Kevin Brennan (Cardiff West) (Lab): The Secretary of State said that Members were correctly identified on the system in 15 cases, but the calls were still recorded and appear to have been listened to. Is it possible that a

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criminal offence was committed by someone listening to those calls in the full knowledge that they were from MPs, and will that form part of the inquiry?

Chris Grayling: I do not believe that this is a criminal matter, because the guidelines are set out in prison rules. I would certainly take a pretty dim view if any member of staff had intentionally broken the rules to listen in to a set of calls involving a Member of Parliament. We will obviously wait to see what the investigation throws up, but I suspect that this is a case of error rather than intent. I am setting up the investigation to confirm that.

Henry Smith (Crawley) (Con): I am grateful to my right hon. Friend for his statement. He was right to bring this matter to the House’s attention expeditiously. Does he have information yet about the division between prisoners on remand whose calls were listened to and post-conviction prisoners, or will we have to wait for the inquiry for that?

Chris Grayling: I do not have that detail of information yet. The right hon. Member for Tooting (Sadiq Khan) was absolutely right to point out that many of those may well not have been convicted of any crime, but have been simply awaiting trial. It is particularly important to ensure that such people are protected, but that is a matter for Nick Hardwick’s investigation.

Jim Shannon (Strangford) (DUP): I thank the Secretary of State for his statement, and for underlining the need for confidentiality in the relationship between Members of Parliament and their constituents. As he will know, policing and justice are devolved matters today, but that was not the case back in 2006. What discussions has he had with the Minister responsible in Northern Ireland, David Ford, to ensure that the confidentiality of the relationship between Members of Parliament and constituents is maintained in Northern Ireland?

Chris Grayling: I have not yet done so because the matter arose very recently, but the hon. Gentleman makes a good point and I will follow it up.

Tessa Munt (Wells) (LD): I thank the Justice Secretary for his statement. He raised questions about communications between a relevant MP and his or her constituents in prison and those between prisoners and an MP’s staff. Was he suggesting that the exclusion of calls from MPs’ Westminster and local offices from the surveillance by prison authorities from now onwards will cover MPs’ staff, or was he trying to differentiate between the two? This is not rocket science. Confidentiality is of supreme importance.

Chris Grayling: This provision will cover all phone numbers for MPs, their offices and their staff that have been placed in the public arena and to which we have access. If Members have other numbers that are not readily available on the system, but that they wish to be covered by the new provision, I ask them to please let us know. The Under-Secretary of State for Justice, my hon. Friend the Member for South West Bedfordshire (Andrew Selous) will be writing to them to ask them to do so.

Mr Peter Bone (Wellingborough) (Con) rose—

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Mr Philip Hollobone (Kettering) (Con) rose—

Mr Speaker: What a delicious choice. I call Mr Peter Bone.

Mr Bone: I congratulate the Secretary of State on following what has become known as the Straw doctrine: if something goes wrong in the Department, go to the House straight away, give them the facts and apologise. What worries me is that the practice has been going on for a number of years. We know that calls have been identified as being to MPs. Why on earth was that not reported earlier? The Secretary of State spoke about the Wilson doctrine. Will he confirm that no MPs’ phone calls are being intercepted at the moment?

Chris Grayling: On the latter point, I am not aware of that. Of course, it would not be a matter for my Department, because none of the security services falls within it. It is therefore a question that my hon. Friend would have to raise with other Ministers. Certainly, no such surveillance has passed my desk.

On the former point, this matter arose because of the chance spotting of a name on a list during another investigation, following an allegation by a prisoner that did not relate to the calls of Members of Parliament being listened to. It took two goes with the BT telephone records to identify the nature of the problem. This practice has gone unnoticed because it genuinely was not obvious that it was happening and there was no easy way to discover it. It was only when a clue arose that there may be a problem that there was a trail to follow. That is why it has taken time.

Mr Hollobone: I appreciate that the investigation will unearth all the details, but going by the information that the Lord Chancellor has, does he think that this is a problem in a few prisons or in 32 prisons?

Chris Grayling: It is difficult to be certain, but I suspect that it is not a problem right across the prison estate. We will have to ensure that the standards in the best prisons are spread to those that are not meeting those standards. It is difficult to know at this stage whether it is a matter of inappropriate staff training or just of it being difficult to spot the name of an MP if they have not been identified. I expect that Nick Hardwick will give us that information and enable us to make appropriate changes.

Guy Opperman (Hexham) (Con): I congratulate the Secretary of State on his speedy response and on the choice of Nick Hardwick, who is clearly the most appropriate person to conduct the review. Will he confirm one final point, which is that no prisoner-lawyer matters are outstanding and that all such matters have been dealt with?

Chris Grayling: I am not aware of any outstanding matters. On my hon. Friend’s point about Nick Hardwick, I should tell the House that the reason I did not ask the surveillance commissioners to carry out this piece of work is that they are the auditors of the process. I felt that it was better to have somebody who was not the auditor investigating this matter because we must also check that our audit processes are robust enough.

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Points of Order

2.14 pm

Sir Andrew Stunell (Hazel Grove) (LD): On a point of order, Mr Speaker. In questions to the Department of Energy and Climate Change on Thursday last week, I raised the case of a constituent who felt that she had been hard done by by a company, which I proceeded to name and to describe in unfavourable terms. That company and my right hon. Friend the Member for Rutland and Melton (Sir Alan Duncan), in whose constituency the firm is based, have made fervent and strong representations to me, which I fully acknowledge. In my attempt to convey just how anxious and concerned my constituent was, I clearly used language that went well beyond what the facts would substantiate. I want to make it clear to the House that I withdraw those remarks, although I still intend to give my constituent whatever help I can in this matter.

Mr Speaker: I am extremely grateful.

Sir Alan Duncan (Rutland and Melton) (Con): Further to that point of order, Mr Speaker. I thank the right hon. Member for Hazel Grove (Sir Andrew Stunell) for his courteous and fulsome retraction. The reputation of the company in my constituency is intact. I am grateful to him for his courtesy.

Mr Speaker: Honour is served. I believe that both right hon. Members, and the House, are satisfied.

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National Defence Medal

Motion for leave to bring in a Bill (Standing Order No. 23)

2.15 pm

Stephen Gilbert (St Austell and Newquay) (LD): I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to introduce a National Defence Medal; and for connected purposes.

This Sunday, like many right hon. and hon. Members, I was proud to represent my community at remembrance services in Newquay and St Austell. Remembrance Sunday is always a poignant and emotional day that brings together people from all backgrounds and unites communities across the generations. Our veterans, whether from the recent conflicts in Iraq and Afghanistan or from the battlefields of world war two, are united in their heroism and bravery, and the rest of us are united in giving thanks for their courage and for the sacrifice that so many of them have made for us.

As we mark the 100th anniversary of the start of the great war this year and the 95th anniversary of Armistice day today, it is easy for us to think that all those who have put on a uniform in the service of our nation have been recognised for their service with the relevant medals. Sadly, that is not the case. Many thousands of people who have chosen to put our country before themselves have not been recognised for their service with a medal, because they have not seen conflict. It is my contention that individuals choose to put on a uniform and, in so doing, choose to put the country ahead of themselves. Individuals cannot, however, choose whether they see conflict, but that does not make their commitment to our country and their bravery any less worthy of recognition than those who do.

My Bill seeks to redress that injustice by requiring the Secretary of State for Defence to introduce a national defence medal to be awarded to all those who choose to put the defence of our nation before themselves, whether or not they see conflict. Let me be clear that the Bill is not intended to diminish in any way the medals for gallantry that have been given to those who have faced conflict; the intention is to recognise the bravery of all those who choose to put the country first.

Over the past 70 years since the Normandy landings, it has been clear that many thousands of veterans have believed, sadly, that the service that they have given to the nation has not been recognised properly. That is because many of those who were involved in national service, who were exposed to nuclear testing, who served with distinction in the cold war or in post-armistice Korea, or who served in many more times and places besides, have been turned down for recognition by the Committee on the Grant of Honours, Decorations and Medals under successive Governments. That is unfair because they have been involved in keeping the nation and its interests safe and secure, and because conditions can be particularly hazardous to service personnel who are deployed to areas after the formal ending of conflicts and wars, such as those who were involved in mine clearance after the Falklands war.

Inexplicably, successive Governments have been reluctant to acknowledge the inherent risk and rigour of daily service life, of the many situations outside those specifically

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designated as campaigns, and of keeping the nation and its interests safe and secure. However, every soldier, sailor, airman and marine has a story to tell. The national defence medal would be a means for the Government and the nation as a whole to express their appreciation and to recognise the professionalism, courage and contribution of all those who serve and who have served in the armed forces, whether or not they have seen conflict.

The cold war saw a formidable threat to this country and, indeed, to western society from the Soviet Union and the countries of the Warsaw pact. There were real guns, a real enemy and a real threat involving nuclear weapons. The freedom and way of life that we experience today are due in no small part to the dedication and professionalism of those who served during the cold war era to deter an invasion and Soviet aggression. A recent Freedom of Information Act request identified 4,889 service personnel who died on duty between 1948 and 1959, and the Ministry of Defence has identified 833 servicemen and women who died on duty in north-west Europe during the cold war between 1960 and 1989. So far, successive Governments have failed to honour the achievement of those deployed during the cold war through medal recognition. British cold war veterans were disappointed at being excluded from the 2010 MOD medal review, and indeed from the later 2012 review. They are still actively pursuing medal recognition for the service that they gave to our country, and I think they are right.

Our approach stands in stark contrast to that of other Commonwealth Governments. Australia and New Zealand have declared how unique a profession the armed forces is, and how much is demanded of those who serve. In 2006 and 2010 respectively, the Governments of Australia and New Zealand established a defence medal and awarded it to those currently serving and those who have served in their armed forces. The MOD has said on many occasions that the United Kingdom Government do not have to follow other Commonwealth Governments on the institution of medals, but British veterans have often served alongside their Australian and New Zealand counterparts in the same locations, experiencing the same risks. They find it difficult to understand why the British Government, who express the same admiration and appreciation of our armed forces as the Governments of Australia and New Zealand, have been reluctant to recognise that with a national defence medal.

Why has the MOD, on behalf of successive Governments, continued to use the veterans identification lapel badge, together with irrelevant medal rules and principles, to deny appropriate medal recognition to those who have served in the UK armed forces? The professionalism, courage and contribution made by all those who serve and have served in the armed forces is held in the highest esteem by our nation, yet the Government have failed to deliver that medallic recognition in so many areas for a considerable time.

Today, and on Sunday, as a nation we promised that we will never forget the service and sacrifice of those who stand in defence of our nation. Let us hold fast to

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that promise. It is time we put things right for all those veterans who have not seen conflict but who have chosen to put their country ahead of themselves.

2.22 pm

Bob Stewart (Beckenham) (Con): I rise to oppose the Bill because medals mean something to those who have them. In the military they denote gallantry, operational duty, good service, or special occasions such as when Her Majesty the Queen grants a jubilee medal. For me, medals worn on the chest can rapidly sum up someone’s service. Medals mean a lot. I recall that Napoleon said, “Men will do much for a scrap of ribbon.” To the services, medals mean a lot, and the gaining of them is terribly important. Medals should not be granted for nothing, and for that reason I oppose the Bill, albeit with some reluctance.

A gallantry medal is self-explanatory, and anyone wearing one is looked on specially by his or her peers. My right hon. Friend the Member for South Leicestershire (Mr Robathan) has a brace of operational service medals. Those mean that someone has put his or her life in harm’s way for our country. Good or long-service medals are rewards for a serviceman or woman who has spent a long time and done very good work in the services, and they are richly deserved. Finally, special occasion medals are different, because servicemen and women do not consider them in the same category as the others.

My hon. Friend the Member for Reigate (Crispin Blunt), who is sitting behind me, served for 12 distinguished years in the cavalry—

Crispin Blunt (Reigate) (Con): Undistinguished by a medal.

Bob Stewart: As he says, undistinguished by a medal. He has told me that he does not expect or want a medal; he thinks it wrong for him to have a medal for not having served operational duty in his time.

The soldiers, sailors and airmen of our armed forces wear a uniform and they are proud of that, but do we automatically put a medal on a uniform when we issue it? No. Members of the armed forces who I have talked to are unanimously against the idea of awarding a medal for nothing. That is the truth, and I oppose the national defence medal on those grounds.

I shall not call for a Division on this matter because my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert) is a friend, and I understand his motives and wishes. It is Armistice day. However, I do want to register the fact that the national defence medal is not necessarily something that the armed forces or people who have served in them wish to have put on their chests without earning it.

Question put (Standing Order No. 23) and agreed to.


That Stephen Gilbert, Sir Menzies Campbell, Sir Bob Russell and Sir Nick Harvey present the Bill.

Stephen Gilbert accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 5 December, and to be printed (Bill 118).

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National Insurance Contributions Bill

Bill, as amended in the Public Bill Committee, considered.

Third Reading

2.28 pm

The Financial Secretary to the Treasury (Mr David Gauke): I beg to move, That the Bill be now read the Third time.

We have reached the final stage of the House’s deliberations on the National Insurance Contributions Bill, and it is worth noting the broad, if not necessarily vociferous, support for the Bill across the House. The hon. Member for Birmingham, Ladywood (Shabana Mahmood) has been vociferous and meticulous in her scrutiny of it, and I also thank external interested parties that have contributed to the consultation and to our deliberations. The Bill will make it easier for the self-employed to comply with their national insurance contributions obligations, while also making NIC avoidance harder.

Let me remind the House of the provisions in the Bill and what it seeks to achieve. Broadly, the Bill contains four measures: simplifying national insurance contributions paid by the self-employed; accelerating the payment to the Exchequer of NICs in dispute in avoidance cases and providing for the issue of follower notices where the scheme or arrangements have been shown to fail in another party’s litigation; applying new information powers and penalties to promoters of avoidance schemes; and introducing a targeted anti-avoidance rule—TAAR—to prevent people from circumventing new legislation tackling avoidance involving employment intermediaries and offshore employers.

At Budget 2014, the Chancellor announced that the Government intend to simplify the NICs collection process for the self-employed, who currently have to operate two different processes for two separate classes of NICs. This followed a 2012 recommendation by the Office of Tax Simplification and a consultation in 2013.

Two separate collection methods for class 2 and class 4 NICs cause confusion and extra work for both the self-employed and HMRC. The objective behind this measure is to modernise the way class 2 NICs are assessed and collected, making the system simpler and more straightforward and reducing administrative burdens on the self-employed. Class 2 NICs are currently collected via a flat rate charge of £2.75 per week paid through six-monthly billing or by direct debit, while class 4 NICs are a percentage charge on profits—of 9% between the lower and upper profits limit and 2% above the upper profits limit—paid through self-assessment alongside income tax.

The aim of clauses 1 and 2 and schedule 1 is to change the way in which class 2 NICs are structured; change the means by which class 2 NICs are collected by moving their collection into self-assessment, so that they can be collected alongside class 4 NICs and income tax; change the means by which class 2 NICs are enforced with changes to associated appeal rights to broadly mirror those for class 4 NICs and income tax; and make consequential changes to legislation relating to maternity allowance to allow women to continue to become eligible for it post-reform. These changes are proposed to take effect for the 2015-16 tax year onwards

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so that the collection of class 2 NICs under self-assessment will be from 6 April 2016. I wish to draw particular attention to the tax information and impact note published by HMRC about this measure. This indicates a very welcome net administrative burden reduction to the self-employed of £74 million over five years as a result of these reforms.

The provisions that deal with accelerating the payment to the Exchequer of amounts of NICs in dispute in avoidance cases also include providing for the issue of follower notices in relevant cases when the scheme or arrangement has been shown to fail in another party’s litigation. These provisions are contained in clauses 3 and 4 and schedule 2. The provisions on follower notices and accelerated payments in avoidance cases broadly follow, for NICs, new powers that are included in the Finance Act 2014 which allow HMRC to issue a notice—a follower notice—to taxpayers who have used avoidance schemes that have failed before the courts in another party’s litigation.

Sir Greg Knight (East Yorkshire) (Con): On the subject of avoidance, when does my hon. Friend expect his Department to review the scope of the avoidance measures—after the Bill becomes an Act, as I am sure it will—bearing in mind human ingenuity?

Mr Gauke: The broader point is the fact that the Treasury and HMRC constantly review measures to deal with avoidance. My right hon. Friend is right to say that, human ingenuity being what it is, we have to be constantly vigilant, and the Government have closed some 40 loopholes over the course of this Parliament. We will keep the specific measures in the Bill, and more broadly the measures we have taken on accelerated payments and follower notices, under review, but we believe that the measures that we have taken to accelerate payments so that those involved in tax avoidance schemes are no longer able to benefit from a cash flow advantage will have a dramatic effect on the flow of tax avoidance through tax avoidance schemes. We are already seeing indications that fewer schemes are being marketed and fewer disclosures are being made under the provisions on the disclosure of tax avoidance schemes. Every indication suggests that this is a diminishing issue, but there is no place for complacency. The Government will continue to endeavour to take appropriate steps to deal with those who are seeking to defy the spirit of the law or make an interpretation of the law that has little justification but can involve HMRC in extended litigation.

I emphasise that the provisions in the Bill and the Finance Act 2014 are estimated to raise £5 billion in tax and NICs for the Exchequer. The House may find it helpful if I explain that a follower notice sets out HMRC’s view that a judicial decision in another case is directly relevant and that those who receive the notice should settle their disputes. If the taxpayer does not settle in response to the notice, they will face a tax-geared penalty if they are unable to show that their case is materially different from the other party’s litigation, or if they did not have reasonable grounds to continue the dispute.

An accelerated payment may be required from taxpayers in the following circumstances: where a follower notice has been issued and the taxpayer decides not to settle their dispute; where taxpayers are involved in schemes

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subject to disclosure under the disclosure of tax avoidance schemes or DOTAS rules: and where taxpayers have used arrangements that HMRC decides to counteract under the general anti-abuse rule or GAAR. For both follower notices and accelerated payments, taxpayers will have 90 days to make representations. There is no formal right of appeal against the notices or payments, but taxpayers can appeal any penalties. These measures are expected to lead to the issue of payment notices to around 43,000 taxpayers involved in avoidance schemes currently under dispute with HMRC over the period to the end of March 2016.

The provisions that apply new information powers and penalties to the highest risk promoters of tax avoidance schemes are also contained in clauses 3 and 4 and schedule 2. Hon. Members may be aware that I mentioned on Second Reading that the measure on promoters of avoidance schemes was first announced in Budget 2013 and the Government’s intention was to extend the measure to NICs at the earliest opportunity. This Bill affords that opportunity.

The Finance Act 2014 included legislation that allows HMRC to issue conduct notices to promoters of tax avoidance schemes and to monitor promoters who breach a conduct notice. This Bill applies the tax legislation to NICs so that the legislation operates as one unified scheme that covers tax and NICs. Monitored promoters will be subject to new information powers and penalties which will also apply to intermediaries that continue to represent them after the monitoring commences. The monitored promoter will be named by HMRC—the naming details will include information on why the conduct notice was breached—and required to inform its clients that it is being monitored by HMRC. Clients of monitored promoters will also be subject to certain obligations, which have a penalty for non-compliance, and extended time limits for assessments.

Other provisions apply a new targeted anti-avoidance rule to prevent people from circumventing new legislation, tackling avoidance involving employment intermediaries. The proposed TAAR is contained in clause 5. On Second Reading, I mentioned that the National Insurance Contributions Act 2014 strengthened existing legislation in respect of offshore employment intermediaries. That measure was specifically intended to address the non-payment of employer’s national insurance in the oil and gas industry involving the placement outside the UK of the employer of oil and gas workers who are working on the UK continental shelf.

The temporary labour market is quick to react to any legislative changes and to find new convoluted ways to reduce the amount of income tax and NICs that it would otherwise be liable to pay. Interested parties have indicated to HMRC that intermediaries involved in the facilitation of false self-employment may set up avoidance vehicles involving convoluted structures specifically designed to circumvent the legislation introduced in the National Insurance Contributions Act 2014. To dissuade such intermediaries the Bill includes a TAAR that would be similar to the tax TAAR included in the Finance Act 2014 for the same purpose—to deter NICs avoidance. The TAAR focuses on the motive for setting up the arrangements, namely the avoidance of NICs, and what they achieve—whether they result in less national insurance contributions being paid. In order that the tax and

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NICs TAARs operate as one, the tax TAAR and the corresponding provisions of the NICs TAAR will both take effect from 6 April 2014.

In conclusion, this is an important and necessary Bill. The modernisation of the way that class 2 NICs are assessed and collected will make the system simpler and more straightforward and will reduce administrative burdens on the self-employed. The Bill also includes a package of measures aimed at making activity that attempts to reduce the amount of NICs payable to the Exchequer harder to accomplish.

I thank hon. Members who participated in the debates on the Floor of the House as well as in Committee. The Bill is good for the self-employed and it makes NICs avoidance harder. I commend the Bill to the House.

2.41 pm

Shabana Mahmood (Birmingham, Ladywood) (Lab): I would like to think that the Minister and I are always vociferous and meticulous in our deliberations on finance and taxation matters, and that we have both been efficient in our deliberations on the Bill. That is because, as the Minister explained, this is a short Bill which aims to simplify the administrative process of paying class 2 national insurance contributions for the self-employed. It applies measures from this year’s Finance Bill, now the Finance Act 2014, to NICs, and introduces a targeted anti-avoidance rule, a so-called TAAR, to tackle disguised self-employment made possible through employment intermediaries and offshore employers. We have supported the Bill throughout its previous stages in the House and will do so today.

Until now, as the Minister explained, payments of class 2 and class 4 NICs by the self-employed have had to be made separately. When the Office of Tax Simplification looked at these matters in 2012, it proposed bringing class 2 NICs within self-assessment, and suggested that this change would bring administrative benefits to self-employed persons and businesses. In July 2013, HMRC published a consultation document in which it noted that the present system places significant burdens on small businesses, and that although class 2 NICs accounted for less than 0.3% of the £102 billion or so of NICs collected by HMRC in 2012-13, they accounted for more than 40% of national insurance-related telephone calls to HMRC and the resulting processing work. The Bill therefore changes the liability for class 2 NICs so that it arises at the end of the tax year and not weekly, as now, and moves class 2 NICs into self-assessment, so that self-employed people can deal with their class 2 NICs together with their income tax and class 4 NICs.

We support the aim of making the system easier for self-employed people and reducing the administrative burden caused by the current separate systems for the collection of class 4 and class 2 NICs. Almost one person in six is self-employed, so this is a significant issue affecting a large number of people. Making the system easier to navigate is therefore welcome and of genuine practical benefit for the self-employed.

A number of specific issues were raised by stakeholder groups regarding eligibility for maternity allowance and the impact of this simplification on people claiming universal credit. Those are issues that we raised on Second Reading, which the Minister dealt with in Committee. We were also able to take evidence from

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expert witnesses who gave evidence to the Committee. We had some useful clarification and reassurance from the Minister on those points, which has dealt with the concerns raised. We are grateful for that.

We noted in Committee that communication of these changes to the people affected by them will be very important, a point which the Minister acknowledged. We were concerned particularly about people who might be described as digitally excluded. It is of course easier for the Government, and it is a responsible time and expense-saving mechanism, to put lots of advice on the internet, but there are groups, perhaps especially those who are self-employed and who may ultimately be reliant on universal credit, who might be described as digitally excluded, and it is important that they can access information about how the changes may impact on them. The Minister gave assurances to the Committee that those matters were in hand. We will continue to scrutinise this aspect as the Bill progresses and becomes law.

As the Minister explained, the Bill also extends provisions relating to follower notices, accelerated payment notices and measures to tackle high-risk promoters of tax avoidance schemes that were passed in the Finance Act 2014 in relation to income tax. It applies those rules to NICs as well. As the Minister noted, we have had extensive debate on these measures, primarily during the passage of the Finance Bill 2014. In Committee the Minister provided a helpful update on how the measures relating to income tax are bedding in.

We heard encouraging evidence from expert witnesses that these measures were already having a positive behavioural impact on the way in which individuals approached their taxation affairs, and that the measures were preventing people from getting involved in schemes that they might previously have taken a chance on. We welcome that. We will continue to scrutinise the impact of these measures, and in particular the effectiveness of HMRC’s internal governance mechanisms in relation to follower notices. These are important changes and they continue to have our support.

Clause 5 introduces a new TAAR to cover the payment of national insurance contributions, which sits alongside the provisions in this year’s Finance Act aimed at tackling employment intermediaries who falsely label workers as self-employed to reduce their tax liabilities. For workers who are falsely badged as self-employed, particularly for those who do not know that that is the case, which has happened on an alarmingly regular basis, the effect is that they are not eligible for many of the benefits available to employed earners, such as holiday and sickness pay.

This year’s Finance Act amended legislation directly to address the issue in relation to the payment of income tax. A worker will now be designated as an

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employee if they are under the supervision, direction or control of someone else, and in that case they must be paid through PAYE, rather than as a self-employed worker. That is a change from the previous designation, under which a worker is deemed to be an employee if they provide their services personally. It was found by HMRC that many intermediaries were able to exploit that test by claiming that there was no obligation for the worker to provide their services personally. To get around that, a clause was often inserted into a worker’s contract stating that they could send somebody else to do their work, even though in reality the employer wanted that specific worker.

Bob Stewart (Beckenham) (Con): I seek clarification from the Minister or the hon. Lady, who understand these things well. A part-time worker has to pay national insurance contributions, and so does the employer. I was a little puzzled that that might not be the case, but it is, is it not?

Shabana Mahmood: I am grateful for the question. If workers are above the threshold which is in place for the paying of national insurance contributions, the usual rules apply. I am sorry if I confused the hon. Gentleman; I was talking about self-employed people, which is a particular case in the context of the Bill. Clause 5, as I said, introduces a targeted anti-avoidance rule to prevent a type of abuse that has been occurring through employment intermediaries.

The role of the TAAR envisaged in the Bill is to prevent the circumventing of the rules so that workers who would be employed earners if it were not for the intermediary arrangements are treated as employed earners. That will allow HMRC to consider both the motive for setting up such an arrangement, including whether it was set up to avoid NICs, and what was achieved, including whether it resulted in less NICs being paid. As I said, the problem of bogus self-employment is widespread and complex. We heard evidence on that, particularly in Committee where one witness said that there were ways in which companies were trying to avoid paying national insurance contributions. The Minister helpfully told the Committee that he and his officials were already looking into that.

Taking action in this area is difficult. If often feels as if the Government of the day are playing catch-up with companies intent on trying to find ways of getting around the rules, but tackling bogus self-employment is necessary for parties of all political persuasions to protect revenues to the Exchequer. The Minister and I may occasionally disagree on the emphasis and priorities for action in dealing with false self-employment, but the TAAR introduced by clause 5 is a useful addition to the Government’s armoury for tackling this type of tax avoidance, and we support that measure.

Question put and agreed to.

Bill accordingly read the Third time and passed.

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Backbench Business

Finances of the House of Commons

2.51 pm

John Thurso (Caithness, Sutherland and Easter Ross) (LD): I beg to move,

That this House notes the First Report of the Finance and Services Committee, HC 757, and the draft medium-term financial plan for the House of Commons as set out in the Appendix to the Report; and endorses the intention of the Finance and Services Committee to recommend to the House of Commons Commission a House of Commons: Administration Estimate for 2015-16 in line with the financial remit set by the House of Commons Commission.

I am very grateful to the Backbench Business Committee for giving me this opportunity again to present the financial plan for the House of Commons. This is the third occasion on which the Finance and Services Committee has sought such a debate. It provides an opportunity for Members to have their say on the House’s finances and the services provided for them.

In my judgment, these debates have increased transparency. They have allowed Members to question the finances and the services that come from them. They have enabled not only questions to be asked but amendments to be made to the plans. All of that has led to a greater ownership by Members of the plans. During this Parliament, the Finance and Services Committee has been working to improve governance, including promoting better oversight of the Members estimate by Member bodies and a new Standing Order on motions with financial consequences for the House, as well as its reports and these debates.

Sir Greg Knight (East Yorkshire) (Con): We should all strive to save money, but will my right hon. Friend nevertheless point out in his speech that some economies available to business are not available to the running of this place? In particular, will he refer the House to paragraph 26 on page 10?

John Thurso: My right hon. Friend makes a very important point, one that informed the very beginning of our first debate. Above all else, our job as a Parliament is to scrutinise Government, to legislate and to work for our constituents. The application of resource must be for that purpose. The savings we make, or the efficiency with which we undertake that operation, come as a consequence; they do not drive the way in which we seek to do our business. The overall point my right hon. Friend makes is absolutely taken and I will allude to it at various points during my remarks. I pay tribute to the fact that he has raised the point now and to his excellent contribution to the Committee.

I thank the director of finance and the other House staff for their positive engagement with the Committee, and for all their work and assistance in helping us to prepare the report and our advice to the Commission on the estimate. The finance team, led by the finance director, has undertaken very considerable improvements, including to the accounting system, management accounts, budgeting processes, management accounts and procurement systems. All are helping us

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to be more efficient and to get better outcomes both in terms of the costs of services and, importantly, what they deliver for us.

May I also use this moment to pay tribute to all the staff who serve us throughout the House service in all areas? I truly think, having now engaged with them for the best part of four years, that had I had such a staff in private life, I would have considered it a privilege to have had them working with me. I think they can be proud of everything that they do for us and we should be very grateful for it.

The Commission is required, under the House of Commons (Administration) Act 1978, to lay an estimate each year seeking the House’s approval to fund administration services. These include the maintenance of the estate, security, the Clerks and the Library staff who advise us, and all the other staff who look after us so well: Hansard; the printing of papers and reports; education, visitor and outreach services; and IT systems. The role of the Finance and Services Committee is to work with the management of the House to prepare a draft estimate for the Commission to consider in December.

The Committee also monitors—this is a new task we have taken on recently—the Members estimate, which funds the Treasury contribution to the parliamentary contributory pension fund, Short money and Members’ ICT equipment. However, the role of the Finance and Services Committee does not extend to the Independent Parliamentary Standards Authority or Members’ pay and allowances, which are dealt with separately.

I am pleased to report that the savings target, which we set in 2010, has been achieved—although there are one or two loose ends currently being tidied up in the savings programme. The House is not bound by the Government’s spending plans. As I said to my right hon. Friend the Member for East Yorkshire (Sir Greg Knight), it is absolutely correct that we have the appropriate resource to undertake our work of scrutiny of Government and as legislators. None the less, it is important that we do so while taking account of the world we live in. The Commission therefore decided, before the 2010 election, that the House needed to reflect what was going on in the wider public sector and to ensure best value for the taxpayer. The Commission committed itself to a reduction in the administration estimate of at least 17% in real terms between 2010-11 and 2014-15. That meant setting a budget of £210 million for 2014-15 compared to a baseline of £231 million for 2010-11.

In December 2013, the Commission agreed an administration estimate for 2014-15 of £201.3 million. However, because of transfers between votes—most notably the merger of the House staff pension scheme into the civil service scheme and other exceptional factors—some adjustments are required to compare that figure with the target of £210 million. However, allowing for all of those factors—details are in the Committee's report—the estimate laid for 2014-15 is some £2 million below the target set in 2010. Part of that is due to a change of culture that has taken place within management and staff, and the fact that we now recognise that resource, once allocated, does not belong to a department and where not required can be returned rather than being spent to preserve the budget. I commend them for that change.

The Commission also decided that savings should be achieved, through detailed analysis of services and how they were delivered, to arrive at something better—not

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simply cheaper. For example, changes have been introduced in the way in which Select Committee evidence is submitted, processed and published. Less Select Committee evidence is being physically printed. That has not only reduced printing costs, but has allowed a reorganisation of staff in the Committee Office that has provided increased resources for priority areas within the Select Committee work stream.

Members will also be aware that the system for providing them with written answers has recently changed. In the past, written answers were walked across Whitehall in multiple copies—sometimes 500 to 600 answers a day in the Commons alone—and Members mostly received their answers only the following day when they were published in Hansard. They are now delivered electronically. Not only do Members receive their written answers by e-mail as soon as the answer is submitted by a Government Department, but the House will be saving nearly £800,000 every year in printing and related costs.

Sir Greg Knight: The changes to written questions are a vast improvement. In many cases under the old system, the press received the answer before the Member.

John Thurso: I concur with my right hon. Friend. It is a saving that has made life better for us, which is our objective.

Major savings have been made through reducing the amount of printing undertaken. For example, some lightly used publications are now only available online and most Committees have agreed to distribute papers electronically. The House is aiming for a “digital first” approach, and the Committee expects this to be a source of further financial savings in the coming years.

As someone who spent his professional life in the hospitality industry before entering this place, it gives me particular pleasure to report that significant progress has been made in the past few years in reducing the net cost of catering. My right hon. Friend referred earlier to paragraph 26, which relates to catering, and I fully accept that because of the hours we work and the way we need to be serviced, it is not possible to make the same profit as if we were a fully operational food and beverage operation, but that should not stop us seeking to be as effective as possible in the delivery of the service.

In 2009-10, at the end of the last Parliament, the net cost of catering and retail services was £5.7 million. In the current financial year, at an equivalent point in the electoral cycle, it is forecast to be £2.7 million. That exceeds the target set of reducing the net cost to under £3 million by 2015. I particularly compliment my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst), the Chairman of the Administration Committee, and his Committee on all the work they have done in this area. The savings have been achieved by good old-fashioned sound management of costs and by benchmarking, and it has been achieved at a time when the House has moved to being a living wage employer and has got rid of zero-hours contracts. The staff and the unions, as well as the management, should be applauded for their help in that.

I never expected to see it in my lifetime, but we are now making great progress in working together with the other place. Under a joint procurement process,

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procurement for the House of Lords, the House of Commons and Parliamentary Information and Communications Technology is all operated by one dedicated service that must produce savings for all three.

The report also considers the prospects for the next four years. In June, the Commission agreed that forward plans for up to 2018-19 should be based on an assumption that the budget for core activities is flat in real terms—that, taking account of Government pay policy and the target for consumer prices inflation, the expenditure envelope for the administration estimate is assumed to increase by 1% in 2015-16 and by 2% thereafter. I stress that this is a working assumption, not a target; actual budgets will be set annually, and clearly it will be for our successor Parliament to decide what it wishes to do, but this establishes a good working base from which the management can proceed.

Even on that relatively generous assumption, it is projected that further savings will be required in 2016-17, 2017-18 and 2018-19. The House service will continue to look for opportunities to make further efficiencies and ensure value for money in the delivery of services through a continuous improvement process that focuses on making services more effective by improving their quality, increasing productivity, cutting costs—or, in the best of all worlds, all three. That most often takes the form of process reviews that engage staff in a continuous review of their work and harness their own creativity to solve problems. There are numerous examples of this, but the goal is to make small savings in time and effort, while maintaining or improving services.

In setting the financial remit, the Commission agreed that some new activities could be undertaken without necessarily having to be financed from within the existing budget. The two main areas are, first, scrutiny and related functions—the Committee received a bid from Chamber and Committee Services regarding Select Committees that we were minded to advise the Commission to accept—and, secondly, the resource consequences of major building refurbishment.

The Commission is keen to deliver a resolution of the House passed in 2007 that there should be dedicated space for education visitors. Construction has now started on a new education centre in Victoria Tower gardens that will accommodate 100,000 children a year, as opposed to the 45,000 we can currently accommodate. In addition, the facility will reduce pinch points, such as the Portcullis House entrance, and release the Macmillan room for other uses. It is due to open, we hope, in 2015.

Following the Wright Committee report at the end of the last Parliament, Select Committees have been one of the success stories of the Parliament, and the Liaison Committee is keen that this success be built on. As I just mentioned, the Finance and Services Committee is recommending a modest increase of £900,000 in the resources available to Select Committees, either in the form of additional staff or by providing additional budget. The Committee is also due to consider a bid from the Library that would enable it to provide more research support.

Members will be aware that the two Houses need to decide how the backlog of work required on this building is to be tackled—a project known as the restoration and renewal programme for the Palace of Westminster. R and R will be a major infrastructure programme that

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will not start in earnest until after 2020—well beyond the time frame of the budgets we are considering today. An independent options appraisal has been commissioned and is due to be published shortly after the election. Current thinking is that the two Houses might be asked to take a decision on their preferred option in spring 2016.

In the meantime, other buildings we occupy, including 1 Canon Row, the Norman Shaw buildings and 1 Parliament street, require significant refurbishment. This work will not only tackle the day-to-day problems that many colleagues have encountered—leaking toilets, rodents and other problems—but optimise the accommodation we occupy outside the Palace and complete that work before R and R begins. I warn hon. Members, therefore, that in the next Parliament many colleagues and staff will need to move offices as work on the various buildings proceeds. Office moves by House staff to facilitate this process and to co-locate Committee and Library staff have already begun.

Although much of the refurbishment work is capital spending, it can result in quite large accounting changes, largely because heritage and security issues mean that the value of refurbishment is not fully reflected in an increase in the book value of the buildings and that therefore a charge needs to be made. The Commission’s remit does not require the substantial notional charges or other resource consequences of the building work, such as decant space, to be met from within the core budget.

Geoffrey Clifton-Brown (The Cotswolds) (Con): Given that the northern estate refurbishment project is likely to cost about £500 million and, on these capital budgets, is not likely to start in earnest until the end of next year, does my right hon. Friend think there is a danger that this big refurbishment project, the specifications for which are not yet even fully known, could run into the period when we will want to start the R and R project and that therefore the decant space, let alone the budget, might not be available?

John Thurso: My hon. Friend has highlighted a clear and obvious red risk to the R and R programme. The management are well aware of the risks, and discussions are already taking place about how they can be mitigated, but I know from the conversations he and I have had with Facilities staff that the critical nature of completing the northern estate prior to commencing R and R has been fully taken on board. The fact that they have taken it on board does not mean that they will make it happen, but if we have not at least understood the risks, we cannot take the mitigating action. At this stage, that is the best answer I can give.

Geoffrey Clifton-Brown: The full extent of the project is not yet known—for example, we do not know whether there will be a broadcasting studio in the new refurbishment—so does my right hon. Friend agree that it is now urgent that this work be undertaken so that we at least have a project on which proper quotes can be obtained? The delivery mechanism is not even known yet, and time is beginning to creep on for this very big project.

John Thurso: I understand that the Commission has reviewed the paper and that the initial decisions that needed to be taken to start that work have all been

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taken. As my hon. Friend knows, the decant space, which would have been one of the biggest blocks, has been acquired and is being fitted out and made available. My understanding is that work properly to scope the project is now under way. Clearly, in order to ensure the best value for the money spent, the work undertaken in scoping the project will reveal whether or not overall savings are available. At the moment, the budget is at its maximum because, quite properly, it has all the contingencies that could be put in. One hopes that proper scoping, including the point my hon. Friend raised, will lead to a tighter budget going forward and the work being completed on time. As he and I both know, however, public procurement is littered with projects for which aspirations were expressed that were not met. Hopefully, we have all learned lessons from that and will make sure that we deliver on time and on budget.

Thomas Docherty (Dunfermline and West Fife) (Lab): For the benefit of those of us who are not entirely familiar with the Commons accounting procedures—I appreciate what the right hon. Gentleman said about the R and R costs; because it has not yet been agreed whether we will decant at all, those costs have not been included—could he say what, if any, costs in the preparatory period have been accounted for in the tables set out?

John Thurso: Obviously, the cost of the options appraisal that is currently going through is, in part, being paid for out of the current estimate and might well be paid for in part from a future estimate, but it is in the budget and properly accounted for. I believe that we are talking about a total of around £7 million. If I am wrong, I am sure I will get inspiration in due course and come back to it. I might even read my vast file and come up with the figure before the end of the debate.

It has been said that spending £7 million on working out what needs to be done is a great deal of money. All my experience of working in the private sector on the refurbishment of large buildings and all I have observed from big projects such as nuclear decommissioning is that the more professional money spent in advance in scoping a project, so that it is really understood, the more effective the actual spend. I suggest that every pound spent now on working out what the problems are is at least a pound spent going forward. If I am wrong, I will come back to the hon. Gentleman.

In closing, I would like to commend again the professionalism of the House service and all those who work for us, and the tremendous improvements that have taken place in management systems and how things have been done over the years that I have been involved in the Finance and Services Committee, the Audit Committee and other bodies. This is the last occasion during this Parliament on which we will discuss the finances of the House. In commending the motion to the House, and in addition to the tributes I have paid on behalf of the House as a whole, I would like to express my personal gratitude for the support and help that I have received from the team, many of whom are watching us today. It has been a pleasure and a privilege to see this process through. The fact that there are in attendance fewer hon. Members than those who put their names down to speak today does not indicate any disinterest in the process, but is perhaps a reflection of

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the fact that we now publicise the plan so well that they do not feel it necessary to be present to suggest amendments to what we have put before them.

Geoffrey Clifton-Brown: I am grateful to my right hon. Friend for giving way to me a last time. He will be glad that he has given way this time because I would like to commend him for the way in which he has chaired our Committee so professionally. I have been a member of it for many years, and I think that the chairing of it in this Session has been outstanding.

John Thurso: I am very grateful, and that will do as a peroration. I commend the motion to the House.

3.14 pm

John McDonnell (Hayes and Harlington) (Lab): I would like to add my name to that tribute to the Member with the most poetically named constituency, let me put it that way— the right hon. Member for Caithness, Sutherland and Easter Ross (John Thurso)—who has worked tirelessly on behalf of all of us and all the staff. I would also like to join the right hon. Gentleman in paying tribute to all the staff who service this House.

I want to raise an issue that I have raised with the right hon. Gentleman before—specifically about the security staff. There are about 300 of them who service this House and provide us with excellent security services overall. Appendix 1 to the Finance and Services Committee report refers to the policy context, stating:

“There are a number of significant policy matters and events on the horizon that may have a bearing on the budget.”

Included in that list is the

“Renewal of the security arrangements in 2015”.

About 250 of these 300 security staff are members of the trade union, PCS, and I chair the PCS parliamentary group—a cross-party group that takes an interest in the policies of the union, with a particular interest in the staff who work here.

The right hon. Member for Caithness, Sutherland and Easter Ross will know the history. The contract expires at the end of March next year, so its future will need to be decided. There were discussions about whether the Metropolitan police would be allocated that contract and indeed about whether they were interested in having it renewed. There was a proposal to give the work on the House’s three main entrances to a private company. I met Mr Paul Martin to discuss that matter, and I found him to be nothing but helpful when he informed us as much as he could about the options available to him. My understanding, as far as can be discerned, is that the Met is not keen on continuing the contract, so the options are privatisation, part-privatisation or bringing the staff in-house. The staff very clearly want to be brought in-house.

Prior to or during the summer it was argued that it would be impractical to split the security arrangements so that the three gates were given to a private company, with the rest of the security arrangements being handled by other staff employed either by the Met directly or by another company. Even the Met argued that we need a fully integrated service rather than have it divided in this way. I share that view. When will a decision about

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this matter be made? Is it forthcoming? The staff want to know what their futures will be and they favour maximum security. As I say, if the Met is not going to continue the contract, they want to be brought in-house. If there are concerns about rushing to a decision, there is also the option of extending the existing contract for a number of years.

My personal view is that I would be very worried and anxious about bringing in a private company to operate this contract, certainly if the work were to be divided up in that way. The last thing I want, frankly, is G4S or something like it to be responsible for security here, particularly during a period of heightened security risk, as we have all acknowledged, and particularly as we move towards a general election that, to say the least, will see significant changes taking place in the political climate.

Bob Stewart (Beckenham) (Con): I presume that when the hon. Gentleman refers to security, he is not implying that outside contractors would be armed. We would still require the Metropolitan police to have an armed facility beside them. I presume he is not suggesting that we could sub-contract that aspect.

John McDonnell: The proposal was for the privatisation of the three main entrances and all the security aspects of running them—basically, the search facility. I think that the Met had come to the conclusion themselves that disaggregating the security service in that way would make it very difficult to manage the whole arrangements. Where we have seen those sorts of disaggregations of security services, we have seen breakdowns in communication, leading to reduced security, putting people at risk. In a heightened period of security—

Madam Deputy Speaker (Dame Dawn Primarolo): Order. The hon. Gentleman was talking specifically about one section of those who were in the House to help facilitate it. He was answering an intervention, but I remind all hon. Members that we do not discuss security issues on the Floor of the House. The hon. Gentleman started out in order, but was tempted down a more complex route about the security of the House. I know that he wants to return to his substantive point.

John McDonnell: It is very easy to be tempted in the House, especially by the hon. Member for Beckenham (Bob Stewart). Let me return to the point. It is important for a decision to be made now so that staff can know what their futures will be. I suggest that the Committee should ensure that the security arrangements remain with the Metropolitan police unless they do not wish that, in which case staff should be employed in-house. That would enable us to maximise the security arrangements of the House during the coming potentially difficult period.

3.20 pm

Sir Alan Haselhurst (Saffron Walden) (Con): I shall concentrate on the savings programme, and on section 3 of the report.

The biggest challenge in 2010, when the members of the present Administration Committee were appointed, was the target that the Committee had been set to cut the deficit in catering and retail from £5.9 million to

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£3 million by the end of the current Parliament. If my figure varies from that of my right hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), it is because it relates to both catering and retail. As my right hon. Friend said, we hope to achieve a lower figure than the £3 million target, which I think is reasonably to the credit of everyone who has been involved in trying to achieve it.

The Committee’s approach has been not just to rely on price increases, but to consider prudent cost-cutting and, more importantly, to increase demand. We resisted a move to separate retail from catering so that we could maintain like-for-like comparison, but we did agree on a separation of management, which has had a very beneficial effect. I shall say more about that later.

Thomas Docherty: Because I have the pleasure of serving under the right hon. Gentleman’s chairmanship, I understand what he means when he talks about the catering and retail subsidy. For the benefit of those who do not have that pleasure, will he confirm that our retail outlets have never been subsidised?

Sir Alan Haselhurst: Yes, absolutely. It was purely for budgeting purposes that the two were linked.

We faced a number of obstacles. For instance, there had been a 10% across-the-board hike in prices before our Committee and, indeed, the Finance and Services Committee, had taken office, and that had an initially bad effect on footfall.

Sir Greg Knight: Does my right hon. Friend agree that some of the problems arose from the fact that decisions were made by the House of Commons Commission when it was under full complement? Does he hope, as I certainly do, that in the next Parliament the Commission will not make any potentially difficult or controversial decisions until it has a full complement of members and Back Benchers on both sides of the House are represented on it?

Sir Alan Haselhurst: I certainly agree that that would be desirable. We have tried to anticipate circumstances in which the last price review will outlive the current Parliament, so that there will be some cover while the time is taken to reconstitute Committees which may be subject to the deliberations of the Governance Committee and which may consequently take a different form.

The Independent Parliamentary Standards Authority introduced a subsistence allowance of £15, which I think has had a malign effect on the propensity of Members to use the facilities of the House. Some told their electorates beforehand that they would not claim it, while others simply do not feel comfortable about claiming it while they are away from home on parliamentary business. That has, to an extent, reduced the uptake of facilities, especially in the Members’ Dining Room. I found IPSA’s rule that the allowance would be available only if the House’s business continued beyond 7.30 pm very difficult to understand, but IPSA has stuck to it firmly, despite all my efforts to persuade it otherwise. It seems to me that whether the House sits until 7.29 or 7.31, the fact remains that many Members who are distant from their homes will have to eat away from home. Many Members now do not eat on the estate, which has had several bad effects.

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I cannot be certain whether that led to the vote to change the House’s Tuesday sitting hours, although a significant number of Members voted for the change. I have counted them out, as it were. There is a pattern which suggests that if they were no longer deemed by IPSA to qualify for help from the taxpayer for the maintenance of another dwelling close to Westminster, they would prefer to leave earlier rather than returning to, in some instances, fairly distant parts of London late at night. That has led to a disappearance of Members and a weakening of the collegiate nature of the House which I remember from the past.

The Administration Committee has tried to come up with an offer featuring the widest possible variety and appeal in order to sustain demand. However, if Members, staff and other passholders are not using our facilities for whatever reason, the Committee’s policy is to let others do so, on the strict understanding that that does not interfere with the prime purpose of the business of the House. We have encouraged third-party commercial hire; we have introduced room-hire fees, not uncontroversially; and tomorrow and the next day, members of the public will be allowed to book lunch in the Members’ Dining Room for the first time. Once that had been advertised, it was a sell-out. We shall await the subsequent report, and then consider whether the same might be done during parliamentary recesses.

The figures that my right hon. Friend the Member for Caithness, Sutherland and Easter Ross and I have given are not recognised by the media. We are constantly told that the catering and retail deficit is what it was at the start of the current Parliament, rather than what it has become since we have been introducing our new policies. Sometimes it has been rounded up to more than £6 million, and on one occasion the deficit carried by the House of Lords was included in our figures. A continual wish to denigrate does not help us to give credit to all the people who have worked so hard to be responsible, for the reasons that my right hon. Friend explained.

The media suggest that this is all about 650 Members of Parliament advantaging themselves. However, there are 13,000 passholders on the estate, many of whom earn much less than Members of Parliament, and the catering service is aimed at everyone who has legitimate cause to be here. As I have said, the deficit has been halved. I hope that that will be recognised, and that we will make continuous efforts to achieve further savings and improvements. I pay tribute to the director of catering services, Richard Tapner-Evans, and to the whole of his team for the way in which they have responded to change while maintaining, in my view, very high quality and the reputation of the House’s catering.

On the retail side, I think that we have seen nothing short of a revolution. When I was first elected to this House, the only branded products that were available were whisky and cigarettes. For many of us, to give a bottle of whisky on every occasion when we were asked to contribute a prize was too expensive, and even in those days we did not really think of giving cigarettes. Now we have a fine and expanding range of quality gifts and souvenirs. Across the House revenue is up 11% in the July-September quarter compared with the equivalent period last year. The new Jubilee shop opened on schedule in July. The whole area around it has been refurbished, and sales are strong. The only niggle I have is that

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signage to the facility should be sufficiently prominent, and we have engaged in a lively debate with English Heritage about the nature of the signage we can have to attract the eye, and I hope we are winning on that one.

The Houses of Parliament shop on the corner of Bridge street now trades on Saturdays. It is unbelievable that it did not trade on Saturdays before. It now has more engaging window displays. Clearly that outlet is directed more to tourists and general visitors to London, and, frankly, how anyone ever thought tourists were coming to London specifically to hunt down a biography of Stanley Baldwin or Ramsay MacDonald is beyond me. The gifts and souvenirs that are in there now have made all the difference in the world to the trade that is done there. In August of this year alone sales were around 40% higher than in August last year.

The Members’ shop on the Terrace has seen an increase in the value of transactions as more product lines are introduced, some of which are exclusive to that shop. The summer fair in July in Westminster Hall built on the success of last year’s Christmas fair, and the Christmas fair itself will be repeated on 2 December upcoming, with 60 new product lines available.

In the matter of encaustic tiles, I owe the House an apology—[Interruption]—and not least my right hon. Friend the Member for East Yorkshire (Sir Greg Knight). I was asked by him about encaustic tiles and the possibility of selling the ones that have been retrieved, and I am afraid I gave a very inaccurate answer on that occasion. I am glad to say that that has been triumphantly overcome, however, in that the tiles that have come out whole and satisfactorily have been marketed. They are in a splendid box with a certificate of authenticity signed by me and my opposite number in the other place, Lord Sewel. We have already sold about 100 of them, with, I hope, more to go.

Finally on the retail side, I would like to compliment Diana Christou, who was appointed as director of retail. She has brought great experience and imagination to her work and she and her whole team are to be complimented on what has been achieved.

Our other experimental activity is the introduction of filming within the Palace. This is seen by many as a remarkable location and we tested the water with the film “Suffragette”, which, of course, did have a distinct connection with this place. On the basis of that experience, we are continuing to consider other filming proposals on a case-by-case basis, but we do see great possibilities.

On tours and visitors and bringing more people into the Palace, which has an impact on the bottom line, I can tell the House that since 1 April we have welcomed 127,000 paying visitors to the Houses of Parliament, 84,000 of them over the summer recess. The House was awarded the accolade of best guided tour at the group leisure awards 2014 and a certificate of excellence from TripAdvisor.

In the Association of Leading Visitor Attractions annual benchmarking exercise the House came fourth out of 80 attractions for overall level of enjoyment. Also rated as excellent were staff helpfulness and friendliness and the guided tour and audio guide.

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Commercial tours have expanded in range and availability. An extra hour has been added to the length of the commercial tour day. Audio guided tours have been introduced, including a family tour. The art and architecture tours continue to be popular and will be expanded in 2015. The tactile tours for blind and visually impaired visitors are also popular and are offered once a month.

In the light of the popularity of guided and audio tours of the rest of the Palace, it may be worth visiting sooner rather than later the issue of charging for tours of the Elizabeth Tower and Big Ben. That issue was highlighted in the House a couple of years ago, and recently 254 e-mail requests were received within the first five minutes of opening for bookings for visits to the Elizabeth Tower, meaning that places were filled within the first two minutes. Expectation from the public has shot up, and it is an expectation we are now having the greatest difficulty in meeting.

Work also continues to establish a logical visitor route, or to make the one we have comprehensible. That is coded language for saying we do the thing the wrong way round. No other tour brings the visitor in at the exit, walks them through to the start and then walks them back again. This is adding to the congestion of the Palace, which was never designed for that number of visitors. The situation at the pinch-points becomes exaggerated, of course, with those numbers going through. This is totally inefficient and unreasonable, and we must consider how we can provide the best possible experience for visitors.

I am grateful to the House for listening to this very concentrated description of what the Administration Committee has been trying to do in its contribution to the overall savings programme. Our overall rationale has been that the Palace of Westminster is a working building—the heart of our democracy—but that it also happens to be an iconic architectural masterpiece. Referring back to something my right hon. Friend the Member for Caithness, Sutherland and Easter Ross said, with the restoration and renewal project to be faced up to in the next Parliament, it is crucial that we save this building. We will be criticised very strongly if we fail to ensure that this symbol of our Parliament and our democracy is maintained to the highest level, to see through another 100 or 150 years.

I have the honour of chairing the Administration Committee, and I want to thank in passing all those who help us most closely in our work. We are a working building and also a visitor attraction and we consider them to be complementary roles. We have been determined in all we have sought to do to preserve the essential purpose of this place, while promoting access to the public, who take great pride in this building and what it means. I have seen the emotion of many people who have come here for the first time in their lives, sometimes in their elderly years, and it is clearly a great experience for them. I do not regard it as in any way cheapening this Palace for it to be more welcoming to visitors, and I know Mr Speaker is anxious that we should make sure that that welcome is warm, while, of course, guarding our security. These are difficult issues to reconcile at times, but the Committee has the interests of this Parliament and this Palace at the very forefront of its considerations, while at the same time trying to ensure that we are responsible in governing its finances and the facilities it contains.

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3.38 pm

Mr Clive Betts (Sheffield South East) (Lab): May I apologise to you, Mr Deputy Speaker, to the House and to the Chair of the Finance and Services Committee, the right hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), for not being here for the start of his speech? I was otherwise detained. I must also apologise as I will have to leave just before 4 o’clock to chair a Select Committee. As a member of the Finance and Services Committee, however, I want to say a few words to the House on this annual occasion when we explain what we have been doing with the House’s finances during the previous Session, and present the financial plan for the years ahead and the estimates for next year.

I join other Members in thanking the Chair of the Committee for his able and outstanding leadership over not only the last Session but the whole Parliament, as he has brought us together to make some often difficult decisions. As has rightly been said, the fact that there are so few Members here today with complaints to make—and certainly none who wants to suggest amendments—demonstrates that we have just about got the decisions right. The remit we were given at the beginning of the Parliament was challenging, in that we had to make 17% cuts in real terms over the course of this Parliament. Our first criterion was that we had to make those cuts without affecting the ability of Members to do their job, and I think that we have achieved our aim. I have not heard Members saying that their job is now more difficult to do because of the cuts. I think we have managed this programme in a proper way.

These expenditure reductions are larger than those being attempted in virtually any other central Government Department during the same period, although perhaps not so large as those that some local councils are having to deal with. In making the reductions, we have also tried to ensure that this building is no less welcoming to visitors, and in particular to our constituents when they come to see how Parliament operates. I think we have achieved that as well. Having listened to the speech from the right hon. Member for Saffron Walden (Sir Alan Haselhurst), I think we should give credit to the Administration Committee for its work on making this place even more welcoming to visitors, who now have more opportunities to buy when they come here and who also have a greater variety of things to do. That is certainly commendable.

We are now working on the launch of the new education centre, which is welcome. It is important that visitors can come in here to see how Parliament operates and to look at this magnificent building even when we are not sitting, but it is even more important when those visitors are children who are coming here to get an educational experience and to see how Parliament operates and learn about the workings of our democracy. That is something that we have achieved despite the expenditure reductions.

Some of us would say that the replacement of mountains of paper by our iPads has resulted in an improvement in our working conditions. We have achieved a lot of the reductions that we were aiming for through major cuts in our printing budget. Not every hon. Member shares the view that iPads represent an improvement, but for many they have certainly introduced a more efficient way of working.

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I also want to give credit to the Clerk who has just retired, and to the management team, for their efforts in advising the Finance and Services Committee by giving us all the options, alternatives and information to help us to make the right decisions and recommendations to the Commission. Our thanks should extend beyond the Officers of the House who give us advice directly. I am thinking of the work of the catering staff, particularly over the past few years. They have made major alterations to their working arrangements—to accommodate the changes in sitting hours, among other things—while maintaining their professionalism and continuing to provide the excellent service that we have come to expect from them. I should put on record that we in the parliamentary football club will shortly be playing our annual game against the parliamentary chefs. This is one of the ways in which Parliament comes together. It shows that we have a genuine working relationship and that we can enjoy such activities together.

Sir Alan Haselhurst: I hope that the hon. Gentleman will ensure that his team does not disable our chefs.

Mr Betts: I shall have a special word with our referee, Dermot Gallagher, to ensure that all our activities are conducted properly, and I shall pass on the right hon. Gentleman’s concerns. Perhaps he would like to come and increase the crowd numbers on that occasion? He would certainly be most welcome; his arrival would probably double the number standing on the touchline.

My hon. Friend the Member for Hayes and Harlington (John McDonnell) has mentioned our security staff. They have experienced a lot of concerns in recent years, not least the uncertainty over their future employment. I am talking not about the police but about the other security staff here. They were unsure whether they were going to be outsourced, whether they were going to stay with the Met or whether they were going to be brought in house. They do an excellent job for us. I understand that discussions are now taking place and that there is a possibility that they might well be brought in house. That is certainly what they want; they make no secret of that. It would give them the certainty and security to enable them to carry on giving us that excellent service. My thanks are widened to include all the staff who work for us. They enable us to act as a Parliament in an efficient and effective way, as well as opening up the building to visitors.

We have done reasonably well during this Parliament, but there will be major challenges in the next one. We have decided on a budget that simply keeps pace with inflation, but we are looking for continuous improvement. The capital challenges on the northern estate and the restoration and renewal project are absolutely massive, and they will be a major focal point for the next Parliament.

It is right that we should consider how we can improve not only our day-to-day working but our scrutiny of the Executive, which is an important role for Parliament. I therefore welcome the budget that has been made available for Select Committees when they can show that extra expenditure in a particular area would enable them to do a better job—whether by commissioning extra research or whatever—of holding the Executive to account. That is another small improvement that we are embarking on in the next Parliament, and I welcome it.

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I am delighted to associate myself with the motion on the Order Paper, and I am sure that it will go through unanimously. That in itself is a tribute to the work of the Chair, the right hon. Member for Caithness, Sutherland and Easter Ross, and I thank him and his Committee for the advice they have given to the Commission over the course of this Parliament.

3.46 pm

Thomas Docherty (Dunfermline and West Fife) (Lab): It is a pleasure to respond to this relatively brief debate on behalf of the Opposition. I should like to begin by paying tribute to the right hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) for the way in which he chairs the Finance and Services Committee, as well as for his service in representing the smaller parties on the House of Commons Commission. That is not always the most glamorous of postings, and it is sometimes a thankless one, but it is critical none the less.

I should like to offer the House the apologies of the shadow Leader of the House, my hon. Friend the Member for Wallasey (Ms Eagle), for her absence from the debate. She and the Leader of the House are giving evidence this afternoon to the governance review. The irony that they are not here to take part in the debate on the finance relating to governance will not be lost on us.

We welcome the progress that is being made on the savings programme. The right hon. Member for Caithness, Sutherland and Easter Ross has already highlighted a number of savings relating to printing. I must confess that I am double-hatting here today, in that I also have the pleasure of serving under the chairmanship of the right hon. Member for Saffron Walden (Sir Alan Haselhurst) on the Administration Committee. One of the savings of which we are most proud—it was one that we proposed, and it was accepted—has been the ending of the printing of the leather-bound volumes of Hansard. We have saved the taxpayer more than £1 million a year—it is important to remember that we are talking about taxpayers’ money—by ending the slightly archaic ritual of printing 150 leather-bound volumes of Hansard every fortnight. They were probably just filling up attic space in hon. Members’ properties. Indeed, in some cases, they might even have been holding up the houses.

The right hon. Member for Caithness, Sutherland and Easter Ross also referred to the catering subsidy, which has been reduced by 47% over the past year. There are 15,000 people working on this site across the two Houses, many of whom are in low-paid jobs, and it is right that we, as a good employer, should provide subsidised canteen facilities. Equally, we recognise that, in this financial climate, we have a responsibility to reduce those costs wherever possible. We therefore welcome the 47% reduction that has been achieved in the first six months of this year. I think that the hon. Gentleman referred to a figure of £2.7 million. My understanding was that the figure for the first six months was £1.2 million, which was £360,000 better than the target. Can he confirm—or perhaps get inspiration that will allow him to confirm—that he is confident we can achieve that £2.7 million target for the year?

The right hon. Gentleman also mentioned restoration and renewal, rightly saying that financial planning is crucial. I suppose I am wearing a third hat because,

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again like the right hon. Member for Saffron Walden, I am a member of the Members advisory group that is assisting in the preparation for restoration and renewal. We believe it is right that we learn from not only mistakes made by other Parliaments, but good practice. Our Parliament is not unique; this is not the only Victorian-era building that requires substantial overhaul, and Parliaments around the world are facing similar challenges. Our colleagues in Canada, Austria and Finland are going through this process, and others will. Therefore, as the right hon. Member for Caithness, Sutherland and Easter Ross said, it is right that we get the planning right now, as we do not want to see a Holyrood debacle in future years. So we fully support the work being done in that area.

My hon. Friend the Member for Hayes and Harlington (John McDonnell) touched on the security contract. Obviously, I am not going to talk about the specifics, for the reasons that have been outlined by Madam Deputy Speaker. I observe only that we are paying about £30 million a year to the Metropolitan police for that contract, whereas the French National Assembly does not pay a penny for the security support it receives. I hope that the Serjeant at Arms and the director of security will seek to ensure that the taxpayer is not picking up an excessive cost for whoever gets the contract in future years—I am sure that will be the case.

The right hon. Member for Saffron Walden talked about the catering budget, and I will not repeat what he said. May I just echo his remarks about the progress that has been made, on not only obtaining greater income, but reducing our costs? I understand that we have finally hit the critical point where our staff-to-sales ratio has fallen below 100%—I believe it is now 88%, which is a step in the right direction. Labour Members were disappointed in one way that the European Union (Referendum) Bill died, because in the previous Session the Smoking Room was very popular among Conservative MPs on Thursday evenings before the debates on that Bill. I believe I am right in saying that we are now not likely to see as many Conservative MPs propping up the catering outlets on a Thursday evening. The Opposition also welcome the work being done on the diversification of retail opportunities, which the right hon. Gentleman mentioned. There were some recent discussions about extending further the range of products available, with some talk about having Deputy Speaker whiskies or beers. Apparently, that is popular elsewhere, but I could not comment on which would be the most popular Deputy Speaker brand.

The Opposition agree with the right hon. Member for Caithness, Sutherland and Easter Ross, the Chair of the Committee, that we should seek to make relevant external hire opportunities available, but we are also clear that we do not wish to see charities being priced out of using the facilities. Many hon. Members on both sides of the House have long supported local charities and good causes, and we think it is vital that the House balances the desire to bring in greater revenue through third party hires with the protection of smaller charities. We concur with the Committee on Standards that there should be no political fundraising on the premises. I hope the right hon. Gentleman will confirm that whatever external opportunities are provided, political fundraising will not be considered.

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My hon. Friend the Member for Sheffield South East (Mr Betts) made an important point about staff relationships, and we agree with it; we wish to see greater progress being made on diversity and equality of staffing. The current Speaker and the House of Commons Commission have made progress on that, but it is important that that work continues. My right hon. Friend the Member for Leicester East (Keith Vaz), in particular, has been championing the cause for some time.

I also want to thank the House staff for their work. A number of staff members have been praised already, so I will not repeat their names, but I wish to add four to the list on behalf of the Opposition: David Natzler, our acting Clerk, who is continuing the good work of his predecessor; John Borley, our director general of facilities, who manages a complex and challenging team; and it is only right that we pay tribute to two Clerks, Helen Wood, on the Administration Committee, and Bob Twigger, who not only clerked the Finance and Services Committee, but has the pleasure of being secretary to the House of Commons Commission—a double treat for him, no doubt!

One thing that my hon. Friend the Member for Wallasey raised last year, on which we are frustrated not to see more progress, is bicameral services. The Opposition appreciate that that is not entirely the fault of those on the Treasury Bench, as some of the responsibility—the culpability—does lie at the other end of the corridor. However, we already see a number of shared services on security, broadcasting and IT, so we feel it is ludicrous that we run two separate catering services and Library services. As the Administration Committee and the House of Commons Commission have said, real progress needs to be made. One hopes that with a new Clerk in post at this end of the building, a new Leader of the House at the other end and indeed a new Leader of the House—of course, temporarily—at this end, we will see in the last six months real dialogue on bringing things together. That is where there are some real opportunities for savings to be made. Obviously, I am also disappointed that the House of Lords does not have the equivalent savings programme in place. It is a credit to you, Mr Deputy Speaker, as one of the members of the Finance and Services Committee, that that Committee has driven savings across the board. We would, however, like to see the House of Lords take up more of its share of this programme.

We welcome the neutral financial remit, as has been set out already, and the fact that it does not set a particular spending path beyond 2015-16 that would fetter an incoming Commission. We entirely concur on the importance of Select Committees and scrutinising the work of the Government, and we welcome the extra funds that are being made available. Although we fully support the proposals for the e-petitions system and the new partnership across Government and the House of Commons, we are slightly concerned about the possibility for spending to rise. I hope the Deputy Leader of the House will confirm whether the Government believe that the overall cost of e-petitions and the Select Committee concerned should not add an additional burden to the Select Committee budget.

We entirely concur with the points made about the education centre, which we believe is an important contribution to fostering a higher level of political

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engagement among young people across the country. The recent referendum in Scotland demonstrates that when we find the right issue, we can engage young people. The education centre has our full support and we wish it full speed.

Let me close by setting out one important point. It is vital not only that Members have opportunities, through continual professional development, to improve our skill sets, but that the senior management team have the appropriate financial skill sets. My hon. Friend the shadow Leader of the House has made it clear that we believe that the senior management team, including the chief executive—this is without prejudging what the Select Committee under the chairmanship of my right hon. Friend the Member for Blackburn (Mr Straw) may decide upon—must have appropriate financial skills. I hope that the Deputy Leader of the House will echo that in his response.

This afternoon’s debate has been useful. I look forward to the last 177 days before the general election, and we look forward to continuing to make progress on delivering not just parliamentary scrutiny, but good value for the taxpayer at the same time.

3.59 pm

The Deputy Leader of the House of Commons (Tom Brake): This debate has been slightly more entertaining that I had expected. I thought that, like a financial report, it was going to be quite dry, but we have had some entertaining illustrations of the activities that the different Committees are undertaking to realise savings.

I welcome the opportunity to participate in what has now become an annual debate on the House of Commons’ financial plan and draft estimates. In doing so, I should first mention my right hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso). At the risk of making him blush under his beard, I join the tributes that have been paid to him and his Committee for the work that they do in scrutinising the financial management of the House and in advising the House of Commons Commission, which is ultimately responsible for running the House.

Like other Members, I wish to pay tribute to the staff of the House, who support the Committee, the Commission and the Members in the activities that they undertake. I also thank my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst) for the role that he plays. He quite rightly pointed out that the finances of this place are not always as they seem, or at least as the press would like to present them. He reflected on the fact that there was a time when the gift shop here was little more than a duty free, selling only whiskey and cigarettes. As someone who has been running a Christmas card competition for reception, year 1, year 2 and year 3 students for the past 17 years, I am pleased that there are now more gifts on offer, as whiskey and cigarettes are clearly not appropriate prizes.

My right hon. Friend also referred to the availability of tiles in the gift shop. I am currently decorating my bathroom at home, so I wish that I had known that earlier—although at £150 a shot, I suspect that we would have had to stick to IKEA as we had originally intended. He quite rightly pointed out—many Members will have seen this—that the House is being used for the first time for the filming of “Suffragette”. He also

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referred to the fact that the House is a highly rated tourist attraction. I regret to say that he did not mention that our debates in this place are part of that attraction. Perhaps this debate is one that people who have been to visit today will remember for years to come.

Sir Alan Haselhurst: I hope that my right hon. Friend is not egging us on to think of charging people for going into the Public Gallery.

Tom Brake: I will leave that to my right hon. Friend the Member for Caithness, Sutherland and Easter Ross to address. Perhaps he will have had some thoughts on that.

Let me finish my comments on the contribution from my right hon. Friend the Member for Saffron Walden. I certainly agree that our investment in this place needs not only to reflect its heritage status but to ensure that the Palace of Westminster is both accessible and visitor friendly in a way that it is not at the moment.

I wish to comment briefly on the comments made by the hon. Member for Dunfermline and West Fife (Thomas Docherty). I congratulate him on his triple-hatted role. I am familiar with the concept of wearing more than one hat. He highlighted the savings we have made from ending the production of leather-bound books of Hansard. That was an appropriate thing to do, especially as it was at the taxpayers’ expense.

On the reconstruction and renovation works that will be undertaken fairly soon, the hon. Gentleman is right that planning them appropriately is essential. I do not like to think of myself as a professional politician, although I am not sure at what point one becomes one and leaves behind one’s previous career. Before being elected to this place, I was a project manager in the IT industry. One thing that must be done before embarking on a project is to work out what one wants to achieve and get from it. Members asked whether our plans for the House included a TV studio. Clearly, we need to establish that well in advance of any renovation work, rather than considering it as an afterthought, as the costs would start to ramp up significantly.

The hon. Gentleman also referred to the importance of diversity in staff, with which I entirely agree. He said that the House of Commons and the House of Lords should be actively considering bicameral services. It would be strange if we as a Government and Opposition called on local authorities to integrate their services to cut down costs if it were not something that we were prepared to consider in this place. I join him in praising the education centre.

The hon. Gentleman referred to the importance of senior managers getting the appropriate training, which I support. He concluded by referring to the e-petition system. I concur with his view that that is something that should not come at substantial extra cost. There may be a slight additional cost, as that inevitably happens in a transition period, but, fundamentally, we already have in place the technology and that should be the basis of the system. Any additional costs should be very limited. If, as part of the system, a petitions Committee is set up, it should not be an additional Committee but an alternative to one of the existing Committees in the

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House. I will not speculate on which, but that may be an appropriate way of dealing with any additional costs that might derive from having a petitions Committee.

It is right to recall the achievements of the House management in successfully delivering the savings programme, which saw a reduction in the administration estimate of 17% from £231 million in 2010-11 to £210 million in 2014-15. That reduction is in line with those that have been made right across Whitehall. Although that reduction has inevitably led to some changes, we have not seen any significant diminution in the services and support provided to Members of the House.

I welcome the fact that, although the saving programme has now come to an end, there is no sense of the job being done and now we can get back to normal. That would not reflect the reality of the financial situation, the need for further deficit reduction and the financial discipline in the wider public sector. The Committee’s report outlines the establishment of a continuous improvement approach being promoted by the Cabinet Office to ensure that the House continues to achieve value for money in the services it provides. I also welcome the bicameral nature of that approach. The potential for achieving savings by the two Houses working together should be fully explored.

The Committee notes improvements in financial discipline and internal control. Further improvements in financial performance will require a sharpening of managerial leadership skills right across the House. That is an area on which attention is rightly being paid, and it is a factor that might play into the current review of the governance of the House. I would also like to apologise on behalf of the Leader of the House for his being unable to attend this debate, which is for the same reason that the shadow Leader of the House is not here.

The House will also want to note the potential, outlined in the report, for further savings or income generation. The ICT strategy has not delivered the anticipated savings in 2014-15, and the expansion of commercial activities has not progressed at the pace originally envisaged. Those matters are being taken forward.

The House will also want to note the increase in resources that the Committee has agreed in respect of the budget for Select Committees, following a bid by the Liaison Committee. The extra £854,000 per annum from 2015-16 will enable Committees to have more staff and to commission more research. I think that is a good example of the core functions of the House being enhanced in a climate of overall savings being pursued.

With regard to the medium-term financial plan, we should be conscious of the need identified by the plan for a further £3 million to be found in each financial year from 2016-17 to 2018-19 and that there are major refurbishments in Norman Shaw North to be carried out. Beyond that, there are still decisions to be taken on the restoration and renewal of the Palace of Westminster, which will involve substantial expenditure however it is carried out.

Finally, turning to the Members estimate, hon. Members will note that the forecast expenditure is set to come down slightly, from £41 million in 2015-16 to £40 million in 2018-19, after the substantial exercise of providing new IT equipment for all MPs after the next election. The successful provision of IT and other resources for

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new MPs will go a long way towards giving them confidence in the management and governance of the House.

I conclude by again congratulating my right hon. Friend the Member for Caithness, Sutherland and Easter Ross on his Committee’s work, as set out in its report, and on the constructive way in which it continues to support the work of the Commission and the other administrative Committees of the House.

4.10 pm

John Thurso: I am most grateful to all Members who have taken part in the debate. It has been quite wide-ranging and had its light-hearted moments, but it has also been very serious, and I think that it does us credit to have discussed our affairs in that way. I will attempt to answer the questions that have been put directly to me, but if for any reason I miss one, I will certainly write to the hon. Member concerned.

The hon. Member for Hayes and Harlington (John McDonnell) asked about security. I have in my brief, in huge, red, block capitals, the words, “You’re not allowed to talk about security in the Chamber”, so I will not. However, I will say that obviously our security is of paramount importance, and so too is value for money. I observe that many places similar to ours get that best security and best value from an in-House security force. I have no idea what the House might do, but I am sure that it will be based on the best evidence externally.

John McDonnell: I do not want to tempt the hon. Gentleman any further, but can he indicate what the time scale is for decision making on that?

John Thurso: Proposals on the principles of the way forward, rather than the detail, have been received and will be put to the Commission and the House Committee of the Lords at their next meetings. If the proposals are agreed to in principle, the detailed work will take place, but I would not anticipate any particular changes until well into next year. I hope that answer is sufficient for the hon. Gentleman. The director of security would probably give him a fuller briefing, if he would like to take him up on that.

I thank my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst) for his full account of the work of the Administration Committee. One of the features of this Parliament has been the Administration Committee and the Finance and Services Committee finding a very good way of working together, with the Administration Committee taking the lead on the services and the Finance and Services Committee taking the lead on the financial implications of that. I am most grateful for his contribution.

The shadow Deputy Leader of the House, or deputy shadow Leader of the House—I am not sure which way around it is—the hon. Member for Dunfermline and West Fife (Thomas Docherty), asked a number of substantial questions. The first was where I got the figure of £2.7 million from. The answer is page 10 of the report, which states:

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“In the current financial year, at an equivalent point in the electoral cycle, it is forecast to be £2.7 million.”

However, he is absolutely right to ask, as always, because the update is that the like-for-like total net cost for catering services was £1.2 million in the first six months of 2014-15, against £2.25 million in the equivalent period of 2013-14, a reduction of £1.5 million, or 47%. Certainly, that being £360,000 better than budget, it is to be hoped that that will be carried through to the end of the year. I hope that is a reasonable answer. I will write to him about the first question he asked during my speech, but I direct him to annex D on page 32 in relation to the costs of restoration and renewal.

The hon. Gentleman mentioned charities. I absolutely agree that charities should not be penalised. That is part of the policies that have been adopted, and I see no chance of their being changed.

With regard to raising funds from those who come to watch us in this Chamber, there has never been any suggestion, ever, that money be paid by our constituents and the public to view the legislative process, Select Committee hearings, or any other part of our work—and nor should there be. There is a very distinct difference between people coming as members of the public to engage with the political process and those who come as tourists and pay for the privilege. The two are absolutely not linked.

Thomas Docherty: We entirely agree about the difference between tourism and watching the democratic process, but will the right hon. Gentleman confirm that the Commission supports the position of the Standards and Privileges Committee and the Opposition that political fundraising should not be allowed on the premises?

John Thurso: Indeed; I was about to come to that. It is in the purview of the Administration Committee, principally, but I am fairly certain that the policy is rigid and there is no known attempt to change it.

The hon. Gentleman raised the issue of bicameral services. It is of course worth remembering that the other place is a sovereign House, and therefore, in all we do, we negotiate with it, but cannot force it. This is not a matter for those on the Treasury Bench; it is a matter for the two Houses to reach a conclusion on. The reasonableness that their lordships demonstrated in so rapidly agreeing to a common procurement service bodes well for the future. Certainly, in any sane world, the whole Palace would be run as one, and I am sure that one day we will get there.

This has been a good debate, and I commend all Members who have taken part in it.

Question put and agreed to.


That this House notes the First Report of the Finance and Services Committee, HC 757, and the draft medium-term financial plan for the House of Commons as set out in the Appendix to the Report; and endorses the intention of the Finance and Services Committee to recommend to the House of Commons Commission a House of Commons: Administration Estimate for 2015-16 in line with the financial remit set by the House of Commons Commission.

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Rail Services (Portsmouth Harbour)

Motion made, and Question proposed, That this House do now adjourn.—(Dr Thérèse Coffey.)

4.17 pm

Caroline Dinenage (Gosport) (Con): I am very grateful to have the opportunity once again to raise the issue of rail networks in the south of England, particularly with reference to the Portsmouth harbour area, which is part of my constituency. We have had a lot of rail-related news recently, with much discussion about the potential HS3 line and talk of a “northern powerhouse” and a proposed super-hub.

It is important that we start this journey in the north. We always hear about the north-south divide and the need to link up the deprived northern towns with the cities—or rather one particular city—of the prosperous south. This narrative relies on drawing the starkest possible contrast between the run-down, post-industrial centres of the north and the gleaming, global city of London, surrounded by leafy suburbs and sunlit shires. Of course, the truth is much more complex. Child poverty in the Deputy Prime Minister’s constituency in Sheffield is less than a third of that in parts of Portsmouth. In my town of Gosport, which is on the other side of Portsmouth harbour, one in five children lives in poverty—about the same as in the centre of York.

Poverty does not respect geography. BAE’s decision to end centuries of shipbuilding in Portsmouth has exactly the same effect on working people on the south coast as a decision to shut down a mine in County Durham or to close a factory in east Lancashire would have in northern areas. Similarly, proximity to London is no use for people south of the capital if we cannot actually get there. It takes as long to get up to London from Portsmouth as it does to travel down from Doncaster—a journey twice as long. It is absolutely right that we are looking to improve our infrastructure across the country, but, as I will set out, we must ensure that some of the poorest communities in the country, who just happen to be in the south, are not left behind.

Mr Mike Hancock (Portsmouth South) (Ind): I suggest to the hon. Lady, and I hope she agrees, that the journey down from Doncaster to London would be a damn sight more comfortable than the journey up from Portsmouth.

Caroline Dinenage: I think the hon. Gentleman is referring to the quality of the rolling stock we have to endure, which I will certainly talk about in due course.

My constituency is home to Gosport, the largest town in the UK without a railway station. Since the last election, £52 million of public and private money has been pumped into our fantastic new Solent enterprise zone at the disused Daedalus military airfield, but the state of our transport links does not reflect the potential of that investment. Even getting to the nearest station is famously difficult: when we want to catch a train, we must either fight our way up the peninsula to Fareham, on the pitifully inadequate roads, or head across to Portsmouth harbour on the Gosport ferry.

It must be said that business at these stations is booming. The number of passengers using Fareham railway station has gone from 1.5 million in 2009-10 to

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1.7 million in 2012-13, while the figure for Portsmouth harbour has gone up from 1.8 million to 2.2 million in the same period—a 20% increase in just over three years. That reflects trends across the country, and the huge increase in demand since privatisation is a tribute to the success of our railways. However, it has been more successful for some than for others.

On journey speed, for example, someone travelling north out of London can be past Peterborough in 45 minutes—a distance of almost 100 miles. By contrast, the distance between Portsmouth and Southampton is just 20 miles, yet that train journey often takes more than an hour, with only two or three direct trains per hour. Inevitably, slow journey times and poor service frequency on the rail network mean that more and more people take to the roads, clogging up the already over-congested M27.

I mentioned earlier the painful journey times up to the capital. If passengers make the pilgrimage from Portsmouth to London, their journey to the busiest station in the UK is rarely pleasant. My hon. Friend the Member for Portsmouth North (Penny Mordaunt) has spoken regularly about that, and the hon. Member for Portsmouth South (Mr Hancock) has alluded to the infamous class 450 carriages, the seats of which South West Trains itself found that 59% of passengers cannot squeeze into

“when their elbows are taken into account”.

Mobile reception is poor along the route and, should a passenger and their elbows manage to make it to Waterloo, they will arrive at a station so heaving that it sees more people in three hours every morning than Heathrow does in a full day.

Crushed on to little more than benches with limited mobile reception and no wi-fi before being spat out into the cauldron that is Waterloo station, it is little wonder that my constituents feel they are not getting value for money. People in the Portsmouth Harbour area pay a premium to travel in cramped conditions at a snail’s pace. I know that a chunk of the £38 billion the Government are due to invest in the railways will go to South West Trains, and that is, of course, welcome. Indeed, one could argue that it is not only welcome, but deserved. My constituents who travel by South West Trains—in fact, all those who do so—are already subsidising train lines in every other part of the country.

The House of Commons Library estimates that, unlike almost every other line that is subsidised by the Government, passengers on South West Trains will subsidise other train lines to the tune of £1.2 billon over the course of the franchise. Given the pressure on that part of the network, would it not be possible for South West Trains to keep hold of at least some of that money to reinvest in and upgrade the network in the south? This is not a case of asking for more money—we are simply asking for our own money back so that it can be invested in the area where it is needed most. Given the unique population pressures we face in the south-east—the south-east of England and London will grow at an unmatched rate over the coming decade—that seems both necessary and fair.

That could also be a sweetener to incentivise further improvements as part of the refranchising process. When that process comes around in September 2017, there simply must be commitments on better signalling to cut

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journey times—potentially even involving a change of signalling around Portsmouth to create more space further up the line—and, of course, refurbished carriages to increase capacity.

In addition, as I said earlier, one of the biggest problems at the London end of the line is the overcrowding at Waterloo. In the recent debate secured by my hon. Friend the Member for Esher and Walton (Mr Raab), the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes (Claire Perry), who has responsibility for rail, said that a few winters ago she saw a wonderful production of “The Railway Children” on one of the former Eurostar platforms at Waterloo. Down south, we do not need the theatre to experience the glamour of 1930s train travel. Our tracks operate on the same lay-out as those laid in 1936. As she said, it is good news that the platforms are coming back into service, but will the Minister give my constituents a timetable for that process?

Finally, better signalling, bigger carriages and longer platforms are all necessary, but they will not be sufficient. In London and the south-east, we will have an extra 2 million people in 10 years’ time, so although all the upgrades to the existing line that I have mentioned are desperately needed, they will be no more than a sticking plaster.

I understand the difficult decisions that this, and indeed the next, Government will have to take on spending—there is less than no money to spend—but if we are seriously committed to building infrastructure fit for the 21st century and want to protect communities along the south coast as we undergo deep economic changes, the only long-term solution will be the construction of another line south from London. That might radically cut journey times, increase capacity and tackle head-on the deprivation that is endemic in too many communities in the south. With that sort of radical thinking, we could create a southern engine to match our northern powerhouse.

4.26 pm

Mr Mike Hancock (Portsmouth South) (Ind): I congratulate my constituency neighbour the hon. Member for Gosport (Caroline Dinenage) on her determination in getting this Adjournment debate. I welcome what she says. She has been consistent in putting her point of view in the House and in the media generally.

I must say that Portsmouth Harbour station has varied very little in the 60 years since I mudlarked underneath it as a kid. My goodness me, that station needs something done to it.

We have to look very carefully at train operators’ responsibilities to their passengers. As has rightly been said, this is a boom time for the railways. More people than ever are using our railways, and we should appreciate and be thankful for the fact that people take it seriously as a mode of transport. The last national census showed that close to 3,500 people a day commute by rail from the city of Portsmouth to different locations, but mostly to London.

From talking regularly to those commuters, I know the problems that they experience. There is sometimes a 20-minute delay while their train is held outside Waterloo station—they can see this House from their train window—perhaps to wait for other trains to go in, which makes

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them late for work. No sensible reason is ever given to passengers about why they have to sit on the train outside Waterloo for that length of time, and it causes them great problems in getting to work on time.

The poor state of the rolling stock has been talked about for at least two generations. I remember debates when I was first elected to the House 30 years ago in which we complained about the state of the rolling stock on the railway line from our city to other parts of the country. Something really needs to be done. The disabled and anybody with any back injury or back pain finds such a journey absolutely intolerable. That is why some of them have exercised their right to start reusing their car, which is the very thing we do not want.

We must understand that the general make-up of the railways since privatisation has in some instances been good for the country, but certainly when it comes to south of London, we are sadly denied the benefits that others receive. The hon. Lady was right to highlight the fact that commuters in the south will subsidise other parts of the network to the tune of £1.5 billion over the lifetime of the franchise, which cannot be right. As she rightly said, some of that money should be retained to improve the situation in our city.

I received a reply as recently as 4 November from the managing director of South West Trains to a letter about the appalling state of the trains and their lack of cleanliness. Constituents consistently write to me and speak to me about the untidiness of the trains. The reply from the managing director does not address that situation in any way. A constituent wrote to me as recently as yesterday, knowing that this debate was going to take place. I will quote directly:

“The stations in Portsmouth really do need improving. At night, they are poorly lit which is a matter of concern as they are used by children getting home from school in Portsmouth in winter.”

My constituent states that young kids frequently use the railways to go out in other parts of the area, and that:

“Poor lighting and limited staff means the risk of untoward incidents is high.”

I hope the Minister will ensure that in the conversations that the Department has with the rail operators, it brings home to them the need to tackle the issues that have been raised. I hope that Ministers will read carefully the Hansard report of this debate and take back to the rail operators the genuine reasons for concern that have been raised. The railways are booming but, sadly, many of the stations and much of the rolling stock are busted. That just is not good enough for the people whom the hon. Member for Gosport and I represent. They deserve better and they need to see better delivery of the service that they pay an awful lot of money to use.

4.31 pm

The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill): I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing this debate. I will do my best to address the points that she raised so eloquently. I apologise for being a poor substitute for the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes (Claire Perry), who has responsibility for rail. She is currently speaking in Westminster Hall, and even she cannot be in two places at the same time.

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As my hon. Friend the Member for Gosport knows, the Portsmouth-to-London line is an essential artery that connects communities across Hampshire, Surrey and south-west London. As she said in her speech, it is not only up north that we need to deliver new jobs and prosperity on the back of infrastructure. She mentioned the problems following the cuts to defence jobs in her part of the world.

The railways are a success story of recent times. Passenger numbers have doubled across the country over the past 15 years to the same levels as 1929, but on a network that is half the length. South West Trains operates about 1,700 services a day and about 222 million passenger journeys were made on South West Trains last year. London Waterloo is the UK’s busiest railway station and Clapham Junction station, which is operated by Stagecoach South Western Trains, is the busiest interchange, with somewhere in the region of 23 million interchanges each year.

My hon. Friend is right to raise the issues of journey times and capacity on the route between Portsmouth and London. She mentioned the journey to Doncaster. I will be journeying to York this evening. That journey takes 1 hour and 50 minutes, which is not much longer than the journey down to Portsmouth. Indeed, if one includes the Gosport ferry, that journey takes much longer, even though it is over a much shorter distance.

There are issues of great concern for many passengers who use train services on the route from Portsmouth to London. Many travel for work, but people also travel for leisure, as Portsmouth offers many attractions for the visitor. That is not to mention the important connections to the Isle of Wight and to my hon. Friend’s constituency by the Gosport ferry, for which South West Trains will offer through fares from January. The provision of reliable rail services on the line is therefore enormously important for economic activity and growth along the route.

Nearly 7 million passenger journeys were made to and from Portsmouth stations during 2012-13. Investment has been made and continues to be made to improve the facilities at those stations through schemes such as the national stations improvement programme. Portsmouth stations are served by a number of train operators—South West Trains, Southern and First Great Western—meaning that Portsmouth is connected to much of the south of England and Wales. However, I agree that the speed of those journeys is somewhat slower than on other routes that connect our cities, with the 74-mile journey between Portsmouth and London Waterloo taking about 90 minutes. My hon. Friend will be aware that there are legitimate reasons for that, which must be borne in mind.

The Portsmouth main line is a two-track route between Portsmouth and Guildford, connecting the south coast to London. The route is powered by a 3rd rail DC supply, with a maximum line speed considerably lower than the 125 mph seen on East Coast or Great Western main lines, for example. The line speed south of Guildford falls below 90 mph to 85 mph or less—indeed, to only 40 mph in some locations—on many parts of the route, which is caused by gradients and curves in the line profile. Coupled with the relatively high number of

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stations at which the train calls along the route, that makes it difficult to increase the line speed of those services.

There are few places where faster trains can overtake slower ones. In the section between Guildford and Havant, the only location where overtaking is possible is at Haslemere. That is not to say that no thought has been given to improving those vital services. Although previous investigations into improving journey times have shown a high cost for minimal benefit, service frequency has been increased where possible. That has been of greater benefit to the large populations using the train service from stations along that route.

There is no quick fix, and I will not suggest there is. The Portsmouth mainline is full to capacity and South West Trains is already operating most peak services at maximum formation. There are constraints on infrastructure and rolling stock, and as we have heard, passengers face difficulties. I am not saying, however, that improvements are not possible, and with the right conditions, journey times can be improved and extra main line capacity added. It is vital that the necessary planning for such investment takes place, and that consideration is given to the needs of the railway as a whole, giving us options for how to meet the demand that is forecast to continue growing over the next 30 years.

The long-term planning process is designed to facilitate the strategic planning of the industry, taking into account the views of the rail industry, funders, specifiers and customers. Network Rail is publishing draft route studies for stakeholder consultation. The draft route study for Wessex is due to be published for consultation later this month. It will set out ideas and proposals for investment over the course of Network Rail control period 6, which runs from 2019 to 2024, and beyond.

Local authorities, including Portsmouth city council, have already had the opportunity to feed into that draft study. It is very much a collaborative process, and I am keen to see it continue. The route studies will be published on the Network Rail website, together with further information about the long-term planning process. I strongly encourage my hon. Friends and their constituents to embrace the opportunity to help us shape the future of that railway, in the collaborative spirit to which I alluded. It is incredibly important for those who use that part of the network to have a say in its future.

Mr Mike Hancock: Will the Minister give an assurance that he will put pressure on train operators to work with the public to bring about improvements? It is one thing to have a consultation, but if nothing is delivered from that, it is a waste of time.

Mr Goodwill: Absolutely. When refranchising takes place, not only financial considerations, but other non-financial considerations such as those suggested by my hon. Friend, will be made. Towards the end of my remarks I will mention the rolling stock that is being used and the discomfort that some passengers may feel.

I understand that plans for more capacity in years to come are of little comfort to passengers who are experiencing delays and crowding today. That is why we have continued to invest in today’s railway to increase capacity where possible within existing constraints. I am pleased that the Government have pledged more than £38 billion of support for the rail industry up to 2019, improving the capacity and quality of a network

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that is experiencing vast growth in demand. My hon. Friend will be happy to hear that that includes significant investment on the South West Trains network.

In early September this year my colleague, the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes, who has just joined us in the Chamber, joined with South West Trains to announce the latest capacity enhancement to be contracted. Some 150 new vehicles are being manufactured by Siemens to be put into passenger use on South West Trains by the start of 2018.

Caroline Dinenage: We are grateful that South West Trains is putting that investment into its rolling stock, but unfortunately not a single one of those carriages will be in use on the route down to Portsmouth. Will the Minister comment on that point?

Mr Goodwill: As we see rolling stock introduced, it will cascade down, so that benefits will be felt not only by those using the new rolling stock. When Stagecoach South Western Trains introduces these new trains, existing fleets will be cascaded which will see a further four evening peak services strengthened on the Portsmouth main line to maximum formation, addressing some of the under-capacity issues. This is part of plans to provide capacity for an extra 24,000 peak-time passengers each day. This is in addition to the 108 additional carriages that are already starting to arrive and are being put into passenger service, to increase capacity each day by 23,000 in the peaks. A similar cascade is also adding capacity to a number of peak services from Portsmouth.

Over the same period, Network Rail will carry out some major enhancement and renewal works in and around the Waterloo area at a cost of several hundred million pounds. Signalling is an important part of our rail infrastructure. It is often forgotten, but it can be low-hanging fruit in efforts to gain additional capacity. The signalling system that covers much of the suburban network needs to be renewed and, as part of that project, a new turn-back facility will be created at Hounslow so that an additional four services can operate in the peak.

By 2017, Network Rail will have carried out works to bring the remaining four platforms at the former Waterloo international terminal back into full operational use—from its current theatrical use, which we have heard about—for scheduled domestic services, restoring a vital piece of the south-western route infrastructure for railway use. Having those extra platforms available is also essential in the plans that have been developed to then extend platforms 1 to 4 at Waterloo, which serve the main suburban routes, so that they can accommodate 10-car length trains. This removes the last constraint that has hampered plans to increase main suburban capacity from a maximum eight-car operation for many years.

All of this takes time and considerable effort in planning to minimise the impact on passengers as these major engineering schemes are implemented. There will

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undoubtedly be significant levels of disruption at times, but high quality communication about what this means to passengers and their daily journey will be key.

My hon. Friend mentioned the infamous 450 carriages and their 3 plus 2 seating configuration, which can make the journey elbow to elbow for some people. As people get bigger, that will be an even greater problem. As my hon. Friend the Member for Portsmouth South (Mr Hancock) said, some people with back pain cannot use those trains.

I have heard the passionate calls from hon. Members about the rolling stock on the Portsmouth to London line. The class 450s that were put in place by Stagecoach South Western Trains on that route following the 2006 franchise competition have increased the amount of seating capacity available. Operational constraints of the route ruled out any additional services, so this was South West Trains’ solution to the requirement to accommodate demand within those constraints.

The train operator takes the decision on where to deploy the rolling stock across the franchise network to address capacity issues as efficiently as possible. Stagecoach South Western Trains has chosen to deploy a mixture of class 444s—the white ones—and 450s on services between Portsmouth and London. The 10-car formation class 444 provides 598 seats, whereas a 12-car maximum formation class 450 provides 738 seats. The additional seats provided by the class 450s provide vital capacity for passengers closer to London.

My hon. Friend the Member for Isle of Wight (Mr Turner) could not be here for this debate as he is chairing a debate in Westminster Hall, but he wanted to raise the issue of passengers who cross the Solent after their train journey. All too often, the trains depart a couple of minutes before the ferries, which means a wait of half an hour, or even an hour in the evenings. I am aware of the problems, and we support the idea of a taskforce to look at the transport issues on the island. I encourage my hon. Friend to work with the Isle of Wight council to establish that taskforce. My hon. Friend the Under-Secretary has written recently to the leader of the council to invite them to meet.

The solutions that we have contracted will address the capacity issues on the Windsor and main suburban routes, but we know that capacity issues remain on the main line. We are doing what we can in the short term to add more capacity where this is possible. However, we know that more is needed, as has been made clear during this evening’s debate. We expect the industry to continue to work in the same collaborative way to address and implement a significant solution for the main line in control period 6, and the planning process for that is under way.

Question put and agreed to.