are some concerns that ensuring that everything is transparent means that we might sacrifice longer-term, less measurable outcomes for shorter-term ones? Can he assure me and the Committee that that compromise will not undermine the effectiveness of British aid?
Mr Mitchell: As the Chairman of the Select Committee rightly says, transparency is about accountability not only to our own taxpayers in Britain, but for the people whom we are trying to help in the poor world; it is about enabling them to hold their own leaders to account. On the nature of evaluation, to which his question also referred, it is important that this should be about not only value for money and the accountancy-driven approach to that, but development expertise. As he says, a lot of development is very long-tailed, so we need to meld both those two streams of expertise together to achieve the right results.
Ms Harriet Harman (Camberwell and Peckham) (Lab): I thank the Secretary of State for yesterday's written statement on the UN millennium development goals summit, which highlighted the decision to record all the commitments made. Making sure that everyone can see and track the progress towards the MDGs is vital, because international effort is simply not enough right now. Those goals can be met, with the international will to do so. Following the summit, can he tell the House what further steps he and his Government colleagues will be taking to increase momentum?
Mr Mitchell: May I welcome the right hon. and learned Lady to her new position? I think I hold the record for having shadowed this portfolio for the longest time-five years-and I wish her every success in beating my record. The whole House knows of her passion for gender equality and I am sure that we will work well together on that. We put girls and women at the heart of development, and I look forward to progressing that policy with her. Frankly, we are delighted that someone so senior on the Labour Benches is now shadowing this portfolio.
As she said, the Secretary-General of the United Nations has set in train work to bring together all the commitments that were made by different countries at the summit. ECOSOC-the Economic and Social Council-which is the relevant body of the UN, will be monitoring this on an annual basis and we will ensure that other countries that have made commitments stand up for those commitments and fulfil them, just as Britain must fulfil its commitments.
The Secretary of State for International Development (Mr Andrew Mitchell): We are moving from a focus on inputs to a focus on outputs and outcomes-the results our money actually achieves. We will gain maximum value for money for every pound we spend through greater transparency, rigorous independent evaluation and an unremitting focus on results.
Joseph Johnson: Will the Secretary of State say what assessment he has made of value for money from the more than £2 billion that the Department has given to the International Development Association over the three years ending June 2011, indicating whether he intends to match past commitments in the next funding period-that is, the 16th replenishment of the IDA?
Mr Mitchell: My hon. Friend raises an important point about the next replenishment of the World Bank IDA funds. As I mentioned in answer to the last question, the multilateral aid review will be the body that looks at value for money. At the last replenishment-IDA15-as anyone who follows these things closely knows, Britain was the biggest contributor and that contribution was £2 billion. What I what from the next replenishment is for people to know to what extent we are getting clean water, sanitation, basic education and health care to the people at the end of the track, who do not have them in our world today.
Andrea Leadsom: Value for money is, of course, crucial, but there is another issue, which is getting the money to the front line once it has been allocated. Will my right hon. Friend explain what steps he will be taking to ensure that money gets to the front line, unlike in Haiti where, I gather, the vast bulk of aid that has been allocated has yet to reach the areas where it is needed most?
Mr Mitchell: My hon. Friend makes an important point about the effectiveness of emergency relief. There are undoubtedly lessons for us all to learn from what happened in Haiti. That is why I have set up an emergency review of the way in which Britain does emergency relief, which is being chaired by Lord Ashdown. That review will focus on all aspects of how Britain does relief and how we co-ordinated with the UN cluster system, and it will focus particularly on the importance of the immediacy of that relief, getting shelter, food and medicine through to people in such desperate circumstances.
Mr Mitchell: Monitoring the effectiveness of British aid in the future will, at least in part, be done by external evaluation in the independent evaluation agency that we have set up. To some extent, evaluation should be built into all projects and into all the work that we are doing, and we are trying to ensure that that happens in the future.
Ms Margaret Ritchie (South Down) (SDLP): Given the success of the global development engagement fund, what steps will the Secretary of State take to reinstate that fund to ensure that the good work done in schools and communities throughout Britain and Northern Ireland can be continued?
Mr Mitchell: We are reviewing the way in which such development awareness work is done. I am looking specifically at trying to ensure that global citizenship is enshrined in the work that schools do. In general, however, I do not think that British taxpayers' hard-earned money meant for development should be spent in the UK. It should be spent helping the poorest in the world-those whom it is the intention of the House that we should be assisting.
The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien): What really matters for the world's poorest is the development results they see on the ground. It is our duty to spend every pound of aid effectively. We will set out expected results for everything we do and monitor them carefully, working with our partners.
Guy Opperman: Following the Paris declaration and the subsequent decisions made in Accra in 2008, will the Secretary of State update us on the ability to harmonise the way forward for such donors' work, rather than being in a position in which that is not complementary, or involves cooking the books?
Mr O'Brien: My hon. Friend makes an important point. The commitments in the Paris declaration are based on the lessons learned in relation to improving the impact of aid, including having more focus on results while supporting partner countries' priorities, not least co-ordinating how various multilateral and bilateral donors come together. When I was in Uganda recently I was heartened to see our DFID office taking a leadership role in bringing multilateral donors together as part of the commitment following the Paris declaration and the Accra agenda thereafter.
"duty to bring an end to the injustice of millions of children dying every year from drinking dirty water."
Will he reassure the House that he will reject the recent option presented to him by his Department to drop the vital commitments to help 25 million people to gain access to water and sanitation in Africa over the next
five years and to help 30 million people in south Asia by 2011? Will he reassure the House that that commitment still stands?
Mr O'Brien: First, may I take this opportunity warmly to welcome the hon. Lady to her new post and to congratulate her on it? I look forward to the numerous exchanges that we shall have in the House. She will be aware that we are reviewing all programmes, be they bilateral or multilateral. As we are focusing so much more on outcomes rather than inputs, I think that she can look forward positively to the likely result of the review, particularly in relation to water and sanitation. She is right that they are crucial, and I dare say that during the recent conference season, she, as much as I, was engaged with a number of those making representations to ensure that that emphasis is reflected in programmes as they come through the review of bilateral and multilateral aid.
The Minister of State, Department for International Development (Mr Alan Duncan): The humanitarian aid we provided to Gaza following Israel's Operation Cast Lead was disbursed through United Nations agencies and reputable non-governmental organisations with a proven track record of delivery. DFID officials regularly visit Gaza to monitor projects and we will carry out a formal assessment of what those projects have achieved early next year.
Stephen Phillips: I thank the Minister for that answer. The whole House is aware of the plight of the people of Gaza, who have effectively been imprisoned in their country by successive Israeli Governments in breach of United Nations resolutions. For that reason, aid is particularly important to the people in Gaza, but at the turn of the year we learned from the head of the United States mission to the United Nations that the United Nations Relief and Works Agency will be underfunded this year to the tune of $140 million. We are paying our share and the United States is paying hers; what steps is he taking to ensure that our other partners pay theirs?
Mr Duncan: My hon. Friend is absolutely right. UNRWA is facing a serious shortfall in its funding this year: our estimate is that it is currently about $80 million. I met Filippo Grandi, the head of UNRWA in New York, two weeks ago. We are doing our best to urge people to contribute and we will do our bit as well. We hope also to talk to potential Arab donors to assist in making good the shortfall.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op): The very welcome increase in aid and economic activity in Gaza is due partly to the co-operation between Israel and the Palestinian Authority. Is Hamas jeopardising further progress?
The hon. Lady will know that we have no dealings with Hamas, but I am afraid that her interpretation of what is going on in Gaza is not entirely accurate. There are still very severe restrictions in the
movement of goods, and we are doing our utmost to urge the Israelis to make more and simpler access possible, especially for products that are necessary for the long overdue reconstruction.
Dr Julian Huppert (Cambridge) (LD): Is the right hon. Gentleman aware that the Gaza blockade is currently preventing UNRWA from building eight urgently needed schools in order to teach thousands of children? Money for the schools has already been provided by international donors and the plans are there, but access to cement and steel bars is not. Will he take urgent steps to make sure that those schools can go ahead for the new school year?
Mr Duncan: My hon. Friend is largely correct. Although it is true that some building materials are getting through to multilateral organisations, they certainly are not getting through to private citizens-for the building of houses for example. Schools must be rebuilt, and we certainly urge the Israelis to ensure that any materials that can be used for the essential reconstruction of schools and the like can be allowed through.
The Minister of State, Department for International Development (Mr Alan Duncan): Israel's international development agency, Mashav, which is part of the Ministry of Foreign Affairs, has a small programme focusing on sharing technical knowledge and humanitarian aid. Mashav operates in a number of countries, including, within the region, Jordan and Egypt, but not in the occupied Palestinian territories. The UK currently has no direct co-operation with Israel on international development. We hope that Israel, having recently become a member of the OECD, will consider joining the OECD's development assistance committee, which verifies the validity of its aid.
Mr McCann: Given the Israeli President's offer at the United Nations to share its scientific innovations to help to tackle global poverty, as well as its recent membership of the OECD, will the Government be sending a delegate to the forthcoming OECD conference in Jerusalem? If not, why not?
6. Mr Philip Hollobone (Kettering) (Con): How much each of the three poorest countries in receipt of aid from his Department received in such aid in the last 12 months for which figures are available. 
The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien):
In 2009-10, the Department for International Development provided £13 million of bilateral aid to Burundi, £12 million
to Liberia and £109 million to the Democratic Republic of the Congo. Those figures were published in "Statistics on International Development" on 7 October. I will place a copy in the House of Commons Library. [Interruption.]
Mr Hollobone: Taxpayers in the Kettering constituency would like to know what steps my hon. Friend is taking to ensure that the poorest, most deserving countries receive most British aid, where British aid can make the biggest difference. Will he please tell them?
Mr O'Brien: I am grateful to my hon. Friend because he makes an important point, not least following the recent Institute of Development Studies report, which states that the bottom billion reside as much in middle-income countries as in low-income countries. However, the key for us, as we go through our bilateral and multilateral aid review, is to measure and to design programmes that will carry the highest impact. The poorest countries of the world are where we can make the most impact with well-designed programmes and with great transparency, monitoring and evaluation.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): If we are to meet our commitments, not just to the poorest countries but to the developing world as a whole, we must reach the 0.7% aid target by 2013. Will the Minister assure the House that he and the Secretary of State will fight to ensure that the comprehensive spending review means year-on-year progress to the 2013 target? We have asked before, but can he now tell us when the Government will introduce legislation to make the target binding?
Mr O'Brien: First, may I take this opportunity to welcome the hon. Gentleman to his post and congratulate him on his appointment? We are committed to ensuring not only that we get to 0.7%, but that we introduce legislation as and when we have had the opportunity to finalise the work on it. He can be assured that, as we run up to the CSR announcement, he should have, I hope, something to look forward to. However, he will have to wait for the precise details at that time and during the days immediately thereafter.
Mr James Clappison (Hertsmere) (Con): Is the Minister concerned by how little of the aid that we spend through the EU goes to the poorest countries in the world, given that less than half the EU aid budget goes to lower-income countries and that some of the largest recipients of EU aid are countries that we would not normally consider poor? Could we not get more money to poorer people and poorer countries if we spent through our own Department, rather than through the EU?
I thank my hon. Friend for his important question, because a considerable amount of our aid budget does indeed go through the EU. However, that is as subject to the multilateral aid review as any other part of our programme. The question that he raises will be closely examined during that process. Indeed, I shall be going to meet like-minded European Ministers later
today and spending time in Brussels on Friday, so I will be able to take his message directly to those who are engaged in that programme.
The Minister of State, Department for International Development (Mr Alan Duncan): DFID has no direct bilateral development programmes with Sri Lanka. However, over the past two years we have committed £13.5 million to humanitarian funding, all through the UN, the Red Cross and NGOs, to target conflict-affected civilians and displaced persons. Our humanitarian programme has been effective and made a significant difference to thousands of Sri Lankan families.
Heidi Alexander: As a Member with a large Tamil community in my constituency, I am repeatedly approached by my constituents who are struggling to locate loved ones displaced as a result of the conflict in Sri Lanka. What recent discussions has the Minister had with the Sri Lankan Government about these matters, and what reassurance can I give to my constituents that the UK Government are doing all they can to assist members of the Tamil diaspora in their attempts to find their friends and families?
Mr Duncan: We work closely with the Foreign Office, and Ministers in both Departments are speaking to the Sri Lankans about that matter. Some 270,000 displaced people were released or returned to their homes. There are now only about 30,000 remaining in camps. There is access to most of these, except where the camps contain about 7,500 former combatants.
The Secretary of State for International Development (Mr Andrew Mitchell): The summit in New York achieved real progress and resulted in global commitments to save 16 million women and children, reverse the spread of malaria and tackle hunger and under-nutrition. The UK's leadership, and in particular the Government's commitments on aid and results, was noted by all our international partners.
Claire Perry: My right hon. Friend mentioned malaria. I am sure he is aware that today 4,000 people in the world will die from that disease, 75% of them under the age of five. Can he please assure the House that he is putting malaria prevention and treatment at the heart of his Department's programmes?
Mr Mitchell: The fight against malaria will be included in every bilateral programme where it is relevant as a part of the bilateral aid review, but I can tell my hon. Friend- [Interruption.] My comments on the fight against malaria do not usually get such a warm reaction from the House. Britain is committed to halving the number of malaria deaths in 10 African countries by 2015.
Mr Mitchell: The hon. Gentleman is right. It is extremely important that people should be held to their commitments. That is why the Secretary-General is pulling together all the commitments that were made at the summit, and why every year ECOSOC will make sure that we have an assessment of the extent to which those commitments have been met.
Mr Duncan: I saw for myself the challenges faced in Yemen and the impact of DFID's programmes when I visited in July. I was also encouraged by the outcomes of the recent Friends of Yemen meeting in New York chaired by my right hon. Friend the Foreign Secretary.
Graham Evans: Given the strategic importance of Yemen in the fight against terrorism, can my right hon. Friend give me an update on his conversations with his counterparts in other nations to support Yemen?
Mr Duncan: The Friends of Yemen process to which I referred, chaired jointly by my right hon. Friend and by the Saudis and the Yemenis, took some important steps in confirming that they would implement an International Monetary Fund programme. There is, however, a deteriorating security situation and it is essential that we do our utmost to make sure that Yemen does not become a failed state.
Keith Vaz (Leicester East) (Lab): I warmly welcome the Minister's recent visit to Yemen, continuing the good work that was done by the previous Government. Will he assure us that despite recent events, including the attempted assassination of the deputy ambassador, we will continue to fund projects in that crucial middle eastern country?
Mr Duncan: I agree with the right hon. Gentleman. Nothing could be more important than spending money now to stop Yemen failing, as the costs and the danger that would follow if it were to fail would be a massive multiple of anything we might do now. It is a serious priority for the Foreign Office, for my Department and for the coalition Government.
The Secretary of State for International Development (Mr Andrew Mitchell): The situation in Pakistan remains extremely difficult. In some areas of the country early recovery is beginning, while in other areas emergency relief is still needed, particularly in Sindh province. My Department continues to monitor the situation closely to identify and deliver aid appropriately.
Mr Bain: A new report by the World Bank and the Asian Development Bank estimates the losses in crops, property and infrastructure caused by the floods to amount to $9.5 billion. Will the Government continue to make representations to the International Monetary Fund and to the World Bank to increase the assistance available for the reconstruction of Pakistan?
Mr Mitchell: First, I congratulate the hon. Gentleman on his elevation to the post of shadow Environment Minister. Secondly, I assure him that we will continue to lead from the front on Pakistan. In particular, in respect of food security, crops and livestock, which he mentioned, we have made a specific intervention with the recent announcement of £70 million of emergency aid for Pakistan.
The Prime Minister (Mr David Cameron): I am sure that the whole House will wish to join me in paying tribute to those soldiers who have been killed in Afghanistan in the past few weeks. They were Sergeant Andrew Jones of the Royal Engineers and Trooper Andrew Howarth of the Queen's Royal Lancers, who died on 18 September; Corporal Matthew Thomas from the Royal Electrical and Mechanical Engineers, who died on 25 September; Rifleman Suraj Gurung from 1st Battalion the Royal Gurkha Rifles, who died on 2 October; and Sergeant Peter Rayner from 2nd Battalion the Duke of Lancaster's Regiment, who died on 8 October. They were incredibly courageous and selfless individuals who gave their lives in the service of our country and for the safety of the British people, and we should send our deepest condolences to their families and to their loved ones.
In the weeks since the House last met, UK forces have completed the latest stage of restructuring in Helmand province. There are now more than 8,000 UK troops and 20,000 American troops there. We now protect one third of the Helmand population, and in my view that is the right proportion.
I am sure that the whole House will want to join me in paying tribute to Brigadier Richard Felton and the troops of 4 Mechanised Brigade for their commitment and sacrifice over the past six months. They have done an outstanding job, and I am sure that 16 Air Assault Brigade, which took over command on 10 October, will carry on that effort.
The House will also wish to join me in sending our sincere condolences to the family of Linda Norgrove, who died late on Friday evening. She was a dedicated professional doing a job that she loved in a country that she loved.
Finally-and I am sorry for the long opening of my remarks-I am sure that everyone would like me, on their behalf, to send our best wishes to the President and people of Chile, as they celebrate the trapped miners coming to the surface. We can see the glorious pictures on our television screens.
Will my right hon. Friend join me in congratulating Opposition Members on their choice of leader-even though he is not on the Front Bench and did not win? Has the outcome of that election changed my right hon. Friend's assessment of the effectiveness of the alternative vote system?
The Prime Minister: I thank my hon. Friend for that question. It was good to see the alternative vote in practice, if I can put it that way, although of course, to be fair to my colleagues on the Government Benches, when it comes to the referendum the trade unions will not have quite such a large involvement.
I should like to take this opportunity to congratulate the right hon. Member for Doncaster North (Edward Miliband). It is an important job that he does, calling the Government to account and standing up for Opposition Members. I am sure that there will be many times when we can work together on issues of national interest, such as on Afghanistan, which I was just talking about. I hope that he will not mind me saying that, as well as wishing him well, I hope that he does the job for many, many years to come.
Edward Miliband (Doncaster North) (Lab): May I start by thanking the Prime Minister for his kind words just then, and for the kind words that he gave to me when I was elected leader of the Labour party? As he said, there will be issues on which we can work constructively, including on Afghanistan.
I join him in paying tribute to our troops who have died in Afghanistan. They were Sergeant Andrew Jones of the Royal Engineers and Trooper Andrew Howarth of the Queen's Royal Lancers, who died on 18 September; Corporal Matthew Thomas from the Royal Electrical and Mechanical Engineers, who died on 25 September, Rifleman Suraj Gurung from 1st Battalion the Royal Gurkha Rifles, who died on 2 October and Sergeant Peter Rayner from 2nd Battalion the Duke of Lancaster's Regiment, who died on 8 October. Each of them showed the highest dedication, commitment and bravery. We honour their memory and pass deep condolences to their families.
We also honour Linda Norgrove, who died doing a simple job trying to make the lives of people in Afghanistan better-a necessary part of any political settlement. She too showed immense bravery. May I say to the Prime Minister that we fully support the decision the Foreign Secretary took to authorise her rescue? We must always make it clear from all parts of this House that responsibility for her death lies solely and squarely with those who took her hostage. May I ask the Prime Minister to update the House on his phone call with President
Obama about the circumstances surrounding Linda Norgrove's death and the progress on the inquiry into those circumstances?
The Prime Minister: I am grateful for what the right hon. Gentleman says and the way that he says it, both about our troops and about the tragic case of Linda Norgrove. As he knows, I spoke to President Obama to stress the point that we think it is extremely important that this is a joint US and UK investigation. I do not think there are any further details I can give about what happened that night-the picture is still unclear-but it was right, I think, to correct the early information, which most likely was wrong, about how Linda died. This investigation is now under way. When there is new information to bring to the House, we will bring it to the House. Most important of all, though, is to keep the family informed at every stage. I will meet General Petraeus tomorrow to discuss this further. I particularly want to echo what the right hon. Gentleman says about the responsibility for this. It is an impossibly difficult decision to make about whether to launch a raid and try to free a hostage. In the end we must all be clear: the responsibility for Linda's death lies with those cowardly, ruthless people who took her hostage in the first place.
Let me turn to the issue of benefits and say to the Prime Minister that we will work with him on his reforms to disability living allowance and to sickness benefits, because they are important reforms and they need to be done. On child benefit, though, I think that those on his own Benches and the country at large do have concerns. May I ask him, first, how many families where one parent stays at home will be affected by the changes that he has proposed to child benefit?
The Prime Minister: In terms of the number of families who will be affected, higher-rate tax is paid by 15% of taxpayers, and the decision that we have taken is to say that child benefit should not be received by families where there is a higher-rate taxpayer. I accept that this is a difficult choice, but the fact is-
The Prime Minister: I have answered the question, "How many?" The answer is that 15% of taxpayers are higher-rate taxpayers. This is a difficult choice, because as we deal with the deficit we have to ask better-off people to bear their share of the burden. The fact is that today we spend £1 billion giving money through child benefit to relatively better-off homes. We think that has to change, and I have to ask the right hon. Gentleman why he thinks that that is not the case.
I am afraid that that the Prime Minister did not provide an answer to the specific question I asked. By my reckoning, there are hundreds of thousands of families where one parent stays at home, and the question they are asking is this: why should a family on £45,000 where
one person stays at home lose their child benefit-£1,000, £2,000, £3,000 a year-but a family on £80,000 where both partners in the couple are working should keep their child benefit? That does not strike people as fair, and it does not strike me as fair: does it strike the Prime Minister as fair?
The Prime Minister: What I believe is fair is asking better-off people to make a contribution to reducing the deficit. Let me try putting it this way to the right hon. Gentleman-think about it like this: there are thousands of people in his constituency earning one sixth of what he earns. Through their taxes, they will be paying for his child benefit. Is that really fair?
Edward Miliband: I am afraid it is nought out of two on straight answers. We should try to change the tone of these exchanges, but the Prime Minister must provide straight answers to straight questions that I ask him. I am not defending the rich- [Interruption.]
Edward Miliband: I am defending the deputy head teacher in her primary school and the police inspector, who are asking a simple question. The Prime Minister used to agree with me. Before the election he went to Bolton, in an event that I gather was called "Cameron Direct", and he said:
"I'm not going to flannel you. I'm going to give it to you straight. I like child benefit. . . I wouldn't change child benefit, I wouldn't means test it, I don't think that's a good idea."
The Prime Minister: The problem that the right hon. Gentleman has to face up to is that he left us the biggest budget deficit in the G20, and he has absolutely no proposals to deal with it. He opposes our changes on housing benefit, yes? You oppose those? He opposes our changes on a benefit cap- [Interruption.]
The Prime Minister: The right hon. Gentleman opposes our changes on a benefit cap, yes? Just nod. And he opposes our changes on child benefit. He quoted something to me; let me quote him something back:
"We have to be frank with people and show our mettle. In times of plenty, giving child benefit to high earners is a luxury the country"
cannot afford. That was Alan Milburn, someone who cared- [Interruption.] Ah, he's gone. I love this-all the Labour politicians who used to win elections have been thrown out of the window. The right hon. Gentleman has to face up to the truth. We have a big budget deficit, and we have to ask better-off people to make their contribution. We say higher earners should not get child benefit. Their child benefit is being paid for by some of the poorest people in our country, and it is about time he protected them.
I really want the Prime Minister to face up to the scale of the changes he is proposing, and I say to right hon. and hon. Members on the Government Benches that they should face up to the scale of the loss.
Take a family on £33,000 after tax. If they have three kids, they will be losing £2,500 as a result of these changes. That is the equivalent of 6p on the basic rate of income tax. That is an enormous loss that the Prime Minister is inflicting on a particular group in the population. If he wants to take people with him on deficit reduction, he has to show that his changes are fair and reasonable. I come back to this point: I do not believe his changes are fair and reasonable-does he?
The Prime Minister: I do not think it is fair for the poorest constituents in the right hon. Gentleman's constituency to contribute to his child benefit. That is what he is asking them to do. Let me remind him of something he said in July, which was that
"whoever is the Labour leader will, by the time of the spending review, have to show that they have an alternative plan".
Edward Miliband: The truth is that the Prime Minister has no defence of that policy. He cannot explain to families up and down the country why they will sustain that loss. I see the Chancellor sitting there. Let us be honest: the policy has been a shambles from day one. The rest of the Cabinet knew nothing about it, and the Local Government Secretary said he found out from the media that it would be announced. The Children's Minister, whom I cannot see in the Chamber, went on the run because he was too scared to defend the policy. I bet the Prime Minister wishes the BBC blackout had gone ahead, given that his conference was such a shambles.
On child benefit, is it not time that the Prime Minister had the grown-up sense to admit that he has got it wrong and that he has made the wrong decision? He should tell middle-income families up and down Britain that he will think again.
The Prime Minister: The right hon. Gentleman has suddenly discovered middle-income families. We are now hearing about the squeezed middle, but who squeezed the middle? Who doubled the council tax and put up tax 122 times, and who taxed the pensions, the petrol, the marriages and the mortgages? Suddenly, having done all that to middle-income earners, Labour wants to stand up for them. That is a completely transparent political strategy to cover up the inconvenient truth that he was put where he is by the trade union movement. It is short-term tactics and political positioning: it is not red, it is Brown.
Q2.  Chris Heaton-Harris (Daventry) (Con): As vice-chairman of the parliamentary football club and a qualified football referee, I am well aware that there are just 50 days left before FIFA makes its momentous decision on the location of the 2018 World cup. Will the Prime Minister join me in supporting the English bid, which is in the interests not only of football, but of the entire country?
The Prime Minister: I thank my hon. Friend for his question. I am sure the whole country, and indeed everyone in the House, will want to get behind our bid for the 2018 World cup. I think we can launch and run an incredible World cup. We have the best fans, the best teams and the best stadiums, but above all this country has the biggest enthusiasm for football. We can make it a success for Britain and for the world.
I should also like to welcome Sepp Blatter, the president of FIFA, who will be coming to No. 10 Downing street after Prime Minister's questions. Indeed, he is in the House of Commons today. I would like to reassure him on everyone's behalf that behaviour in this House is always worse than behaviour either on the pitch or on the terraces.
Mr Nigel Dodds (Belfast North) (DUP): It is sometimes easy to forget how far Northern Ireland has come in recent years, but there are still immense challenges to stability. In the light of discussions with the Chancellor on the part of the Northern Ireland Executive and the recent visit by the Deputy Prime Minister, can the Prime Minister confirm today that he will stand by the formal guarantees given to the Executive at the time of the restoration of devolution, especially in relation to the financial package and capital investment stretching through to 2018? Those are critical matters if we are to establish and embed devolution in Northern Ireland in a power-sharing Executive.
The Prime Minister: The right hon. Gentleman makes very good points on how far Northern Ireland has come. Everyone on both sides of the House wants to continue that process, make the institutions work and embed the peace that we have achieved in Northern Ireland. I pay tribute to my predecessors, who put so much hard work into that.
On the specific issues, the previous Prime Minister made a series of promises, particularly about policing and justice in Northern Ireland, which we discussed when we were the Opposition. We stand by those promises. On the Presbyterian Mutual Society and a group of people who did lose money in the financial crunch-I know how angry it can make people in Northern Ireland when people say, "Nobody lost money", because they did-we are working very hard to try to find a fair and equitable solution.
Q3.  Mr Robert Buckland (South Swindon) (Con): Does the Prime Minister agree with the previous Government's policy of part privatisation of Royal Mail? Will he urge those on both sides of the House to work together to help to revitalise that great British institution?
The Prime Minister:
I am grateful for what my hon. Friend says. The fact is that Royal Mail is a business that has falling volumes of mail and a £10 billion pension fund deficit, and it badly needs investment, modernisation and change right now. The last Labour Secretary of State supported such reform, the Conservative party supports that reform and the Business Secretary supports that reform, and we are publishing the Bill
today, which includes a minimum of 10% employee share ownership and participation in this important move. I hope that the Opposition will not turn their backs on the future, but will back this change, rather than stepping back into their comfort zone.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): We were all deeply saddened, especially in the Hebridean community, by the death at the weekend of Linda Norgrove, the aid worker from the Isle of Lewis. It was welcome that the Prime Minister took time to speak to her father on Monday. The family have asked me to convey that they are pleased that the US Administration corrected accounts of the events surrounding her attempted rescue and did not attempt to sweep information under the carpet. At a difficult time, the family are grateful for that openness, as they are for the care and support of the wider community in Uig at this time of grief. As Linda's remains are expected to arrive in the UK this week, may I ask the Prime Minister that if the family need any help, independent or otherwise, in coming to a true understanding of what happened to their daughter in Afghanistan, they will receive it?
The Prime Minister: I thank the hon. Gentleman for his question and the way in which he put it. Linda's family must have all the help that they need, and I have said that we will do anything that we can to help them and get them any information that they need. Tragically, nothing will bring Linda-that wonderful daughter who led an incredible life-back, but it can help to get all the information about what happened. The British ambassador to Afghanistan, William Patey, has met the family and will meet them again. Along with others, I hope that he can give them information on the background of what happened and why so that they, and the community that the hon. Gentleman mentioned, can try to find some closure to this terrible episode.
Q4.  Esther McVey (Wirral West) (Con): Lord Adonis said that a pure graduate tax would be unworkable and a catastrophe. Will the Prime Minister take the advice of the shadow Chancellor, who said:
"Oh, and for goodness' sake, don't pursue a graduate tax."?
The Prime Minister: I thank my hon. Friend and she is right. We looked at this policy carefully over the summer-I am glad to see that the shadow Chancellor is laughing. I gather that at a lively shadow Cabinet meeting they could not agree on their policy. We looked at this in detail, and a pure graduate tax does not work. I recommend to the Opposition the document "Why not a Pure Graduate Tax?", published by the Department for Education and Skills under the previous Government. It points out that
"there is no guarantee universities would receive the additional funding raised. There would be no direct relationship between what the student paid and the...value...of their course."
A graduate tax would put up the deficit as it would not break even until 2041. It is a completely flawed policy, totally unworkable and expensive. As a first choice of policy to go out on, it is a complete disaster.
The Prime Minister: I am extremely sorry, but I did not catch the hon. Gentleman's question. I will either write to him- [ Interruption. ] Short questions are a very good thing, but I am afraid that I missed it. Is it in order for him to have another go?
Q6.  Roger Williams (Brecon and Radnorshire) (LD): This year, four British scientists have gained Nobel prizes, confirming their position in the premier league of world science. The comprehensive spending review gives an opportunity to identify areas for investment as well as reducing costs. Does the Prime Minister agree that, with the US, Germany, France and other countries increasing their expenditure on science, it would be prudent for Britain to do likewise?
The Prime Minister: It is vital that we retain a good science budget and invest in our science base, but I cannot hide from the hon. Gentleman-or anyone in this House-the fact that we inherited a budget deficit of £155 billion. [ Interruption. ] I know that the Opposition do not like hearing it, but it is the truth. Those are the facts, and we have to deal with that. We will do what we can to ensure that as we go through this process we help to keep science and scientists in this country. That is what we must do, but it is very difficult to make all areas immune from the spending reductions forced on us by the complete incompetence of the people now sitting on the Opposition Benches.
Q7.  Ian Austin (Dudley North) (Lab): In the past two years, Britain's cold weather payments were increased to £25, but the small print of this year's legislation does not contain that guarantee. Is the Prime Minister really saying that 4 million of Britain's poorest families and pensioners will have their payments cut by two thirds and receive just £8.50 this year?
The Prime Minister: The hon. Gentleman will know, as he worked closely with the previous Prime Minister, that there was never a guarantee about the scheme. We will look at it carefully and make our announcement in the spending review. [ Interruption. ] He asked a question; he might wait for the answer. He will have an announcement in the spending review.
Q13.  Margot James (Stourbridge) (Con): Clare Rayner, the president of the Patients Association, sadly died yesterday. Her final words were a warning to the Prime Minister that if he screws up the NHS she is going to come back and haunt him. With the enormity of the financial crisis becoming ever clearer and the comprehensive spending review getting closer, can the Prime Minister reassure the House that we will honour our commitment to spend more on the NHS and improve outcomes to match the best in Europe?
The Prime Minister: I am grateful for what my hon. Friend says. I was brought up listening to Dr Rayner on Capital Radio, and I would never want to do anything to upset her or her memory. The House will know that we have protected the national health service and will invest in it, unlike the Opposition, who proposed to cut it.
Q8.  Dr William McCrea (South Antrim) (DUP): The Prime Minister is aware that many small Presbyterian Mutual Society savers are at wits' end corner. When do we expect to have a satisfactory conclusion to this whole issue, and will he assure the House that the Government will recognise the danger of a double-dip recession in Northern Ireland when the Chancellor makes his speech next week?
The Prime Minister: I know that the hon. Gentleman knows how difficult this issue with the PMS is. Achieving a fair resolution is not easy. I believe that we will have it done by the announcement of the spending review on 20 October. That is our goal. An announcement will be made, and he will be able to explain to his constituents what we are going to do.
Q12.  Sajid Javid (Bromsgrove) (Con): This past summer, my constituents in Bromsgrove have had to endure Travellers trespassing on their land, vandalising it and causing thousands of pounds of damage. Will my right hon. Friend consider bringing forward legislation to create a new offence of intentional trespass, so that people who go on to land without the owner's permission can be prosecuted without the need for a court order?
The Prime Minister: We will certainly look at the issue. The basic point is that this is an issue of fairness. If everyone else in the country has to obey planning laws, that should be the same for the Traveller community as well. We should have one law that everybody obeys. That is what we will aim for, and we will look at the proposal that my hon. Friend makes.
Q9.  Kevin Brennan (Cardiff West) (Lab): When the Prime Minister did the deal with the Deputy Prime Minister on the coalition, was it sealed with a traditional gentleman's handshake or was there some kind of written pledge involved? If a written pledge was involved, why does the Prime Minister think that the Deputy Prime Minister is any more likely to honour his pledge to him than he was to honour the pledge that he gave to students and their families in this country?
Q10.  Paul Uppal (Wolverhampton South West) (Con): One of the most short-sighted mistakes of the previous Labour Government was the repeal of business rate relief on empty commercial property. What measures can the Prime Minister take to reverse that decision or at least have a moratorium, to give a boost to regeneration, investment and business in the urban west midlands and my constituency of Wolverhampton South West?
The Prime Minister: I am afraid that I have to disappoint my hon. Friend a little bit. This was a bad tax. Properties were being left empty not because business people chose to do that; they were being left empty because of the recession. However, we are not in a position, with this massive budget deficit, where we can undo all the bad things done in one go. What we have focused on is getting a lower rate of corporation tax, cutting national insurance on new businesses and giving small business rate relief. Those are all things that will help to get our economy growing. As evidence of that, we can welcome today's fall in unemployment figures and the growth in employment that we have seen over the past three months.
Joan Ruddock (Lewisham, Deptford) (Lab): After years of falling as a result of Labour policies, unemployment in my constituency rose by 80% during the global recession. Will the Prime Minister therefore explain why his Government are going to close the only jobcentre in my constituency?
The Prime Minister:
I want to take the right hon. Lady up on the way in which she put her question. She talked about falling unemployment under Labour, but omitted to point out that it rose under Labour in the
past three years. What matters is helping people back into work, and what she will see with the Work programme is the biggest, boldest effort to get people out of benefits and into work that this country has ever seen.
Q11.  Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con): My constituents very much welcome the fact that the Prime Minister is leading by example in these difficult economic times by taking a 5% reduction in his prime ministerial salary. Is he aware that the chief executive of Suffolk county council is paid a salary of £220,000 a year? Will he join me in calling on her and other senior public sector managers to set an example through leadership by taking a reduction in their salaries, especially given the fact that they are paid 15 or 20 times more than front-line public sector workers?
The Prime Minister: My hon. Friend makes an extremely good point. It is right to have complete transparency in pay levels throughout the public sector. For the first time in a long time, we have been able to find out what all these people are being paid and, as a result, there is downward pressure and better value for money throughout local government. I think that this revolution in transparency should continue.
Secretary Vince Cable, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Mrs Secretary May, Mr Secretary Paterson, Secretary Michael Moore, Mrs Secretary Gillan, Mr David Willetts, Mr Edward Davey and Mr Edward Vaizey, presented a Bill to make provision for the restructuring of the Royal Mail group and about the Royal Mail Pension Plan; to make new provision about the regulation of postal services, including provision for a special administration regime; and for connected purposes.
That leave be given to bring in a Bill to exempt public houses and private members' clubs from the requirements of part 1 of the Health Act 2006 relating to smoke-free premises; and for connected purposes.
Let me first declare an interest, in that I am a member of the Salisbury Conservative club in Bury, which is a private members' club. In common, no doubt, with many right hon. and hon. Members on both sides of the House, I also visit public houses from time to time. I must also declare at the outset that I am a devout non-smoker. I have never smoked, and indeed I would encourage others not to start smoking. I would also encourage those who do smoke to stop. I am entirely persuaded that smoking can cause potentially fatal diseases. That said, however, smoking remains entirely legal, and the Treasury benefits by many billions of pounds each year from excise duties and VAT on the sale of tobacco products.
It is now more than three years since the outright prohibition on smoking in public places was introduced on 1 July 2007. Since that time, the ban has been widely accepted in most areas. Although there are arguments for it to be completely repealed, this Bill aims to deal with what has perhaps been the most contentious aspect of the ban-namely, its application to public houses and private members' clubs. This Bill would exempt such premises from part 1 of the Health Act 2006 and allow them to reintroduce a smoking room if those in charge chose to do so. Smoking would be permitted in a separate room, provided that appropriate and effective air extraction equipment was fitted. Smoking would continue to be prohibited where food was being served.
"all restaurants will be smoke-free, all pubs and bars preparing and serving food will be smoke-free; and other pubs and bars will be free to choose whether to allow smoking or be smoke-free. In membership clubs the members will be free to choose whether to allow smoking or to be smoke-free."
I submit that there are two main reasons why the blanket ban should be relaxed and smoking should once again be permitted in public houses and private members' clubs. First, there is the economic case; and, secondly, there is what I believe to be an even more important reason-namely, freedom of choice and the desirability of devolving decisions to the lowest appropriate level.
Let me deal briefly with the economic argument. Since the ban was introduced, thousands of public houses have closed down. As ever with statistics, it is possible to choose the ones that best suit the desired argument. Few could argue against the fact, however, that since the introduction of the smoking ban, thousands of public houses have closed down. I do not claim that the smoking ban was the only cause of all those closures,
as other factors such as the availability of lower-price drinks from supermarkets, the cost of satellite television and the general economic climate no doubt all played a part. For many, however, the smoking ban was the final straw.
One does not have to travel very far in my constituency to find a public house that has called time for the very last time. There are closed public houses in Bury and in Ramsbottom that are now for sale, and "To let" signs outside public houses are becoming increasingly commonplace. This picture appears to be replicated in constituencies throughout the country. When a rural pub or a local community pub closes down, everyone loses out, not just those who wish to smoke.
Let me turn to deal with the second reason-freedom of choice and localism. I believe that in the case of a private members' club, the decision should be taken by the members of that club. I believe that the decision on whether smoking takes place in a public house should be taken by the pub landlord. I believe in trusting the people. This means giving individuals the power and the responsibility to take decisions for themselves.
Pub landlords are the right people to decide whether allowing a smoking room is the best thing to do for their establishments. Some would no doubt choose to take advantage of the freedom that the Bill would give them, but I know from my own constituency that many would not. As smoking would continue to be prohibited where food was being served, many public houses would remain just as they are today. Customers would have a choice whether to use a completely non-smoking pub or to use one with a smoking room. The establishment of separate smoking rooms in some pubs would also reduce the incidence of smokers' being forced to gather on the pavements outside pubs.
The Bill puts into practice the principle of localism that my right hon. Friend the Prime Minister set out with such clarity in his speech to the Conservative party conference last week. It transfers power from the state to the citizen, from politicians to people. It puts the "local" back into localism, and I commend it to the House.
Mr Kevin Barron (Rother Valley) (Lab): I oppose the Bill. The same argument was put to the House not so many years ago in a debate that resulted in the current legislation. The hon. Member for Bury North (Mr Nuttall) was right to say that the original legislation, proposed by the then Labour Government, did not provide for a comprehensive ban in areas of all public houses or private members' clubs. In 2005 the Select Committee on Health, which I chaired, conducted a detailed inquiry into the issues before the Bill that became the Health Act 2006 had completed its passage. When it had done so, the amendments that had been tabled were put to the vote. Labour Members were eventually given a free vote, as, I understand, were Opposition Members.
Let me give the House a flavour of the results of that vote. The hon. Gentleman described this as a contentious issue. The result of the vote on clause stand part, as amended-there had been an attempt to remove the amendment-was 452 Ayes and 127 Noes. At no time
did any Member trying to defend the hon. Gentleman's position manage to persuade more than 200 Members into the Lobby. It followed a great tradition that in the other place, shortly after the votes in February 2006, Lord Tebbit rose to defend the Labour party manifesto of 2005. At the time some of us, although we had stood on that manifesto, thought it was nonsense from the point of view of public health.
In the same year that the House made that decision, Spain implemented a smoking ban exempting small bars and restaurants. The law was not seen as a success, and as a result of public dissatisfaction with the exemptions the Spanish Government have proposed to extend the ban to all pubs and restaurants, although they are considering an exemption for private smokers' clubs. An evaluation of the Spanish law found that levels of second-hand smoke were reduced only in bars where smoking was prohibited by law, and that
"Most hospitality workers continue to be exposed to very high levels of SHS"-
That was the issue then, and it is still the issue today: people who work in the leisure sector are exposed to people's life-threatening habits. It was the issue in 2006, when the original legislation went through the House, and it remains the issue today. Unless bars contain NHS operating theatres with doors that are rarely opened, it will never be possible to avoid the effect of Bills such as this on workers. Evaluations of other partial bans have found limited evidence of health gain, and they are believed to aggravate health inequalities.
I remind Government Members that they have just fought and won a general election criticising the then Labour Government for not ending health inequalities in this country. I agree: they did not do away with health inequalities, and some 50% of health inequalities are created by tobacco use. If Members on the Government Benches are going to continue saying what they said when in opposition, this Bill is the last measure I would expect their Front-Bench team to support, because health inequalities are writ large in tobacco use in this country.
An Australian study of 2004 found that no-smoking areas in licensed premises contained as many tobacco toxins as smoking areas. Even in clubs with completely separate no-smoking rooms there was no material reduction in the levels of harmful toxins in the air. Ventilation systems in smoking areas in rooms that are not fully segregated will not protect people in non-smoking areas. The Select Committee on Health-an all-party Committee, I might add-came to that conclusion. It is also the finding of research by D. Kotzias and others at the European Commission Joint Research Centre. We cannot isolate smoking in smoking rooms and think it has no effect elsewhere. That will not work, and it is the reason why the original Health Bill put before the House in 2005 was changed in the House in 2006.
Let us look at the health gains, because that is what this is about. It is not about leisure; it is about the health of the public. Hospitality industry workers have benefited most from the UK legislation. Evaluation of the Spanish partial ban found that the law had failed to protect them significantly. The most notable health gain for members of the public is the fall in the number of admissions for acute myocardial infarction. Researchers
at the university of Bath have calculated that there has been a 5% drop in the number of heart attacks in England, attributable to smoke-free legislation. The figure was higher for Scotland and it was measured within 12 months of the ban coming into force-as Members will know, the ban was introduced earlier in Scotland than in the rest of the UK. Similar reductions have been observed in other jurisdictions with a comprehensive ban, including New York, Ireland and Italy. Indeed, the Health Committee went to Ireland when taking evidence for our report.
It has also been suggested that having more people smoking out on the street might increase young people's perception that smoking is a normal adult activity and so increase the number of under-age smokers. In fact, international research shows that smoking bans are associated with reducing smoking among teenage boys in particular, possibly because it is seen as less normal. This topic has been debated in the House throughout the decades during which I have been a Member, and I have frequently argued for legislation to de-normalise smoking.
Some 50% of people who smoke will die a premature death, as well as having suffered from various diseases and all the other burdens they will carry throughout their life-and that taxpayers will carry for the rest of their lives in having to treat these people in the NHS. It is sometimes argued that we must recognise that smokers put money into the Treasury as opposed to looking at the ill health that is suffered as a result of tobacco use. That is a ridiculous argument.
It was claimed at the time of the Health Bill that banning smoking in pubs would displace smoking into the home, thereby increasing children's exposure. The reverse has been true. The proportion of homes in England where smoking is prohibited throughout has increased to 79% and children's exposure has fallen because of that. I have not got the figures to hand, but recently-within the past 12 months-research has found a link between cot death and smoking. That affects young children who do not have anything directly to do with cigarettes, but who are exposed to them through passive smoking. It is irresponsible for any Member to stand up in this House and say we should reverse this measure which has led to such great health gains in this country.
Support for smoke-free legislation in England has risen to more then 80% of adults, many of them smokers themselves who agree that this legislation is right. Support has risen fastest among smokers, half of whom support the legislation as it stands. Most smokers believe the law has been good for their health, good for the health of the public and good for the health of most workers.
There is an issue with the effect on business. I have looked at all the evidence and I must say that trying to introduce smoke-free rooms ventilated to the level that would be necessary would have a negative effect on business; there is no way that will benefit businesses.
Let me finish by discussing the issue of trusting the people. This morning, I found the following words on the hon. Member for Bury North's website-he has a blog and people post things on it. He said that we should trust the people, and these are the comments of someone called Jim:
"Mr Nuttall, I am a tory voter and a pub landlord, you are so wrong on this and I suggest you use your common sense to drop this headline catching cause.
The smoking ban was one of the few things labour got right in their last reign."
"To even suggest undoing it in this manner brings yourself and the party into disrepute. As a landlord my biggest fear about the smoking ban was the proposal you are advocating. In my humble opinion it will create an unfair playing field, that panders to the weak and stupid.
Many people because of the ban have given up smoking, myself included, I do not want to go back to the days of smoky pubs, the blanket ban has worked. My business is proof, I am still trading and making a living".
I shall not read out the rest, but there are many other comments on the hon. Gentleman's blog, including some from nurses in his constituency. One of them says that they wished he had put this proposal in his manifesto when he stood for election in May, because they may have then had a different view about the Conservative candidate. I would like to oppose this Bill. [Interruption.]
Mr Speaker: Order. The hon. Member for Northampton South (Mr Binley) has been in the House for five years, so I feel sure that he is keenly conscious of the fact that there are two speeches on these occasions and no more.
"(3A) Subsection (3) above does not apply to a provision which would have the effect of reducing the amount of a compensation benefit except in so far as the compensation benefit is one provided in respect of a loss of office or employment which is the consequence of-
"compensation benefit" means so much of any pension, allowance or gratuity as is provided under the civil service compensation scheme by way of compensation to or in respect of a person by reason only of the person's having suffered loss of office or employment;
"the civil service compensation scheme" means so much of any scheme under the said section 1 (whenever made) as provides by virtue of subsection (2) above for benefits to be provided by way of compensation to or in respect of persons who suffer loss of office or employment.
(3C) In subsection (3B) above a reference to suffering loss of office or employment includes a reference to suffering loss or diminution of emoluments as a consequence of suffering loss of office or employment."
(6) The fact that the amendments made by this section were not in force when that consultation took place does not affect the question whether the consultation satisfied the requirements of section 1(3) of the 1972 Act.'.- (Mr Maude.)
'(2A) Section 1 shall not come into force until the Minister has laid a report stating that the affected members of the relevant
trade unions under section 2(3) of the Superannuation Act 1972 have given their approval by means of ballots to the terms of section 1, and the House of Commons has come to a Resolution on a Motion in the name of a Minister of the Crown approving the report.'.
Mr Maude: In my statement to the House in July and again on Second Reading in September, I made it clear the Government's intention is to make the civil service compensation scheme affordable, and I set out our intention to legislate to underpin the negotiations to achieve that. However, I have made it clear at all stages-and I make it clear again today-that our principal aim has been to reach a negotiated settlement with all six civil service unions to introduce a new successor scheme that would provide, in particular, better protection for lower-paid civil servants.
The current civil service compensation scheme is unaffordable and completely out of kilter with practice in the rest of the public sector, let alone in the private sector, and it actually makes more likely redundancies among the lowest paid and shortest-tenured civil servants. The previous Government recognised that and engaged in protracted negotiations over many months-indeed, over several years-with the Council of Civil Service Unions to try to reach agreement on a successor scheme. I pay tribute today, as I did on the previous occasion, to the right hon. Member for Dulwich and West Norwood (Tessa Jowell) and her predecessors, who persisted in trying to get full agreement from all members of the Council of Civil Service Unions.
Despite those months of negotiations, the previous Government were unable to achieve full agreement. I understand that it looked as though an agreement was there, but at the last minute the PCS-the Public and Commercial Services Union, the largest of the civil service unions-pulled out, leaving a proposed new scheme in place that had been agreed by five unions, but not by the sixth.
Given the extensive consultations and negotiations that took place, which gained agreement from five out of the six unions, the previous Government felt and concluded-I said at the time that I agreed-that it was only right that one union should not hold the right of veto on any change. So in April the previous Government imposed a new compensation scheme that reflected the agreement with the five unions. But for the action of the PCS, that might have been where the story ended, but the subsequent actions of the PCS have led us to where we are today.
The PCS challenged in the High Court the right of the Government to impose a settlement in such circumstances and the Court subsequently quashed the February scheme. So almost literally on my first day in office after the election, I was confronted with a situation in which the previous civil service compensation scheme was still in force and had not been reformed at all. That scheme, as I have said, is completely unaffordable, inherently unfair and in urgent need of reform. It was striking that
on Second Reading, when this issue was extensively and thoroughly debated in a constructive and open spirit with no element of partisanship creeping in, every Member who spoke agreed that the current scheme was unsustainable and needed reform. There was complete consensus across the House.
The current compensation scheme is extremely generous compared with the rest of the public sector, let alone private sector, equivalents. A comparison with the statutory redundancy scheme shows that payouts, particularly for lower-paid workers in the private sector, are capped at 32 weeks' pay at a maximum weekly pay that is still, I think, capped at £380. The maximum that can be paid out to anyone under that scheme is less than £12,000. By contrast, the maximum value under the civil service scheme is the equivalent of six years and eight months' salary. Typical schemes in the private sector-particularly the statutory scheme-pay one week's salary for each year worked. The civil service scheme pays at least four times that amount-a month's salary for each year worked, and in some cases up to three months' salary for each year of service.
The previous Government spent £1.8 billion on civil service redundancy payouts in the last three years, including a number of spectacular six-figure settlements for individuals. The result of the scheme's being so generous and unaffordable is that Departments cannot afford to make civil servants redundant, even if they are willing to go voluntarily, if they are highly paid and of long tenure. If Departments need to save money-as they had to under the previous Government and as they will have to under the coalition Government-through redundancies, they simply cannot afford to choose those individuals on high pay and long tenure. In order to make the same savings in salary terms, they need to make many more lower-paid and shorter-tenured staff redundant. The unjust effect of the current scheme's being so badly structured and unsustainable is that if it were allowed to remain in place, more civil servants would lose their jobs and more civil servants on lower pay would lose their jobs. The coalition Government are not willing to see that happen.
Stewart Hosie (Dundee East) (SNP): I understand the logic of the Minister's argument, but I have a constituent who has a business case for her to take early retirement under the voluntary scheme-I have seen the business case, which will save a great deal of money over the next few years. She is not being allowed to go now because of the uncertainty surrounding this process. Do we not have a little disconnect at the moment in that this process and this Bill are stopping people leaving early when it suits them and would save money right now for that Department?
Depending on what the House decides today, some of that uncertainty should be removed. I want Parliament to be able to move quickly to enable the new scheme to be put in place, because it will provide certainty. I absolutely understand the uncertainty that exists for many dedicated, hard-working public servants who know that there might not be a future for them because of the situation-because, frankly, of the previous Government's legacy of the fiscal deficit-and
it is really unfair to leave people in limbo and with that kind of uncertainty. I want us to achieve the greatest certainty at the earliest time so that people know where they stand and so that Departments and agencies that have to make redundancies can go ahead with them and enable people to make the break and start the next phase of their lives.
The caps contained in the Bill are, as I said on Second Reading, a blunt instrument that will immediately limit the amount that can be paid to any individual. Those caps were never intended to be a long-term solution. It is and has always been our absolute priority to create a scheme that is affordable but that provides protection for the lower-paid. However, those protections are complicated to engineer and we felt-I do not resile from this at all-that it is incredibly important to consult thoroughly and to discuss properly how those protections should be configured. The discussions with the unions have been very productive and have led to the scheme, which I shall describe, being configured.
Jack Dromey (Birmingham, Erdington) (Lab): Widespread concern has been expressed throughout the House about the impact of the Bill on hundreds of thousands of civil servants. I welcome the fact that the Government have improved the offer to the civil service, but that offer is not as generous as what was on offer in February and agreement has yet to be reached. Will the Minister agree personally to meet the six unions concerned to try to achieve a negotiated solution? Negotiation has to be better than the blunt instrument that will impose serious changes for the worse to the employment contracts of, for example, defence civilians in the Ministry of Defence who are serving in support of our forces in Afghanistan right now. That instrument will establish a chilling precedent for the future and it is worrying all public servants. Will he make one final effort before the Bill becomes law?
Mr Maude: Absolutely and unequivocally, yes. I shall talk a little about the process we have been through and where we are in the negotiations. I say clearly to the hon. Gentleman and to the House that if it is at all possible to achieve a fully negotiated settlement that is affordable and fair to the taxpayer and that meets the concerns of all the unions, we will certainly try to achieve such an agreement with all six unions. I shall say a little more about that in a while, but the answer is definitively yes.
John Hemming (Birmingham, Yardley) (LD): In Committee, the hon. Member for Birmingham, Erdington (Jack Dromey) made some good points about individual exceptions in which even the terms proposed in the negotiations with the trade unions might be unfair to individuals who have been through particular hardship. Does the Minister agree that that can be resolved only through negotiation and that aiming to resolve it through legislation would be a mistake?
Mr Maude: My hon. Friend is completely right: there has to be flexibility. That is why I have always said that the caps imposed by the Bill are not right for a permanent system because they do not provide that flexibility. The scheme that has been brokered between the negotiators for five of the unions would provide much greater flexibility and would, I think, meet the concerns that he raises.
John Hemming: Also in Committee, Dusty Amroliwala, the civil servant responsible for handling the scheme, said that he would have advised any Government to take that approach to break the legislative logjam. He also said that there had been no estimates of what the Bill would save because there was no expectation that what it proposed would be the end result. In that sense, does the Minister agree that this is part of the process of breaking the legislative logjam?
Mr Maude: Yes, indeed. If the result of the process that we have been through with the Bill is that it makes a negotiated settlement more likely, that will be extremely beneficial. I do not want the outcome of all this to be that the existing scheme remains in place with the crude caps that the Bill imports. What we want is a new, successor scheme, and there is now a serious prospect of that being achieved. If it can be achieved with the support and agreement of all six civil service unions, no one will be more delighted than I. However, if we have to go down the path of having a new scheme that is supported by fewer unions, that would still be better because it would mean that many of the concerns that have been raised would be met better than by the Bill. That would be infinitely better than the current scheme remaining in place, as it is simply unaffordable and unsustainable, as the previous Government openly accepted.
Elizabeth Truss (South West Norfolk) (Con): In response to the points raised by Opposition Members regarding the difference between the deal that was done by the previous Government and deal being done now, how would the impact on low-income workers in the civil service differ?
Mr Maude: If my hon. Friend will allow me I shall come to that later, because I want to talk in a little more detail about the terms of the scheme that has been brokered by the negotiators for five of the unions.
I repeat that we want a long-term negotiated successor scheme. We want a package of reform that provides genuine protection for lower-paid civil servants, that caps the total amount that can be paid out, that provides protection for those closest to retirement and that reforms the accrual rates. It takes time to negotiate such a scheme and it has been a very intensive process. That is why the caps were put in place in the Bill-as a safeguard to ensure that if agreement could not be reached, we could at least limit the payouts in the short term. I have always been hopeful that we could reach agreement with all six unions by the time the Bill reached Report.
After the intensive negotiations throughout the summer, we reached an impasse. The same five unions that agreed the February deal with the right hon. Member for Dulwich and West Norwood came together once again and put to me concrete proposals for reform. Sadly, the PCS refused to join them in that approach. That was disappointing, but I made it clear to the PCS that it was welcome back at any stage if it was willing to put forward concrete proposals, and I wrote to Mark Serwotka, the general secretary, to that effect. In the meantime, my officials and I engaged productively with the remaining five unions to attempt to reach agreement. Last week, all five union negotiators, representing Unite, GMB, Prospect, the First Division Association and the Prison Officers Association, agreed terms with us that
they were prepared to recommend to their executives. The terms of that agreement represent a reasonable outcome for everyone involved and deliver on our objectives of being fair, affordable and sustainable.
It is worth dwelling a little on the terms of the agreement. We reached agreement on a standard tariff in which each year of service would provide one month's salary in the event of redundancy. That compares with one week's salary for every year of service under the statutory redundancy scheme. The tariff would be capped at 12 months for compulsory redundancy and at 21 months for voluntary redundancy. All civil servants being made redundant would be entitled to a three-month notice period. That is in contrast to a cap, in some circumstances, of well over six years' pay-six and two-thirds years-and paying up to three months' pay for every year of service, as is the case currently. It contrasts with the current situation of having a six-month notice period for all compulsory redundancies, but no equivalent notice period for voluntary redundancies. The new scheme will be simpler, fairer and more affordable.
We also agreed on significant protection for lower-paid civil servants. Under the terms of the scheme, any civil servant on a full-time equivalent salary of less than £23,000 who was made redundant would be deemed to earn £23,000 when their redundancy payment was calculated. So for someone earning £13,000 in those circumstances, the multiplier by which the number of years would be multiplied to calculate the redundancy payment would be deemed to be £23,000. For the very lowest paid in the civil service, that is significant additional protection and, I have to say, better protection for the lowest paid than the February scheme. I say again that that would be a permanent feature of the scheme, not a transitional feature of it. It would be in place for all time, or for all time until some subsequent Government chose to revisit it.
Conversely, staff earning more than six times the private sector median average earnings, which is around £150,000, would have their salary capped at that figure for the purpose of calculating their redundancy payment. That would be an end to the mega-payouts, which have been highlighted in a national newspaper recently and which cause a certain amount of offence to taxpayers.
We also agreed on protection for staff who have reached the minimum pension age of 50, allowing them to opt for early retirement when they leave, in return for surrendering the appropriate amount of any redundancy payment. Again I stress to the House that under this proposal that will be a permanent feature of the scheme, whereas in the February scheme, which the right hon. Member for Dulwich and West Norwood attempted to impose, it was framed as a transitional arrangement that would run out over time.
I believe that that is a fair deal for civil servants and for taxpayers. Given that we had agreement from five of the six union negotiators on the terms of the new scheme, I therefore proposed an amendment-the new clause that we are now discussing-to allow the Government to impose that scheme, which is a power that the Government thought they had and used when the right hon. Lady was in office, but which was subsequently struck down by the High Court.
I want to make it absolutely clear that there will be an obligation for the Government to consult properly before any scheme is imposed. I believe that that obligation
already exists in section 1(3) of the Superannuation Act 1972, but lest there be any doubt, I undertake that we will introduce a further amendment in the other place to put the matter beyond doubt. In the intervening period, I shall want to discuss with the right hon. Lady and with the unions how we can frame that measure in a way that gives the necessary comfort that this is a serious process. That commitment is there. There is already in the existing Act an obligation to consult the unions. It is not framed in quite that way, but that is the effect of it. We shall introduce further amendments if they are regarded collectively, by us all, to be necessary to put the matter absolutely beyond doubt.
I want now to make it absolutely clear what the new clause does. It does not create any unprecedented power for me that has not been available to my predecessors. It simply recreates precisely the power that the right hon. Lady had when she imposed the February scheme. It does not go one whit beyond that. It is rigorously framed so that it goes no further at all than the power in the original Act, on the basis of which the right hon. Lady-in good faith, and with our full support-acted before the election.
Let me say a word about the PCS. I have no wish at all to exclude the PCS from the negotiations. Late last week, the leadership of the PCS came back to me and indicated that they would like to return to the negotiating table. I welcome that and have told them that I am looking forward to seeing their proposals. The other five unions have been making constructive proposals for some little time now, and those suggestions have formed the basis of the proposed new scheme brokered and agreed by the negotiators for those five unions. I have stressed to the PCS that any changes to the proposed scheme cannot exceed the cost envelope of the scheme already agreed, and that any changes must be agreed with the other unions, which have already worked hard to reach this agreement.
May I say a word about the Opposition amendments, which have been grouped with the Government new clause and amendment? The Opposition amendments would effectively invalidate the effect of the Bill, as they would remove the caps, which are the essence of the Bill. There is nothing more to say about that. On Second Reading, I set out the reasons for having the Bill at all, and I have reiterated them today. I say again that no one would be more happy than I would if, the day after Royal Assent is given to the Bill, should it get that far, I am able to put those provisions into abeyance; I do not want us to be in a position whereby those caps are what applies in practice. I want there to be a new scheme-ideally agreed by six unions, but if not, agreed by as many as possible, and imposed using the powers that the right hon. Lady herself used, which the Government new clause will put into effect and allow to be used.
I earnestly hope that a successfully negotiated new scheme agreed by all six unions will follow from today's debate. I stress that I remain completely committed to achieving that. If we can achieve it, neither the caps in the Bill nor the power contained in the new clause will be needed, but if there were no such agreement, it would be wrong for the PCS to be able to veto any changes to the current scheme, because that scheme has been universally agreed in the House to be unsustainable.
This amendment will simply put the current Government in the same position as the previous Government-committed to consultation and to negotiation, but able, in the end, to decide. I commend it to the House.
Tessa Jowell (Dulwich and West Norwood) (Lab): I shall speak against Government new clause 1 and in favour of the amendments standing in my name and that of my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). I give notice that I intend press amendment 4 to a Division, subject to your will, Mr Speaker.
I also want to put on record my appreciation of the conciliatory tone in which the Minister has addressed the House today and note what I think was very constructive scrutiny of the Bill in Committee, which gave the opportunity to hear witnesses.
I would like to identify the common ground that we share, but also what still divides us. We agree that the civil service compensation scheme is in need of reform-as the Minister observed, I spent many hours trying to secure that reform-but it is also important that new legislation take account of the conclusions of the judicial review. It is important, too, that that is done in the right way, giving the 500,000 or so civil servants who are liable to be affected the confidence that the process will be fair and that the fairness of that process is institutional.
The legislation represents very high stakes for the 500,000 or so civil servants whose lives stand to be directly affected by its provisions. The Bill is not simply a blunt instrument for negotiating purposes. For those 500,000 civil servants, it could be a matter of their keeping their home, helping their children through university or averting financial hardship while they look for a new job. We heard eloquent evidence of that anxiety from witnesses who appeared before the Public Bill Committee.
To summarise, we have two central problems with the Government's position on the Bill. The first problem, as we argued from the outset on Second Reading, is with the unacceptable caps set out in clause 1. Our amendment 4 is intended to deal with that. The second is the unbridled powers that the Government are seeking to impose on any new scheme that fails to secure a negotiated agreement. We will take every step we can to insist that a requirement for consultation and due process appears in the Bill.
Mr Maude: The right hon. Lady describes the powers that we are seeking in the new clause as unbridled, but does she accept that they would be precisely the same powers as she had and exercised only eight months ago?
Tessa Jowell: I accept that only in part, in that the scheme set out in the Bill, with the caps, is substantially less generous than the scheme that we negotiated with the trade unions only a few months ago.
Mr Maude: I am not talking about the scheme; I am talking about the power in the new clause for the Government to impose a new scheme, which the right hon. Lady has just described as an unbridled power. I am asking her to agree what is certainly the case: that the power that the new clause would give to me is precisely the same power as she had and exercised when she held my job eight months ago.
Tessa Jowell: Let me come back on that point. When I was responsible for the negotiations, they were long, as the Minister outlined, and involved a serious and concerted attempt to reach a negotiated agreement. New clause 1 is a necessary way of dealing with the unexpected outcome of the judicial review earlier this year. Had we been returned at the general election, we would no doubt have had to amend the 1972 Act in the light of that, but the critical difference is that we would not have introduced legislation simply to impose a settlement in the absence of a clear commitment in the Bill to negotiation in good faith in order to try to achieve a proper agreement. That is why I stand by my description of the powers, as drafted in the Government's new clause, as unbridled.
We recognise the need for an amendment to the Superannuation Act 1972. The High Court judgment made a clear case for ensuring that the Government are able to compel a settlement and that no union should be able to veto changes. That is a position that we would support.
John Hemming: The right hon. Lady's amendment (a) would mean that the unions would have to consult their members in accordance with the rules before any new scheme could come in. Does she agree that that would provide the opportunity for a trade union to veto any changes merely by refusing to negotiate or consult its members?
Tessa Jowell: If the hon. Gentleman reads the amendment carefully, it will be clear to him that it is intended not to give the trade unions a veto, but to require a report to Parliament on the progress of the negotiations where the power is intended to be used, giving the effect of the imposition of a settlement in the absence of the agreement of all six unions.
"a report of the consultations that have taken place with the workforce and their recognised representative trades unions with a view to agreement"
"a statement that the representative trades unions have consulted their members in accordance with their rules".
Tessa Jowell: The approach is intended to ensure that what appears in the Bill when it receives Royal Assent represents a right and proper balance between the responsibility of the Government to secure a settlement and the entitlement of the trade unions to be properly consulted. However, as the hon. Gentleman may not quite be aware, in Mr Speaker's wisdom he did not select that amendment for debate.
I return to our clear view that no one union should be able to veto a change to the civil service compensation scheme that is the result of negotiated agreement with the majority of unions. The Government's ability to compel a settlement should be the course of last resort, once it is clear that common agreement cannot be reached-
We cannot support the Government new clause as drafted because it allows the Government to impose changes to the scheme at any point, without the contingent obligation to consult the work force or their representative trade unions.
" Before making any scheme"-
"under this section the Minister . . . shall consult with persons appearing to the Minister . . . to represent persons likely to be affected by the proposed scheme".
So there is an explicit obligation in the 1972 Act to consult representatives of staff affected by any new scheme. That is absolutely explicit. It was the obligation that the right hon. Lady herself followed scrupulously when holding the job that I now hold, and it is the obligation that I absolutely undertake we have been following. If there is any doubt about it, we will make that even more explicit with an amendment tabled in the other place.
Tessa Jowell: I am grateful to the Minister for that clarification, but as nearly 30 years have passed since the Superannuation Act was introduced, both the terminology and the reference to the negotiating structure could be updated to make the two commitments clear-the right to impose in the absence of unanimity among the unions, but a right that is exercised only on the basis of clear, systematic, open and proper negotiation with the appropriate trade unions and work force representatives.
The other underlying issue is the lack of confidence in the process so far. The Bill was published before the civil service unions had even met the Minister or his officials. None of the work force had the opportunity, unlike during the negotiations that we undertook, to comment on the proposed reforms, despite the fact that they marked a significant and detrimental departure from the previous package. The obligation to consult the work force at every stage is missing from the Bill.
Given the powers that the Government have asked the House to grant them through the new clause, it is only right that safeguards be put in place to ensure a fair and reliable process whereby the work force have a right to be consulted, the Government are obliged to seek an agreement with the representative trade unions and the House is the arbiter of whether that process has been fair and transparent. If those safeguards had been put in place, we would have supported the Government and not sought to vote against the new clause.
We have outlined a very clear basis for our opposition to the proposed change, but we make it equally clear that if the Minister for the Cabinet Office seeks to introduce in the other place a revised amendment that addresses the judicial review and puts consultation and proper process in the Bill, we will support him. That is dependent on Mr Speaker taking his usual principled and pragmatic view and not judging the Bill to be a money Bill, which would eliminate the possibility of any such constructive amendment and scrutiny in another place.
Mr Maude: To be absolutely clear, I am advised that if the new clause were not agreed to and the Bill remained as drafted, it would be possible for Mr Speaker to exercise his discretion-and it is a discretion-and certify it as a money Bill. However, I am also advised that if the Bill were to include the new clause and amendment that I have tabled, the question of its being a money Bill would not even arise. So, if the House were to carry our proposed changes, there would be no question of the Bill's continuing to be a money Bill for the purposes of the other place; it would go through the full and usual processes there.
The issue is about the right reforms, which we seek to put forward through our amendments 4 and 5, whose purpose is to strike out the arbitrary caps that the Government introduced at the start of the process. Those caps have led to an improved offer, as my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said, as a result of negotiation, and we welcome that. There is now an improved offer on the table, so we do not understand why the Government oppose our amendment. Given that new clause 1 would give them the power to impose any settlement, why have the caps, which have caused such distress and anxiety to civil servants, remained in the Bill?
We are pleased that the Government claim to have reached an agreement with at least some of the trade unions, and the Government have declared that that will supersede the terms before us. To echo the Minister's language, I note that he has managed to introduce a "sharp instrument" to replace the "blunt" one, but that leads us to question why the Government persist in wanting those terms to remain in the legislation.
The caps are simply out of kilter with the subsequent agreement that the Minister claims to have reached. He, his colleagues and his officials have told us that he wants a negotiated settlement, and on both sides of the House the consensus is that that would be the right course of action. Instead, however, the Government want to proceed to impose the arbitrary caps that they sought to impose at the beginning of the process. For those reasons, we ask the House to oppose the Government's proposed changes and to support our amendments 4 and 5.
The Government, in their handling of the Bill, have already tried the patience of the House to its limit. First, they asked us to agree to caps that they never intended to use, or hoped would never be used or reach the statute book. Then, they asked us to support a set of final provisions that would allow those terms to expire and be resurrected at any time in the future. Now they implore us to support a new clause that, in effect, would give them a blank cheque to draw up a new scheme at any time, with no guarantee that the work force, the trade unions or the House would be engaged in or influence the outcome.
The handling of this Bill has been an absolute shambles, and it is with some sympathy that I say to the Minister that he is now in a hole. The Treasury is breathing down his neck and insisting that he makes whatever savings that earlier in the process he might have pledged, but
that now will take a little longer to realise. We will oppose the new clause and press the House to a vote on our amendment 4, simply because the legislation before us will have a profound effect on the lives of thousands and thousands of civil servants, and they deserve better.
John Hemming: This has been a rather depressing debate, because the Opposition have demonstrated "oppositionism" at its worst. Everybody recognises that there is a problem and, basically, we cannot afford to pay six and two thirds years' redundancy payments to some senior civil servants. The Government are trying to look after the low-paid, and our proposals are better than the Opposition's. The Opposition's amendment, which admittedly has not been selected, would have reinstated a veto for the trade unions on any proposals for change, something that the Opposition disagreed with when they were in government.
Tessa Jowell: Will the hon. Gentleman explain why the proposals in the Bill provide a better deal for low-paid civil servants earning less than £20,000 a year than the proposals in the February 2010 package?
John Hemming: I accept the shadow Minister's point that the Opposition's proposals are the same as those in the negotiations, but the whole point of the Bill is that it is not supposed to be the end result. Civil servants have not made any estimate of the savings as a result of the Bill, because it is not supposed to be the end result. This legislation is what the civil service has advised us to undertake in order to break the legislative logjam that the previous Government created. It is about making progress.
On the issue of how we manage the civil service, I think that we should try to look after our employees and aim to minimise redundancies. In the absence of the Bill, however, that would become harder and harder. One thing that must be recognised is that reorganisation has essentially come to a halt, because we will not be able to save money if we have to pay six years' redundancy to somebody. Paying six years' redundancy will mean that we increase the deficit.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab): The hon. Gentleman keeps using the figure of six and two thirds, but will he concede that that is wholly inaccurate? Under the current terms, the maximum payment is three years. The six and two thirds figure to which he refers includes the enhanced pension that somebody would receive if they were over 50 years old. Will he therefore accept that his explanation is inaccurate?
John Hemming: The question is about what we add to the deficit-the actual cash costs. That is the key. The proposals that the previous Government tried to impose were struck down by a judicial review, so we have reverted to the original scheme.
In essence we are trying to reduce the deficit and reduce borrowing, and, if by making redundancies we increase borrowing, that will not get us anywhere at all. That is the reality of life. Underlying that, however, things can be done to reduce the full-time equivalent headcount without reducing staff-finding ways in which people can go part-time and so on. But, there is a legislative logjam that needs to be broken, and we need negotiations. Indeed, the 1972 Act requires them. The
Public and Commercial Services Union argues in its briefing that there needs to be a trade union veto because there is no contract. However, those people who have contracts can find that their contracts are changed.
To be fair, I should take a very different view if there were any threat to pension rights. Pension rights are different, but an unaffordable redundancy scheme, in which we cannot reorganise organisations and save any money, is one that we cannot deal with in these circumstances-much that the priority has to be otherwise. To that extent, new clause 1 is the right way forward. I am surprised that the Opposition have taken the view that they would rather this were a money Bill than not, because their amendment would create the situation whereby it suddenly became a money Bill.
John Hemming: I thank the shadow Minister for saying what her objectives are. In the past, the Opposition have often had objectives that they failed to achieve. Their objective was to remove the trade union veto, but the amendment would reinstate it. Their objective is for this not to be a money Bill, but by voting against new clause 1 they would, if successful, make it a money Bill. I accept that the shadow Minister has particular objectives, but what she does tends not to work; that is the reality of the situation.
We have to be effective in terms of running Government. We must do things that work-that achieve results. This Bill is about achieving results: it is about creating a situation whereby there can be negotiations with the trade unions in which we can deal with difficult cases where individuals are suffering particular hardship. In the Public Bill Committee, there was an attempt to negotiate through discussions with the trade unions. That was dreadful-it was almost impossible to get anywhere, and I find it rather sad that anyone tried. The reality is that negotiations have to work in a particular way; one cannot negotiate through a process of producing legislation. We need a blunt instrument that creates an environment in which a negotiated settlement can be arrived at. To that extent, I support new clause 1.
John McDonnell (Hayes and Harlington) (Lab): Following the final comments by the hon. Member for Birmingham, Yardley (John Hemming), I fully agree that we have been trying to create an environment in which agreement can be reached. However, if I were a civil servant watching this debate, with the prospect of the large-scale redundancies that will happen after the comprehensive spending review, I would almost despair. It will be extremely difficult for all of them to come to terms with the loss of their jobs. As a manager in the public sector in a former life, I have always found that people are realistic as long as their views are respected and they are involved in the discussions and negotiations, which have been entered into in a spirit of good will. To achieve that, we need to create a climate of good will where people feel that their views are being heard.
Despite my having opposed every cut of every job in recent years under the previous Government, we were told in the Public Bill Committee that 80,000 jobs were lost but there were only 80 compulsory redundancies. The negotiations that took place on the basis of the
protocols established with regard to redundancies and transfer between Departments resulted in a system whereby large-scale compulsory redundancies were avoided. The Minister referred to past practice under the previous Government. As I said, I did not support the cuts that went on, but I genuinely think that they were committed to a negotiated settlement. In my view, had it not been for the interference of No. 10 and the Treasury-this is almost like history repeating itself-we would have obtained a negotiated settlement that all unions would have accepted. However, the settlement was imposed, and I opposed that. The PCS took the then Government to court because it believed that the accrued rights of its members were being interfered with contrary to law because it was an imposed settlement, not an agreed one. It was proved right in the court of law, and we have to come to terms with the reality of that.
Harriett Baldwin (West Worcestershire) (Con): I am interested in the hon. Gentleman's point of view on this. Does he believe that it is possible for the Government to negotiate to a satisfactory conclusion with the PCS given its position in all the negotiations?
The position of the unions in the Public Bill Committee represented an attempt to acknowledge their responsibilities to their members. The PCS was in a similar position whereby, if it had not taken the Government to court to assert its members' rights to their accrued rights and to consultation and agreement, it could have been taken to court by any individual member for failing to undertake its duty to its members.
Under the previous Government, there was a genuine attempt to negotiate a settlement. Under the current Government, I have found in my discussions with civil servants-not only PCS members but members of the other unions-that there is uncertainty among many of the people who may well be affected by the cuts to come as to whether the Government genuinely want a settlement, and anxiety that the Government are seeking to provoke a dispute. I listened to the Minister's words, and I am grateful for them: they were positive and tried to create the climate in which a negotiated settlement can be achieved. However, the pattern of negotiations and ministerial statements in the past few months has not engendered an atmosphere in which a negotiated settlement can be brought about. That is why the Opposition have tabled their amendments. Every trade union representative at the Public Bill Committee made it clear to us that it was unprecedented for a Government, in the midst of negotiations, to introduce a Bill to impose a settlement in this way. It has never happened before in negotiations between a Government and the public sector.
John McDonnell: That very civil servant's advice landed the last Government in court, where they lost. I met him in the week before the general election and said to him: "You will lose in court because this is inaccurate advice on legal grounds, but in addition, it will not contribute to the conclusion of a negotiated settlement, and we'll be back again within weeks"-and we were.
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