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House of Commons

Monday 30 January 2012

The House met at half-past Two o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Communities and Local Government

The Secretary of State was asked—

Public Spending

1. Mr Douglas Carswell (Clacton) (Con): What steps his Department has taken to increase transparency in (a) local government and (b) departmental spending. [92054]

The Secretary of State for Communities and Local Government (Mr Eric Pickles): We have replaced the previous Administration’s byzantine bureaucracy with transparency and local accountability. We have asked every council to open up their books and to publish their spending over £500. Every council is doing this, apart from Nottingham city council, which finds it a bit difficult.

My Department is practising what we preach. Not only do we publish our spending over £500, but we have also published every single item of corporate credit card spending since 2004.

Mr Carswell: Will my right hon. Friend join me in congratulating and applauding Tendring district council, which has decided not only to publish items over £500, but to publish all items of expenditure every month? This has created a climate of thrift that has allowed it to cut council tax. Will he ensure that Whitehall Departments, agencies and quangos take similar steps?

Mr Pickles: I am happy to join my hon. Friend in congratulating Tendring. The council did not make the headlines for many years, but suddenly it has started coming up with lots of new initiatives. It is certainly in the forefront of transparency, and where Tendring leads, I am more than happy to follow.

Mr Denis MacShane (Rotherham) (Lab): Frankly, it is not good enough, because the Department is not publishing spending between 50p and £500, and that is where—on credit cards and in other areas—a lot of things go wrong. Can we have some transparency in this wretched Department, instead of the cover-up it is currently practising?

Mr Pickles: I am afraid that the right hon. Gentleman is quite wrong. We have published every penny of spending on credit cards, and that is why we know that Labour Ministers wined and dined at some of the finest restaurants in the country, including the Boisdale, Somerset House,

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the National Gallery, the Wolseley and the Cinnamon Club. It may be of interest to know that Labour Ministers were not alone—the Audit Commission managed to go to L’Escargot, Coq d’Argent and the Cinnamon Club, and its board members even went to an oyster bar to discuss corporate governance, and then lost the receipt.

Empty Properties

2. Sir Bob Russell (Colchester) (LD): What plans he has to return empty homes to use. [92055]

5. Dr Julian Huppert (Cambridge) (LD): What plans he has to return empty homes to use. [92058]

6. Charlie Elphicke (Dover) (Con): What plans he has to return empty homes to use. [92059]

The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): We have put in place powerful tools and incentives to support local communities to tackle empty homes. The Government published “Laying the Foundations—A Housing Strategy for England” on 21 November 2011. This sets out our plans for tackling empty homes.

Sir Bob Russell: I thank the Minister for that reply and I congratulate the coalition Government on taking action after 13 years of failure. While I welcome the empty homes premium and the empty homes fund—and bearing in mind that the borough of Colchester has 2,024 empty houses, 591 of which have been empty for more than six months—may I urge him to bring more pressure to bear on local authorities, especially as 2,000 dwellings is roughly the size of a sprawling estate, land for which is short and which would be a planning and environmental disaster if it went ahead?

Andrew Stunell: I certainly agree with my hon. Friend that it is a scandal that there are so many empty homes, especially if they are empty for more than six months. The total at the moment is 270,000 across the country, but the good news is that that is a reduction of 21,000 in the last year. It is important to tackle the problem and that is why we have committed £150 million to bringing empty homes back into use. I am sure that his friends in Colchester will want to take advantage of that.

Dr Huppert: Will my hon. Friend join me in congratulating councillors Sian Reid and Catherine Smart of Cambridge city council on their work to reduce the number of empty homes in Cambridge since 2004? The Government’s £150 million empty homes fund is welcome. How can Cambridge city council access it in order to get even more empty homes back into use?

Andrew Stunell: Local authority bids will be invited shortly for the £100 million that we have announced for providing affordable housing, and I hope that Cambridge will be right there. We are currently drawing up the criteria for the £50 million to tackle the worst concentration of empty homes. I also know that several community and voluntary groups in the east of England have their eyes on Cambridge.

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Charlie Elphicke: Although the number of homes empty for six months in the Dover district has fallen sharply, to 872, do Ministers agree that a lot more work is needed to undo the damage of the past in Dover? In 2005, there were 674 empty homes. I urge the fastest possible action. During the same time, the social housing waiting list has grown by 14%.

Andrew Stunell: I absolutely agree with my hon. Friend that it is an urgent task to get empty homes back into use, particularly affordable use. Often, the waiting lists facing many local authorities could be shortened if authorities tackled empty homes vigorously. That is why we have provided the new homes bonus as a reward and are investing £100 million to switch empty homes to affordable homes.

Gloria De Piero (Ashfield) (Lab): Does the Minister accept that making use of empty homes is vital not just to tackling homelessness but to protecting the green belt from house building?

Andrew Stunell: The hon. Lady is absolutely right. An empty home already has planning permission and is capable of use without all the aggravation often created by new development. More than that, an empty home is often the cause of antisocial behaviour and other problems in a community, so it is a double win; in fact, a treble win. I agree entirely.

Bill Esterson (Sefton Central) (Lab): Sefton has a shortage of land for building houses but has 6,000 empty homes. Why do the Government not let councils such as Sefton include those homes in their housing strategy? That would also be a way to protect the green belt and urban green space.

Andrew Stunell: I strongly urge Sefton council to develop a stronger policy on tackling empty homes. I hope that with the incentives that we have provided—the new homes bonus, the investment in affordable housing and the £50 million available to tackle the worst concentration of empty homes—it will do exactly that. The matter that the hon. Gentleman raises really relates to issues in the national planning policy framework and his council’s core strategy. I suggest that he watch this space.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Although dealing with empty homes is one way to address the housing crisis, what is the Minister doing to build more homes, particularly as the net supply, housing starts and housing completes have all fallen?

Andrew Stunell: First, we have commissioned a social and affordable housing programme, which will deliver 170,000 homes during this Parliament, resulting in more social and affordable homes at the end of this Parliament rather than a reduction, as happened under the Labour Administration. Secondly, the new homes bonus was paid out on approximately 160,000 new and returned empty homes in the past 12 months, and we are determined to increase that rate dramatically.

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Private Rented Sector

3. Alex Cunningham (Stockton North) (Lab): What recent assessment he has made of value for money and standards for tenants in the private rented sector. [92056]

The Minister for Housing and Local Government (Grant Shapps): The English housing survey shows that standards in the private rented sector have continued to improve more rapidly than in other sectors. In most areas, renting remains more affordable than purchasing a home.

Alex Cunningham: Shelter’s rent watch report 2011 found that, on average, private rents in 55% of local authorities in England were unaffordable for ordinary working families, and that 38% of privately renting families with children had to cut down on food to pay their rent. Many rogue landlords are still out there, providing appalling accommodation at poor value. What are the Government doing about those issues?

Grant Shapps: The hon. Gentleman is absolutely right to point out those issues. I am concerned to ensure that quality in the private rented sector is as good as possible, and I am undertaking work in that direction. It is worth considering, though, that satisfaction rates in the private rented sector are higher, at 85%, than those in the social sector, at just 81%.

Annette Brooke (Mid Dorset and North Poole) (LD): What is the Department’s view on local landlord accreditation schemes, and what advice does he give on such schemes to local authorities?

Grant Shapps: Local accreditation and licensing schemes can be good value for local people. I attended a local accreditation in Welwyn Hatfield on Thursday evening. The scheme is very good and designed locally to address local problems; in our case, it happens to be a student population. That is the advantage of doing it locally: it can be fitted in with what the community requires.

Jack Dromey (Birmingham, Erdington) (Lab): Rents are soaring in the private rented sector, and too many rogue landlords are ripping off tenants, undermining reputable ones. Yet earlier this month the Prime Minister said that rents were falling, and the Minister for Housing and Local Government has put up for grabs the remaining tenant protections that he has not already scrapped. Will he explain why the Prime Minister is so out of touch that he thinks that rents are falling and why he believes that basic tenant protections amount to red tape, at a time when it has never been more important to regulate the private rented sector, in order to drive standards up and rogues out?

Grant Shapps: On the first point, I imagine that the Prime Minister was probably referring to recent surveys by LSL Property Services showing two-month falls in rent levels. Those might be partially seasonal, but nevertheless rents have been falling—we will see what happens in future months. The hon. Gentleman calls for greater regulation. I will tell him what happened when there was greater regulation in the private rented sector. There used to be rent controls, for which some of his colleagues, including Labour’s London mayoral

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candidate, are calling, but when they were introduced, the housing rented sector fell from 55% of the overall sector to just 8%. However, since rent controls were abolished in the late ’80s, the market has doubled to 16%. I am afraid, therefore, that more regulation is unlikely to be the solution.

Tessa Munt (Wells) (LD): House owners have a duty to declare neighbour problems or disputes when selling their properties. Will the Secretary of State protect tenants in the private and social housing sectors in the same way by making it the law that landlords and agents must disclose neighbour problems when they enter into a new tenancy agreement, so that we do not have one rule for house owners and another for tenants?

Grant Shapps: My hon. Friend makes a good point. It is important that when people move they know what their neighbours are like, whether for social housing, properties purchased or in the private rented sector. I encourage everybody thinking about renting to use an agent that belongs to something like the Safe Agent Fully Endorsed scheme, which provides reassurance that some of these checks are being carried out properly.

Empty Properties

4. Dr Sarah Wollaston (Totnes) (Con): What steps he is taking to make (a) empty houses and (b) vacant properties above shops available for rent. [92057]

The Minister for Housing and Local Government (Grant Shapps): Our strategy for empty homes applies to all properties, including flats above shops, but we are also committed to revitalising high streets and shortly will publish the Government’s response to the Mary Portas review.

Dr Wollaston: The South Hams is one of the least affordable places to live in the UK, with house prices on average 16.7 times the average income, and more than 1,200 households on bands A to D of the housing waiting list. What does the Minister plan to do to address these affordability issues in the South Hams?

Grant Shapps: My hon. Friend is right that for levels of non-affordability in many areas to have reached 16.7 times average earnings is unacceptable. The Under-Secretary, my hon. Friend the Member for Hazel Grove (Andrew Stunell), referred to the social house building programme and the 170,000 being delivered during this Parliament. She will also be pleased to hear about the provisional allocation, within the local authorities comprising her constituency, of more than £3.5 million under the new homes bonus, which will also encourage greater affordability when used to build more homes. We are also considering allowing homes over shops, and many other changes coming from the Portas review.

Mr Andrew Love (Edmonton) (Lab/Co-op): Will the Minister explain how dismantling the powers available to local authorities to deal with empty homes above shops—for example, the management orders have increased from six months to two years, and properties have to be substantially dilapidated before action can be taken—will help to deal with the problem?

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Grant Shapps: There might just be a fundamental difference of opinion between Opposition and Government Members on this matter. The latter believe that private property should not be taken over automatically by the state just because somebody has gone on holiday or is working absent. There have been cases where people who have been working absent for six months have come back to find that their properties have been taken over. That is unacceptable, and we do not want that to happen. The hon. Gentleman is right that we have raised the limit to two years, but a range of tools is available to local authorities to get properties back into active use, and we are working actively on the empty homes programme. The Government are fully committed to getting properties back into use, hence the big drop in the number of empty ones.

Dr Andrew Murrison (South West Wiltshire) (Con): Given the Mary Portas review and the flagging state of many high streets in our small market towns, what more can be done to help change to residential the usage of redundant retail properties that, realistically, are unlikely ever to be used for retail purposes again?

Grant Shapps: My hon. Friend makes an excellent point. He will be aware that we are looking at making changes to the use class orders, through the national planning policy framework, to allow for greater flexibility. We have a good opportunity to allow some commercial properties to be more easily converted to homes, and I hope that will help with the ever-present pressures on housing in this country.

Council Tax Benefit

8. Grahame M. Morris (Easington) (Lab): What assessment he has made of the potential effects on lower-income households of his planned localisation of and changes to council tax benefit. [92061]

The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): On 19 December my Department published an impact assessment setting out the Government’s assessment of the impacts of the reform of council tax support.

Grahame M. Morris: The Secretary of State has told councillors that they have a “moral duty” to freeze council tax this year, but at the same time he plans a cut of £500 million, or 10%, to council tax benefit for the poorest, so that the only people to face rising council tax bills next year in constituencies such as mine will be the most deprived and the working poor. Why is he balancing the books on the backs of the poorest?

Andrew Stunell: The hon. Gentleman’s original question referred to localisation and changes in level. I hope that he accepts that the localisation part of the proposal is absolutely right and fully consistent with what this Government are doing. The changes in level are necessary to tackle the deficit; they are part of the Government’s deficit reduction programme. I would remind him that the bill for council tax benefit has gone from £2 billion a year, in 1997, to £4 billion a year. That is largely a product of the rampant rises in council tax during the 13 years of Labour Government, so it seems absolutely right that we should tackle the deficit in this way.

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Geoffrey Clifton-Brown (The Cotswolds) (Con): Those on low incomes in Cirencester are suffering a double whammy. Their town council is increasing its precept by 4.7% and the police are increasing their precept by 2.9%, at a time when the district and county councils are making the tough decision to freeze council tax. Will my hon. Friend see what can be done to ensure that all precepting authorities keep their increases to a minimum?

Andrew Stunell: The Secretary of State has made the Government’s point of view clear. He believes—and I believe—that local authorities and precepting authorities should behave with responsibility in these difficult times. I am sure that his words will have been heard, and I am happy to underline them from the Dispatch Box.

Mr Clive Betts (Sheffield South East) (Lab): Will the Minister confirm that localising council tax benefits in 2013 and cutting Government support by 10% will mean that if authorities that are strapped for cash cannot put extra money into the benefits scheme, if pensioners cannot have their benefits altered, and if councils have to take account of the tapers for people in work, those on council tax benefit who are out of work will see those benefits effectively cut by over 20%?

Andrew Stunell: First, may I thank the hon. Gentleman for his support for our localising the council tax benefit? Secondly, I do not recognise or accept that figure. If he looks at the impact assessment, he will see that he has grossly overstated the facts. In fact, the average weekly reduction in support will be £2.64 per household. I believe that is the right figure to be quoting in the House, not the one that he chose to use.

Michael Ellis (Northampton North) (Con): Council tax more than doubled under Labour, whereas the coalition has funded a council tax freeze for two years in a row. I support this Government’s localism agenda. Does the Minister agree that it will be fairer for the general population as a whole under the current Government’s scheme?

Andrew Stunell: Yes I do. I would make the point that with localism comes the capacity of local authorities to fine-tune the schemes in their areas to suit their local circumstances, and I would encourage local authorities to start to do that.

Helen Jones (Warrington North) (Lab): The Minister needs to accept that the scheme he is proposing is arbitrary and unfair, and hits the working poor most. How can he possibly justify cuts of between 13% and 25% in benefit for people of working age, and a switch from annually managed expenditure to grant, which means that any increase in claims will be paid for by cuts in benefit for the poorest people? Is it not time that the Government, who were prepared to accept a million-pound bonus for a banker, realise that they do not have the moral authority to inflict such cuts on the poorest people in our communities?

Andrew Stunell: I think that that was yesterday’s soundbite—[ Interruption. ]

Mr Speaker: Order. The hon. Member for Northampton North (Michael Ellis) must exercise the kind of restraint that I am sure has characterised his distinguished performances in the law courts over many years.

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Andrew Stunell: I should like to remind the hon. Member for Warrington North (Helen Jones) that the proposals in the Bill will give local authorities the capacity to vary the discounts on second homes and empty homes, and that there will be extra income for local authorities in that regard. There will be scope for efficiency and for the authorities to tailor their schemes to their local circumstances. I do not accept the point that she has made.

Business Rates

10. Diana Johnson (Kingston upon Hull North) (Lab): What assessment he has made of the possible effects on local authorities in deprived areas of his planned localisation of national non-domestic rates. [92063]

12. Tony Lloyd (Manchester Central) (Lab): What assessment he has made of the potential effect of his proposals for the localisation of business rates on regional inequality. [92065]

The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill): Currently, local authorities see no financial benefit from delivering growth. Our proposals will create a strong incentive for all local authorities, wherever they are in the country, to promote growth, local enterprise and jobs. We will ensure that no council will lose out as a result of its business rates base at the outset of the scheme.

Diana Johnson: Recent estimates show that, after year 1 of the business rates reforms, Hull council could lose up to £45.5 million, on top of the cuts that it has already targeted. With richer areas such as the City of London and Westminster benefiting at the expense of places such as Hull, how will this policy help to rebalance the economy between the poorest areas in the north and the richest in the south?

Robert Neill: The hon. Lady neglects to mention that, throughout the period of the Labour Government, the economic position of the north deteriorated by 2%, while that of Greater London improved by 15%. Moreover, her city of Hull grew in excess of the national average over the past business rate period, as did Manchester, Leeds, Durham and Stockton-on-Tees. All those places will gain under our proposals; they did not do so under the system that her Government operated.

Tony Lloyd: It is astonishing that the Minister has just completely failed to address my hon. Friend’s question. The poorer areas, which have already done badly under this Government in regard to their funding from central Government, are going to be even worse off unless they can guarantee to generate increased economic activity. Not every area can give that guarantee, however. Are these measures not simply going to make the poor poorer, and is that not morally unacceptable?

Robert Neill: I am sorry that the hon. Gentleman is not pleased that his Manchester constituency grew at about 6.9%, as opposed to a national average of 5%. He might also like to take on board the fact that a baseline will be set for all local authorities that takes into account their needs and resources at the beginning of the scheme,

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and that they will thereafter be protected by the top-ups and tariffs that flow from the baseline being uprated in line with the retail prices index.

John Stevenson (Carlisle) (Con): Does the Minister agree that the localisation of business rates will result not only in local councils taking a greater interest in the activities of local businesses, but in local business people taking an interest in the activities and performance of their councils? Does he agree that that will help deprived areas as well as others?

Robert Neill: I entirely agree with my hon. Friend. The proposal has been welcomed by the Local Government Association, and—the hon. Member for Manchester Central (Tony Lloyd) might be interested to know—by the Association of Greater Manchester Authorities. It was of course one of the recommendations of the Lyons inquiry, which was set up by the previous Government, and then ignored by them.

Parking

11. Ian Lucas (Wrexham) (Lab): If he will undertake a comparative assessment of parking schemes in town centres. [92064]

The Minister for Housing and Local Government (Grant Shapps): The Mary Portas review on the future of our high streets recommended the establishment of a new league table for parking charges. We welcome the review and will publish our response to it in the spring.

Ian Lucas: Why do so many parking schemes across the country involve the use of parking machines that do not give change? When the Government make their assessment of the Portas review, will the Minister check to see what proportion of local authorities have parking machines that give change to the hard-pressed people who are suffering in these Tory times?

Grant Shapps: First of all, I should point out that planning—and therefore many of the changes to parking regimes—is devolved in Wales and Scotland. Furthermore, one of the first things this Government did was to remove Labour’s incredible instructions to have only upward increases in parking charges and deliberately to build too few parking spaces in both residential areas and high streets throughout the county.

Mr Marcus Jones (Nuneaton) (Con) rose

Ian Lucas: Answer! The Minister did not answer my question.

Mr Speaker: Order. We must have order, however angry and irate is the hon. Member for Wrexham (Ian Lucas). He is shouting out that he has not had an answer to his question, but if that were to legitimise that sort of ranting, there were would have been permanent ranting in the House of Commons under successive Governments over the last 100 years. We cannot tolerate it.

Mr Jones: Excessive car parking charges are a tax on our town centres and high streets. Does my right hon. Friend believe that the implementation of free control parking schemes in many of our town centres would

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put us on a level playing field with out-of-town stores and therefore start to rejuvenate our town centres and high streets?

Grant Shapps: My hon. Friend is right. Key is ensuring that local and sensible plans are in place to ensure that people can arrive at a town centre, shop and not be exposed to unreasonable charges. I encourage all local authorities to think about their local economy—something that should be much easier to do when they know that they are going to be keeping the business rates in future.

National Planning Policy Framework

13. Angela Smith (Penistone and Stocksbridge) (Lab): When he plans to publish information on transitional arrangements in respect of his national planning policy framework. [92066]

The Minister of State, Department for Communities and Local Government (Greg Clark): We are committed to publishing the national planning policy framework by the end of March, having taken account the consultation responses, and the framework will include transitional arrangements.

Angela Smith: I am glad to hear the Minister say that, as there have been reports that the Government are minded to introduce a transitional period of 18 months. Will he confirm what the transitional period will be—how much time will be allowed? Will he also explain why Members and local authorities have had to learn some of the details from the media?

Greg Clark: I would be keen to understand that myself. We made a commitment that we would consult and listen to the responses, and the transitional arrangements were included. I gave a commitment to work closely with the Local Government Association on the transitional arrangements, and we are having those conversations.

Miss Anne McIntosh (Thirsk and Malton) (Con): Will the Minister confirm that the transitional arrangements will cover the application of PPS25 to properties at risk of flooding, and that all the reassurances given under PPS25 will continue into the permanent arrangements afterwards?

Greg Clark: Clearly, the protection of properties against flooding is important to the whole country, and not least in my hon. Friend’s constituency. We are working on the transitional arrangements to ensure that there is no gap between the current regime and the new regime.

Roberta Blackman-Woods (City of Durham) (Lab): In connection with the transitional arrangements to the national planning policy framework, will the Minister update us on village greens? Last year, in his speech to the Conservative party conference, the Secretary of State spoke glowingly about his determination to protect village greens, so why does he now have plans to charge local communities £1,000 just to start the process of protecting them? Is the policy of a grand for a green going to continue?

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Greg Clark: I had not spotted the hon. Lady at our party conference, but she would be a welcome visitor at any time. The consultation on village greens is being taken forward by DEFRA. What we have consulted on in the national planning policy framework is a new designation of local green space, which will make it open to every authority for the first time to protect locally valued green space in the same way as the green belt. We shall respond to that consultation shortly.

New Homes Bonus

14. Iain Stewart (Milton Keynes South) (Con): What his timetable is for the next allocations of the new homes bonus. [92067]

16. Amber Rudd (Hastings and Rye) (Con): What his timetable is for the next allocations of the new homes bonus. [92069]

The Minister for Housing and Local Government (Grant Shapps): The Government will shortly announce the final new homes bonus payments for 2012-13. These were provisionally estimated in December at £430 million.

Iain Stewart: Will my right hon. Friend congratulate Conservative-run Milton Keynes council on its innovative plans to use part of a new homes bonus to acquire land assets from the Homes and Communities Agency, which will help to stimulate both more housing regeneration and economic growth?

Grant Shapps: Yes, absolutely. My hon. Friend’s council in Milton Keynes is a shining beacon of housing growth and delivery, which puts many other councils to shame.

Amber Rudd: Towns such as Hastings have almost no new land for the building of new homes, but we are encouraged by the new homes bonus to tackle derelict buildings and are doing it well, despite—if I may say so—being controlled by a Labour council. Does my right hon. Friend agree that that social bonus is as welcome to communities as the additional financial bonus?

Grant Shapps: I entirely agree. In the last year 85 homes in Hastings have been brought back into use, which is indeed welcome. It is essential for us to reverse the catastrophic policies that, under the last Government, led to the lowest level of house building since the 1920s.

Mr Nick Raynsford (Greenwich and Woolwich) (Lab): May I draw the House’s attention to my interests contained in the Register of Members’ Financial Interests?

According to the Minister’s answer to a written question that I submitted on this subject recently, more than 70% of all homes qualifying for the new homes bonus in Kensington—one of the richest and most expensive parts of the country—are in council tax band A, which means that in 1991 their rateable value was less than £40,000. No developer or housing association director to whom I have spoken believes that it is possible to build a one-bedroom flat with that value, and some do not think that it is possible even to build a broom cupboard with that value. Is the Minister’s much-vaunted

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new homes bonus scheme delivering what it is supposed to deliver, or is it simply encouraging the reclassification of existing multi-occupied houses?

Grant Shapps: I know that the architect of the previous system does not like the new homes bonus, but I have to say that he is very mistaken about its impact. Nearly 160,000 new homes have been built—[Interruption.] Twenty-two thousand were brought back into use in the past year. I also know that the right hon. Gentleman is convinced that the new homes bonus does not benefit the right kind of homes, but I can tell him that two thirds of all new homes have been between bands A and C, which is exactly in line with the normal averages. The new homes bonus is rewarding homes throughout the country, and he should welcome the increase in house building.

Graham Jones (Hyndburn) (Lab): The Minister will be aware that east Lancashire has received some of the lowest new homes bonus payments for the second year running. He will also be aware that there are more properties than people in the region, and that given such a market it is very difficult to build new properties. What is he going to do about the problem? It is not possible for us to receive the necessary amount of money in Hyndburn, yet we are paying into the pot year after year and losing out. Is this not just another example of “Take from the north and give to the south”?

Grant Shapps: The hon. Gentleman and I have had many discussions about the issue, and he will know that his local authority is being paid for homes that are returned to use when they have been empty for a long time. I should have thought that the new homes bonus money would be welcome and useful to him in that regard. Moreover, his area has just received all the housing market renewal money for which it asked, but I did not hear him say thank you.

European Regional Development Fund

15. Julian Smith (Skipton and Ripon) (Con): What steps his Department is taking to ensure the efficient approval of applications to the European regional development fund. [92068]

The Minister of State, Department for Communities and Local Government (Greg Clark): The Government have improved the management of the ERDF. We have already saved the taxpayer £100 million on the last programme, and two thirds of the way through the current programme, two thirds of the funds have been allocated.

Julian Smith: I thank the Secretary of State for using his weight to sort out the recent problems involving broadband and ERDF funding. Will he confirm that the North Yorkshire project and pilot can proceed to the next stage of the ERDF funding application?

Greg Clark: The Secretary of State has indeed been helping in the negotiations with the European Commission to ensure that there is more flexibility on broadband

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projects, which is absolutely right. I understand that Connecting North Yorkshire will proceed with those plans forthwith.

John Healey (Wentworth and Dearne) (Lab): Does the Minister accept that the big block on the approval of applications is the failure to provide the match funding that is needed for many investments to boost jobs and growth? There is £245 million going begging that is earmarked for Yorkshire. What is the Minister going to do about match funding?

Greg Clark: The right hon. Gentleman is incorrect. The allocations that have been made are on track, and the correct proportion have been made for this point in the programme. Many match-funding opportunities are available, and they are being taken up, not least in Yorkshire. The chaos caused by the previous administration of the programme lost £100 million of taxpayers’ money that could have been invested, but by making the changes that we have made, we have saved that money for the taxpayer.

Troubled Families

17. Heidi Alexander (Lewisham East) (Lab): What progress the Troubled Families Team based in his Department has made in its work. [92070]

19. Damian Hinds (East Hampshire) (Con): What steps he plans to take to tackle the problems of the most troubled families. [92072]

The Secretary of State for Communities and Local Government (Mr Eric Pickles): In December, the Prime Minister announced a £448 million programme to turn around the lives of 120,000 troubled families. So far, more than 95% of upper-tier local authorities have engaged with the programme. Local authorities have begun to recruit a local troubled families co-ordinator, and to pull together their own list of local troubled families. We have also been able to offer each area £20,000 to help it to prepare for the programme.

Heidi Alexander: The funding for the troubled families initiative involves councils covering 60% of their costs up front and central Government picking up the tab for the remaining 40%, albeit on a yet-to-be-defined payment-by-results basis. Merrick Cockell, Conservative chairman of the Local Government Association, describes this model as “doomed to failure”. Does the Secretary of State agree with him?

Mr Pickles: The hon. Lady has, I am sure accidentally, given a partial quote. Sir Merrick is, of course, completely behind our approach, and was laying out a theoretical example that we are not adopting. We do not expect the entire 60% to come from local authorities’ moneys; we expect some of it to come from other agencies, and indications so far suggest that that will be successful.

I listened carefully to the hon. Lady’s questions to the Select Committee, and should she want to be actively involved, let me say that it is my intention that things will be handled on an all-party basis and that she will be most welcome to make a contribution.

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Damian Hinds: Some 55,000 of the 120,000 most-troubled families have children with behavioural problems. How will the work being done to deal with problems such as serial truancy dovetail with other initiatives dealing with parenting and early intervention?

Mr Pickles: Probably about 65% of those 55,000 cases involve truancy issues, while others involve criminal convictions and special educational needs. The purpose of this initiative is to pull all the various interventions and programmes together so that we can, at last, tackle these issues. I have found from talking to council leaders of all political parties that we all recognise that we must solve these problems, and this is our big chance to work together to do so.

Housing (Affordability)

18. Dr Alan Whitehead (Southampton, Test) (Lab): What assessment he has made of recent trends in housing affordability. [92071]

The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): The housing strategy recognised that affordability has significantly deteriorated in recent decades. Under-supply of housing is a major factor. The strategy announced an ambitious package of measures to boost house building, including the £420 million get Britain building fund, the release of public sector land and a new-build mortgage indemnity scheme.

Dr Whitehead: Is the Minister aware that the average family in Southampton would have to spend nine times its salary in order to purchase an average house in the city, and that, based on rent as a proportion of median income, Southampton’s private sector rents are also deemed very unaffordable? How does he intend to take people out of this trap, given that even if the Government’s affordable housing programme works it will produce only 70% of what the Labour programme produced in its last five years?

Andrew Stunell: I thank the hon. Gentleman for his question. I should perhaps point out to him that we have a programme for 170,000 social and affordable homes by the end of this Parliament, which will leave the country with a net addition to the amount of social and affordable housing, unlike the 220,000 fall in such housing during Labour’s period in office.

I should also point out that the most important thing we are doing is stabilising the financial situation of this country and keeping interest rates low. The combination of policies the coalition Government are following will produce the results that the hon. Gentleman and I both want.

Housing (Veterans)

20. Gordon Henderson (Sittingbourne and Sheppey) (Con): What steps he has taken to support former members of the armed forces in relation to housing. [92073]

The Minister for Housing and Local Government (Grant Shapps): I am determined to help current and former members of the armed forces gain the housing they

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deserve. Among the several measures I am taking, I have given service personnel priority for the Government’s affordable home ownership schemes, including Firstbuy, and I am consulting on proposals to change the law to make it easier for service personnel to access social housing.

Gordon Henderson: I welcome the Minister’s reply. Will he join me in congratulating UK Homes 4 Heroes, which supports homeless ex-service personnel? In order to see the great work that that charity is doing for our brave ex-servicemen and women, will he consider visiting a base for the charity’s outreach programme that is opening in my constituency in March?

Grant Shapps: I congratulate UK Homes 4 Heroes, which does a tremendous job. I know that 16 very dedicated people work with that charity. I also congratulate all the other charities across the country that do such great work for homeless and returning personnel. Last year I held a housing summit as part of the military covenant to try to ensure that we do everything possible to ensure that housing for people who return from having fought for this country is a No. 1 priority.

Simon Kirby (Brighton, Kemptown) (Con): Does the Minister agree that it is vital to consult all organisations that represent ex-service personnel when framing housing policy that affects them?

Grant Shapps: Yes; my hon. Friend is absolutely right. I mentioned the housing summit a moment ago, and I invited a range of service organisations to represent those personnel. It is important to get their ideas. I have also recently written to two service organisations to invite further contributions and all ideas are welcome, so I extend that invitation across the House.

Topical Questions

T1. [92079] Charlotte Leslie (Bristol North West) (Con): If he will make a statement on his departmental responsibilities.

The Secretary of State for Communities and Local Government (Mr Eric Pickles): I congratulate the 150 local authorities that have already signed up and intend to take the council tax freeze. I expect those numbers to grow as the weeks progress. On a more sombre note, I thank Members of the House for their contributions to the commemoration of Holocaust memorial day. It is very clear to me, looking at the various events that have taken place around the country, that Members of Parliament have been very heavily involved. It is important for us, at all times, to speak up and speak out against extremism and hate.

Charlotte Leslie: Will the Minister outline the measures he is taking to ensure that front-runner schemes, such as the Lockleaze front runner project in my constituency, have sufficient expertise, resources and actual power to do what they are remitted to do? Will he meet representatives of the project in my constituency?

Mr Pickles: Obviously, neighbourhood planning is a radical new right that gives communities and businesses real power in deciding the shape of the place. We will be

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providing £20,000 for each of the front-runner projects so that they can get on to the front foot. Should my hon. Friend wish to be involved and to meet me or my right hon. Friend the Minister of State, she would be more than welcome.

Hilary Benn (Leeds Central) (Lab): The Secretary of State is on record as saying that he is determined to help those facing the “frightening prospect of repossession”, yet the Government are making that prospect more likely for many hard-pressed families. The number of forced repossessions, in which the bailiffs come in, has risen by 27% since he took up his job. What is he going to do about it?

The Minister for Housing and Local Government (Grant Shapps): Any recession or downturn has a very long tail. When there are pressures such as those we see in the world economy, one can understand how household budgets are under pressure. That affects repossessions. It must be said that had interest rates not stayed at 0.5%—something that has been possible only because we have cut the deficit, because we have been working to cut the deficit and because we have had a credible plan to do so—and had the previous Government remained in power, we would surely have seen great numbers of people facing repossession.

Hilary Benn: I am sorry that the Secretary of State was not able to answer for himself. People want not excuses but help. The Secretary of State knew that there would be a problem, because he sent a letter to No. 10 last year to say that there would be an increase in the number of people who would lose their homes. However much he tries to disown that letter, is it not the case, whether it is because of benefit cuts that threaten more people with the loss of their home, the collapse in affordable housing starts or a Housing Minister who seems to believe that council housing is a “stagnant option for life”, that the only thing families can look forward to is more and more insecurity?

Grant Shapps: First, the Council of Mortgage Lenders said that there would be 40,000 repossessions last year, but there were fewer than that; they came in at 36,000 or 37,000. I should have thought that that would be welcomed, even by Opposition Members. I understand that the right hon. Gentleman is tempted to go back to old letters, but that letter has already been proved wrong in several different ways, including the fact that its main concern was the number of affordable homes that would be built. We now know that rather than 150,000, 170,000 will be built. I should have thought that he welcomed those moves rather than going back to old letters that have already been discredited.

T3. [92082] Tony Baldry (Banbury) (Con): Will my right hon. Friend instruct the Planning Inspectorate that in considering whether a local authority has made adequate provision for housing over a five-year period it should take into account all the extant granted permissions for housing that a local authority has given, irrespective of whether construction work on such housing has started?

The Minister of State, Department for Communities and Local Government (Greg Clark): My hon. Friend makes an excellent point. We want to strengthen the sovereignty of local plans and it seems to me that if

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councils have done their bit by granting planning permission, that ought to be taken into account by the Planning Inspectorate. I will certainly make sure that that point is reflected in the new framework on which we are consulting.

T2. [92080] Alex Cunningham (Stockton North) (Lab): What briefing does the Minister plan to give to the Prime Minister to ensure that he knows that, contrary to what he has repeatedly suggested in statements, rents are, apart from the odd small drop, continuing to rise across the country, hitting hard-pressed families? The Prime Minister needs to know.

Grant Shapps: It is absolutely true that rent rises are of concern and put a lot of pressure on people, but it is also true that private sector rents did not rise at the same pace as mortgage costs right up to 2007, so to some extent the market has been catching up with house prices. However, the hon. Gentleman is wrong to say that it is only one month of drops, because LSL has reported a second month of drops in rent prices.

T5. [92084] Mark Menzies (Fylde) (Con): Given that the Fylde borough council local plan will not come into force for a couple of years, what assurances can my right hon. Friend give me and my constituents that we will not see a stampede of planning applications in the meantime?

Greg Clark: I certainly encourage my hon. Friend’s council to make all speed in producing its plan, as it is desirable that there should be a plan in place. However, the transitional arrangements that we will put in place will make sure that councils that are doing the right thing by planning for the future of their area will not be disadvantaged.

T4. [92083] Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): The Minister’s Department estimates that neighbourhood plans could cost each council up to £63,000, but each council could receive only £20,000 at best. Given that both council planning and planning aid budgets are being cut, will the Minister explain just how these will be implemented without diverting scarce resources from other much-needed services?

Greg Clark: We have put funds aside to make sure that there is support for communities in preparing neighbourhood plans. In fact, we have another round of front-runners. We have been deluged with applications to get on with neighbourhood planning and we have heard examples of that from across the House today. We will make sure that there is support for all these communities.

T6. [92085] Paul Maynard (Blackpool North and Cleveleys) (Con): I am sure that my right hon. Friend will join me in praising the contribution that many indoor markets across the north of England make to our local communities, including Cleveleys and Bispham in my constituency. Will he update the House on the progress he is making on implementing the recommendations of the Mary Portas review?

Grant Shapps: I am pleased to tell my hon. Friend that we will have a Government response to the Mary Portas review by spring. We have also backed the “Love

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your local market” fortnight, working with the sector, and I know that there are many excellent markets across the north of England, including in his own patch.

T7. [92086] Pat Glass (North West Durham) (Lab): I met the chief executive of Dale and Valley Homes in my constituency on Friday, when he told me that nearly a quarter of his tenants will be hit by the bedroom tax. He said that many of those people are not on benefit but are working and are on a low-income or minimum wage, and that he has no smaller houses to move them on to. What does the Minister say to my constituents who risk losing their home or being driven out of minimum-wage jobs on to benefits as a result of the reforms?

Grant Shapps: The hon. Lady points to an unnecessarily miserable view of the changes being made, which have the overwhelming support of this country. Things have to be the same for those on welfare as for those in work and, as Members will know, there are many people in their 20s and 30s who share properties—not rooms but properties—and the same should be the case for those on benefits.

T8.[92087] Gordon Henderson (Sittingbourne and Sheppey) (Con): Last week, Thames Steel in my constituency went into administration with 350 workers being made redundant. That is another employment blow for the Isle of Sheppey, which already has above-average unemployment. Will my right hon. Friend consider designating Sheppey as an enterprise zone so that we encourage more firms into the area?

Mr Pickles: It is relatively easy to create an enterprise zone without the Government’s help. All that is required is a local development order, which the council can provide, and deals on superfast broadband, which the council can put together. Councils now have the ability to discount business rates. If my hon. Friend would like to come to see us, I shall put my Department at his disposal to take him through the process to help his local council.

Mr Jack Straw (Blackburn) (Lab): Is the Secretary of State aware that some developers, including Peel Holdings, which has a small retail park in Whitebirk, between Accrington and Blackburn, appear to have aggregated a series of minor planning permissions gained over the years for minor modifications to existing planning permissions to claim that they are entitled to a lawful development certificate justifying a major change of use? Does he also accept that that practice appears to run contrary to, and potentially undermines, his entirely commendable approach to strengthening high streets?

Mr Pickles: I am grateful to the right hon. Gentleman for giving me notice of his question. The whole process of securing small plots of land within a larger plot under change of use and making minor modifications is normal and, by and large, it works reasonably well. However, a local authority can take into consideration the cumulative effect on the larger plot in looking at those individual applications. If it appears to the local authority that the developer has abused the system or has taken a number of measures that will affect the whole, it is perfectly possible to take that into consideration.

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T9. [92088] Mr John Leech (Manchester, Withington) (LD): Under planned housing benefit changes, more than 2,000 of my constituents in social housing are expected to move to accommodation outside the social rented sector. They will be forced to move to smaller, more expensive accommodation in the private rented sector, thereby increasing the housing benefit bill. Is it not about time that the Minister for Housing and Local Government, along with the Department for Work and Pensions, scrapped those ludicrous plans for existing tenants?

Grant Shapps: The context of the housing benefit changes in particular need to be taken into account. The housing benefit bill was only £14 billion 10 years ago. It is now £21 billion, and left unchecked it would be £25 billion by the end of this Parliament. We propose to ensure that it does not increase to more than £23 billion. That is the scale of the changes—not £25 billion but £23 billion. Opposition Members seem to be disagreeing today. In the past week, they have agreed, then disagreed, then agreed, then disagreed. The House has a right to know where they stand on this matter as well.

Alison Seabeck (Plymouth, Moor View) (Lab): I draw the attention of the House to my indirect interest in those registered by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford).

May I take the Minister back to his answer to my right hon. Friend the Member for Leeds Central (Hilary Benn)? Will he give a straight yes or no—very simple—on whether he expects the number of forced evictions in the private rented sector to increase in the coming year?

Grant Shapps: The answer is that I very much hope that the number does not increase, and there is a very large sum of money—about £200 million—available for the mortgage rescue scheme. We are doing everything we can to ensure that people stay in their home, including encouraging people to seek early help and advice. In fact, I held a meeting of the home finance forum only last week in conjunction with the Treasury and the sector. The single greatest thing that we can do to keep people in their home in this country is to cut the deficit.

James Morris (Halesowen and Rowley Regis) (Con): I think it is fair to say that there has been a healthy debate about the contents of the national policy planning framework, but does the Minister agree that there is an urgent need to press ahead with simplification of the framework so that we can secure the sustainable development and economic growth that we desperately need in this country?

Greg Clark: I do agree with that. My hon. Friend is a member of the Select Committee on Communities and Local Government, which considered the matter, and it concurred that it was necessary and desirable to simplify the planning system that has grown to such an extent that it holds back growth and gets in the way of local people participating in the future of their neighbourhood.

Steve Rotheram (Liverpool, Walton) (Lab): It is nearly two years since this nightmare coalition was thrown together, yet we are still waiting for it to implement the regulations stemming from the Sustainable Communities Act 2007. To quote a twice delivered speech in the Chamber, if not now, when?

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Greg Clark: An announcement will be made about the Sustainable Communities Act regulations very shortly.

Duncan Hames (Chippenham) (LD): I thank the Minister for that answer and note that a quarter of the recommendations in the Portas review were suggestions that had been put forward under the Sustainable Communities Act. When bringing forward those regulations, will he ensure that town and parish councils have the right to make suggestions directly to the Government under the Act, rather than having to depend on county councils to act as unnecessary gatekeepers?

Greg Clark: My hon. Friend is absolutely right. We have opened up the Government to receive representations directly from all members of the community, whether community groups or individuals, rather than them needing to go through a filter before arriving with the Government.

Sheila Gilmore (Edinburgh East) (Lab): I would like to give the Housing Minister a third opportunity to give a straight answer on the bedroom tax. The real reason housing benefit has risen so much is the growth of the private rented sector, so why are council and housing association tenants being told to leave their homes or take a benefit cut?

Grant Shapps: A whole range of protections is in place, including the fact that people can choose to bridge the gap themselves. If they cannot do that, a discretionary fund of £190 million is available. If that does not work, by definition a third of properties within the local housing area are available. There are just some decisions that cannot be delayed, and it must be right that people who are in receipt of different types of benefits, whether social housing or housing benefit, have to make the same decisions as people who rent or own privately.

Zac Goldsmith (Richmond Park) (Con): Many of my constituents are wondering what the point is of local elections when so many decisions taken by the elected local authority, and supported by the majority of people, are simply overruled by remote authorities. Given that the referendum clause has been deleted from the Localism Bill, what hope can my constituents have that we will see a genuine shift in favour of local democracy?

The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): I draw my hon. Friend’s attention to the referendum carried out in Salford last Thursday. Local residents convened a referendum on whether the local authority’s system of governance should be changed and got a positive result. It is entirely possible for local residents to take control of the governance of their local authorities should they wish to do so.

Mr Andy Slaughter (Hammersmith) (Lab): The chief executive of Hammersmith and Fulham borough council recently retired. Thanks to a pay rise of £11,000 last year, which took his salary to £281,000, the Library calculates that he will receive a pension of £100,000 and a tax-free lump sum of £250,000. When the council is cutting Sure Start by 50%, is this a good use of public money?

Mr Pickles: I am sure that the answer is no. I am pleased that the level of chief executive remuneration has dropped by 14% and that 25% of chief executives have taken a voluntary pay cut. I am also pleased that Hammersmith and Fulham is reducing its council tax for the fourth year running.

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Victims and Witnesses Strategy

3.32 pm

The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke): Today I have laid before Parliament a consultation on far-reaching plans to improve the way our criminal justice system deals with victims of crime. Proper protection and support for those who have suffered at the hands of criminals is a fundamental part of a civilised justice system, yet ours is falling short in some respects. Victims of crime should be able to rely on justice that is not only swift and sure, punishing offenders properly, but intelligent and effective. That means, among other things, a system that promotes reparation, requiring criminals to make amends to victims and society for the wrongs that have been done, and a system in which compensation is focused on serious cases and is not available to those who have themselves committed crime. Current arrangements do not always measure up well against those ideals.

There has been a good deal of criticism recently about the experiences of victims in the aftermath of a crime. For one reason or another, a consistently high standard of victims’ services is not available all over the country. The Government have a responsibility to ensure that practical and emotional support to help victims recover from the consequences of crime is provided when required. Of course, high-quality counselling and practical support costs money and perpetrators of crime should, wherever possible, contribute to the costs instead of taxpayers having to pick up the entire bill.

The process of justice, as experienced by the victim, also needs to improve. Investigation and trial involve inevitable stresses, but it is unacceptable that victims still frequently report being told too little, too late about the progress of their case, or being expected in court to sit next to the families of offenders. It adds insult to injury that, if something goes wrong in the process, victims have to choose between 14 different routes of complaint. Victims have already been badly hurt by crime. The system should not be rubbing salt into the wounds.

Finally, in this list of matters that we are addressing, there is compensation. In my view, no amount of money can make up for the injury or emotional trauma that often results from a crime. The criminal injuries compensation scheme, since it was set up in 1964 and then reformed in 1996, has offered a measure of support from the taxpayer to victims of crime. Successive previous Governments, almost from the first, have never been able to ensure that the scheme has been properly funded, and this has had the wholly undesirable consequence whereby claimants can wait months and, in some cases, years for the process to run its course and payments to arrive. Meanwhile, millions of pounds have been spent compensating people for minor injuries such as sprained ankles and broken fingers. Even more perverse is the fact that over the past decade more than £75 million has been paid in compensation to 20,000 claimants who are themselves convicted criminals. It is no surprise that the scheme, in its current form, is not sustainable.

The consultation published today seeks views on a set of reforms to deliver a more proportionate, speedy and effective system to provide for the needs of victims of crime. I want to see a system that prioritises high-quality

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practical help to people in the aftermath of the crime, whereby we sort out compensation so that it is targeted at the most serious cases, and whereby criminals contribute to the costs of victims’ services, instead of being able to make claims as if they were blameless, law-abiding victims of crime themselves.

I propose therefore that we will introduce a new victims code, so that victims know what to expect during the investigation and trial process, and know where to turn when things go wrong; we will set out plans to make improvements to the practical and emotional support available to victims, raising up to £50 million from the perpetrators of crime through the victims surcharge and financial penalties; we will move decisions about local priorities for most victims’ services away from Whitehall, so that the vast majority of funding is in the hands of democratically accountable police and crime commissioners; and we will reform the criminal injuries compensation scheme, so that it is sustainable in the long term.

Compensation should be focused on those with serious injuries that have long-term or permanent consequences. We propose therefore that the top 13 bands—more than half the tariff bands—covering the most serious injuries continue to be compensated at the current level. We will also protect tariff awards at lower levels, if necessary, for the families of homicide victims, and awards for sexual crimes or persistent physical abuse.

In order to offer that protection, and to fund the scheme sustainably, we propose to reduce or remove awards for those with less grave injuries. Injuries such as sprained ankles, broken toes or bruised ribs, from which people tend to recover fairly quickly, will no longer be covered at all. In a further step, those who have committed crimes against others and have unspent criminal convictions will, in most cases, no longer be eligible to seek taxpayer compensation when others commit crimes against them.

The overall ambition of the changes is that total spending levels on victims—compensation, counselling and support—should remain the same. However, I believe that the proposals we are consulting on today will mean that finite funding is used more wisely. Instead of compensation going to those with less serious injuries and to those who have broken the law, it will be targeted where it counts most—on the most serious injuries. The support services, which many victims need as much as or more than compensation, will be available when required, paid for as far as possible by offenders and not by the taxpayer.

For families bereaved by homicide and those affected by serious violent and sexual crimes, the reforms will move compensation on to a sustainable footing and at the same time improve the quality and availability of practical support and advice. This constitutes intelligent, radical reform to sort out a system that is not working well and it will give a better deal to victims.

I wish to make good on the previous Government’s commitment—on which we agreed—to compensate victims of overseas terrorism. I believe that it is important that British victims of terrorist attacks abroad should in future qualify for compensation on a similar basis to victims of domestic terrorism. From April, we will make ex gratia payments to victims of past incidents, going back to 2002, on the basis of the current CICS tariff, as the previous Government proposed. I recognise the concern that was caused by the delay in confirming

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the details of these schemes and I thank all those who waited patiently for the announcement while the detail was being worked out.

Despite improvements introduced by successive Governments, victims still too often feel let down by the criminal justice system, yet they are the people to whom we have the greatest responsibility. Their needs should be dealt with sensitively, proportionately and promptly. I believe that the proposals that we are setting out today will ensure that victims’ services are on a more sensible and sustainable footing, and will go a long way to putting right the failings of the past. I commend the statement to the House.

3.41 pm

Sadiq Khan (Tooting) (Lab): First, I thank the Justice Secretary for his usual courtesy in giving me advance sight of the statement, albeit a much-delayed statement that it has taken the Government 20 months to draft.

Our attitude towards victims should always be at the top of our priority list. Quite simply, without victims and witnesses there would be no justice system. Without victims having confidence that our justice system will effectively punish and reform offenders, fewer would report crimes or come forward with evidence as witnesses. That is one reason why we have a basic duty to treat victims of crime and witnesses with the dignity that they deserve.

Sometimes it is the little things that make a big difference, such as ensuring that victims and witnesses have court proceedings explained to them, so that they understand how the trial is progressing. However, sometimes it is the bigger things that matter, such as giving them the support that they need to recover from the trauma of a crime, or ensuring that sentencing is transparent and fair in delivering effective punishment. Many of those things do not cost anything.

As a result of Labour’s record on crime, there were 7 million fewer crimes a year by the time we left government in 2010 than in 1997. There were therefore countless fewer victims of crime. That is the most sure-fire way in which we can help. We must have policies backed up by adequate resources to ensure that people do not become victims in the first place.

This Government’s policy on law and order is all over the place. The way they treat victims of crime is a prime example. Over the past 20 months, their policies on bail, sentencing, the chief coroner, domestic violence and rape have shown them to be out of touch with victims of crime in this country.

I welcome the fact that, after nearly three years in government, in April 2013 the Justice Secretary will finally honour the commitment to compensate innocent victims of overseas terrorism. However, the time that it has taken to come to that decision, despite cross-party support, is shameful. Will he confirm that the funds for that policy will not come from the resources destined for victims of crime in this country?

On the Criminal Injuries Compensation Authority, the Justice Secretary focused on the £75 million that has been paid to those with unspent convictions, which was

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just 3% of the total over the past 10 years. Will he confirm that there will be no further cuts to the CICA budget?

I put it on the record that we continue to support the victims surcharge, which was introduced by the previous Government and under which offenders work and pay towards victims’ services and victims. Will the Justice Secretary assure the House that none of the services that are funded by the surcharge will face cuts because of the additional surcharge that he referred to, which will go to the CICA?

As well as presiding over a 43% reduction in crime, Labour sought to improve the experience of victims in the justice system. To be fair, the 98-page White Paper lists some of the advances made over the 13 years of a Labour Government. I am already on record as saying that Labour would commit to working with victims groups and the Government to introduce a victims law so that the rights of the bereaved families of homicide victims were honoured, and I am pleased that the right hon. and learned Gentleman has announced a victims code today. I am pleased also that he has taken on board the announcement that I made at the Labour party conference—I have no problems with his stealing our ideas, I just hope that he will go the whole distance and ensure that the code is enshrined in statute and not just another unenforceable and ignored code of practice.

We have a duty to support victims through all stages of the process, and today’s strategy will be judged against that duty. My fear is about whether the Government will be able to deliver the justice that victims in this country deserve, bearing in mind their record over the past 20 months. I hope that I am wrong.

Mr Clarke: The right hon. Gentleman first touched on the arguments that we have been having on a wide range of other justice and sentencing issues, and on one or two subjects on which I was not aware that we had any differences on policy. The fact that he started on that basis rather led me to believe that he was not really very opposed to a great deal of what we have put forward in our consultation document.

I shall deal with the right hon. Gentleman’s specific questions. We are able to go ahead with terrorism compensation. I quite accept that it has taken some time since it was announced, and supported by us, during the time of the previous Government. We are putting it on exactly the same basis as the domestic CICS, and the time has been taken up getting the details of that scheme right. The domestic compensation scheme was left to us with an enormous financial deficit, and we are striving to make it sustainable and financeable, I hope without significant further change, in a way that it has never really been since it was first introduced back in the 1960s.

The right hon. Gentleman asked whether I could guarantee that there would be no further reductions in criminal injuries compensation. As I have just said, I very much hope there will not be. The scheme was set up in 1964 and ran into financial difficulties almost straight away. It was altered in 1996, and the last Government kept consulting on it but not doing very much. By one measure, when I took over from my predecessor there was an unfunded deficit of £750 million. We have had to find a lot of extra money from the

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Treasury to deal with unfunded pre-tariff liabilities, and we are trying to put the matter on a set footing for the future.

The victims surcharge will be raised in a fairer way, and I do not think there is any question of any cuts being made. At the moment the surcharge is levied only on those who pay fines. It is fair that it should be levied also on those who go to prison or serve community sentences, and that is how we are changing it. We hope to get a substantially bigger contribution from those who commit a crime, to compensate the people who have suffered from it.

As we move the detail of the current services to local responsibility and to the new police and crime commissioners, we will still provide specialist services for bereaved families nationally. We have put extra money into that, and into specialist groups, on Louise Casey’s recommendation, but we will not reduce the support for Victim Support. Support will be provided more locally and sensitively by the commissioners, who will have to build up partnerships with a lot of local agencies. We have of course done such things as putting extra money into rape support centres to open some new ones and give the current ones long-term funding security for the first time.

I concede that the last Government made considerable improvements on victims and witnesses during their term of office. Awareness of the inadequacies of how the criminal justice system dealt with victims and witnesses began to grow in the ’80s and ’90s, and it has been a fairly continuous process from the early 1990s onwards. However, we are making a significant step forward. As I said when I began my reply, I believe that the right hon. Gentleman and his hon. Friends will find it quite difficult to find very much with which they disagree.

Anna Soubry (Broxtowe) (Con): I agree with and support today’s announcement of these reforms, but does the Lord Chancellor agree that nothing in them will stop the victims of crime receiving compensation directly from the offender when sentence is passed? Some would say that that is at the very heart of the Legal Aid, Sentencing and Punishment of Offenders Bill, which is currently going through the other place.

Mr Clarke: We are seeking to make it more of an obligation on the court to consider making a compensation order for the victim when they appear for a crime. We are also trying to address ways in which we can improve the collection of that compensation so it can be paid over. My hon. Friend touches on what ought to be a key feature of the justice system, and one that needs to be improved.

Keith Vaz (Leicester East) (Lab): Six months on from the riots last August, only 42 people have received compensation under the Riot (Damages) Act 1886. The Home Affairs Committee report suggests that there should be a review of the victims surcharge. Is that part of the Lord Chancellor’s strategy? Does he agree that compensation should go directly to the victim rather than to a general fund?

Mr Clarke: The victims surcharge has always been separate from orders for compensation for victims—or at least it has for a long time. Either way, as I have

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explained, we are hoping to get more from the victims surcharge to give more money to victim support services in general across the country, because there are still deficiencies in them. I think we are all agreed that it is a very good idea that courts should make compensation orders for the victims of crime.

We hope that that will be done more often as a matter of course in court, but it depends on the defendant’s means, so we must look at how the court gets better information on the assets available to pay for such things. That will come later as we work on the proposals. We must also improve the recoverability of compensation orders. We all believe that we should cover more by way of fines, compensation orders and so on, and that that steadily improves. The difficulty is that a large number of people before the court either do not have much money or will not co-operate in recovering it. As for all creditors recovering money from extremely reluctant and feckless debtors, it is difficult for us to raise that money, but we hope to have the assistance and advice of the Home Affairs Committee from time to time on how we might improve that record.

Mr Peter Bone (Wellingborough) (Con): May I clarify with the Secretary of State whether a mass murderer in prison will be entitled to compensation if they are beaten up by another prisoner?

Mr Clarke: There is a discretionary element in the current system so that a very bad criminal record can be taken into account. At least one mass murderer did not get compensation for an injury in prison. My answer to the question is no, he certainly should not get compensation. We are going much further; it is simply not right for someone one week to commit a crime against another member of the public, and the next week to say that the taxpayer must compensate him because somebody has committed a crime against him. There may be exceptions to that on the fringes, but we must go much further even in the straightforward case that my hon. Friend describes.

Paul Goggins (Wythenshawe and Sale East) (Lab): I commend the Secretary of State for his statement, but what does he propose to do in cases—including a recent one in my constituency, to which I drew his attention—when an offender commits a serious offence and receives a community sentence, but then, via Facebook or other social media, claims to have got away with it, adding insult to injury for the victim? Will he consider a power of recall to the court so that such offenders can be held to account?

Mr Clarke: I will consider it. Such situations are extremely irritating, and in extreme cases could be contempt of court, but, as the right hon. Gentleman knows, no one has ever found a way to deal with them. There always will be cases when some miscreant leaves court and celebrates too vigorously the fact that he has not lost his liberty or in some other way. If he starts adding insult to the court or his victims, something should be done to find a way of dealing with him under the rules of contempt of court.

Tom Brake (Carshalton and Wallington) (LD): I welcome the Secretary of State’s statement and the proposals, particularly on requiring offenders to pay more to compensate victims and on providing compensation to

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UK victims of terrorism abroad. On UK victims of crimes abroad, will the Secretary of State agree to meet a cross-party group of MPs to look at the issue of people who are victims of serious crimes of another nature, such as serious assault?

Mr Clarke: It would be very nice to do that, but that is the history of this scheme from the start, which is why the aspirations of Parliament and Government have always run rather ahead of the available funding. I would like to compensate people with broken fingers or sprained ankles, but that would get us into arrears and months and years of delay before anyone could be paid. We have to concentrate on the most serious cases. As far as people abroad are concerned, all kinds of nasty things can happen abroad, although we hope that they usually do not. People can have all sorts of crimes committed against them or catch all sorts of peculiar diseases, but we have to bear in mind that British taxpayers’ obligation to compensate in such cases has to be limited to a certain extent.

On terrorism, the case has always been that it cannot be insured against, and that is why everybody has agreed that the taxpayer should compensate in such cases. I would be reluctant to accede more readily to going further and adding yet more people whom the British taxpayer has to compensate for unfortunate experiences in Africa.

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): The victims code is most welcome, although not as novel as one might think. I seem to have heard about it a few times before. How will delivery of the service uniformly across England, Wales and Scotland be affected by the fact that the Lord Chancellor has closed 40% of the court venues, that police numbers are falling and that thousands of court staff have been made redundant?

Mr Clarke: The victims code has been steadily improved over the years—it is all very well for the right hon. Gentleman to be a little sarcastic about it; it has been renamed—and we intend to improve on that. The right hon. Member for Tooting (Sadiq Khan) says that he will make it a victims law, but it is the same thing. The one reason for not putting it on a statutory footing is that we are waiting to see what comes out of the European victims directive, which we have opted into, so that we can clarify the legal obligations. We will improve the service, and it has nothing to do with the closure of under-used courts in various parts of the country.

Mr Robert Buckland (South Swindon) (Con): One of the problems that my right hon. and learned Friend referred to with the criminal injuries compensation scheme has been delay. The backlog reached a high of 85,000 cases a few years ago under the previous Government, although the figure is coming down. What effect will these proposals have on reducing the appalling delays that victims of crime are suffering?

Mr Clarke: I am glad to say that the figure is coming down, but delay is the most serious symptom of the underlying failing of the system. For as long as I can remember, we have had deficits in the funding and an

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inevitable delay in payments because they cannot be funded. Every year, the Home Office previously and now the Ministry of Justice has had to find more money to put into the scheme to try to keep ahead of the claims. A realistic attempt to concentrate the funding on the most serious offences that have lasting or permanent consequences should enable us to pay those people more promptly, rather than paying quite as many people as we do at present for a wide range of injuries.

Jeremy Corbyn (Islington North) (Lab): There are many people who are victims of crime, but no prosecution follows because they are victims of racist harassment, neighbourhood terrorism or domestic violence. There is a problem of getting independent witnesses and therefore getting a prosecution. Within the context of the reforms, is the Secretary of State prepared to consider enhanced funding and support for professional witness schemes so that we can bring about a greater sense of safety for those people who are suffering serious racist harassment in our society?

Mr Clarke: One of the things that we are consulting on—we have not mentioned it much, but anything we can do would be valuable—is increased support for witnesses. It has got better in recent years, but support to enable witnesses to find the experience a little less intimidating than they otherwise might, and to explain to them the process through which they will go, is always valuable and needs to be improved. On people who are victims of crimes about which they do not complain or which have not led to a prosecution, we have considered that and are issuing a consultation document. But the underlying rule of the scheme has always been that, in order to get compensation, people must be prepared to co-operate with the police and the prosecutors to get the crime dealt with, and we have to keep that. We have dealt specially with repeated physical violence, and that is meant to address domestic violence and some of the other cases to which the hon. Gentleman referred.

Nick Boles (Grantham and Stamford) (Con): I welcome the Lord Chancellor’s statement, but does he understand that my constituent Trevor Lakin can never be compensated for the loss of his son Jeremy in the Sharm el Sheikh attack? He has been fighting for years for compensation for the sake of such people as Will Pike, who survived an attack in Mumbai. Will Pike is trying to rebuild his life and needs help from the Government to do so.

Mr Clarke: I agree with my hon. Friend, who has campaigned consistently on the issue since arriving in the House. Nothing can ever compensate people who suffer severe consequences or bereavement as the result of a serious crime, which is why the scheme has always aimed only to make a contribution towards easing the financial problems that such victims suffer. In the case of overseas terrorism, we are moving as we are and in future the direct victims of overseas terrorism will be able to receive compensation on the same basis as on the domestic scene. We are still imposing some limitations on claims by family and so on, but this is an enormous advance on the previous situation in which nothing was being done, as all parties agreed in the last Parliament that it should.

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Ann Coffey (Stockport) (Lab): It cannot be right that children who have suffered sexual exploitation by multiple perpetrators then have to endure days of aggressive questioning by defence lawyers in court. What does the Secretary of State propose to do to support child victims giving evidence in court and make it a less distressing experience for them?

Mr Clarke: In the consultation document we address vulnerable witnesses, who often include children, particularly those whose evidence involves fairly traumatic events. There are arrangements now, of course: it is no longer necessarily the case that such children are exposed to open court. A certain amount of judicial discretion must be left, but in suitable cases video evidence and so on are now obtained. I hope that the consultation document will enable us to see what more can be done to ensure, first, that justice is done, but justice is best done when witnesses give evidence in the most suitable and justifiable circumstances. One cannot shield an adult from cross-examination, but one can certainly shield someone as vulnerable as a child of the kind that the hon. Lady described.

Philip Davies (Shipley) (Con): It is fair to say that the Secretary of State and I have not always seen eye to eye on criminal justice matters, so it is a rare treat to be able to congratulate my right hon. and learned Friend on his proposals for preventing criminals from accessing the criminal injuries compensation scheme. What assessment has he made of whether the proposal will meet the requirement of the Human Rights Act 1998, or indeed his beloved European convention on human rights? If it falls foul of them, what does he propose to do at that stage?

Mr Clarke: It is a rare treat for me as well to find myself agreeing with my hon. Friend. Who knows where it might lead? It might not lead to instant agreement on the Human Rights Act, but I see no jeopardy to the proposals in the consultation paper from any claims under the Act. I look forward to continuing to have interesting debates with him about the subject on other occasions.

Kevin Brennan (Cardiff West) (Lab): The Secretary of State used the example of millions of pounds being spent on compensation for sprained ankles and broken fingers, but he did not use the example that he used in the press of someone gaining compensation for being hit over the head with a bunch of flowers and the psychological damage caused. Will he outline to the House the details of that case, in the same way that he required the Home Secretary to outline the details of the cat in the immigration case?

Mr Clarke: The hon. Gentleman will notice that I did not use that example. [ Interruption. ] No, I have not. I might be quoted as having used that example, but I have not. He asked why I did not. I would like to make careful inquiries about exactly where that well-known case actually occurred, and what the precise circumstances were.

Bob Stewart (Beckenham) (Con): On Friday, I was told by a constituent whose family were about to go to appeal court—they were victims, of course—that they

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were absolutely terrified of giving evidence again. The Secretary of State has said that there is no way to protect people giving evidence from cross-examination, but is there any system whereby these people, who are often very frightened when attending court, could be protected?

Mr Clarke: Nowadays, victim support officers will talk to witnesses before they attend court, and it is possible for witnesses to be shown the court beforehand—certainly they will be taken through the process that they can expect to be followed. It is essential to the rules of justice, however, that evidence be properly tested. If we are to deal severely with criminals, we have to ensure that the person convicted actually committed the offence. It is right, therefore, that he—or, better, his representatives—has the opportunity to test the evidence against him if he maintains his innocence. Judges have powers to intervene if the questioning becomes offensive or irrelevant, but in the light of recent cases we are considering how to strengthen those powers so that offenders do not gratuitously add insult to their offence. It is difficult, however, because one can treat an offender with proper severity only once he has had every opportunity to maintain his innocence and the court has found that he is lying and guilty.

Ian Lucas (Wrexham) (Lab): Following the question from the hon. Member for Shipley (Philip Davies), may I ask whether the Government have specifically considered whether convicted criminals excluded from an application under the scheme could take their case to the European Court of Human Rights? This is a legitimate point.

Mr Clarke: We must ensure that the approach is proportionate and the circumstances appropriate. The hon. Gentleman, who raises a perfectly serious point, will see his question canvassed in the consultation document. It is not for me to suggest circumstances in which difficulties might arise. However, if someone was convicted for shoplifting and then, a year or two later, was the victim of an extremely serious assault in unrelated circumstances, that might be an exceptional case. If someone with a previous conviction has got themselves injured intervening to protect another victim from another crime, that, too, might be an exceptional case. I do not want to sketch out all the exceptional cases, however, because there would not be many of them. Nevertheless, I think that we can protect ourselves against challenge as long as it is possible to consider those cases. However, the bulk of criminals should not be entitled to payment from the taxpayer when they are victims of crime themselves.

Mr David Nuttall (Bury North) (Con): The current maximum award available under the criminal injuries compensation scheme to the most seriously injured victims of crime is much less than they would receive from a civil law claim for damages. Do the plans contain any proposals to remedy this problem?

Mr Clarke: That was the problem when the scheme was first set up—I remember wrestling with it 20 years ago. At that point, we had slipped into a situation in which a compensation claim was assessed as though it was a personal injuries claim in a civil court, which meant that every case took ages to litigate, lots of lawyers would turn up to make representations on the

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basis of large numbers of medical reports, and the costs soared. Everybody accepted that this was completely unsustainable. The compensation scheme for criminal injuries is not meant to be full compensation; it is meant to be a contribution towards covering the financial consequences of the injury. As I said earlier, it would be nice if the taxpayer could pay everybody full compensation as if it were a civil award, but frankly that was never practicable from the moment it started, and it certainly is not affordable now.

Tony Lloyd (Manchester Central) (Lab): May I return to the question of delays? Certainly for victims of serious crime—either threats of violence or violence itself—delays in the investigation and delays by the Crown Prosecution Service and in the court process simply add to the menace that victims suffer. The Secretary of State has made some suggestions on how to proceed, but will he assure us that this matter will be a key consideration when drawing conclusions from the consultation? Of all the matters I have dealt with, perhaps the most harrowing involve those who live in fear, suffering a sentence while those awaiting trial are free on the outside.

Mr Clarke: Most of the delays that I have been talking about are delays in payment of criminal injuries compensation, but I agree with the hon. Gentleman that it is just as important that we do something about delays in the criminal justice system. We must improve the efficiencies of the court, avoid wasting as much time as is wasted currently, and so on. Together with the Minister for Policing and Criminal Justice, my right hon. Friend the Member for Arundel and South Downs (Nick Herbert), we are working on ways of improving the efficiencies of the court so that the more straightforward cases can be dealt with more promptly and those that are contested are handled more efficiently, to everybody’s advantage, including in terms of court costs, police costs, and everything else. Our system does not have as many delays as some of the worst in western Europe, but if someone is staying in custody for too long before they can get a trial, it is bad for justice. However, I agree that the biggest complaint we usually get from laymen in criminal cases that have gone slightly wrong is that it has taken too long to get to court and that there have been several abortive appearances that wasted their time before the case finally got dealt with.

Simon Hughes (Bermondsey and Old Southwark) (LD): The Justice Secretary has generously recognised the concern felt by the families of Jeremy Lakin, a constituent of mine, and others who were either killed or injured in serious incidents such as those in Sharm el Sheikh or Mumbai, given that the original commitment was made by the last Government, before the last election. Given the delay so far, can the Justice Secretary assure them and others in their position that the announcement of April payments will mean that it will be possible to make payments soon after the beginning of the next financial year? What they need is certainty.

Mr Clarke: Yes, I can assure my right hon. Friend on that. We are not consulting on this because it has been around for so long. We are not having further delay

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while we consult on it: it is a non-consultative part of the document. We are going to implement the scheme in April, and I hope that will lead to prompt payment. It has taken far too long, and we will certainly do everything we can to make the payments as promptly as possible, though some will have to be assessed, in order to get the figure right in each case.

Sheila Gilmore (Edinburgh East) (Lab): One of the concerns in family law cases is that the victims of domestic violence can, in subsequent proceedings—perhaps on issues of custody or other things to do with children—be faced with a party litigant against them. Will not the changes to legal aid make that sort of thing more likely to happen, and that that is extremely oppressive to victims?

Mr Clarke: The hon. Lady has ingeniously raised a point that is wholly relevant to the legal aid provisions in the Legal Aid, Sentencing and Punishment of Offenders Bill, which is in another place, and not to this statement. In family law it is by no means unusual for the parties to face each other, and if one starts behaving badly towards the other, the judges just have to use the powers available to them to stop that happening. It is simply not possible to make every aspect of a dispute in court free of any stress or problem for both sides, because usually the parties in such cases are arguing about very stressful and emotional things about which both parties are considerably overwrought.

Mr Tobias Ellwood (Bournemouth East) (Con): I welcome this statement, and in particular the commitment to support British victims of terrorism overseas. As the Secretary of State implies, this is long overdue. As compensation goes, I think terrorism falls into a different category from a broken finger, which he mentioned, or a robbery. It is a brutal message from the state. Terrorists do not recognise borders, but our compensation system does. Will he confirm that Britons affected by terrorist attacks, such as those in Bali, Sharm el Sheikh or Mumbai, will be supported in the same way as those affected by 7/7, including for loss of earnings?

Mr Clarke: My hon. Friend has campaigned strongly on this subject—again, ever since he has been in the House—and I am very much aware of his views. What I have announced for the ex gratia arrangement—that is, the one that is paid under no legal obligation, but which we have agreed to pay for those whose claims will predate the new scheme’s coming into effect—is in exactly the same terms as what was announced under the previous Government, which was agreed to by both my party and the Liberal Democrat party. That arrangement does not include loss of earnings, and we are not going back to try to revalue it. However, in future claims will be eligible for compensation on exactly the same basis as they would have been eligible for compensation for a similar crime in the United Kingdom.

Pat Glass (North West Durham) (Lab): Will the Secretary of State confirm that the consultation will also look into the issue of prison officers who are assaulted by lifers? In such cases, the CPS routinely takes the view that it is not in the public interest to prosecute as the perpetrators are already in prison. Compensation matters, but so does justice, to prison

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officers such as my constituent Neil Walker, who, along with colleagues, was seriously assaulted by Kevan Thakrar. Some of those prison officers will never work again. They need compensation, but they also need justice.

Mr Clarke: Prison officers do an extremely important and sometimes dangerous job, so I entirely share the hon. Lady’s views on the need to look after and protect them. They are entitled to, and should receive, criminal injuries compensation on exactly the same basis as any other citizen. I would expect the CPS to take allegations of assault or violence against prison officers just as seriously as they would take such allegations relating to any other citizen, and I think that it usually does. I cannot intervene in individual cases, and there is always some discretion, but I agree that our prison officers deserve the fullest possible protection that we, as a society, can give them.

Henry Smith (Crawley) (Con): Will the consultation document cover the possibility of curbing payments of compensation to people who have been convicted abroad but now reside in this country?

Mr Clarke: I think it certainly should, but I will have to examine further how effective the administrative arrangements for detecting such cases will prove to be. We are always trying to improve the exchanges of criminal records, so that people bear the proper consequences of any criminal records that they have built up.

Rehman Chishti (Gillingham and Rainham) (Con): I welcome the Lord Chancellor’s statement. Will he confirm that the money raised by the increase in fixed penalties for motoring offences will also be used to support victim services?

Mr Clarke: Yes. The reason that we are raising more money from offenders through the surcharge is precisely to improve the services offered to the victims of crime. Whatever the source of the money, it will all be directed towards improving those services across the country.

Dr Andrew Murrison (South West Wiltshire) (Con): I very much welcome my right hon. and learned Friend’s statement. He is right to direct the services of the criminal injuries compensation scheme towards those victims who have suffered the most. People who develop mental health problems as a result of a crime often find that their conditions are difficult to quantify or are not readily apparent. What can be done to ensure that such people are not disadvantaged?

Mr Clarke: As my hon. Friend says, the problem is often one of obtaining a proper diagnosis, in order that the consequences of crime can be recognised. In order to concentrate on the most serious offences that have lasting and sometimes permanent consequences, we had to draw the line somewhere. Below that line, the amount of compensation starts steadily to be reduced under the tariffs, with the very lowest tariffs receiving no compensation at all. Mental illness occurs at various levels in the tariffs, according to the lasting consequences that are being suffered, and to their severity. We will therefore still have the problem of assessing and diagnosing

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each case accurately, to ensure that it is the serious, lasting problems that are compensated, as they quite properly are now.

Michael Ellis (Northampton North) (Con): I commend the Lord Chancellor for his statement, which any right-minded person would regard as sensible and forward thinking. Does he agree that support services are as important as compensation for many victims? Does he think it right and proper that the taxpayer should not be asked to pay for those support services when the offender can do so?

Mr Clarke: Support services are sometimes more important. The trauma suffered by a victim is not always proportionate to the seriousness of a crime. Some people, for example, are hardy and can get over a nasty experience fairly rapidly, while some frail, vulnerable people can be severely affected for many years by a comparatively minor incident. We are trying to ensure that the support services are better targeted so that we can concentrate on those who really need the help, and that local priorities are determined more locally. It is obviously sensible to say—no one has disagreed with the view today—that those who commit crimes, including those who go to prison and those who receive a community sentence, should contribute to the cost of the support given to the victims of crime in general.

Dr Sarah Wollaston (Totnes) (Con): As a result of funding from the Ministry of Justice, women who have been victims of sexual crimes in my constituency can now benefit from help and support from Devon Rape Crisis. As a patron of Devon Rape Crisis, I ask the Secretary of State to ensure that a sufficient amount of the £50 million that is going to be taken from convicted criminals will go towards long-term secure funding for rape crisis centres around the country.

Mr Clarke: The Government will continue to look at rape crisis centres as a national responsibility and consider funding them from the centre. We have been able to open, I think, four new ones since we came to office, but for all existing ones we have for the first time pledged funding for three years, providing them with more sustainable security than under the previous year-by-year changes. I can assure my hon. Friend that we will continue to give very high priority to improving support for such valuable centres as much as we possibly can. I think she agrees and is prepared to say that our record so far is pretty good. My right hon. Friend the Home Secretary certainly helps me to ensure that we keep concentrating resources in this area.

Dr Julian Huppert (Cambridge) (LD): I recently visited Cambridge victim support, which does an excellent job, but there is no doubt that greater help is needed for victims and witnesses. I welcome that much of the statement, but will the Justice Secretary clarify his comments about those who have been convicted? I accept that we need to stop those who simply take advantage of the scheme, but he will be aware that some convictions are never spent. Is he arguing that someone who was convicted for such an offence 50 years ago should still not be eligible for any compensation, irrespective of what happens to them?

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Mr Clarke: As the hon. Gentleman will know, the Government are committed to introducing amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill, currently in the other place, in order to amend the Rehabilitation of Offenders Act 1974. This is very much a Liberal Democrat initiative, and it will make the difference between spent and unspent sentences a little less rigorous. We are consulting on exceptions to an absolute bar. It is right that someone injured in their 60s does not necessarily lose all right to compensation on the basis that he had quite a serious conviction when he was 19. Without opening the gates too wide, we are, as it were, canvassing views on how to accommodate such exceptional cases—so long as they are rare and exceptional.


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Civil Aviation Bill

[Relevant document: The Thirteenth Report from the Transport Committee, Draft Civil Aviation Bill: pre-legislative scrutiny, HC 1694 ]

Second Reading

4.22 pm

The Secretary of State for Transport (Justine Greening): I beg to move, That the Bill be now read a Second time.

A successful aviation sector goes hand in hand with a growing economy; they are two sides of the same coin. That is why we need to ensure that the regulatory framework for civil aviation in the UK enables the sector to make a full contribution to economic growth, without compromising the high standards consumers rightly expect from the industry. Passengers are the lifeblood of successful aviation, so, above all, the Bill puts the interests of the consumer first, enabling the regulator to address the things that passengers care about most.

The aviation industry in the UK is vital and dynamic, and it has changed dramatically since the current regulatory framework was introduced in the 1980s. In many areas, competition has flourished and passengers have benefited, but while the industry has innovated and diversified, much of its regulatory framework has remained fixed and inflexible. There is compelling evidence that the current regulatory regime is distorting competition between airlines and needs to be reformed. When competition is distorted, the people who suffer are the consumers and customers—the 211 million passengers who travel by air each year and the freight customers who rely on aviation to transport their goods quickly and efficiently and make reliable connections with global markets.

We need only recall the scenes at airports closed by bad weather last winter to be reminded just how much people can suffer when air travel lets them down. The current regulatory regime proved itself a blunt and ineffective tool when it came to dealing with the issues that arose last winter—and we need to put that right.

With our independent Civil Aviation Authority we already have a world-class expert regulator with a first-class track record on safety, so the aim of this Bill is to give more responsibility to the CAA and to provide a better regulatory framework that would enable it to introduce more flexible and proportionate regulation and to take timely action on the issues that matter to passengers.

The Bill will devolve more responsibility to the specialist regulator for aviation, and will remove regulatory functions and unnecessary intervention by Government. It will also ensure that the CAA operates in a transparent and accountable manner, so that when appropriate it can carefully weigh up the costs and benefits of regulation as an integral part of the decision-making process. As a result, future regulatory intervention will be directed only at areas in which it is strictly necessary. For the first time, the regulator will be allowed to give the public reliable information about the sector’s performance and its environmental impacts, and about measures taken to address them. Moreover—this will be important as we work to reduce the deficit—the Bill will substantially reduce taxpayer funding for the regulation of aviation. It surely makes sense for the costs of regulation to be met by the sector itself.

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The Bill focuses on three key areas: reform of the economic regulation of airports, a range of measures giving the CAA a role in aviation security and in the reform of its own regulatory framework, and reform of the air travel organisers’ licensing scheme to improve the protection of passengers. I will explain each of those in turn.

Let me begin with the importance of competition and the economic regulation of airports, a vital area that accounts for two thirds of the clauses in the Bill. Most airports up and down this country are subject to effective competition and do not need economic regulation, but for the small number with substantial market power, economic regulation is vital to defend consumers’ interests.

The case for reforming airport economic regulation is compelling. Few people would claim that the current regime, which, after all, was designed 25 years ago, is giving passengers the quality of service that they deserve. The industry and the regulator have urged change as well, and three years ago the Competition Commission concluded that the legislative framework distorted competition between airlines by adversely affecting the level, specification and timing of investment at airports and the service that passengers receive.

Pete Wishart (Perth and North Perthshire) (SNP): Does the Secretary of State think that the takeover of British Midland International by the British Airports Authority will increase competition in the provision of air services to Scotland? What will the Government do to ensure that slots at Heathrow will be protected for the purpose of transport between Scotland and the rest of the United Kingdom?

Justine Greening: The hon. Gentleman is right to raise an issue that we also consider important. BAA also wants to ensure that it remains competitive, with connections to new markets, and that is the balance that we want to be struck. I know that the subject was raised last week at Prime Minister’s Question Time, and I know that the Prime Minister takes careful note of such matters. The hon. Gentleman will be aware of the work that the Government did to help ensure that we kept the connection between Northern Ireland and Newark airport in New York. We are strongly committed to ensuring that we have the connections between airports and across the country that our economy needs to be successful.

Part 1 of the Bill replaces the current framework for the economic regulation of airports with a flexible, modern regime designed to put consumers first. The current “one size fits all” system of economic regulation is rigidly focused on a five-year price control regime. The Bill replaces that with a flexible licensing regime which can be directed at areas where regulation adds real value, and which will allow the CAA to reduce or remove unnecessary regulation. The CAA will have the power to incentivise and improve airport resilience, and to take more speedy action to tackle poor performance. When competition in the market grows, airports will be removed from regulation when that is in passengers’ interests.

I understand the importance of clear and certain decision-making to the ability of businesses to make long-term investments in our transport infrastructure, particularly when billons of pounds of investment are at stake. Independent economic regulation ensures that

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there is no political interference, which is why it is such a common feature of modern economic regulatory regimes. The Bill will remove the Secretary of State’s role in deciding which airports are regulated and will give that responsibility to the independent CAA, which will need to make decisions based solely on the need to regulate and to protect the interests of consumers.

Gavin Shuker (Luton South) (Lab/Co-op): The Secretary of State has said that the CAA will have additional powers and responsibilities. Will she say a little more about that? I find it odd, for instance, that it is excluded from the remit of the National Audit Office.

Justine Greening: The hon. Gentleman correctly points out that exclusion and I will address his point shortly. When Sir Joseph Pilling reviewed that matter in 2008 he concluded that the current approach was appropriate.

Importantly, the CAA’s decisions will become more accountable because the Bill will provide greater access to challenge regulatory decisions. As the CAA discharges its responsibilities, it is essential that its decisions are guided by the needs of customers. Therefore, clause 1 establishes for the first time a single, clear, primary duty on the CAA to further the interests of consumers—all passengers and owners of air freight both now and in the future—and, wherever possible, to do that by promoting competition.

Some airlines have argued that the CAA’s duty should be extended to airlines as users of airports, alongside passengers. The airlines are important of course, but I am in no doubt that if conflicts of interest arise between airlines and passengers, the regulator must be squarely on the consumer’s side. To protect consumers at all airports, the Bill gives the CAA powers to enforce competition law concurrently with the Office of Fair Trading in the airport services sector.

Mr Tom Harris (Glasgow South) (Lab): The Secretary of State makes a valid point about what should happen if a conflict of interests were to arise between passengers and airlines. However, can we not address this issue by stating in the Bill that the CAA’s prime obligation is to passengers and that the airlines are specifically a secondary priority?

Justine Greening: I do not think we need to go that far. As I have said, the Bill’s key purpose is to provide clarity on what the CAA must focus on primarily, which is consumers. It is important to provide that clarity.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): The Secretary of State rightly points out that consumers’ interests can be protected by promoting competition and thereby giving passengers greater choice, but how does the Bill address situations that cannot be dealt with by more competition, such as passengers facing long queues to get on and off planes? In the short term, that will not be addressed by competition, so how might the Bill help in such respects?

Justine Greening: The Bill cannot deliver absolutely everything in respect of the aviation industry. It will, however, deliver a key element of the regulatory framework that will sit alongside how the industry operates. Competition is working. We need only consider the

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investment that both Heathrow and Gatwick are putting into winter resilience to see that passengers will make a choice between those two airports based on which one they believe they can rely on. As a result, we are seeing competition lead to far more investment on that side of airport operations. I have seen that development for myself, and I greatly welcome it. Providing the CAA with these new powers will promote effective competition by enabling the CAA to make use of its specialist knowledge and to co-ordinate its use of economic regulation and general competition powers.

Turning to modernising the regulators’ wider role, part 2 of the Bill includes changes to how the CAA operates by improving transparency and accountability, removing unnecessary Government funding and involvement and cutting red tape. Transparent information is of huge benefit to the public. It gives all of us as consumers the means, if we want to use them, to compare different services on offer to us and to judge for ourselves which we want to buy. In keeping with this approach, clauses 83 and 84 introduce two new information duties for the aviation regulator, to serve the interests both of consumers and those affected by air travel.

The CAA would arrange for consumer information to be published to help passengers and freight users make more informed choices about what is on offer, while having regard to the principle that the benefits of information should outweigh the cost. Similarly, the CAA would publish information for the public about the environmental effects of civil aviation in the UK, and the measures taken to limit environmental harm. What is more, it would be able to use both those powers to issue advice and guidance to the industry so that it can improve standards of service and operate more sustainably. As we modernise the legislative framework, we are taking the opportunity to give the CAA new freedoms to appoint its own executive directors and to carry out criminal proceedings without recourse to Government. As criminal proceedings can be both slow and costly, the Bill would also enable the Secretary of State to give the CAA powers to enforce existing offences through civil sanctions where they are more proportionate.

The Bill also includes some other measures enabling the disclosure of anonymised medical data about aviation workers who are subject to health checks by the CAA. That would pave the way for valuable medical research into the particular health risks for specialist workers such as flight crew and air traffic controllers.

Let me move on to our proposals to improve the regulation of aviation security. This section of the Bill is relatively short, amounting to just five clauses and two schedules, but I know the House will rightly consider it carefully. Above everything else, passengers expect the highest levels of safety and security.

For me, keeping people safe and secure when they travel is and will continue to be of key importance. At present, aviation safety is regulated by the CAA while security regulation is carried out by officials in the Department. The CAA has an excellent track record as a safety regulator, as good as any in the world, and it has empowered our airlines and airports to develop safety management systems that keep safety at the heart of their operations, striving for ever safer and more

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efficient systems. That is why I believe there would be real benefits to bringing the CAA’s impressive specialist expertise to the regulation of aviation security.

In the past, security regulation has been criticised for being too process-driven, too often relying on a tick-box approach. Although those arrangements have kept people safe, too often their inflexibility has caused frustration on the ground at airports. There would be attractive benefits for passengers if we could empower the experts to find the best and most efficient way of maintaining the highest levels of security for air travel. That means more involvement from the experts in aviation operations, which can bring real benefits. Of course, it is essential that the Secretary of State should stay responsible for aviation security policy and for giving security directions, although it also makes sense for the specialist expert regulator to have a role in maintaining and improving aviation security. Consequently, the Bill includes provisions for the CAA to keep under review security directions made by the Secretary of State and for it to provide advice and assistance to the industry and Government. With its track record in handling safety, I believe the CAA will approach those new responsibilities with the rigour they deserve.

Mr John Leech (Manchester, Withington) (LD): Can we be assured that the transfer of staff from the Department to the CAA will not result in a loss of expertise in the security sector within the Department for Transport?

Justine Greening: We have considered that very closely and it is one reason why these changes will not happen overnight. They will take place over the next two to three years so that we can ensure we get the right staff transferred with the right expertise. As my hon. Friend points out, we have a wealth of security expertise within the Department and across Government and that will still be there for us to draw on within the Department for Transport. I am assured of that.

Maria Eagle (Garston and Halewood) (Lab): Is the right hon. Lady at all concerned that the division of responsibilities will create new interfaces that might cause delay and problems in the swift implementation of policy?

Justine Greening: That is a very fair question and it is one that I have considered carefully, too. I do not believe that it will cause a problem at all; in fact, it will enhance the security approach that we are able to take. It will mean a far more ongoing and rigorous approach to security that will manage to combine the highest standards of security and safety at airports while delivering a more streamlined approach for passengers on the ground. That is better for everybody.

Clause 82 makes provision for the transfer to the Civil Aviation Authority of rights, powers, duties and liabilities as the Secretary of State considers appropriate. That will allow us to transfer to the CAA the experienced staff who carry out the regulatory compliance and vetting functions currently carried out by civil servants in my Department. That will not only devolve more responsibility to the CAA but will have the further advantage of bringing the “user pays” principle to aviation security. It is not right or fair that the taxpayer currently subsidises the cost of aviation by paying for its

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regulation. At a time when our overriding priority is to reduce the inherited debt and when difficult choices are being made about funding priorities it is right that the cost of regulatory compliance should be met by the industry that benefits from it and not by the taxpayer.

Dr Andrew Murrison (South West Wiltshire) (Con): Has my right hon. Friend considered the impact of the transfer of powers from the Department’s Transport Security and Contingencies Directorate to the CAA on TRANSEC’s residual functions, particularly in relation to maritime safety and elements of rail safety?

Justine Greening: Yes, we have considered that and we are very happy that we will continue to strike the appropriate balance in our internal departmental expertise on security in all those areas. That is absolutely vital and we will not compromise on it in any way. We seek to have a more proportionate and smart approach to ensuring that we maintain the very highest standards of security and safety in our airports.

The final area of the regulatory framework that the Bill seeks to reform is the regulations covering the air travel organisers’ licensing scheme, or ATOL as it is known to millions of people each year. Those people have the peace of mind that comes from knowing that their package holiday is financially protected and that they will not be left stranded if a travel company becomes insolvent. Since the scheme was set up the holiday market has diversified, partly due to the innovations that internet booking has allowed. As a result, the holiday industry has told us that it is no longer clear to consumers whether their holiday has the protection of ATOL. Clause 94 will allow us to make regulations to improve clarity for the consumer by adding more flight-based holidays into the ATOL scheme, including holidays sold by airlines. That will mean that businesses selling holidays that include a flight should have a more coherent and consistent regulatory framework in which to operate.

Mr Peter Bone (Wellingborough) (Con): I refer hon. Members to my declaration in the Register of Members’ Financial Interests. This area is very important because it is not clear to consumers at the moment whether they are protected or not, with some people on a flight being covered while others on the same flight are not. I do not think the Government are going far enough in that they are not going to say that all people on all flights are covered, but why not?

Justine Greening: No doubt my hon. Friend will want to return to this issue in Committee, but I think that our proposals are measured and will mean a real step forward in the number of consumers that ATOL can protect, while also making ATOL more financially sustainable in the longer term, which is important. The clauses that relate to the reform of ATOL are long overdue and are welcome. I appreciate that he might want them to go further and I look forward to having that debate in Committee because this is an incredibly important aspect of the Bill for people up and down the country who want to be able to book their holiday knowing that it has the protection they want behind it.

In conclusion, the Bill brings together the Government’s commitment to having a successful and sustainable aviation sector with our agenda on regulation. It will

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allow the CAA to modernise the way it regulates, bring a stronger consumer focus to its activities and improve transparency and accountability. It will also create a stable environment for investment in airports and will allow the UK aviation sector to continue to thrive and develop. I commend the Bill to the House.