Wednesday Volume 583 2 July 2014 No. 17

HOUSE OF COMMONS OFFICIAL REPORT

PARLIAMENTARY DEBATES (HANSARD)

Wednesday 2 July 2014

£5·00 © Parliamentary Copyright House of Commons 2014 This publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 873 2 JULY 2014 874

Scotland’s economy, and jobs for the people of Scotland House of Commons that come from inward investment—instead of a referendum distraction.

Wednesday 2 July 2014 John Thurso (Caithness, Sutherland and Easter Ross) (LD): My right hon. Friend will be well aware that marine renewable energy presents a considerable The House met at half-past Eleven o’clock opportunity for inward international investment as well as for export, based on the knowledge we have acquired. In that regard, it is vital that MeyGen’s project goes PRAYERS ahead. What discussions has he had with either the Department of Energy and Climate Change or the Crown Estate to enable that to happen? [MR SPEAKER in the Chair] Mr Carmichael: I have had a number of discussions, as I think my hon. Friend is aware, involving my colleagues in DECC and in the Crown Estate. I am very keen to Oral Answers to Questions ensure that no procedural difficulties will stand in the way of the development from MeyGen, which, as he and I both know, is a very exciting and potentially lucrative development for his area. SCOTLAND Angus Robertson (Moray) (SNP): Inward investment The Secretary of State was asked— into Scotland is at a 16-year high under a Scottish International Inward Investment National party Government and in the run-up to an independence referendum. That contrasts with all the claims of doom and gloom from the Chancellor of the 1. Mike Freer (Finchley and Golders Green) (Con): Exchequer. Given that the UK Government were What assessment he has made of the potential for spectacularly wrong in their claims on inward investment, international inward investment in Scotland after 2014. why should anybody trust the myriad Westminster scare [904528] stories?

The Secretary of State for Scotland (Mr Alistair Mr Carmichael: I am delighted that the hon. Gentleman Carmichael): As part of the United Kingdom, Scotland gives me the opportunity to remind the House that of has an impressive track record of attracting international the 111 inward investment projects that were successful inward investment, which recent figures have put at its in 2012-13, 84 were supported by UK Trade & Investment. highest level for 16 years. Scotland has strong potential That is the sort of heft that is given to Scottish business to build on that record as part of the UK, the No. 1 by being part of the United Kingdom; that is what he location for Europe-bound foreign investment. wants us to walk away from.

Mike Freer: Does my right hon. Friend agree that Angus Robertson: The UK Government have launched inward investment is boosted by Scotland being part of a confrontational approach to the European Union. a single market and having a single currency? The Prime Minister went to Brussels last week and was outvoted 26 to 2. If smaller countries have no say in the Mr Carmichael: Indeed; I do agree with my hon. European Union, why is it that a Luxembourger is the Friend. The people of Scotland very much understand new President of the European Commission—from a that access to the pound sterling as our currency and country smaller than the city of Glasgow? access to that larger UK market benefit them, and they value them, especially the business community. We know Mr Carmichael: I will take absolutely no lectures that, because that is why the nationalists are constantly from the Scottish nationalists on the subject of telling us that even in independence we would still be confrontational approaches. It really is a mark of the able to keep those things. They are wrong; it is cynical; desperation of the position in which they find themselves and as we saw from yesterday’s poll, nobody is really that that is the best they can come up with. being fooled by it. Mrs Anne McGuire (Stirling) (Lab): The Secretary of 11. [904538] Mr Brian H. Donohoe (Central Ayrshire) State commented on the Ernst and Young report, and it (Lab): However, it is the case that inward investment is also identified that although investment was increasing, faltering. I have had experience after experience of the number of jobs related to that inward investment talking to foreigners who are not investing in Scotland was decreasing. I wonder what action the Minister can as a result of the uncertainties and the possible likely take, hopefully in co-operation with the Scottish divorce. Are we not by far better off as a united Government, to ensure that there is greater correlation kingdom than we would be with a separate Scotland? between investment and jobs created in Scotland.

Mr Carmichael: We are very much better off as a Mr Carmichael: The right hon. Lady points to a result of being part of the United Kingdom, and I long direction in which sensible politics ought to go, and I for the day when again Ministers here and in Edinburgh would love to be working in that way with the Scottish can all concentrate on doing their day job of working Government. Unfortunately, however, it takes two to together to get the maximum benefit to Scotland and tango. 875 Oral Answers2 JULY 2014 Oral Answers 876

Living Wage David Mundell: I absolutely agree. Tens of thousands of Scots have benefited from the fact that we have raised 2. Ann McKechin (Glasgow North) (Lab): What steps the personal allowance. Roughly two thirds of those on he is taking to incentivise employers in Scotland to pay the minimum wage are now paying significantly less tax the living wage. [904529] than they were when this Government came to power.

The Parliamentary Under-Secretary of State for Scotland Mr Russell Brown (Dumfries and Galloway) (Lab): I (David Mundell): The Government support businesses know the Minister recognises that payment of the living that choose to pay the living wage, where it is affordable wage will ease the pressures of the cost of living that and does not cost jobs. many households experience, but in view of his recent admission to the Scottish Parliament’s Welfare Reform Committee that his Government’s benefits sanctions Ann McKechin: The Minister will be aware that many and welfare reforms have contributed to the increase in people in Scotland have started the holiday season and the number of food bank users, will he now apologise? packed their bags, and many will be visiting the beautiful islands of Scotland, but last week the National Union of Rail, Maritime and Transport Workers reported that David Mundell: What I think politicians should apologise foreign-resident seafarers who are working on the ferries for is making the poor and most vulnerable into political are being paid as little as £2.35 an hour. That is a footballs. Poverty is a scourge in our country, not an disgrace to Scotland, and I urge the Minister to use his opportunity for a press release. offices to work with the Scottish Government to persuade the ferry companies to pay not only the minimum wage Mr Speaker: Order. In case the House is not aware, I but a living wage to every single one of their workers. can inform colleagues that the House of Commons has received its accreditation from the Living Wage Foundation. David Mundell: I most certainly take on board what the hon. Lady says and I will make representations in Independence Referendum that regard. I am sure she welcomes the fact that earlier this month the UK Government published a list of 3. Pete Wishart (Perth and North Perthshire) (SNP): employers who had not paid the minimum wage. What steps he is taking to inform the public about the Unfortunately, two of them were in Scotland. Scottish independence referendum. [904530]

Mike Crockart (Edinburgh West) (LD): Mr Speaker, The Secretary of State for Scotland (Mr Alistair I know that you will be happy to hear that in May I Carmichael): To inform the debate, a variety of information, employed an apprentice in business administration in including a range of detailed analysis papers and a my office and committed to paying her the living wage. booklet for each household in Scotland, has been published. Does the Minister agree with me that all MPs’ offices I have also participated in public debates and will and Government Departments should set an example continue to do so to set out the benefits of Scotland’s and move as quickly as possible to being accredited remaining in the United Kingdom. living wage employers? Pete Wishart: For which we are eternally grateful, but David Mundell: The hon. Gentleman sets a good is not the best way to inform people to debate? Instead, example, and certainly in apprenticeship schemes offered we have the leader of the no campaign, his right hon. by Members of Parliament, I support the action he has Friend the Prime Minister, running a mile, feart to do taken. just that? What about the substitute-designate? It will be a slaughter worse than the Bannockburn re-enactment 14. [904541] Mr William Bain (Glasgow North East) if they put up the angry, agitated Alistair to debate with (Lab): Seven out of 10 young people in Scotland who the First Minister. The Secretary of State himself could are unemployed are applying for benefit for the second do it; he is good at this stuff—he could even take Rhona time. Is that not testament to the fact that there are with him. But what we really need is the organ grinder, simply not enough secure jobs for them that pay the not one of the Alistair monkeys to debate with the First living wage? Why will this Government and their Minister. equally bad counterparts in Edinburgh not use the public procurement powers available to them to ensure Mr Carmichael: That was pitiful. I cannot believe it that every Scottish young person gets the living wage? sounded good even when the hon. Gentleman rehearsed it in the mirror this morning. It is typical, though, of David Mundell: I would have thought that the hon. what we hear from the Scottish nationalists. They are Gentleman would welcome the fact that the number of desperate always to talk about how we will debate. They those in the 16 to 19-year-old category in Scotland who do that only because they want to avoid the actual are out of work has fallen by 4,000. Work is the way out debate, because they know that the force of argument is of poverty, and that is what this Government are on the side of those of us who want to remain in the encouraging. United Kingdom.

Robert Halfon (Harlow) (Con): Does my hon. Friend 15. [904542] Iain Stewart (Milton Keynes South) (Con): not agree that the best way to achieve the living wage in Will my right hon. Friend make sure that before Scotland and elsewhere in the country is by continuing 18 September the public have full information at their to take millions of low earners out of paying income disposal about the significant extra powers for the tax altogether? Scottish Parliament for which this Parliament has 877 Oral Answers2 JULY 2014 Oral Answers 878 already legislated? It is perfectly possible for Scotland Margaret Curran: I thank the Secretary of State for to have more autonomy without ripping up our that answer, which is particularly important this week, country. as we celebrate the naming of HMS Queen Elizabeth. Will he ensure that people across Scotland are informed Mr Carmichael: That is exactly the position. As of about the value of such UK contracts to the shipbuilding next year, as a result of the Scotland Act 2012, the industry in particular? Does he agree with the shop Scottish Parliament will have control over stamp duty stewards at Rosyth and on the Clyde that the best way land tax and the landfill tax, it will have a borrowing to protect the shipbuilding industry in Scotland is to say power and, come 2016, it will have the power to set a no thanks in September? Scottish rate of income tax. Those are significant tax-raising powers. I want to see us go further on that. Of course, Mr Carmichael: I absolutely agree with the hon. Lady that will require Scotland to decide to remain part of and with the shop stewards at Rosyth and on the Clyde, the United Kingdom. all of whom I have met on a number of occasions in recent weeks. They are clear and unambiguous about Graeme Morrice (Livingston) (Lab): Does the Secretary the message that the hon. Lady has just articulated. The of State agree that third parties such as businesses and House should remember that that is not the view of a trade unions need to be able to make their voices heard politician; that is the view of trade unionists—people in the referendum debate? Will he join me in condemning who are charged with protecting the best interests and those people who continue to intimidate those who the jobs of their members. If they thought for a second speak out against independence? that independence would be good for their members and that it would help to protect their jobs, I have no Mr Carmichael: I absolutely 100% and without any doubt that the trade unions on the Clyde and at Rosyth reservation condemn any intimidation, wherever it may would be supporting it. The fact that they are not tells appear. This is by a country mile the single most important us all we need to know. issue that we, the people of Scotland, will ever have to resolve for ourselves. Nobody should feel that they are Sir Gerald Howarth (Aldershot) (Con): Will the Secretary constrained in having their say or asking questions of State ensure that Scottish voters understand that if about what it would mean for them, their family or their they vote for Scotland to become a foreign country, business. Anybody who tries to silence people on the they will lose the pound and all the stability and economic other side of the debate should be no part of it. advantage that goes with it? Will he also make it clear that many of us in England—indeed, the vast majority— Sir Menzies Campbell (North East Fife) (LD): Is not want Scotland to remain a vital and important part of the role of our Government to provide answers to the our United Kingdom so that we can jointly share in our questions that those arguing for independence refuse to future prosperity? provide—either because they do not know the answer or because they do not want us to know the answer? Mr Carmichael: I agree with my hon. Friend that that Mr Carmichael: Indeed, that is the case. It has been is the view of most people in England, and in Wales and remarkable that on every occasion when we could have Northern Ireland. I look at how we have tackled the been given hard facts and information by the Scottish challenges we have faced over the past 300 years, and I Government throughout this exceptionally long campaign, see that over that time we have identified the problems we have instead been given opinion and assertion. People and reached out from Scotland, to communities such as are not stupid, though. They draw their own conclusions Liverpool, Newcastle, Manchester, Cardiff and Belfast, from that, as was apparent from yesterday’s YouGov and tackled them by making common cause. That has poll in The Times. worked for us, and I believe that it will continue to work for us. Margaret Curran (Glasgow East) (Lab): This is the last Scottish questions before the referendum. People Regional Air Connectivity Fund across Scotland know the magnitude of this decision and that if there is a yes vote, it is irreversible. That is 4. Jim McGovern (Dundee West) (Lab): What why people need as much information as possible. Does assessment his Department has made of the effect of the Secretary of State agree that when presented with the regional air connectivity fund on Scotland. [904531] the facts, most Scots do not want to turn their backs on the United Kingdom, and that a message of a strong Scotland with a strengthened Scottish Parliament is The Parliamentary Under-Secretary of State for Scotland gaining support in every part of Scotland? (David Mundell): The regional air connectivity fund was announced by the Chief Secretary to the Treasury last Mr Carmichael: The most important message that year and was doubled to £20 million in the Budget. It the people of Scotland have to get from any source is has already been successful in securing the air link that the decision we make on 18 September is a decision between Dundee and London, a vital support for economic from which there will be no going back. This has to be growth in the hon. Gentleman’s great city. a once and for all decision. From that point of view I agree completely with the hon. Lady. Over the past Jim McGovern: I thank the Minister for that answer. 300 years, as part of the family of nations that is the Some £2.8 million came from the UK Government to United Kingdom, we have achieved a great deal of retain the air link between London and Dundee. Is that which we should be proud, and I and the people of not just one more example, albeit a crucial one for Scotland do not want to walk away from that. Dundee, of why Scotland is stronger as part of the UK? 879 Oral Answers2 JULY 2014 Oral Answers 880

David Mundell: I absolutely agree. The air connectivity Fiona O’Donnell (East Lothian) (Lab): Does the Secretary fund is a good example of the UK Government working of State think there would be a market in the rest of the to support economic development across all the nations UK for expensive renewable energy from an independent and regions of our United Kingdom. Scotland, or is a single regulated energy market best for Scotland and best for the UK? Mr Charles Kennedy (Ross, Skye and Lochaber) (LD): May I ask the Minister, on behalf of my hon. Friend the Mr Carmichael: The benefits and opportunities that Member for Argyll and Bute (Mr Reid) and myself—this come to generators of renewable energy in Scotland is not just a parliamentary pincer movement; it is close from being part of that single integrated market speak to the Secretary of State’s heart, and I am assured that for themselves. The fact that we are being asked to leave he does have a heart, at least on Wednesdays—about that should be of concern to them. Islay airport and Broadford airport on the Isle of Skye? Transition Costs (Independence) They could both benefit if that excellent scheme were extended in conjunction with the Scottish Government: 6. Sheila Gilmore (Edinburgh East) (Lab): What in the case of Islay, because it lacks a public service discussions he has had with his ministerial colleagues obligation and wants more commercialism; and in the on the transition costs of an independent Scotland. case of Broadford, by re-establishing passenger links. [904533] Will he give that his full support? The Secretary of State for Scotland (Mr Alistair David Mundell: I will most certainly take on board Carmichael): I have regular discussions with ministerial what the right hon. Gentleman says on his behalf and colleagues, to ensure that people in Scotland have the that of his colleagues. I am sure that everybody would full facts about the economic consequences of independence. welcome the opportunity to fly over the sea to Skye. The Scottish Government have repeatedly refused to publish their own workings. I call on them today to Mr Ian Davidson (Glasgow South West) (Lab/Co-op): publish the work they have carried out. Does the Minister agree that those who are using that Sheila Gilmore: I thank the Secretary of State for that fund to fly from London to Dundee later this week in reply. The Scottish Government’s own Finance Secretary order to see the launch of the aircraft carrier will be able calculated, in an internal memo, that the cost of setting in two different ways to see the strength of the United up a new tax authority alone would be some £650 million. Kingdom? Is it not right that the Scottish Government should give that and other, similar information they have to the David Mundell: Absolutely. The hon. Gentleman will Scottish people before asking them to vote for a pig in a have heard the Secretary of State highlight the importance poke? of the flotation of the aircraft carrier on Friday, which will be a very important moment not only for Scotland, Mr Carmichael: It is worth reflecting that that figure but for our whole United Kingdom. is in the public domain only because the document was leaked. The truth of the matter is that, whenever there is Energy (Independence) any difficult news to be had, the Scottish Government will go to any lengths to suppress it, because, frankly, 5. David Mowat (Warrington South) (Con): What they are prepared to tell us anything that they think will assessment he has made of the potential effect of Scottish make us more likely to vote for independence. independence on energy flows between Scotland and 13. [904540]Mr Angus Brendan MacNeil (Na h-Eileanan the rest of the UK. [904532] an Iar) (SNP): With the renovation costs of the Westminster Parliament expected to be £400 million a The Secretary of State for Scotland (Mr Alistair year every year for 10 long years, Professor Patrick Carmichael): Scotland has a thriving energy sector which Dunleavy said yesterday at the London School of benefits from unrestricted access to the integrated Great Economics that the set-up costs for an independent Britain energy market. That supports jobs, keeps bills Scotland would be £200 million and not the £1.5 billion lower and spreads the substantial costs over 30 million that is on the Treasury website. Will the Secretary of households and businesses. State see to it that that figure is corrected and that the Westminster Government apologises both to Professor David Mowat: The Scottish Government have now Dunleavy, an expert in this area for 30 years, and to the decided to generate 100% of electricity from renewables people of Scotland for that error and misinformation? by 2020. The implied subsidy for that is £4 billion a [Interruption.] year, or £1,000 per voter a year. Has the Secretary of State had any discussions with the Scottish Government Mr Speaker: Order. The hon. Gentleman is talking about who would pay for that in the event of independence? out his colleagues.

Mr Carmichael: What I can tell my hon. Friend is Mr Carmichael: The hon. Gentleman is out of date. I that at the moment the cost of the subsidy required for can tell him exactly what Professor Dunleavy said yesterday: the development of renewables is spread across the “Scotland’s voters can be relatively sure that total transition whole United Kingdom market. In an independent costs over a decade will lie in a restricted range, from 0.4 of one Scotland, that cost would have to be met by households per cent of GDP (£600 million), up to a maximum of 1.1 per cent (£1,500 million). This is a step forward in debate”. in Scotland, which would mean a difference of between £38 and £189 in Scottish energy bills. We do exceptionally He was agreeing with Professor Iain McLean and said: well from the subsidies that come to Scotland as part of “I am grateful to Iain for helping to bring it out.” the United Kingdom. The hon. Gentleman should also be grateful. 881 Oral Answers2 JULY 2014 Oral Answers 882

Housing Benefit The Prime Minister (Mr David Cameron): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have 7. Mr Michael McCann (East Kilbride, Strathaven further such meetings later today. and Lesmahagow) (Lab): What assessment he has made of the effects of the distribution of housing benefit in Charlotte Leslie: A key driver of our welcome economic Scotland. [904534] growth has been investment in new commercial enterprises. Does my right hon. Friend agree that the speedy completion The Parliamentary Under-Secretary of State for Scotland of the Sainsbury’s and Bristol Rovers deal is a key part (David Mundell): In recent months, I have met every of Britain’s fight back to prosperity not only in achieving local authority in Scotland to discuss a wide range of a new stadium for the south-west, but in unleashing issues, including housing benefit. hundreds of jobs, affordable housing, business growth Mr McCann: A report by my trade union, the GMB, and rail infrastructure plans? Will he do all he can to shows that huge sums of housing benefit are paid to hasten the completion of this Sainsbury’s deal, which is company landlords in Scotland. Bearing in mind the so vital for our economy? Secretary of State’s earlier answer, will the Minister The Prime Minister: Having visited my hon. Friend’s meet me to discuss how we can bring together the UK, constituency recently, I know how passionately she feels Scottish and local governments to ensure that we get about this important development. I know that she will best value for housing benefit and that we can create be delighted that the judge in question has dismissed new houses and new jobs, rather than fill the pockets of the judicial review. We can now hope that this paves the company landlords? way for the supermarket and the stadium to be built, David Mundell: I would certainly be happy to meet and I hope that Sainsbury’s will press ahead with that. the hon. Gentleman, with a view to convening such a Not only will this mean a new home for Bristol Rovers, meeting. but it will mean more jobs, more growth and better infrastructure for Bristol. Mr Alan Reid (Argyll and Bute) (LD): I want to thank the Government for recognising the extra costs of Edward Miliband (Doncaster North) (Lab): It is four living in remote rural areas and giving councils such as years since the Prime Minister announced his top-down Argyll and Bute extra money to give discretionary NHS reorganisation. Can he tell us whether, since then, housing payments to their tenants. I hope the Government the number of people having to wait more than the will continue to give extra money to such councils in guaranteed two months for cancer treatment has got future years. better or worse? David Mundell: The hon. Gentleman will know that I The Prime Minister: The number of people being wrote to the Deputy First Minister of Scotland with an treated for cancer has gone up by 15%, and we are offer to executively devolve the power to Scottish Ministers meeting the key waiting time targets, particularly the to set the statutory cap on discretionary housing payments waiting time target for accident and emergency, which in Scotland. That offer has been accepted and we are we met for April, even though the right hon. Gentleman working constructively with the Scottish Government had once again predicted a crisis. to take it forward in relation not just to rural areas, but Edward Miliband: That was a very specific question to all councils in Scotland. about cancer treatment: I asked whether things had got Michael Connarty (Linlithgow and East Falkirk) (Lab): better or worse. After all, the Prime Minister did this Will the Minister intervene with the Department for big reorganisation and said things would get better. Work and Pensions so that we can have a system where Macmillan Cancer Support warns that more lives are someone who is sanctioned and taken off benefits when being put at risk. Cancer Research UK says, they have an appeal does not lose their housing benefit “This isn’t just a missed target—some patients are being failed”. until the appeal is heard? Once the appeal is heard, they The NHS has missed the target on access to cancer get their money back, but they then have the problem of treatment for the first time ever. Is he really telling two finding that they are in debt to the local council. Can we of the most respected cancer charities that they are not have a system that is sensible and fair to people who wrong about the target and that things are getting are sanctioned by the DWP? better, not worse? David Mundell: I certainly take note of what the hon. The Prime Minister: What I am saying is that we Gentleman says, and I would be happy to meet him to introduced for the first time ever a cancer drugs fund, discuss it further. which is treating 50,000 people. That is what is happening. The number of people being treated for cancer is up 15%. This is all in stark contrast to Wales, where Labour is in charge—[Interruption.] Labour Members all shake PRIME MINISTER their heads, but the fact is that Labour is in charge of the NHS in Wales, and it has not met a cancer target there since 2009. The Prime Minister was asked— Engagements Edward Miliband: Actually, the Prime Minister is wrong about that. In Wales, more patients start cancer Q1. [904588] Charlotte Leslie (Bristol North West) treatment within 62 days than in England. We know (Con): If he will list his official engagements for why he wants to talk about Wales—because he cannot Wednesday 2 July. defend his record in England. Was it not interesting 883 Oral Answers2 JULY 2014 Oral Answers 884 that, on the cancer treatment target, he could not pretend the question. More people are waiting more than four things were getting better, but he could not admit things hours in A and E. What about those people whose are getting worse? Let us try him on another one: in the condition is so serious that they need in a bed in four years since his reorganisation, has the number of hospital? Can he tell us, since his reorganisation has the people waiting more than the guaranteed four hours in number of people waiting more than four hours on A and E got better or worse? trolleys—something he said he would get rid of—got better or worse? The Prime Minister: We have met our waiting time target for accident and emergency. Let me tell the right The Prime Minister: People are waiting less time to hon. Gentleman exactly how long people are waiting. get into accident and emergency than they were under When the shadow Secretary of State was Secretary of the last Labour Government. We remember what that State for Health, the average waiting time was 77 minutes; Government gave us: the disgrace of Mid Staffordshire, under this Government, it is 30 minutes. That is what is for which they have never properly apologised. As for happening under this Government. what they said about our plans, we have put £12.7 billion Let me admit to a mistake, Mr Speaker. I have just extra into the NHS and their view was that that was said that Labour has not met a cancer treatment target irresponsible. They oppose reform of the NHS, and we in Wales since 2009. I am afraid I was wrong: it has not can see the effect in Wales: no reform, no money, longer met a cancer treatment target in Wales since 2008. Of waiting lists, no targets met and people dying on waiting course, in Wales there is no cancer drugs fund; there has lists. That is under a Labour Government. been an 8% cut to the budget; people are dying on waiting lists—and Labour is responsible. Edward Miliband: The Prime Minister cannot answer any of the basic questions about his own targets in the The right hon. Gentleman asked me to defend my NHS. I can tell him that the number of people waiting record over the past four years; I will. There are 7,000 on trolleys for more than four hours has gone up from more doctors, 4,000 more nurses, over 1,000 more midwives, 61,000 to 167,000 on his watch. He promised that the and we are treating over 1 million more patients a year. reorganisation of the NHS would make things better, Whereas the NHS under Labour had the disgrace of but it has made them worse: worse on access to cancer Mid Staffs, we can now see the NHS being properly treatment, worse on A and E waits, worse on GP access. invested in and properly improving. The NHS is getting worse on his watch, and there is only one person to blame: him. Edward Miliband: I will tell the Prime Minister about our record on the NHS: the shortest waiting times ever, The Prime Minister: If the right hon. Gentleman more doctors and nurses than ever before and the cannot do better than that, even on the NHS, he really highest patient satisfaction ever. That is Labour’s record is in trouble. Under this Government, millions more on the NHS. Now, it was a long time ago, but he did not patients have been treated. There is a cancer drugs fund answer the question. It was on a target that he set, on for the first time ever. Our health service is ranked four-hour waits in A and E. Let me give him the figures officially the best in the world. We know what he would for his target: before his reorganisation, the number of do, because we have heard from the director of policy, people waiting more than four hours was 353,000. After who said that no interesting ideas will emerge from his reorganisation, that has risen to 939,000, an increase Labour’s policy review—that is official—and his guru, of 300%. Is that better or worse? Lord Glasman, has come out and said that he has “no vision.” Yesterday he misquoted statistics and got them The Prime Minister: The average waiting time is completely wrong, and the managing director of the down by more than half. That is better. But the right factory he was speaking in said that Labour’s policy hon. Gentleman does not have to listen to me—he can would be a “bureaucratic nightmare”. I say to the listen to the shadow Health Secretary, who said that this people looking glum behind him, cheer up, folks—it’s is only Wednesday. “the best health service in the world.” That is what he said. He was quoting the report from Jake Berry (Rossendale and Darwen) (Con): It is the Commonwealth Fund, which is an independent good to be back, Mr Speaker. organisation. It ranked the United Kingdom—for the Cherylee Shennan, a 40-year-old mother, was murdered first time, and under this Government—as having the in Rossendale on 17 March by Paul O’Hara, who was best health service anywhere in the world. It is better out on licence after having murdered his former partner than in America, better than in Germany, better than in in 1998. The introduction of Clare’s law or the right to France, better than in Australia. [Interruption.] He says know whether one’s partner has a history of violence— that is his record, but it has happened only under this Cherylee did know of her partner’s history of violence— Government, and I can tell him why. Mixed-sex wards must be backed up by support from the police and the have been virtually abolished. Infection rates have been probation service, so that people in such situations halved. A million more patients have been treated. know of the dangers that they face and so that we do There is a cancer drugs fund for the first time ever. not see another tragedy like the death of Cherylee. There are more doctors, more nurses, more midwives, more people being treated, and it is official: the best The Prime Minister: It is good to see my hon. Friend NHS in the world. back in his place. He makes an important point. The introduction of Clare’s law has made a difference because Edward Miliband: It is this party that created the it gives people the right to any information about the NHS, and every time we have to save it from that lot potential dangers from a partner. I am pleased that that opposite. Once again, the Prime Minister did not answer has been rolled out across the country. He is absolutely 885 Oral Answers2 JULY 2014 Oral Answers 886 right that we need to do more with the police, the The Prime Minister: First, I am very proud to lead a probation service and the Prison Service to ensure that Government who have increased the basic state pension more warnings are given in more cases. by £15 a week, which will have helped his constituent. On how we help people in work, what we need to do is Q2. [904589] Ms Diane Abbott (Hackney North to create more jobs. We have seen 2 million more private and Stoke Newington) (Lab): The Prime Minister will sector jobs under this Government. The second thing be aware of the housing crisis in London, but is he that we need to do is to cut people’s taxes. Under this aware of the distinctive contribution of his colleague, Government, people can earn more than £10,000 before the hon. Member for Newbury (Richard Benyon)? they pay any income tax. That is at the heart of our Through his £110 million family firm, he has bought long-term economic plan and it is working for Britain. up the New Era estate in Hackney. The firm intends to drive up—[Interruption.] Q4. [904591] Robert Halfon (Harlow) (Con): The world has seen the tragic and brutal murders of three Israeli Mr Speaker: Order. The question will be heard. What youngsters, most probably by Hamas. Will my right people think of it is neither here nor there. This is hon. Friend give the Israeli Government every possible supposed to be a bastion of free speech and the hon. support at this time? Does he agree that, far from Lady will be heard, however long it takes. showing restraint, Israel must do everything possible to take out Hamas terrorist networks, and will he give the Ms Abbott: Families in Hackney face seeing their Israeli Government support in that? rents driven up, eviction and being put on the street. Are the activities of the firm of the hon. Member for The Prime Minister: What I say to my hon. Friend, Newbury the Prime Minister’s idea of compassionate who I know is passionate about these issues, and to conservatism? everyone in the House, is that this was an absolutely appalling and inexcusable act of terror, and one can The Prime Minister: What I would say to the hon. only imagine the effect on the families and friends of Lady is that we all know that we need to see more those poor teenagers, and what happened to them. It is houses being built. We have seen 41,000 affordable very important that Britain will stand with Israel as it starts over the last year and more than a fifth of those seeks to bring to justice those who are responsible. We have been in London. We need more house building and also welcome the fact that President Abbas has firmly more houses being provided. We will then see more condemned the abduction and tried to help find those affordable rents in the social sector and in the private people. As my hon. Friend said, it is important that all sector. security operations are conducted with care so that further escalation is avoided. The people responsible for Q3. [904590] Mr John Baron (Basildon and Billericay) this should be found and brought to justice. (Con): One in three of our nuclear test veterans’ descendants has been born with a serious medical Q5. [904592] Jack Dromey (Birmingham, Erdington) condition. Given that our cross-party campaign seeks (Lab): In 2011, the Prime Minister said that waiting recognition and not compensation, including an ex lists “really matter”. Why, then, are nearly 3 million gratia payment by the Government into a charitable people on ever-lengthening waiting lists—the highest fund to help those in need, will the Prime Minister, number for six years? What does he have to say to following our last meeting in April, clear the logjam, Katherine Sinclair, a constituent of mine, who has been recognise the veterans and finally resolve this shameful waiting in pain for 33 weeks for a hip operation? Does chapter in our nuclear history? not she “really matter”? The Prime Minister: First, I pay tribute to my hon. Friend, who has campaigned consistently on this issue The Prime Minister: I say to the hon. Gentleman that in the House and outside it. He and I have discussed the he needs to look at the figures. The figures show that the matter. I am happy to tell the House that the Government numbers of people waiting longer than 18 weeks, 26 weeks recognise and are extremely grateful to all the service and 52 weeks to start treatment—[Interruption.] The personnel who participated in the nuclear testing shadow Chancellor says they are getting worse, but they programme. We should be in no doubt that their selfless are lower today than they ever were when he was sitting contribution helped to equip the UK with the deterrent in government—lower than at any time. We have the that it needs. Following our meeting, I asked my officials record from yesterday of the Leader of the Opposition to look again at the specific points and arguments that using dodgy statistics. Yesterday he claimed that three he made. I will come back to him as soon as possible. quarters of the jobs in our country were created in London. That is totally wrong. Have we heard an apology? Have we heard a correction? Does he want to Andy McDonald (Middlesbrough) (Lab): Last Saturday, correct the record? He will do anything to talk down the I spoke to my 93-year-old constituent, Keith Ludrecius, British economy. who served as a merchant seaman throughout the second world war. He told me that he never thought he would live to see the day in this country when people who are Andrew George (St Ives) (LD): The Prime Minister is in work still do not have enough money to live on. What aware—I have raised this issue with him before—of my does the Prime Minister have to say to Keith? Is it long-standing campaign for serious investment in rail simply that this Tory Government make the rich richer services from Penzance, of the independent and Liberal and everyone else poorer, or is it just the inevitable Democrat Cornwall council proposal for a train upgrade consequence of his long-term economic con? and train care centre at Long Rock, and of my 3,000-name 887 Oral Answers2 JULY 2014 Oral Answers 888 petition, which I recently delivered to this House in look at the Labour party candidates and take out of the support of that campaign. Will he visit my constituency mix the fact that they have got son of Blair, son of with his cheque book and a favourable announcement? Straw, son of Prescott, son of Dromey—when you take out the red princes—you will find that 80% of the The Prime Minister: I intend to spend a lot of time in candidates are union-sponsored. They have bought the my hon. Friend’s constituency between now and the candidates, they have bought the policy, they have bought next election, and I believe I will be bringing all sorts of the leader. We must never let them near the country. good news for the people of St Ives. Mr Brian Binley (Northampton South) (Con): The Q6. [904593] Ian Austin (Dudley North) (Lab): number of NEETs in Northamptonshire has fallen Germany has three times as many apprentices as the from 4,580 in March 2012 to 2,645 now thanks to a UK, and the number of young apprentices has fallen. joint project set up by the local enterprise partnership Long-term youth unemployment in Dudley is twice the and the Northampton Alive organisation. Will the Prime national average, and we will attract secure and Minister congratulate those responsible for that success, better-paid jobs only if we make education and skills and urge more MPs to get involved with their local our No. 1 priority. Will the Prime Minister make a start LEPs, thus recognising their great value if constituted by ensuring that every public sector procurement correctly, led imaginatively and targeted wisely? contract provides apprenticeship places? The Prime Minister: My hon. Friend is absolutely The Prime Minister: If the hon. Gentleman looks at right. There is interest in this right across the House. All the figures for Dudley North, he will find that the parties are now committed to making local enterprise claimant count is down by 20% in the last year. He will partnerships work and to not going back to the old find that the youth claimant count is down by 21%, and regional development agencies. It is important that the long-term youth claimant count down by 28% in the LEPs are business-led and it is important they are last year. The fact is that in the west midlands things are strong in every part of the country.Members of Parliament getting better, with more people in work and more jobs can play a real role in encouraging prominent businessmen being created. He should be celebrating Dudley rather and businesswomen to get involved with LEPs and in than running it down. making sure they deliver for local areas.

Anne Marie Morris (Newton Abbot) (Con): The Prime Q8. [904595] Jeremy Corbyn (Islington North) (Lab): Minister will be aware of the tragic death of my three- May I take the Prime Minister back to the question of year-old constituent Sam Morrish from sepsis while the private rented sector in Britain? Across London, under NHS care. Sam was failed by his GPs, out-of-hours there are thousands and thousands of families—people services, the hospital, the primary care trust and the in work and on benefits—who are frightened of rent ombudsman. This must not happen again. Will the increases, frightened of short-term tenancies and Prime Minister ensure that the ombudsman’s frightened of the consequences, for themselves and recommendations are implemented in full and that the their children, of being evicted or forced to move out of systems of review within the NHS, and by the ombudsman, the area in which they live. What is happening in are radically overhauled to deliver proper transparency central London is social cleansing, and it is coming to and accountability in a timely way? That family waited the rest of the country. Will he give me an assurance two years for justice. that, in addition to any regulation of the agencies, serious consideration will be given to the need to bring The Prime Minister: My hon. Friend is absolutely back rent control to protect people and ensure they right to raise that tragic case, and all our thoughts have somewhere secure and decent to live? should be with Sam’s parents, who I know have had a meeting with the Health Secretary. It is shocking and The Prime Minister: Where I would agree with the saddening, as she says, to see how a whole succession of hon. Gentleman is on the need for greater transparency health services failed that family, and anyone who has in the work of letting agents in terms of fees. There is a lost a child, and lost a child that young, knows how need for alternative options, which we have put forward, harrowing and how dreadful that experience is. She is for longer-term tenancies, but in the end we must allow absolutely right: we must learn the lessons from that customers to choose what they want. Where I part case, and make sure they are acted on and that they company with him is on the idea of introducing full-on cannot happen again. Last week we launched a major rent controls. Every time they have been tried, wherever safety campaign to prevent those sorts of tragic and— they have been tried in the world, they have failed. That sadly—avoidable deaths. is not just my view; it is also the view of Labour’s own shadow housing Minister, who is on the record as Q7. [904594] Kerry McCarthy (Bristol East) (Lab): At saying that she does not think rent controls will work in the Tory billionaires’ summer ball, the Defence practice. Perhaps he might want to have a word with her Secretary was sat with the lobbyist for the Government before coming to me. of Bahrain. Can the Prime Minister tell us whether they discussed the fact that Bahrain is still not regarded Q9. [904596] Sir Tony Baldry (Banbury) (Con): In the by the Foreign Office as a human rights country of ’83 general election, a 13-year-old boy delivered leaflets concern? around my constituency pledging that Michael Foot would take Labour out of the European Union. Does The Prime Minister: What I think will be discussed is my right hon. Friend find it strange that that same boy, the fact that the Labour party just has to get one trade now leader of the Labour party, is not willing either to union to write one cheque for £14 million. When you support the renegotiation of Britain’s terms of 889 Oral Answers2 JULY 2014 Oral Answers 890 membership of the European Union or to pledge to The Prime Minister: The short answer is yes. That is trust the people of Britain in a referendum on our exactly what we are doing—saying that employment membership of the European Union? agencies cannot do that; they cannot purely advertise jobs abroad, and we are doing everything we can to stop The Prime Minister: I have always thought it terribly that. unfair to hold against people things they might have done in their youth. If that was the right hon. Gentleman’s Mr Adrian Sanders (Torbay) (LD): We have a £12 billion idea of fun as a 14-year-old, then, obviously, we have to tourism deficit in this country—the deficit generated make room for everybody. The point is this: it is in the between people going overseas and people coming here. interests of the British people to have a renegotiation. One reason for that is believed to be our high VAT rates [Interruption.] What is my idea of fun? It is not hanging on accommodation and attractions. Will the Prime out with the shadow Chancellor—that is no idea of fun. Minister look at that and ensure that that is not what is I feel sorry for the Leader of the Opposition, because he driving up that deficit? has to hang out with him all the time. What a miserable existence it must be to have sitting next to you the The Prime Minister: My hon. Friend is absolutely person who wrecked the British economy, and to have right to promote the south-west as a holiday destination. to listen to him, day after day, as he says to the British We should do everything we can to help. Obviously, the people, “We’re the people who crashed the car, give us restoration of the transport links has been vital. It is the keys back.” difficult to have differential rates of VAT on some of these things, but everything we can do to promote the Jim Sheridan (Paisley and Renfrewshire North) (Lab):The UK as a holiday destination—including, for instance, uncertainty surrounding the future of Scotland and the brilliant fact that the Tour de France is coming here indeed the UK has resulted in many among the business this weekend—we should do. community in Scotland withholding significant investments Q12. [904599] Jim Shannon (Strangford) (DUP): in that country. Does the Prime Minister therefore agree Cancer Research UK has just launched its new with me that there is a moral responsibility on employers strategy—a focus on tailoring treatment to individuals, to inform their employees about the consequences, if which should prove more effective in combating cancer. any, of the separation of Scotland from the UK so that How will the Prime Minister ensure that the NHS is in they can make an informed choice prior to the referendum? a position to enable access to radiotherapy and ensure that cancer drugs are available for all regions of the The Prime Minister: The hon. Gentleman makes a United Kingdom of Great Britain and Northern very important point—that a huge amount of pressure Ireland. is being put on businesses by the Scottish Government with all sorts of threats and warnings against speaking The Prime Minister: The cancer drugs fund has been out and saying what they believe is the truth. I come a huge breakthrough not just in making available drugs across business leader after business leader—large and but some important treatments, too. I hope that other small in Scotland—who wants to keep our United parts of the United Kingdom will take up what we are Kingdom together and thinks it would be crazy to have doing with the cancer drugs fund. Another thing we can border controls, different currencies and split up our do is to make sure, by working with Genomics England, successful United Kingdom. Together with the hon. that we are sequencing genomes as fast as we can so that Gentleman, I urge them to speak out, talk with their we can carry out the research necessary to see which work forces about the strength of our United Kingdom cancer drugs will be effective on which patients in and then vote to keep it together. accordance with their DNA. This will be the modern way to do tailored medicine, and I am very pleased to Q10. [904597] Greg Mulholland (Leeds North West) say that Britain is well ahead of the pack when it comes (LD): This weekend, the cities, towns and villages of to investing in our universities and science base as well Yorkshire will be alive to cries of “Allez, allez” as the as in our NHS. world’s greatest annual sporting event passes through our county. Will the Prime Minister join in people’s Q13. [904600] Mark Pawsey (Rugby) (Con): Jack enthusiasm for le grand départ this weekend, and does Gayton and Hannah Fountaine are two young he agree that this is a wonderful way to build a legacy constituents who now own one of the 108 properties in for cycling and encourage more people to “get on their Rugby bought as a result of this Government’s Help to bikes”? Buy scheme. Does the Prime Minister agree that the fact that Jack and Hannah now enjoy their own home The Prime Minister: I absolutely agree with my hon. and have made a start on the housing ladder Friend. It is brilliant that the Tour de France is starting demonstrates this Government’s support for those who in Yorkshire, and I think it will be a fantastic event for want to work hard and get on? our country while also providing a great advertisement for Yorkshire and all that the county has to offer. I am The Prime Minister: I join my hon. Friend in greatly looking forward to going and seeing some of the congratulating his constituents. The Help to Buy scheme race and some of the preparations. It is going to be a is working to get people on to the housing ladder. It is magnificent event, and I will do everything I can to enabling people who do not have rich parents, and who promote it—apart from wearing lycra. cannot afford a big deposit but can afford a mortgage, to go out and buy the flat or house that they want. We Q11. [904598] Susan Elan Jones (Clwyd South) (Lab): have seen 30,000 people taking advantage of the scheme Will the Prime Minister make it illegal for recruitment already, and it has also helped to kick-start investment agencies to advertise overseas for jobs in this country, in housing and raise the level of housing starts in our unless they advertise them locally, too—yes or no? country. 891 Oral Answers2 JULY 2014 Oral Answers 892

Q15. [904602] Mr Dennis Skinner (Bolsover) (Lab): Is which will be used in my constituency. Does not that the Prime Minister aware that, as an out-patient, I have infrastructure investment show that it is only the to visit a hospital on a regular basis, and hear from the Conservatives who have a plan that puts Britain on the front line about the problems in the health service? The road to recovery, whereas the Labour party would drive nurses have lost a considerable amount of their real the country’s economy off a cliff? pay, and A and E services are bursting at the seams. Then there is the fact that nearly every hospital in The Prime Minister: I think my hon. Friend is fully Britain is running into financial difficulties. As a justified in taking a lot of credit for the work that has member of the Bullingdon club, is the Prime Minister been done on potholes. He has raised the issue in every proud to be surrounded by this wreckage? Remember, forum, including the House, over and over again, which it is his legacy, not ours. Stop blaming the Opposition. is partly why Northamptonshire received £3.3 million Get it done, or get out. specifically to spend on repairing roads. He will be pleased to know that that is enough to fill in a staggering The Prime Minister: I think the picture that the hon. 62,000 potholes. This is important, because potholes Gentleman paints is completely wrong. Of course more damage people’s cars, motorbikes and cycles when they people are going to A and E departments in our country— are on their way to work, and mending them is good for over a million more people—but we are meeting our hard-working families. targets, and waiting times are down by a half. The hon. Gentleman talks about nurses. There are 4,000 more Chris Ruane (Vale of Clwyd) (Lab): Arthur Jones, a nurses in our NHS than there were when I first stood at 73-year-old Army veteran from Denbigh in my constituency, this Dispatch Box, and there are 7,000 more doctors. went hill-walking in Crete. He has not been seen since What the hon. Gentleman ought to know is that we 19 June, and his family are frantic with worry. Will the have cut the number of administrative staff, the bureaucrats Prime Minister ensure that the Foreign and Commonwealth with whom we were left by the Labour party. There are Office continues its excellent work, and co-operates 19,000 fewer of those, which is why we are able to treat with the Greek Government to ensure that Arthur is more patients with more clinical staff. That is a record found? of which we can all be proud. The Prime Minister: I will certainly do everything I Q14. [904601] Michael Ellis (Northampton North) can to help the hon. Gentleman with his constituent. I (Con): It is thanks to our long-term economic plan that will have discussions with the Foreign Office about all £200 million has been allocated to fighting potholes, the consular assistance that is being given, and about including £3.3 million for Northamptonshire, much of anything else that it can do. 893 2 JULY 2014 Points of Order 894

Points of Order ensure that the MOD answers to the House, to explain its responsibilities and clarify its liability, and to say when a warning system will be installed in both Tornado 12.33 pm and Typhoon aircraft? Andy Burnham (Leigh) (Lab): On a point of order, Mr Speaker. Just now, during Prime Minister’s Question Mr Speaker: The response to the hon. Gentleman is Time, the Prime Minister appeared to suggest that the twofold. [Interruption.] Order. If a Minister wishes to number of people waiting longer than 18 weeks for an catch my eye, he or she is perfectly entitled to do so, but operation had gone down since his reorganisation. I the hon. Gentleman raised his point of order, at least have the figures here. In April 2010, 20,662 people ostensibly, with the Chair and therefore perhaps he will waited longer than 18 weeks. In April 2014, the figure rest content with my answer, and the answer is, as I said, was 29,417. The number has gone up. Do you not think, twofold. First, it is up to Ministers to decide whether Mr Speaker, that the Prime Minister might correct the they think an oral statement is required. Secondly, in record before he leaves the Chamber? the absence of an oral statement, it is perfectly open to the hon. Gentleman to seek a debate in this House on The Prime Minister (Mr David Cameron): Further to the Adjournment. To the best of my knowledge, the that point of order, Mr Speaker. I can tell the House hon. Gentleman has not thus far done so, but he might and the right hon. Gentleman that the numbers waiting find that he is successful if he does. We will leave that longer than 18, 26 and 52 weeks to start treatment are matter there for today. lower than they were at any time under the last Government. Those are the facts. The Opposition were caught out Toby Perkins (Chesterfield) (Lab): On a point of with dodgy statistics yesterday, and I think that they order, Mr Speaker. I have notified the Justice Secretary have just done it again. of my intention to raise this point of order. Yesterday in Justice questions he claimed that my allegations about Mr Speaker: We will leave that exchange there. the selection process for the south Yorkshire probation service were nonsense and that there was a carefully Ian Swales (Redcar) (LD): On a point of order, constructed process of selection and a proper appeal Mr Speaker. In yesterday’s Finance Bill debate, the hon. mechanism for those who were not selected. I have here Member for Birmingham, Ladywood (Shabana Mahmood) a letter from Angela Tinker, the human resources systems said that the tax gap was £32 billion when the previous manager at South Yorkshire Probation Trust, to my Government left office and that it has now gone up to constituent, Gwen MacDonald, in which she says: £35 billion. Official Her Majesty’s Revenue and Customs “There was a random selection process and employee numbers figures show the tax gap was actually £42 billion when were used to select between NPS”— Labour left office, so there has been a fall of £7 billion national probation service—“and CRC”, or community under this Government. I know the Opposition are rehabilitation companies. It continues: keen to regain some financial credibility, so I hope the “Employee numbers were drawn out of a hat”, hon. Lady will correct the record and also find time to congratulate this Government on their progress in— which confirms exactly the allegations I was making, and also that yesterday the Justice Secretary inadvertently Mr Speaker: Order. May I just say to the hon. misled the House. Can you, Mr Speaker, let us know Gentleman—and I say it in a cordial spirit—that that how he might have the opportunity to set the record was another action replay? We have now had two action straight? replays today, and I must strongly counsel colleagues against raising as attempted, but actually bogus, points Mr Speaker: There are two points here. First, everybody of order what are really political points. Otherwise this takes responsibility for his or her utterances in this House. phenomenon will multiply over the next nine months or There is a formal means by which a Minister can correct so, which is undesirable. The hon. Gentleman has made the record, if he or she judges it necessary to do so, and his point and it is on the record, and we will leave it that is through a statement to colleagues. Secondly—and there—and I am grateful for his nod of assent to my I say this in all politeness to the hon. Gentleman, as I ruling. did to another Member—Members should not use the point of order procedure to continue debate. Although Shabana Mahmood (Birmingham, Ladywood) (Lab): I am greatly flattered by the extent of the powers that Further to that point of order, Mr Speaker— hon. and right hon. Members think I enjoy, they sometimes have a somewhat exaggerated notion of what, in practice, Mr Speaker: There is no further to it, because the I can be expected to achieve. The hon. Gentleman is, I point has been made and I have left it there. am sure, now an increasingly experienced and discerning fellow. Judging by the broad smile on his face, he knows Angus Robertson (Moray) (SNP): On a point of order, that he has had a go and he has got it on the record, and Mr Speaker. Tomorrow is the second anniversary of the he can now go and enjoy his lunch, resting content. We tragic Tornado collision when two Tornadoes collided will leave it there. over the Moray firth and three service personnel lost their lives. Yesterday the Ministry of Defence accepted Conor Burns (Bournemouth West) (Con): On a point liability for the collision, but it has not updated the of order, Mr Speaker. House or appropriate parliamentarians on the MOD’s responsibility or answered questions on the service inquiry Mr Speaker: I hope it is a genuine one. I have known report, which was published on Monday. The whole the hon. Gentleman for 25 years and I hope he is not situation is frankly disgraceful. What is the best route to going to let me down. 895 Points of Order2 JULY 2014 Bills Presented 896

Conor Burns: We have indeed known one another for SELF-BUILD AND CUSTOM HOUSEBUILDING BILL 25 years, Mr Speaker. As we were previously involved in Presentation and First Reading (Standing Order N0. 57) politics together, we had a great reverence for this Chamber of Parliament and for hon. Members on all Jeremy Lefroy, on behalf of Mr Richard Bacon, sides telling the truth to it on all occasions. You have supported by Nick Herbert, John Mann, John Pugh, correctly identified the mechanism that Ministers who Mr Angus Brendan MacNeil, Mr Nigel Evans, Sir Edward have misled Parliament can use to rectify that. May I Leigh, Jim Fitzpatrick, David Morris, George Freeman, ask you what the correct mechanism is for other hon. Mr Philip Hollobone and Mr Graham Allen, presented Members who inadvertently, or deliberately, mislead a Bill to place a duty on local authorities to keep a Parliament? register of individuals and community groups who have expressed an interest in acquiring land to bring forward Mr Speaker: The answer is that a Member can take self-build and custom-build projects and to take account the opportunity through an intervention or a speech, or of and make provision for the interests of those on such through a personal statement, to correct the record if registers in developing their housing initiatives and that Member judges it necessary to do so. But we have, their local plans; to allow volume house builders to in essence, a self-regulating procedure in the House, and include self-build and custom-build projects as contributing the hon. Gentleman, as a keen student of procedure, towards their affordable housing obligations, when in will recognise the truth of what I have just said. We will partnership for this purpose with a Registered Social leave it there for now, and I am grateful to the hon. Landlord; and for connected purposes. Gentleman for not denting my confidence in his tendency Bill read the First time; to be read a Second time on to behave properly. Friday 24 October, and to be printed (Bill 16).

BILLS PRESENTED HEALTH AND SOCIAL CARE (SAFETY AND QUALITY) BILL AFFORDABLE HOMES BILL Presentation and First Reading (Standing Order N0. 57) Presentation and First Reading (Standing Order N0. 57) Jeremy Lefroy, supported by George Freeman, Andrew George, supported by Mr Nick Raynsford, Sir William Cash, Ann Clwyd, Margot James, Sir Tony Mr Charles Kennedy, Jeremy Lefroy, Caroline Lucas, Cunningham, Dr Phillip Lee, Sir Malcolm Bruce, Fiona Mr Clive Betts, Stephen Gilbert, Mr Mark Williams, Bruce, Charlotte Leslie, Julian Sturdy and Andrew George, Alison Seabeck, Mr Adrian Sanders, Valerie Vaz and presented a Bill to make provision about the safety of Mr Grahame M. Morris, presented a Bill to make health and social care services in England; to make provision about the availability of affordable homes; provision about the integration of information relating and for connected purposes. to users of health and social care services in England; to Bill read the First time; to be read a Second time on make provision about the sharing of information relating Friday 5 September, and to be printed (Bill 13). to an individual for the purposes of providing that individual with health or social care services in England; INTERNATIONAL DEVELOPMENT (OFFICIAL to make provision for removing individuals convicted DEVELOPMENT ASSISTANCE TARGET)BILL of certain offences from the registers kept by the regulatory Presentation and First Reading (Standing Order N0. 57) bodies for health and social care professions; to make provision about the objectives of the regulatory bodies Michael Moore, supported by Mr Andrew Mitchell, for health and social care professions and the Professional Annette Brooke, Mrs Anne McGuire, Alistair Burt, Standards Authority for Health and Social Care; to John Thurso, Mr Tom Clarke, Fiona Bruce, Roger make provision about the disposal of cases concerning Williams, Hugh Bayley, Jeremy Lefroy and Dr Julian a person’s fitness to practise a health or social care Huppert, presented a Bill to make provision about the profession; and for connected purposes. meeting by the United Kingdom of the target for official development assistance (ODA) to constitute 0.7 per Bill read the First time; to be read a Second time on cent of gross national income; to make provision for Friday 7 November, and to be printed (Bill 17) with independent verification that ODA is spent efficiently explanatory notes (Bill 17-EN). and effectively; and for connected purposes. Bill read the First time; to be read a Second time on Mr Speaker: Gosh, the hon. Member for Stafford Friday 12 September, and to be printed (Bill 14 ). (Jeremy Lefroy) is a busy bee.

EUROPEAN UNION (REFERENDUM)BILL Presentation and First Reading (Standing Order N0. 57) NATIONAL HEALTH SERVICE (AMENDED DUTIES AND POWERS)BILL Robert Neill, supported by Sir Tony Baldry, Guto Bebb, Mr Graham Brady, Sir William Cash, Mr Nigel Presentation and First Reading (Standing Order N0. 57) Dodds, Mr Stephen Dorrell, Jackie Doyle-Price, Dr Liam Clive Efford, supported by Frank Dobson, Ms Karen Fox, Zac Goldsmith, Sir Gerald Howarth and Sheryll Buck, Mr Andy Slaughter, Grahame M. Morris, Diana Murray, presented a Bill to make provision for the Johnson, Alison Seabeck, Shabana Mahmood, Steve holding of a referendum in the United Kingdom and Rotheram, John Healey, Mr Dennis Skinner and Angela Gibraltar on the United Kingdom’s membership of the Smith, presented a Bill to re-establish the Secretary of European Union. State’s legal duty to provide national health services in Bill read the First time; to be read a Second time on England; to amend the provisions of the Health and Friday 17 October, and to be printed (Bill 15). Social Care Act 2012 relating to Monitor; to repeal the 897 Bills Presented2 JULY 2014 Bills Presented 898 regulations made under section 75 of that Act; to make ZERO HOURS CONTRACTS BILL other amendments to the provisions in that Act relating Presentation and First Reading (Standing Order N0. 57) to competition and provision of private health services; Ian Mearns, supported by Grahame M. Morris, Ian and for connected purposes. Lavery, Pat Glass, Steve Rotheram, Mrs Emma Lewell- Bill read the First time; to be read a Second time on Buck, Andy McDonald, Kelvin Hopkins, Katy Clark, Friday 21 November, and to be printed (Bill 18). John Cryer, Jim Sheridan, Mr Dennis Skinner and Mr Ronnie Campbell, presented a Bill to limit the use of TENANCIES (REFORM)BILL zero-hours contracts; and for connected purposes. Presentation and First Reading (Standing Order N0. 57) Bill read the First time; to be read a Second time on Sarah Teather, supported by Tessa Munt, Tim Farron, Friday 21 November, and to be printed (Bill 23). Sir Peter Bottomley, Bob Blackman, Mr Andrew Smith, Sir Andrew Stunell, John Healey, Jeremy Lefroy, Mr Philip Mr Ronnie Campbell (Blyth Valley) (Lab): It’s a good Hollobone, Nicola Blackwood and Fiona Mactaggart, Bill. presented a Bill to protect tenants against retaliatory Mr Speaker: We are grateful to you, Mr Campbell, eviction; to amend the law on notices requiring possession for your sedentary interjection. relating to assured shorthold tenancies; and for connected purposes. LOW PAY COMMISSION (NATIONAL MINIMUM WAGE) Bill read the First time; to be read a Second time on BILL Friday 28 November, and to be printed (Bill 19). Presentation and First Reading (Standing Order N0. 57) Dan Jarvis, supported by Margaret Beckett, Stephen CONTROL OF HORSES BILL Doughty, Jack Dromey, Julie Elliott, Lilian Greenwood, Presentation and First Reading (Standing Order N0. 57) Mike Kane, Mrs Emma Lewell-Buck, Alison McGovern, Julian Sturdy, supported by James Wharton, Mr Philip Mr Jamie Reed, Mr Steve Reed and Alison Seabeck, Hollobone, Mrs Cheryl Gillan, Neil Parish, Jeremy presented a Bill to require the Secretary of State to set a Lefroy, Andrew Percy, Mr Graham Stuart, Ian Swales, target for the Low Pay Commission to increase the David Morris and Caroline Nokes, presented a Bill to minimum wage during the term of a Parliament; to make provision for the taking of action in relation to require the Low Pay Commission to write to the Secretary horses which are in public places; and for connected of State if this target cannot be met; to require the purposes. Secretary of State to ensure that the Low Pay Commission Bill read the First time; to be read a Second time on has the power to set up taskforces in certain sectors; and Friday 24 October, and to be printed (Bill 20). for connected purposes. Bill read the First time; to be read a Second time on Mr Speaker: Never was there a more appropriate Friday 28 November, and to be printed (Bill 24). linkage between name and title. LOCAL GOVERNMENT (RELIGIOUS ETC OBSERVANCES) BILL LOCAL GOVERNMENT (REVIEW OF DECISIONS)BILL Presentation and First Reading (Standing Order N0. 57) Presentation and First Reading (Standing Order N0. 57) Jake Berry, supported by Mr Stewart Jackson, Mr Ben Mr Mark Spencer, supported by Chris Heaton-Harris, Wallace and Fiona Bruce, presented a Bill to make Simon Kirby, Karl McCartney, Stephen McPartland, provision about the inclusion at local authority meetings Caroline Nokes, Heather Wheeler, John Stevenson and of observances that are, and about powers of local Jackie Doyle-Price, presented a Bill to make provision authorities in relation to events that to any extent are, about the procedure for conducting investigations under religious or related to a religious or philosophical belief. Part 3 of the Local Government Act 1974; and to make Bill read the First time; to be read a Second time on provision for cases where an authority to which that Friday 21 November, and to be printed (Bill 25). Part applies takes a decision that affects the holding of an event for a reason relating to health or safety. HOUSEHOLD SAFETY (CARBON MONOXIDE Bill read the First time; to be read a Second time on DETECTORS)BILL Friday 24 October, and to be printed (Bill 21) with Presentation and First Reading (Standing Order N0. 57) explanatory notes (Bill 21-EN). Andrew Bingham, supported by Tracey Crouch, Dr Philip Lee, Justin Tomlinson, Heather Wheeler, Stephen OFF-PATENT DRUGS BILL Phillips, Nick de Bois, Simon Hart, Pauline Latham, Presentation and First Reading (Standing Order N0. 57) Caroline Nokes, Chris Heaton-Harris and Craig Whittaker, Robert Neill, on behalf of Jonathan Evans, supported presented a Bill to introduce a requirement that a by Annette Brooke, Sir Alan Meale, Dame Angela functioning carbon monoxide detector must be installed Watkinson, Dr Liam Fox, Robert Neill, John Healey, in all newly built and all rented residential properties; Glyn Davies, Dr Phillip Lee, Mr Elfyn Llwyd, Mr David and for connected purposes. Nuttall and Dr Sarah Wollaston, presented a Bill to Bill read the First time; to be read a Second time on require the Secretary of State to take steps to secure Friday 12 September, and to be printed (Bill 26). licences for off-patent drugs in new indications; to require the National Institute for Health and Care UNDER-OCCUPANCY PENALTY (EXEMPTIONS)BILL Excellence to conduct technology appraisals for off-patent Presentation and First Reading (Standing Order N0. 57) drugs in new indications; and for connected purposes. Yvonne Fovargue, supported by Paul Blomfield, Nic Bill read the First time; to be read a Second time on Dakin, Steve Rotheram, Sheila Gilmore, Dan Jarvis, Friday 7 November, and to be printed (Bill 22). Jenny Chapman, Mrs Mary Glindon, Graham Jones, 899 Bills Presented2 JULY 2014 Bills Presented 900

Rosie Cooper, John Healey and Mike Kane, presented a RESPONSIBLE PARKING (SCOTLAND)BILL Bill to exempt social housing tenants who claim Disability Presentation and First Reading (Standing Order N0. 57) Living Allowance or who have occupied a property for Mark Lazarowicz, supported by Sheila Gilmore, Mike at least six months or who have not been offered alternative Crockart, Katy Clark, Dame Anne Begg and Dan accommodation from the size criteria provisions of the Jarvis, presented a Bill to amend Schedule 5 to the Housing Benefit Regulations 2006, the Housing Benefit Scotland Act 1998 to exclude from the reservations (Persons who have attained the qualifying age for state certain provisions relating to parking; and for connected pension credit) Regulations 2006 and the Universal purposes. Credit Regulations 2013; and for connected purposes. Bill read the First time; to be read a Second time on Bill read the First time; to be read a Second time on Friday 28 November, and to be printed (Bill 27). Friday 5 September, and to be printed (Bill 30).

HEALTH SERVICE COMMISSIONER FOR ENGLAND TRANSPARENCY AND ACCOUNTABILITY BILL (COMPLAINT HANDLING)BILL Presentation and First Reading (Standing Order N0. 57) Presentation and First Reading (Standing Order N0. 57) John Hemming presented a Bill to make provision regarding arrangements for children involved in court Mr David Davis, supported by Mr Dominic Raab, proceedings; to make provision about the transparency, Dr Sarah Wollaston and Alan Johnson, presented a Bill administration and accountability of courts and case to make provision about the handling of complaints by conferences; to require the Secretary of State to report the Health Service Commissioner for England; to require to Parliament annually on the number of prisoners who the Commissioner to notify a complainant of the reason have exceeded their tariff and have not been released for the delay if the investigation of the complaint is not because they do not admit guilt; to extend the Criminal concluded within a 12 month period; to require the Cases Review Commission’s powers to obtain information; Commissioner to lay before Parliament an annual report to make provision about consumer complaints in markets giving details of how long investigations of complaints for public services; to amend certain sections of the have taken to be concluded and progress towards meeting Freedom of Information Act 2000 relating to contracts; a target of concluding investigations within a 12 month and for connected purposes. period; and for connected purposes. Bill read the First time; to be read a Second time on Bill read the First time; to be read a Second time on Friday 17 October, and to be printed (Bill 28) with Friday 5 September, and to be printed (Bill 31). explanatory notes (Bill 28-EN). PAVEMENT PARKING BILL CONTROL OF OFFSHORE WIND TURBINES BILL Presentation and First Reading (Standing Order N0. 57) Presentation and First Reading (Standing Order N0. 57) Martin Horwood, supported by Mr Jim Cunningham, Mr Christopher Chope, supported by Conor Burns, Tracey Crouch, Kate Green, Mr Elfyn Llwyd, Caroline Richard Drax, Mr Tobias Ellwood, Dr Julian Lewis, Lucas, Roger Williams, Lisa Nandy, Richard Fuller, Mr Robert Syms, Mr Peter Bone, Sir Greg Knight and Mike Thornton, Henry Smith and Greg Mulholland, Mr Nigel Evans, presented a Bill to restrict the height, presented a Bill to make provision for the safety, convenience number, location and operation of wind turbines situated and free movement on pavements of disabled people, off shore within twenty miles of the coast; to restrict older people, people accompanying young children, subsidies available for such turbines; to make provision and other pavement users; to clarify, strengthen and regulating the length, location and environmental impact simplify the law relating to parking on pavements in of cables connecting such turbines to the national grid; England and Wales; and for connected purposes. and for connected purposes. Bill read the First time; to be read a Second time on Bill read the First time; to be read a Second time on Friday 12 September, and to be printed (Bill 32). Friday 16 January 2015, and to be printed (Bill 29). 901 2 JULY 2014 Finance Bill 902

Finance Bill options before next April. We expect that this will enable around an extra 85,000 people to access their [2ND ALLOCATED DAY] pension wealth as a lump sum this tax year. In addition, 400,000 people will have the option of receiving significantly Further consideration of Bill, as amended in the Public greater withdrawals from their pension savings, but we Bill Committee did not want to stop there. Usually people lose the advantages of a tax-free lump New Clause 13 sum if they do not decide what to do with the rest of their pension savings within six months of taking the PENSION FLEXIBILITY: FURTHER AMENDMENTS lump sum. On 27 March, the Government announced ‘Schedule (Pension flexibility: further amendments) makes that those who had already taken a tax-free lump sum further provision in connection with pension flexibility.’— from their defined contribution pension savings, but (Mr Gauke.) had not yet secured their pension, would be given more Brought up, and read the First time. time to decide what they wished to do with the rest of their retirement savings. We also did not think it would 12.47 pm be fair to prevent people from taking their tax-free lump sum now simply because they wished to wait to The Exchequer Secretary to the Treasury (Mr David access their pension savings more flexibly from next Gauke): I beg to move, That the clause be read a Second April, so the Government promised to introduce new time. provisions in the Bill to ensure that people do not lose their right to a tax-free lump sum if they would rather Mr Speaker: With this it will be convenient to discuss use the new flexibility this year or next. the following: The provisions are technically quite detailed, but New clause 9—Pension flexibility: Treasury analysis— their purpose is not. Full pension flexibility for defined ‘(1) The Chancellor of the Exchequer shall, within six months contribution savings will be introduced in April 2015, of this Act receiving Royal Assent, publish and lay before the and until that happens we want people to be able to take House of Commons any analysis prepared by the Treasury prior to the publication of Budget 2014 relating to the impact of their tax-free lump sum and to have until October 2015 changes made by sections 39 to 43 of this Act to schedules 28 to make their pension choices without tax consequences. and 29 to the Finance Act 2004. The changes made in new clause 13 and new schedule 5 (2) The information published under subsection (1) must will enable people to take a tax-free lump sum and to include— wait until April 2015 to decide how they want to access (a) any assessment made of the impact of the provision for their pension savings: by transferring the rest of their independent face to face guidance on the 2004 Act; pension savings to another pension provider to enable (b) the distributional impact, by income decile of the them to access them more flexibly; by repaying the population, of changes made by sections 39 to 43 of lump sum when the scheme that paid it will accept it in this Act; order to access the whole of their savings more flexibly; (c) a behavioural analysis; and or by receiving the rest of the pension savings as a lump (d) the financial risk assessment.” sum under the higher limits that clause 40 provides. Government new schedule 5—Pension flexibility: further Those changes also ensure that people who have the amendments. right to receive a tax-free lump sum at an earlier age, or of a larger amount than is normally allowed, can use Mr Gauke: New clause 13 and new schedule 5 make the new flexibility and keep those rights. provision to ensure that individuals who wish to make New clause 13 and new schedule 5 help people who use of the new pension flexibilities announced by the have worked hard to save into a pension, enabling them Government do not face detrimental tax consequences to take some of those savings tax-free now, and to take if they take their tax-free lump sum and then defer a advantage of the new flexibilities for the rest of their decision on how to access the remainder of their pension pension savings. savings. On Budget day, the Government announced radical Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co- reforms that will enable people with defined contribution op): I understand that the Minister is trying to introduce pension savings to have more choice and control over an element of fairness into the new arrangements while their pension wealth from next April. The greater choice avoiding unintended consequences. Can he give us some and flexibility that these reforms will give pension savers assurances about the time scale for the rules being have been widely welcomed. There has been broad brought in, and tell us whether he has done additional consensus that individuals who have been responsible work to ensure that there are no unintended consequences? and saved for their future should be trusted to access their pension savings in the way that most suits them. Mr Gauke: We have been engaged in a consultation We announced a consultation on the detail of these process, which closed recently, and have engaged fully longer-term proposals, which has now closed. We will with all interested parties more generally on this policy. publish a response in the near future, and legislation I will address some of these points when I respond to will be brought forward later this year to implement the new clause 9, but we will respond shortly to the consultation, necessary changes, but the Government wanted to make setting out the details of how the policy will be taken sure that people who are approaching retirement now forward. This is an important matter, and it is important would not miss out. As a first step, we introduced that we get things right. There are a number of aspects clauses 39 and 40 to ensure that individuals nearing to it, and new clause 9 takes us into some of those retirement this year can benefit from a wider range of aspects that, although perhaps not relevant to the Finance 903 Finance Bill2 JULY 2014 Finance Bill 904

[Mr Gauke] Dr Eilidh Whiteford (Banff and Buchan) (SNP): Before the Minister fully leaves the point about how people Bill, are of significance none the less. I can assure the might spend the lump sums, one concern that I have House that there will be plenty of opportunities to had is that people might be tempted to invest in property, debate the details, given that legislation on the subject for example, which could have the unintended consequence will be introduced, as the hon. Lady knows full well. of boosting an already overheating housing market for the next generation. That is still prudent spending from Ian Swales (Redcar) (LD): The Minister rightly says those people’s point of view, but there could be unintended that on such policy matters, assessments are a normal consequences for everyone else. I wonder to what extent part of Government practice. Will he confirm that the that consideration featured in the Government’s thinking. reviews will take account of any potential future cost to the public purse? For example, what if people have Mr Gauke: There are two points to make. First, we inadequate funds to cover their future care costs, as believe that individuals should be able to make their they have already spent their accumulated pensions, or own choices. Of course, they should be provided with if they have other recourse to the state because they guidance, but essentially a system that relies on the state have inadequate resources later in life? telling people precisely what their investment portfolio, as it were, should be is too restrictive, and does not perform the role that we should be performing. As for Mr Gauke: During the assessment of the policy the systemic effect on the housing market, which was, I announced in the Budget, we considered all the various think, the hon. Lady’s central point, I do not think that issues, including the consequences for the Exchequer in our changes will have any such effect. Both the Governor both the short and long term. We will say more about of the Bank of England and the Chancellor of the the specific interaction with social care and so on in the Exchequer have made it clear that we need to ensure near future. I would make the point that the very people that we do not return to the bad old days and to the restricted by the old regime were the people who, over unsustainable housing market boom we saw some years the course of their working lives, saved responsibly and ago. There are measures in place to reflect that, and we ended up with a pension sum that demonstrated their have the institutions in place to ensure that if there are prudent approach to saving. It is not unreasonable to problems they can be addressed quickly. believe that the vast majority of those people will continue to act prudently when given greater flexibility. As a matter of philosophy, both parties in the coalition Gregg McClymont: I thank the Minister for giving Government share the view that when we can give more way once again. Opposition Members become power and responsibility to people, we should do so. concerned—well, I certainly do—when Ministers refer to the state telling people what kind of investment portfolio to have. Most people have never invested in Gregg McClymont (Cumbernauld, Kilsyth and the way that that comment suggests. He is a well-intentioned Kirkintilloch East) (Lab): The Minister referred to the and good Minister, but I become concerned when we Budget and the documents published about this policy, think about investment for the majority of people in but what was published was merely the estimated tax those terms. The fact is that on the day of the Budget take for the Treasury. Nothing was published about the the Chancellor said that there would be guaranteed behavioural impact, the prospect of mis-selling or the advice, but that turned out not to be the case. It is now interaction with social care. When I asked the Government guidance, which is a very different thing. Unless we get via a freedom of information request to reveal the basis that guidance absolutely right, there is a danger of the on which the policy was made, they refused to do so. kind of mis-selling that Members on both sides will Will we get more information as quickly possible about remember from the 1980s. It is crucial that we understand the basis on which the Government reached this policy the way in which people tend to make decisions about position? The Minister is right, of course, that annuities these kinds of issues. need to be reformed, but the question is about the basis on which the policy was made. Mr Gauke: I agree that it is vital that we get the guidance right. I am sure the hon. Gentleman will Mr Gauke: On the question of social care, let me understand that now is not the occasion for the Government repeat the point that I just made: we will respond to the to set out the details of how this will operate, but there consultation in due course and set out our thinking on will come a point when we will do that. There will be that point. As for the issue of mis-selling, we made it plenty of opportunity for the House to debate those very clear on Budget day that it was important to have a matters. I have no doubt that he is looking forward to guidance guarantee in place. We will set out details of that opportunity and will scrutinise our policies on this how that will work in the near future, as the consultation matter with his customary vigour—[Interruption]—as period closed only relatively recently. It is important indeed will the hon. Member for Kilmarnock and Loudoun that we get that guidance guarantee right. That brings (Cathy Jamieson). While it is very important to get the me to new clause 9. guidance right, we instinctively support giving people New clause 9 would require the Chancellor to publish greater flexibility and freedom. Given the tone of the any analysis of the impact of changes made by clauses 39 hon. Gentleman’s intervention, I am not sure that he is to 43 of the Bill to schedules 28 and 29 of the Finance entirely comfortable with that. Act 2004. However, as I said in Committee, only clauses 39 and 40, which increase the amount that can be taken 1pm as a tax-free lump sum as a draw-down pension from Cathy Jamieson: I understand the point about the 27 March 2014, make changes to schedules 28 and 29 of timing of the guidance, and I will discuss that in my the 2004 Act. speech. The pensions Minister has said: 905 Finance Bill2 JULY 2014 Finance Bill 906

“Face-to-face, the Chancellor used that phrase, and we will meet people’s needs. On advice, will the Minister assure honour that, of course. But if face-to-face means individuals us that the system will be transparent as regards how sitting down for an hour with someone every-where in the country, advisers are rewarded and that we will not get into a that would be very, very expensive. Face-to-face could involve situation where overt or covert kick-backs from product groups, for example; a lot of the conversation’s generic.” providers are the main source of income for those Some people may have concerns about what is being providing the advice? referred to in terms of guidance. Will the Minister give us some further information at this stage? Mr Gauke: My hon. Friend is trying to draw me into the details of what we will say about how the guidance Mr Gauke: The hon. Lady, perfectly understandably, will operate. It is important that we have a system that is is seeking more information at this point. I do not think transparent and maintains the confidence of the general I am being in any way unreasonable in saying that we public, and that is at the heart of what we are trying to will set out the details of this in the near future. We are do. working very closely with interested parties, whether Gregg McClymont: I will not try to draw the Minister the industry or consumer groups, to ensure that we get into the details. He rightly refers to the instinct to give this right. We have set out the broad principles behind people more control over their own lives, and that is our guidance guarantee, and we believe that we can something we would all agree with. However, I urge him deliver something that provides the protection that all to read the debates involving a Tory Minister in his Members want. position in the 1980s who talked about the revolution in personal pensions using language very similar to that James Duddridge (Rochford and Southend East) (Con): used by the Minister and, more exuberantly, by his I understand the need for a professional to offer guidance colleagues about these reforms. He should compare that face to face and on a quality end-product. However, with what was said in the 1980s, which led to the may I urge my hon. Friend to consider the use of the mis-selling scandals and some of the loss of confidence internet and technology to collect the basic information? in pensions. Greater control, yes, but let us also be It makes no sense for a qualified financial consultant to aware of the lessons of history. take one and a half to two hours to do a basic fact-find that is actually about data collection. It is much more Mr Gauke: I take that point in the spirit in which it efficient to do that on the internet and use the time was offered. I maintain that it is right that we give spent face to face for guidance right at the end of the people greater control and flexibility. This is about process. ensuring that individuals are in the best position to make the best decisions for them. Guidance is an important Mr Gauke: I am grateful for my hon. Friend’s part of that, and, from day one, the Government have observation. Without getting too much into the details been very clear that that was the approach we wanted to of what we will announce in due course, it is important take. I suspect that there is, at least at some level, a to point out that there are various means and methods philosophical difference between Members on either of delivering guidance and that different people will side of the Chamber on this point. I do not think that a want different things. We have made it clear that face-to-face Labour Government would have brought forward these guidance will be available for those who want it. reforms, but I welcome any extent to which we can have a consensus. Stewart Hosie (Dundee East) (SNP): The Minister Mr Gregory Campbell (East Londonderry) (DUP) said that he is discussing this with the industry and rose— other interested parties. I welcome that because, as he will be aware, on the announcement of this plan, the Mr Gauke: I will give way once more and then I share price of many businesses in the life and pensions should return to my speech. field dipped quite sharply with the market discounting Mr Campbell: The Minister will be aware that many what might happen in future. Will he confirm that he is people are glad that this Government have introduced paying attention to ensuring that the life and pensions greater control and flexibility, particularly in pensions. sector is protected while offering flexibility to people Given that the new individual savings account regime whohavesaved? came into force yesterday, will he consider, at a very early stage, introducing flexibility to give people who Mr Gauke: The purpose of the reforms is to ensure are saving for their long-term future into retirement— that there is a savings and pensions environment that is whether through the new ISA or a pension—greater good for those saving for their pension and those claiming control, particularly as regards spouse-to-spouse transfers? on their pension. We believe that the reforms that we have set out will result in greater innovation in this area. Mr Gauke: The hon. Gentleman raises an interesting We do not think that the purpose of the rules is to point. Indeed, I have just signed off a parliamentary protect particular businesses. Nevertheless, the industry answer to one of his questions about this. If I recall has responded well to our proposals. Many see this as correctly, I said that these regimes, in essence, work on an opportunity to improve the culture of saving and an individual basis but matters can be kept under have engaged very constructively with the Government. review. I will certainly take his comments as a representation I hope that that addresses the hon. Gentleman’s concerns. for future reform in this area. The clauses I have been talking about increase the Ian Swales: I recently met representatives of a major amount that can be taken as a tax-free lump sum and as financial institution who rightly see the potential for a drawdown pension from 27 March 2014. In addition, new products following these changes. I am sure that the Government’s new clauses and new schedule make innovative companies will come up with products that changes to schedule 29. As I have explained before, on 907 Finance Bill2 JULY 2014 Finance Bill 908

[Mr Gauke] in broadly the same tax position. I therefore hope that new clause 13 and new schedule 5 will stand part of the Budget day the Government published a tax information Bill, and I request that new clause 9 is not pressed to a impact note entitled “Increasing pension flexibility”, vote. which covered the impact of the changes set out in clauses 39 and 40. That impact note has been updated Cathy Jamieson: I want first to put something on the to reflect the changes made by new clause 13 and new record. Earlier, the hon. Member for Redcar (Ian Swales) schedule 5. suggested that when the Labour Government left office As I have previously said, the changes made by the tax gap was £42 billion, but the most recent HMRC clauses 39 and 40 are likely to be of particular benefit to figures show that in 2009-10 it was £32 billion. I think individuals with smaller pension wealth, including women. that addresses the point that he raised yesterday with The same applies to the changes that would be made by my hon. Friend the Member for Birmingham, Ladywood new clause 13 and new schedule 5. That is set out in the (Shabana Mahmood). tax information impact note that was published on To return to issues from today’s debate, as I observed 27 June. in Committee, the amendment that we moved then and I have already mentioned that the Government published the discussion on it addressed some of the most important a consultation, “Freedom and choice in pensions”, on clauses in the Bill. The Minister suggested yesterday the broader measures announced in the Budget. That that I could make the most unreasonable things sound document set out the rationale and the relevant analysis reasonable. I think that today he has done a reasonably behind the Government’s proposals and invited comments good job of putting across the Government’s view. on the expected impacts. The consultation will inform However, I would have to say at the outset that he has the final shape of the Government’s proposals, including not said enough to convince me not to press our the guidance guarantee. The Government will set out amendment—he still has time to say something during further details in their response to this consultation, the debate—and I will explain why. which will be published shortly. As I have said, the reforms provided for in these clauses are very important. Our primary concern in James Duddridge: I always find terms like “shortly” tabling new clause 9 and in pressing it is to ensure that confusing. Is “shortly” in the next few weeks, in the next those affected have the information that they need to the few months or before the next general election? make an informed choice, because that is very important Perhaps, while not giving an exact date, my hon. Friend indeed. might hone it down a little finer than the very broad term “shortly.” 1.15 pm It is also relevant to recap on what the measures in Mr Gauke: I used the word “shortly;” I could have the Bill would do. First, they will increase the amount said “in due course,” but I hope that my hon. Friend is that savers can access through trivial commutation, more encouraged by “shortly.” He will just have to be a capped draw-down and flexible draw-down. Secondly, little more patient, but I can assure him that it will not those in defined contribution pension schemes can now be very long before he will be satisfied on those details. withdraw more money from their pensions annually, Let me say a brief word about guidance, which I have and the threshold at which wealthier savers can have touched on already. The Government believe that, as unlimited access to their pension pots has been reduced. people have greater choice over retirement, they will Thirdly, for schemes that allow members to take their need the right support and guidance to make the choice pension via a draw-down, the capped draw-down limit that is right for them, so we are working to ensure that has been increased from 120% of the amount of an everyone approaching retirement with a defined- equivalent annuity to 150%. Fourthly, the amount of contribution pension can receive impartial, face-to-face guaranteed annual income that savers must have to guidance on the choices available to them. However, the draw down their pensions flexibly has been reduced guidance guarantee is not a tax rule, so I hope that hon. from the current minimum of £20,000 to £12,000. So, in Members will understand that although it is a very essence, the rules for accessing pensions have been important part of the radical reforms that we are greatly liberalised with the aim of affording savers introducing from April 2015, it does not form part of increased choice and flexibility. the changes being discussed today. In principle, and as my hon. Friend the Member for The Government have already published information Birmingham, Ladywood has already said, we do not on the impact of clauses 39 and 40, as well as on new have a problem with supporting greater choice and clause 13 and new schedule 5, and have consulted flexibility, but we want to ensure that savers are not further on their broader proposals. New clause 9 is exploited in any way. That has been a very important therefore unnecessary. Whether that is enough to persuade principle for us from the outset. Indeed, over the past the hon. Member for Kilmarnock and Loudoun not to three years we have consistently advocated reform of press her case, I somewhat doubt, and no doubt she will the annuities market, and we have called for a cap on put it very reasonably, but I hope that she considers my pension fund charges. Of course, it would be our view response reasonable as well. Whether she considers it that the Government have delayed the introduction of reasonable or not, that is my response. the charge cap, and this extra year of excess charges will The overall purpose of the changes that the Government cost a saver with £100,000 up to £750 this year. are making today is to enable people who had recently However, to return to the present, our primary concern taken the tax-free lump sum from their defined-contribution now is to ensure that savers have access to the information pension savings to use the new flexibility, while remaining that they need to exercise their new rights judiciously. 909 Finance Bill2 JULY 2014 Finance Bill 910

Gregg McClymont: On that point, my hon. Friend, as not trusting people to decide what to do with, essentially, usual, is making an eloquent, precise case. There is an their own money, let me say that it is important to issue not just around informed choice, but around our understand that for many people, having significant ability to predict our own longevity; there are substantial pots of money at their disposal will be an entirely new issues. The evidence is that it is very difficult for us to experience at a time in their life when, as we have heard, predict our own longevity, both for obvious reasons and they may not properly have predicted what resources in terms of biases inherent in our human nature. Therefore, they are going to need or their own longevity. It is this is not just about choice—although we think that is therefore a bit disappointing that the Government have important—but about how one makes such decisions not been able to answer our questions. Looking back on one’s own. over the Hansard report of the Committee stage, I was struck by the amount of time we spent dealing with Cathy Jamieson: My hon. Friend makes an extremely some of these questions and, unfortunately, not getting important point. My understanding of the research is the answers from the Government. Some of the responses that, when asked to predict their longevity, people we got from Government Members were, I would say, significantly underestimate it and do not always predict misunderstandings if not misrepresentations of our long enough into the future, particularly when anticipating own position, which led us to believe that the Government their potential care needs or support needs. For might simply not want to engage with those issues. understandable reasons, people do not want to think of To ensure that the Government are held to account, those things during their earlier years, but increasingly we have set three tests for the pension reforms. The first they will have to do so. is the advice test—ensuring that there is robust advice I heard the Minister say that some of the issues that for people who are providing for their retirement and have to be dealt with, such as guidance and so on, do that measures are in place to deal with mis-selling. In not form part of tax law. Of course he is correct on that, Committee, I and others quoted a number of cases but there is an issue about a joined-up approach to brought to us by financial advisers in our local areas government. Already we have concerns—I shall say and by constituents in which people had been given more if time allows—about how all the Government’s so-called advice—often, information provided by policies on social care and some of the other economic unregulated people—and had therefore made wrong issues that people have to think about will come together. choices, which cost them significant sums. We do not It is important to ensure at every stage that there are no want that to happen again. unintended consequences. As the Minister accepted, we tabled our new clause, Gregg McClymont: On the question of guidance, the as always, in a spirit of being reasonable and sensible. Pensions Minister’s comments about Lamborghinis were Indeed, I was a wee bit excited when he seemed to particularly unfortunate. Does my hon. Friend agree suggest that some of the things we might be saying were that the biggest danger is not that hard-working, sensible worthy of further consideration. Of course, my excitement people will blow their own money, but that they will was short-lived, as he then said that he would not accept take it as cash and not invest it because they have no our new clause. confidence in the financial services industry, so their Quite simply, new clause 9 would require the Treasury, money will not be working for them? Is not that as big a within six months of Royal Assent, to publish and lay danger, if not a greater danger, than the Lamborghini before the House any analysis it prepared before the sort of stuff the Pensions Minister raised? publication of Budget 2014 relating to the impact of the changes made in clauses 39 to 43 and the relevant Cathy Jamieson: If I did not know better, I would schedules, and that the information published include suspect my hon. Friend of having read my speech. I was any assessment made of the impact of the provisions just about to come to that very point. The infamous for independent face-to-face guidance on the Finance Lamborghini comment might have been made in jest, Act 2004. That is important, because without it, as my but that sort of joke is entirely lost on those who have hon. Friend the Member for Cumbernauld, Kilsyth and already lost their savings because of poor or insufficient Kirkintilloch East (Gregg McClymont) said in an attempt advice. My hon. Friend makes a very valid point indeed to elicit information, which has not so far been possible, about people’s confidence in what they can do with it will be difficult to scrutinise provisions in a Bill that is their own resources. To an extent, the Government may to come in due course, shortly, when time permits— have begun to acknowledge the need to expand the whichever one of the time scales so beloved of Ministers range of choices available and ensure that consumers is utilised. The new clause also asks that we be provided have help to navigate those choices—I think that was with information on the distributional impact of the the phrase used. That sounds pretty sensible and changes by income decile, a behavioural analysis and commendable, but we need to make sure that it actually the financial risk assessment. As our new clause and the happens. points I have made show, our concern about some of The second test we have set is the fairness test—the the reforms extends to the face-to-face guidance that new system has to be fair to those on low and middle the Government have committed to providing. incomes, which means they still should be able to access We discussed this issue extensively in Committee. I products that give them the certainty in retirement they think Labour Members made a number of valid and want, and the billions we spend in pensions tax relief reasonable points on the potential pitfalls for savers must not benefit only those at the very top. That is why who have money at their disposal—those who, perhaps we have called for restrictions on pensions tax relief for for the first time in their life, have a significant pot of those earning more than £150,000 a year. The third test money and have to make a decision. Lest anyone suggest is the cost test: the Government have to ensure that the that our concern is patronising or that we are somehow policy does not result in extra cost to the state. That 911 Finance Bill2 JULY 2014 Finance Bill 912

[Cathy Jamieson] in advance of drawdown, so we need to consider whether the point of retirement is the sensible time for financial point was made earlier, and I think the Minister, to his planning. credit, understands that there is an issue with social care Hon. Members will have noted the Government’s and pensioners having to fall back on means-tested proposed allocation of £20 million over the two-year benefits—housing benefit, for example—later in their period, but it is questionable whether that will meet the life if they do not properly or sensibly manage their need and the demand. Again, the matter was discussed resources. As yet, however, the Government have not extensively in Committee, but we did not get the required explained how all that will be joined up in policy terms. answers. For example, we are told that the sum is based In our view, if the Government’s pensions reforms fail on an expected cost of £70 to £100 per individual, yet any of those tests, the negative impact on savers could the Association of British Insurers has estimated that be considerable. 500,000 members of defined contribution pension schemes In Committee, my hon. Friend the Member for Islwyn retire each year. If we take the lower end of the (Chris Evans) talked about protecting people from the Government’s estimate and multiply it by 500,000, we “sharks in the market”. That brings us to the vexed get a total of £35 million, so there is a question whether question of guidance. Going back to the Chancellor’s the Government’s current budget for guidance would no doubt innocent slip, there is a serious point to be even be sufficient to meet the potential demand at a cost made about definitions. When pressed subsequently, the of £70 per head. Chancellor said: One industry insider, I understand, commented that “There is a technical distinction between advice and guidance. “the £20 million the Government is putting forward is a drop in The budget document exists, I don’t get up and read it out the ocean”, because it contains all the technical details of the Budget and we and, of course, the money is available only for the next publish it at the same moment. The speech needs to also communicate two years, raising questions about what is supposed to in English so people watching it can understand what is meant.” happen after that. A further question is what savers can I understand that, but as I emphasised strongly in expect from guidance that costs between £70 and £100 per Committee, there is a world of difference between advice person. The Association of Professional Financial Advisers, and guidance in technical terms and in terms of legality. for example, estimates that the average flat fee charged The Government need to deal with that. by an adviser for annuities advice—I say advice—is £681. We know that guidance carries none of the legal Dr Thérèse Coffey (Suffolk Coastal) (Con): I am protections attached to advice, which is regulated. That listening carefully and trying to understand. Is the hon. no doubt accounts in part for the significant difference Lady suggesting that the Government should be people’s in cost between the two. financial adviser? I am not sure that is what the role of It is important to note the comments made by the Government should be. I thought the reform was about pensions Minister when he appeared before the Work opening up choices and making sure that people realise and Pensions Committee on 29 April. He said that the what steps they can take, not telling them what direction Government’s plan was for 15 minutes worth of guidance they should go in. per person. In Committee, my hon. Friend the Member for Islwyn, who had significant experience in the financial services sector prior to entering the House, observed Cathy Jamieson: It is important that Government use that when giving someone independent financial advice, language consistently and do not inadvertently mislead it is not just their pension that has to be looked at, but people about what they are going to get, whether it is their investments if they have any, their income, and the guidance, advice or information, given face-to-face, over right product for them overall. He estimated that that a telephone or through the internet. could not be done effectively in less than two hours. The Red Book states: Advice and guidance are very different, and guidance “from April 2015, all individuals with defined contribution pension begins to look less than adequate to meet some people’s pots are offered free and impartial face-to-face guidance at the requirements. Much confusion arises from the Chancellor’s point of retirement”. comments in the Budget speech, which I accept were an innocent slip of the tongue, leading to a number of One might consider that a good and positive measure, unintended consequences. We need clarity, not confusion, but it raises some questions—questions that largely for people who are making major financial decisions. accord with the three tests we have set. First, there is The pensions Minister told the Select Committee that a question about cost: the budget for guidance of just guidance would £20 million—£10 million each for 2015-16 and 2016-17— gives rise to some concern, as does its including no “lead more people to take formal advice”. provision for this year. According to the tax impact and That has been endorsed by the Royal London insurance information note, the measures in the Bill will enable up company, which said that guidance to 400,000 people to draw down their pensions. I note “should be a rich source of referrals to financial advisers.” that the Minister referred earlier to an updated tax Royal London has illustrated a number of issues in impact and information note. Perhaps he can tell us relation to what guidance ought to be and what would whether he has revised any of those sets of numbers. We be a good practice model. For example, it says that need to understand why nothing has been put aside for there is a real prospect that many people who receive that free and impartial guidance in this financial year. guidance will find that their needs are more complex My hon. Friends spoke about what people need at the than they originally thought, or that they do not know point they make a decision, which was also raised in which of the retirement options would best suit their Committee. People need access to information and guidance circumstances. There will be people in that category 913 Finance Bill2 JULY 2014 Finance Bill 914 who would not normally consider using a financial Again, before people get excited and claim that I am adviser but who would benefit from advice at that somehow suggesting that people should not be in charge point. That raises the prospect of people being referred of their own money, let me make it clear that there is on. not necessarily anything wrong with that. For many Royal London considered the impact of guidance on people it might seem to be the reasonable thing to do. debt levels. People approaching retirement who have They might wish to pay off a mortgage or debt, buy the debt to pay off may need information and support in car they had not previously been able to afford, or make deciding whether to use some of their pension funds to improvements to their home. Of course they ought to pay off the debt, and some would require debt counselling. be able to make that choice, but they ought to be able to Royal London highlighted the fact that guidance should do so in the knowledge of what they might face in later encourage people to shop around for the best deal, and years. suggested that after providing advice, providers should The potential impact of that change on the wider not be allowed to approach customers to try to sell their economy has already been mentioned, particularly in own products for three months. Interestingly, the insurance relation to the housing market. For example, what are company suggested that, rather than the issue becoming the implications of people with substantial pension a political football, guidance would best be provided by pots deciding to invest in property, particularly in the a not-for-profit organisation with a single focus. I look buy-to-let market? I also think that the Government forward to hearing the Minister’s comments on those must look at the impact on household savings ratios, points. given that the OBR has projected that they will fall from If guidance is a stepping stone to advice, does that 5% in 2013 to just under 3% at the end of the forecast leave the consumer with a considerable additional expense, period. In the midst of any economic recovery that has which could run into hundreds of pounds? If it becomes been driven by consumer savings, any change in the way routine to lead people from free guidance to paid-for people choose to invest their savings and the consequent advice, what is the point? Another question that we impact on the household savings ratio should be looked raised in Committee was whether guidance would be at very carefully. available to everyone, regardless of where they live. The In conclusion, I think that this is a crucial issue for Minister acknowledged today that some of the guidance thousands of people across the country. Many people may be made available through the internet, which will do not think about pensions and long-term savings, and not be suitable for everyone and will not be face to face. not because they have no interest in them or do not We need more explanation of the comments of the want to save, but because they are trying to manage pensions Minister when he suggested that group sessions their expenditure week by week and do not have the were an option worth exploring. Are we to conclude opportunity to look at the longer term. Everything we that the Government’s position has moved from face-to-face can do to encourage good-quality financial education is advice or guidance to face-to-faces advice? I am not important, which is why we must get the guidance and sure that many people would want to sit with others to advice absolutely correct. People also need to be confident discuss their private circumstances. I hope the Minister that the information they get from the industry itself will deal with the point about face-to-face guidance, as will be tailored and suitable for them. it is important that people understand what is being offered. Gregg McClymont: Perhaps this time I am not Gregg McClymont: Before my hon. Friend moves off anticipating what my hon. Friend is about to say, as I the important topic of guidance, I am sure she will think she is bringing her remarks to a close. It strikes agree that the context to this is that the median pension me, having listened to the Government on this issue, pot is much smaller than many hon. Members imagine: that the employer is never mentioned. One arm of the it is well below £30,000 a year. Moving from guidance Government is promoting workplace employer pensions, to advice potentially means that a significant proportion but what is the employer’s role in relation to greater of a person’s pension pot is eaten up by the cost of flexibility and choice? advice. We should all bear that in mind during the debate. Cathy Jamieson: Once again, my hon. Friend makes a valid and important point. He is correct that I was Cathy Jamieson: Once again, my hon. Friend makes about to conclude my remarks, so I will resist the an important point and anticipates some of the things I temptation to go into great detail on that issue, other want to mention before bringing my remarks to a close. than to say—we raised this in Committee—that in some I understand that in some instances pension pots are ways there seems to be no joined-up government here, relatively small, and we do not want a scenario in which with pensions sometimes seeming to be at odds with people find that a fairly high percentage of their pension other aspects. Rather than all pulling together in the pot must be spent on taking the advice to which he interests of the consumer, there could be tensions, which refers. I think the Government should address. In that context, I would be particularly interested to As I have said, this is a crucial issue for thousands of know whether the Government have conducted any people. We need to get it right. I am of course aware serious work on how and when savers will invest the that there is further legislation coming down the line. money taken out of their pension pots, particularly However, given that the Minister indicated that at least when those pots are relatively small. Industry analysis some of our requests for information are reasonable from Australia, which has total flexibility at the and relevant to the matter being discussed, I hope that de-accumulation stage, has found that over half of even at this late stage he will agree to our new clause, pension lump sums are spent on homes and cars. which we will want to press when the time comes. 915 Finance Bill2 JULY 2014 Finance Bill 916

1.45 pm James Duddridge: The Minister, as ever, will provide clarity, and I will ensure that he has plenty of time to do James Duddridge: I find this issue rather exciting, so. although clearly the House does not, given how empty the Chamber is. The pension changes that the Government We need to look at these changes in the round and are bringing forward are absolutely essential and, I consider other changes being made, particularly the think, will transform the marketplace in the long term. individual savings account legislation that is going through. However, I am concerned that the hon. Member for In the longer term, I think that ISAs and pensions will Kilmarnock and Loudoun (Cathy Jamieson), having be linked and that we will move towards the individual suffered the Finance Bill in Committee, seems to have retirement accounts we see in America, but working spent the intervening time reading the Hansard reports more from the base of an ISA up to a pension, rather of what we all said. Really, it is too much of a punishment than a merging of the two or a dumbing down of to do that and then have to come back yesterday and pensions. today. Thankfully we will have Third Reading later this An earlier intervention referred to spouse-to-spouse evening, if all goes well. transfers on ISAs, which I think are particularly relevant With regard to new clause 13, my hon. Friend the in relation to new clause 13 and defined contribution Exchequer Secretary talked entirely about defined pensions, because some people will be taking larger contribution schemes. When he winds up, perhaps he sums of money out and investing them directly into an will update the House on what is happening with defined ISA with little awareness that it cannot then be transferred benefit schemes, or perhaps there are no transitional to their spouse. The earlier the Government look at issues for defined benefit schemes in the new clause. I making spouse-to-spouse transfers exempt for inheritance think it is entirely right to give people plenty of time to tax, the better, particularly during this early transition look at these issues, because a number of people were period. The Sunday Times and a number of other not expecting these changes and would not have predicted financial services campaigners are urging the Government them, so they will need longer to consider their personal to look at the issue of spouse-to-spouse transfer, but I positions. As time goes on, I think that there will be less have not heard it mentioned with regard to the release need for guidance and advice, whether provided by the of lump sums and defined contribution lump sums. state or privately, because people now going into defined Through new clause 13 the Government are recognising contribution schemes will know what the options are that there are transitional issues, but the additional likely to be when they come out. Indeed, five years from transitional issue relating to ISAs has not necessarily now it will be slightly more predictable. People should been covered. look at that years, rather than just a few months, before they retire. Of course, that is not possible immediately, I welcome the reduction from £20,000 to £12,000, given that these changes have only just come in. which entrusts individuals to make decisions. Changes to trivial contributions are also very welcome, particularly as people move from employer to employer, building up Gregg McClymont: The hon. Gentleman will be aware large numbers of very small pots. It may not make that the other arm of the Government on this, the financial sense to merge them, so it may be better to pensions Minister, has developed a whole pensions policy take them out of a pension tax wrapper and independently based on the notion that inertia has to be harnessed for move them to an ISA. the public good, meaning that, as a rule, people are not aware of the complexities of pensions and there therefore On the issue of guidance, we should be open and needs to be a system in place so that those who do not honest that the Government cannot afford to provide exercise a choice still get a good outcome. Is the hon. full-blown advice and recommendation. It is very good Gentleman really that confident that we will very quickly of the Government to allocate a significant sum of reach a situation in which there will be informed consumers money to pointing people in the right direction. If the across the board who can make the kinds of investment average pot is £30,000, as we have heard, the thousands decisions to which he is referring? of pounds that full-blown advice and recommendation may cost would be totally disproportionate to the potential benefit. James Duddridge: I think that the default position will be that an annuity is purchased, rather than a lump It is good to get guidance, but I would exercise sum being withdrawn. I think the hon. Gentleman is caution about what is best: face-to-face guidance is not saying that that is the more cautious route, but I am always the best option. If I wanted to transfer money or concerned that it is not the right route for some people. enact a financial transaction, I would not want to sit Taking out a lump sum might make a lot more sense for down face to face with my bank manager. I would much them. However, it is an additional option. The guidance prefer the tried and tested method of interacting with that the Government are offering is not perfect. In fact, and getting advice and guidance through the internet, perfect advice, if it is taken forward to a recommendation, at least at an early stage. I would not want the Government is incredibly expensive. spending all the money on face-to-face guidance. Guidance on the internet may well be better for an increasing number of people, including a mini fact find into which Gregg McClymont: I thank the hon. Gentleman for they put their basic information. that thoughtful response. I am not sure that the default position will be that someone is defaulted into an The change may be from face-to-face to face-to-faces. annuity. We need clarity on that as we discuss these Financial services presentations can work face to face, clauses. I think that a choice will have to be exercised but they can also work over the internet. Once people one way or another, but I might be wrong. Perhaps the have completed an initial fact find or an overview of Minister will provide clarity on that. their financial position—they may want to use their 917 Finance Bill2 JULY 2014 Finance Bill 918 lump sum to repay debt, for instance—they could be to pull in different directions? One is about giving diverted to an individual web cast with the relevant people more control over their money, while the other is financial guidance. about collective direct contribution schemes, which are the opposite of that. That could lead to a conflict, Gregg McClymont: I thank the hon. Gentleman, who because two Departments are involved in developing is speaking from his experience of the sector, for giving the policy. way again. Would he care to comment on why the existing annuities market was not working? My James Duddridge: I do not believe they are contradictory, understanding of the analysis is that the default position because some people want to hand over that level of of individuals was simply to accept what they were responsibility. offered and not to get involved in the type of process to which he refers. If that means that the annuities market I know that other Members want to speak. I wanted was a failure because people were not getting value for to make a number of other points, but I will sit down money as a result of not shopping around, what confidence and leave it at that in order to give the Minister a chance does he have that there will be an overnight revolution to respond. in people’s engagement with the type of guidance he suggests? Mr Gauke: Let me quickly try to address some of the points that have been raised, many of which related to James Duddridge: The annuities market was not working guidance. As I said earlier, the issue features in Labour’s effectively in a number of ways, but, in relation to the new clause 9, but it is not directly related to the Finance lump sum, it did not work for a lot of our constituents if Bill. I will be as helpful as I can. On the question of they rationally expected a very low life expectancy. If whether guidance will only be face to face, the face-to-face they had been diagnosed with a particular illness, the offer will be available to those who need and want it. question of what would happen to their money would However, that is not to say that it will be the exclusive cause them great stress. It is important, therefore, to delivery channel. Not everyone will want face-to-face enable them to release some of that pension money and guidance, as my hon. Friend the Member for Rochford put it into another instrument so that their family can and Southend East (James Duddridge) has made clear. share it or, indeed, so that they can enjoy it themselves For many people, both now and in the future, other in their final years. I understand there is a risk of people channels will better suit their needs. We are currently under-predicting their longevity, but the large number considering the appropriate range of options for delivery of people with a diagnosed illness would like to access channels, to ensure that consumer needs are properly that pot. That is a slightly extreme position, but it is at understood and met, building on the views and evidence the other end of the scale. received during the consultation. We have asked the Financial Conduct Authority, working closely with Dr Whiteford: The hon. Gentleman is making a very the Pensions Regulator, the Pensions Advisory Service, good point about encouraging people to shop around, the Money Advice Service and consumer groups, to but is he aware that many parts of these islands do not co-ordinate a set of clear and robust standards that the have very good internet access, so putting all the eggs in guidance will have to meet. that basket will not help many people who want pensions The point was made about costs and, in particular, advice? the £20 million funding. It is important to realise that that is a development fund for the purpose of getting James Duddridge: I agree that we should not put all the initiative up and running; it is not to pay for the the eggs in one basket, but we certainly should not put ongoing costs of the scheme. We will talk more about none in the internet basket. It is a very useful provision that later. and, as public and domestic access to broadband improves throughout the islands, I think that use of the internet will speed things up. Sheila Gilmore (Edinburgh East) (Lab): Does not that illustrate the need for gathering and publishing the I find it odd that so much of our discussion about information, as proposed by our new clause 9? We are this Finance Bill, which is a Treasury matter, has been constantly hearing new things, such as, “There will be about pensions Bills. The hon. Member for Kilmarnock more costs for guidance, but we don’t know what they and Loudoun has prayed in aid the pensions Minister’s are or what will happen.” If the information is going to submission to the Department for Work and Pensions. I be gathered anyway, as the Exchequer Secretary constantly wonder whether we conduct our debates on Finance assures us, why not publish it to make sure we get this Bills in the right way, structurally speaking, and whether right? other departmental Ministers should be involved, where relevant, alongside Treasury Ministers. Fundamentally, the report supported by Opposition Members almost Mr Gauke: I do not know whether the hon. Lady was amounts to a fundamental review of a number of issues present earlier—[Interruption.] I am pleased that she in the pensions industry, which is clearly in the remit of was. She will have heard me say that we have consulted the DWP, not the Treasury. I am not arguing that it is on this matter and will respond shortly. If I may provide wrong or right; it is just that not all the key players are a little more clarity, that will happen before the summer involved. recess, so it is at that point that we will set out our proposals and, obviously, there will be an opportunity Dame Anne Begg (Aberdeen South) (Lab): I have over the months ahead for the House to give them some sympathy with what the hon. Gentleman is saying considerable scrutiny. about the fact that these pensions provisions are being To address the particular point made by the hon. handled by the Treasury. Does he agree that the two Member for Kilmarnock and Loudoun (Cathy Jamieson) pensions Bills announced in the Queen’s speech appear about whether the numbers in the tax information and 919 Finance Bill2 JULY 2014 Finance Bill 920

[Mr Gauke] Burden, Richard Havard, Mr Dai Burnham, rh Andy Healey, rh John impact note have been changed, the answer is no. The Byrne, rh Mr Liam Hepburn, Mr Stephen TIIN has been amended to take account of the Government Campbell, rh Mr Alan Hermon, Lady new clause and new schedule, but the impacts remain Campbell, Mr Gregory Heyes, David the same, so there is no fiscal cost. I hope that that Campbell, Mr Ronnie Hillier, Meg Champion, Sarah Hilling, Julie clarification is helpful. Chapman, Jenny Hodge, rh Margaret Lastly, to be clear about the guidance—we will get Clarke, rh Mr Tom Hodgson, Mrs Sharon the full details on it—as we have said throughout, it will Clwyd, rh Ann Hoey, Kate be impartial and will not include recommendations for Coaker, Vernon Hood, Mr Jim specific products or providers. It will not be a sales Connarty, Michael Hopkins, Kelvin process; it is important that the sales process is separate. Cooper, Rosie Hosie, Stewart Cooper, rh Yvette Howarth, rh Mr George I hope that that information is helpful to the House. I Corbyn, Jeremy Irranca-Davies, Huw hope that new clause 13 can be added to the Bill, and I Crausby, Mr David Jackson, Glenda advise my hon. Friends to oppose the Opposition’s new Creagh, Mary James, Mrs Siân C. clause 9. Creasy, Stella Jamieson, Cathy Question put and agreed to. Cruddas, Jon Jarvis, Dan New clause 13 accordingly read a Second time, and Cryer, John Johnson, Diana Cunningham, Alex Jones, Helen added to the Bill. Cunningham, Mr Jim Jones, Mr Kevan Cunningham, Sir Tony Jones, Susan Elan 2pm Curran, Margaret Kane, Mike Proceedings interrupted (Programme Order, 1 July). Dakin, Nic Kaufman, rh Sir Gerald The Deputy Speaker put forthwith the Questions necessary Danczuk, Simon Keeley, Barbara for the disposal of the business to be concluded at that David, Wayne Kendall, Liz Davidson, Mr Ian Khan, rh Sadiq time (Standing Order No. 83E). Davies, Geraint Lammy, rh Mr David De Piero, Gloria Lazarowicz, Mark New Clause 9 Denham, rh Mr John Leslie, Chris Dobbin, Jim Lewell-Buck, Mrs Emma Docherty, Thomas Llwyd, rh Mr Elfyn PENSION FLEXIBILITY:TREASURY ANALYSIS Donohoe, Mr Brian H. Long, Naomi ‘(1) The Chancellor of the Exchequer shall, within six months Doran, Mr Frank Lucas, Caroline of this Act receiving Royal Assent, publish and lay before the Doughty, Stephen Lucas, Ian House of Commons any analysis prepared by the Treasury prior Dowd, Jim MacNeil, Mr Angus Brendan to the publication of Budget 2014 relating to the impact of Doyle, Gemma Mactaggart, Fiona changes made by sections 39 to 43 of this Act to schedules 28 Dromey, Jack Mahmood, Mr Khalid and 29 to the Finance Act 2004. Dugher, Michael Mahmood, Shabana (2) The information published under subsection (1) must Durkan, Mark Malhotra, Seema include— Eagle, Ms Angela Mann, John (a) any assessment made of the impact of the provision for Eagle, Maria Marsden, Mr Gordon independent face to face guidance on the 2004 Act; Edwards, Jonathan McCabe, Steve (b) the distributional impact, by income decile of the Efford, Clive McCarthy, Kerry population, of changes made by sections 39 to 43 of Elliott, Julie McClymont, Gregg this Act; Ellman, Mrs Louise McCrea, Dr William (c) a behavioural analysis; and Engel, Natascha McDonagh, Siobhain (d) the financial risk assessment.”—(Cathy Jamieson.) Esterson, Bill McDonald, Andy Brought up. Evans, Chris McDonnell, John Farrelly, Paul McFadden, rh Mr Pat Question put, That the clause be added to the Bill. Field, rh Mr Frank McGovern, Alison The House divided: Ayes 241, Noes 295. Fitzpatrick, Jim McGovern, Jim Flello, Robert McKechin, Ann Division No. 29] [2 pm Flint, rh Caroline McKenzie, Mr Iain Flynn, Paul McKinnell, Catherine AYES Fovargue, Yvonne Meale, Sir Alan Abbott, Ms Diane Begg, Dame Anne Gapes, Mike Mearns, Ian Abrahams, Debbie Benn, rh Hilary Gardiner, Barry Miller, Andrew Ainsworth, rh Mr Bob Benton, Mr Joe Gilmore, Sheila Mitchell, Austin Alexander, rh Mr Douglas Berger, Luciana Glass, Pat Moon, Mrs Madeleine Alexander, Heidi Betts, Mr Clive Glindon, Mrs Mary Morden, Jessica Ali, Rushanara Blenkinsop, Tom Goodman, Helen Morrice, Graeme (Livingston) Ashworth, Jonathan Blomfield, Paul Green, Kate Morris, Grahame M. Austin, Ian Blunkett, rh Mr David Greenwood, Lilian (Easington) Bailey, Mr Adrian Bradshaw, rh Mr Ben Griffith, Nia Mudie, Mr George Bain, Mr William Brennan, Kevin Gwynne, Andrew Munn, Meg Balls, rh Ed Brown, Lyn Hain, rh Mr Peter Murphy, rh Mr Jim Banks, Gordon Brown, rh Mr Nicholas Hamilton, Fabian Murphy, rh Paul Barron, rh Kevin Brown, Mr Russell Hanson, rh Mr David Murray, Ian Bayley, Hugh Bryant, Chris Harman, rh Ms Harriet Nandy, Lisa Beckett, rh Margaret Buck, Ms Karen Harris, Mr Tom Nash, Pamela 921 Finance Bill2 JULY 2014 Finance Bill 922

O’Donnell, Fiona Smith, Angela Davies, Philip Hughes, rh Simon Onwurah, Chi Smith, Owen Davis, rh Mr David Hunt, rh Mr Jeremy Osborne, Sandra Spellar, rh Mr John Dinenage, Caroline Huppert, Dr Julian Owen, Albert Straw, rh Mr Jack Djanogly, Mr Jonathan Hurd, Mr Nick Paisley, Ian Stringer, Graham Dorrell, rh Mr Stephen Jackson, Mr Stewart Pearce, Teresa Stuart, Ms Gisela Dorries, Nadine James, Margot Perkins, Toby Sutcliffe, Mr Gerry Doyle-Price, Jackie Javid, rh Sajid Phillipson, Bridget Tami, Mark Drax, Richard Jenkin, Mr Bernard Pound, Stephen Thomas, Mr Gareth Duddridge, James Jenrick, Robert Powell, Lucy Thornberry, Emily Duncan, rh Mr Alan Johnson, Gareth Qureshi, Yasmin Timms, rh Stephen Dunne, Mr Philip Johnson, Joseph Raynsford, rh Mr Nick Trickett, Jon Ellis, Michael Jones, Andrew Reed, Mr Jamie Turner, Karl Ellison, Jane Jones, rh Mr David Reed, Mr Steve Twigg, Derek Elphicke, Charlie Jones, Mr Marcus Reeves, Rachel Twigg, Stephen Evans, Graham Kawczynski, Daniel Reynolds, Emma Umunna, Mr Chuka Evans, Jonathan Kelly, Chris Reynolds, Jonathan Vaz, Valerie Evans, Mr Nigel Kirby, Simon Riordan, Mrs Linda Walley, Joan Evennett, Mr David Knight, rh Sir Greg Ritchie, Ms Margaret Weir, Mr Mike Fabricant, Michael Kwarteng, Kwasi Robertson, Angus Whiteford, Dr Eilidh Fallon, rh Michael Lamb, Norman Robertson, John Whitehead, Dr Alan Farron, Tim Lancaster, Mark Robinson, Mr Geoffrey Williamson, Chris Featherstone, Lynne Lansley, rh Mr Andrew Rotheram, Steve Wilson, Phil Field, Mark Latham, Pauline Roy, Lindsay Wilson, Sammy Foster, rh Mr Don Leadsom, Andrea Ruane, Chris Winnick, Mr David Fox,rhDrLiam Lee, Dr Phillip Sawford, Andy Winterton, rh Ms Rosie Freeman, George Leech, Mr John Seabeck, Alison Wishart, Pete Freer, Mike Lefroy, Jeremy Shannon, Jim Wood, Mike Fuller, Richard Leigh, Sir Edward Sharma, Mr Virendra Woodcock, John Gale, Sir Roger Leslie, Charlotte Garnier, Sir Edward Lewis, Brandon Sheerman, Mr Barry Woodward, rh Mr Shaun Sheridan, Jim Garnier, Mark Liddell-Grainger, Mr Ian Wright, David Shuker, Gavin Gauke, Mr David Lidington, rh Mr David Wright, Mr Iain Simpson, David George, Andrew Lloyd, Stephen Skinner, Mr Dennis Tellers for the Ayes: Gibb, Mr Nick Lopresti, Jack Slaughter, Mr Andy Graham Jones and Gilbert, Stephen Loughton, Tim Smith, rh Mr Andrew Mr David Hamilton Gillan, rh Mrs Cheryl Luff, Sir Peter Glen, John Lumley, Karen NOES Goldsmith, Zac Macleod, Mary Goodwill, Mr Robert Main, Mrs Anne Adams, Nigel Brokenshire, James Gove, rh Michael Maynard, Paul Afriyie, Adam Brooke, Annette Graham, Richard McCartney, Jason Aldous, Peter Browne, Mr Jeremy Grant, Mrs Helen McCartney, Karl Alexander, rh Danny Bruce, Fiona Gray, Mr James McIntosh, Miss Anne Andrew, Stuart Bruce, rh Sir Malcolm Grayling, rh Chris McLoughlin, rh Mr Patrick Arbuthnot, rh Mr James Buckland, Mr Robert Green, rh Damian McPartland, Stephen Bacon, Mr Richard Burley, Mr Aidan Grieve, rh Mr Dominic Menzies, Mark Baker, Steve Burns, Conor Griffiths, Andrew Metcalfe, Stephen Baldry, rh Sir Tony Burrowes, Mr David Gummer, Ben Miller, rh Maria Baldwin, Harriett Burstow, rh Paul Halfon, Robert Mills, Nigel Barclay, Stephen Byles, Dan Hames, Duncan Milton, Anne Barwell, Gavin Cable, rh Vince Hammond, Stephen Mitchell, rh Mr Andrew Bebb, Guto Cairns, Alun Hancock, Matthew Moore, rh Michael Beith, rh Sir Alan Cameron, rh Mr David Hands, rh Greg Mordaunt, Penny Bellingham, Mr Henry Campbell, rh Sir Menzies Harper, Mr Mark Morgan, rh Nicky Benyon, Richard Carmichael, rh Mr Alistair Harrington, Richard Morris, Anne Marie Beresford, Sir Paul Carmichael, Neil Harris, Rebecca Morris, David Berry, Jake Carswell, Mr Douglas Hart, Simon Morris, James Bingham, Andrew Cash, Sir William Harvey, Sir Nick Mosley, Stephen Binley, Mr Brian Chishti, Rehman Haselhurst, rh Sir Alan Mowat, David Birtwistle, Gordon Chope, Mr Christopher Heald, Oliver Mulholland, Greg Blackman, Bob Clappison, Mr James Heath, Mr David Mundell, rh David Blackwood, Nicola Clark, rh Greg Heaton-Harris, Chris Munt, Tessa Blunt, Crispin Coffey, Dr Thérèse Hemming, John Murray, Sheryll Boles, Nick Collins, Damian Henderson, Gordon Murrison, Dr Andrew Bottomley, Sir Peter Colvile, Oliver Hendry, Charles Neill, Robert Bradley, Karen Cox, Mr Geoffrey Herbert, rh Nick Newton, Sarah Brady, Mr Graham Crabb, Stephen Hinds, Damian Nokes, Caroline Brake, rh Tom Crockart, Mike Hoban, Mr Mark Nuttall, Mr David Bray, Angie Crouch, Tracey Hollingbery, George Offord, Dr Matthew Brazier, Mr Julian Davies, David T. C. Hollobone, Mr Philip Ollerenshaw, Eric Bridgen, Andrew (Monmouth) Howarth, Sir Gerald Opperman, Guy Brine, Steve Davies, Glyn Howell, John Osborne, rh Mr George 923 Finance Bill2 JULY 2014 Finance Bill 924

Ottaway, rh Sir Richard Stewart, Rory (ii) the sum is paid before 19 September 2013, a Parish, Neil Stride, Mel contract for a lifetime annuity is entered into to Pawsey, Mark Stuart, Mr Graham provide the pension in connection with which the Penrose, John Stunell, rh Sir Andrew sum is paid, and on or after 19 March 2014 the Perry, Claire Sturdy, Julian contract is cancelled, and Phillips, Stephen Swales, Ian (d) the member becomes entitled to the sum before Pickles, rh Mr Eric Swayne, rh Mr Desmond 6 October 2015. Pincher, Christopher Swinson, Jo (3) Where— Poulter, Dr Daniel Syms, Mr Robert Prisk, Mr Mark Thornton, Mike (a) a lump sum to which this paragraph applies is a pension commencement lump sum but would not be Pritchard, Mark Thurso, John a pension commencement lump sum if sub- Pugh, John Tomlinson, Justin paragraph (1) were omitted, and Raab, Mr Dominic Tredinnick, David Randall, rh Sir John Turner, Mr Andrew (b) the lump sum is paid to the member in connection Reckless, Mark Tyrie, Mr Andrew with a pension under the scheme to which it is Redwood, rh Mr John Uppal, Paul expected that the member will become entitled (“the expected pension”), no lump sum paid to the Rees-Mogg, Jacob Vara, Mr Shailesh member out of the expected-pension fund is a Reid, Mr Alan Vickers, Martin pension commencement lump sum; and here “the Robathan, rh Mr Andrew Villiers, rh Mrs Theresa expected-pension fund” means the sums and assets Robertson, Mr Laurence Walker, Mr Charles that from time to time represent the sums and assets Rogerson, Dan Walker, Mr Robin that, when the lump sum mentioned in paragraph (a) Rudd, Amber Walter, Mr Robert was paid, were held for the purpose of providing the Russell, Sir Bob Ward, Mr David expected pension. Rutley, David Watkinson, Dame Angela (4) For the purposes of sub-paragraph (2), if the Sanders, Mr Adrian Weatherley, Mike circumstances are as described in sub-paragraph (2)(c)(ii), the Scott, Mr Lee Wharton, James member is treated as not having become entitled to the arranged Selous, Andrew White, Chris pension as a result of the cancelled contract having been entered Shapps, rh Grant Whittaker, Craig into; and here “the arranged pension” means the pension that Sharma, Alok Whittingdale, Mr John would have been provided by that contract had it not been Shelbrooke, Alec Wiggin, Bill cancelled.” Shepherd, Sir Richard Willetts, rh Mr David Temporary relaxation to allow transfer of pension rights after lump Simpson, Mr Keith Williams, Mr Mark sum paid Skidmore, Chris Williams, Stephen Smith, Chloe Williamson, Gavin 2 (1) In Schedule 29 to FA 2004 after paragraph 1A insert— Smith, Henry Wilson, Mr Rob “1B (1) When deciding whether a lump sum to which this Smith, Julian Wollaston, Dr Sarah paragraph applies is a pension commencement lump sum— Smith, Sir Robert Wright, Jeremy (a) paragraph 1(1)(aa) and (c) and (3) are to be omitted, Soames, rh Sir Nicholas Wright, Simon (b) paragraph 1(4) is to be treated as referring to the actual Soubry, Anna Yeo, Mr Tim pension (see sub-paragraph (2)(h) of this paragraph), Spelman, rh Mrs Caroline Young, rh Sir George and Spencer, Mr Mark Zahawi, Nadhim Stanley, rh Sir John (c) paragraph 2(2) is to be treated as referring to the arrangement under which the member was expected Stevenson, John Tellers for the Noes: to become entitled to the expected pension (see Stewart, Bob Mr Sam Gyimah and sub-paragraph (2)(b) of this paragraph). Stewart, Iain Jenny Willott (2) This paragraph applies to a lump sum if— Question accordingly negatived. (a) the sum is paid in respect of a money purchase arrangement, (b) the sum is paid to the member in connection with a New Schedule 5 pension under a registered pension scheme to which it is expected that the member will become entitled PENSION FLEXIBILITY: FURTHER AMENDMENTS (“the expected pension”), Temporary extension of period by which commencement lump sum (c) the expected pension is income withdrawal, a lifetime may precede pension annuity or a scheme pension, 1 In Schedule 29 to FA 2004 (authorised lump sums under (d) the sum is paid before the member becomes entitled to registered pension schemes) after paragraph 1 (conditions for a the expected pension, lump sum to be a pension commencement lump sum) insert— (e) either— “1A (1) Paragraph 1(1)(c) is to be omitted when deciding (i) the sum is paid on or after 19 September 2013 but whether a lump sum to which this paragraph applies is a pension before 6 April 2015, or commencement lump sum. (ii) the sum is paid before 19 September 2013, a contract for a lifetime annuity is entered into to (2) This paragraph applies to a lump sum if— provide the expected pension, and on or after (a) the sum is paid in respect of a money purchase 19 March 2014 the contract is cancelled, arrangement, (f) the sum is not repaid at any time before 6 October 2015, (b) the sum is paid before the member becomes entitled to the sum, (g) before the member becomes entitled to the expected pension, there is a recognised transfer of the sums (c) either— and assets that immediately before the transfer represent the sums and assets that when the sum was (i) the sum is paid on or after 19 September 2013 but paid were held for the purpose of providing the before 6 April 2015, or expected pension, 925 Finance Bill2 JULY 2014 Finance Bill 926

(h) the member becomes entitled before 6 October 2015 to (3) For the purposes of subsection (2), if the circumstances are a pension under the scheme to which the recognised as described in subsection (2)(e)(ii), the member is treated as not transfer is made (“the actual pension”), having become entitled to the expected pension as a result of the (i) the actual pension is income withdrawal, a lifetime cancelled contract having been entered into.” annuity or a scheme pension, or some combination Calculation of “applicable amount” in certain cases of them, and 4 In paragraph 3 of Schedule 29 to FA 2004 (pension (j) all of the sums and assets that represent the sums and commencement lump sums: applicable amount) after sub- assets transferred by the recognised transfer are used paragraph (8) insert— to provide the actual pension. “(8A) Sub-paragraphs (1) to (8) have effect subject to the (3) If a lump sum to which this paragraph applies is a pension following— commencement lump sum, any lump sum paid— (a) if— (a) to the member, (i) paragraph 1A or 1B applies to the lump sum, (b) by the scheme to which the recognised transfer (ii) the lump sum is paid more than 6 months before mentioned in sub-paragraph (2)(g) is made or by any the day on which the member becomes entitled to other registered pension scheme (including the it, scheme from which the transfer was made), and (iii) a contract for a lifetime annuity is entered into to (c) in connection with the member’s becoming entitled to provide the pension in connection with which the the actual pension, lump sum is paid, and is not a pension commencement lump sum. (iv) on or after 19 March 2014 the contract is (4) For the purposes of sub-paragraph (2), if the cancelled, circumstances are as described in sub-paragraph (2)(e)(ii), the the applicable amount is one third of the annuity purchase member is treated as not having become entitled to the expected price that would have been given by sub-paragraphs pension as a result of the cancelled contract having been entered (4) to (5) in the case of that annuity had the contract into.” not been cancelled, and (2) In section 166(2) of FA 2004 (time at which a person (b) if— becomes entitled to a lump sum)— (i) paragraph 1A or 1B applies to the lump sum, (a) before paragraph (a) insert— (ii) the lump sum is paid more than 6 months before “(za) in the case of a pension commencement lump the day on which the member becomes entitled to sum to which paragraph 1B of Schedule 29 it, and applies (certain sums paid before 6 April 2015), (iii) paragraph (a) does not apply, immediately before the person becomes entitled to the applicable amount is one third of the sums, plus one the actual pension (see paragraph 1B(2)(h) of that third of the then market value of the assets, held at Schedule),”, and the time the lump sum is paid for the purpose of (b) in paragraph (a) for “of a” substitute “of any other”. providing the pension at that time expected to be the pension in connection with which the lump sum is Temporary relaxation to allow lump sum to be repaid to pension paid. scheme that paid it (8B) For the purposes of sub-paragraph (8A)(a)(ii), the 3 In Chapter 3 of Part 4 of FA 2004 (payments by registered member is treated as not having become entitled to a pension as pension schemes) after section 185I insert— a result of the cancelled contract having been entered into.” “Repayments of lump sums Expected pension commencement lump sums treated as trivial 185J Effect of repayment of certain pre-6 April 2015 lump commutation lump sums sums 5 (1) In section 166(1) of FA 2004, in the lump sum rule, omit ‘(1) For the purposes of this Part— the “or” after paragraph (f), and after paragraph (g) insert “, or (a) a lump sum to which this section applies is treated as (h) a transitional 2013/14 lump sum.” never having been paid, and (2) In Schedule 29 to FA 2004, after paragraph 11 insert— (b) the payment by which it is repaid is treated as not being a payment. “Transitional 2013/14 lump sum, and its related trivial commutation lump sum (2) This section applies to a lump sum if— 11A (1) A lump sum is a transitional 2013/14 lump sum for the (a) the sum is paid by a registered pension scheme to a purposes of this Part if— member of the scheme in respect of a money purchase arrangement, (a) the sum (“the earlier sum”) is paid to the member in connection with a pension under a registered pension (b) the sum is paid to the member in connection with a scheme to which it is expected that the member will pension under the scheme to which it is expected that become entitled (“the expected pension”), the member will become entitled (“the expected pension”), (b) the earlier sum is paid before the member becomes entitled to the expected pension, (c) the expected pension is income withdrawal, a lifetime annuity or a scheme pension, (c) either— (i) the earlier sum is paid on or after 19 September (d) the sum is paid before the member becomes entitled to 2013 but before 27 March 2014, or the expected pension, (ii) the earlier sum is paid before 19 September 2013, a (e) either— contract for a lifetime annuity is entered into to (i) the sum is paid on or after 19 September 2013 but provide the expected pension, and on or after before 6 April 2015, or 19 March 2014 the contract is cancelled, (ii) the sum is paid before 19 September 2013, a (d) all of the sums and assets for the time being contract for a lifetime annuity is entered into to representing the sums and assets that when the earlier provide the expected pension, and on or after sum was paid were held for the purpose of providing 19 March 2014 the contract is cancelled, the expected pension are, before the member becomes (f) before the member becomes entitled to the expected entitled to the expected pension, used in paying a pension, the member repays the sum to the pension further lump sum to the member (“the further sum”), scheme that paid it, and (e) the further sum is paid on or after 6 July 2014 but (g) the repayment is made before 6 October 2015. before 6 April 2015, and 927 Finance Bill2 JULY 2014 Finance Bill 928

(f) the further sum is a trivial commutation lump sum (see (b) the earlier sum is paid to the member in connection sub-paragraph (2)). with a pension under a registered pension scheme to (2) Sub-paragraph (4) applies when deciding under which it is expected that the member will become paragraph 7 whether the further sum is a trivial commutation entitled (“the expected pension”), lump sum in a case where the earlier sum is paid before the (c) the earlier sum is paid before the member becomes nominated date (see paragraph 7(3) for the meaning of “the entitled to the expected pension, nominated date”). (d) either— (3) If the earlier sum is a transitional 2013/14 lump sum, and the earlier sum and the further sum are not the only lump sums (i) the earlier sum is paid on or after 19 September paid under registered pension schemes to the member, sub- 2013 but before 27 March 2014, or paragraph (4) applies when deciding under paragraph 7 whether (ii) the earlier sum is paid before 19 September 2013, a any other lump sum paid under a registered pension scheme to contract for a lifetime annuity is entered into to the member is a trivial commutation lump sum. provide the expected pension, and on or after (4) If this sub-paragraph applies, the payment of the earlier 19 March 2014 the contract is cancelled, sum is to be treated for the purposes of paragraph 8(1)(b) as a benefit crystallisation event— (e) all of the sums and assets for the time being representing the sums and assets that when the earlier (a) which occurs when the earlier sum is paid, and sum was paid were held for the purpose of providing (b) on which the amount crystallised is the amount of the the expected pension are, before the member becomes earlier sum. entitled to the expected pension, used in paying a (5) If the earlier sum is a transitional 2013/14 lump sum, and further lump sum to the member (“the further sum”), only the sums and assets mentioned in sub-paragraph (1)(d) are used in paying the further sum, section 636B of ITEPA 2003 (f) the further sum is paid on or after 6 July 2014 but applies in relation to the further sum with the omission of its before 6 April 2015, and subsection (3). (g) either— (6) If the earlier sum is a transitional 2013/14 lump sum, and (i) the payment of the further sum is a payment the sums and assets mentioned in sub-paragraph (1)(d) are used described in regulation 11, 11A or 12, or together with other sums and assets in paying the further sum— (a) section 636B of ITEPA 2003 applies in relation to the (ii) the further sum is a trivial commutation lump sum further sum as if instead of the further sum there within paragraph 7A of Schedule 29 and the were two separate trivial commutation lump sums as earlier sum is the pension commencement lump follows— sum in connection with which the further sum is paid. (i) one (“the first part of the further sum”) consisting of so much of the further sum as is attributable to (2) If this regulation applies to the earlier sum, and the the sums and assets mentioned in sub-paragraph payment of the further sum is a payment described in (1)(d), and regulation 11, 11A or 12— (ii) another consisting of the remainder of the further (a) the payment of the earlier sum is a payment of a sum, prescribed description for the purposes of (b) the first part of the further sum is to be treated for the section 164(1)(f), and purposes of section 636B of ITEPA 2003 as having been paid immediately before the remainder of the (b) section 636A of ITEPA 2003 (exemption from income further sum, tax for certain lump sums) applies in relation to the earlier sum as if the earlier sum were a pension (c) section 636B of ITEPA 2003 applies in relation to the commencement lump sum. first part of the further sum with the omission of its subsection (3), and (3) When deciding for the purposes of this regulation whether (d) for the purposes of applying section 636B(3) of ITEPA the further sum is a trivial commutation lump sum within 2003 in relation to the remainder of the further sum, paragraph 7A of Schedule 29, sub-paragraph (2)(c) of that the rights to which the first part of the further sum paragraph is to be omitted. relates are to be treated as rights that are not (4) If this regulation applies to the earlier sum, and only the uncrystallised rights immediately before the sums and assets mentioned in paragraph (1)(e) are used in paying remainder of the further sum is paid. the further sum, section 636B of ITEPA 2003 applies in relation (7) For the purposes of sub-paragraph (1), if the to the further sum with the omission of its subsection (3). circumstances are as described in sub-paragraph (1)(c)(ii), the (5) If this regulation applies to the earlier sum, and the sums member is treated as not having become entitled to the expected and assets mentioned in paragraph (1)(e) are used together with pension as a result of the cancelled contract having been entered other sums and assets in paying the further sum— into.” (3) In section 636A of ITEPA 2003 (income tax exemption for (a) section 636B of ITEPA 2003 applies in relation to the certain lump sums)— further sum as if instead of the further sum there were two separate trivial commutation lump sums as (a) in subsection (1) after paragraph (c) insert— follows— “(ca) a transitional 2013/14 lump sum,”, and (i) one (“the first part of the further sum”) consisting “transitional 2013/14 lump sum”,”. of so much of the further sum as is attributable to (4) In section 280(2) of FA 2004 (index of expressions) at the the sums and assets mentioned in appropriate place insert— paragraph (1)(e), and (ii) another consisting of the remainder of the further “transitional 2013/14 lump sum paragraph 11A of Schedule 29”. sum, Small pot lump sums (b) the first part of the further sum is to be treated for the 6 (1) In the Registered Pension Schemes (Authorised purposes of section 636B of ITEPA 2003 as having Payments) Regulations 2009 (S.I. 2009/1171) after regulation 3 been paid immediately before the remainder of the insert— further sum, “3A (1) This regulation applies to a lump sum if— (c) section 636B of ITEPA 2003 applies in relation to the (a) the sum (“the earlier sum”) is paid under a registered first part of the further sum with the omission of its pension scheme to a member of the scheme, subsection (3), and 929 Finance Bill2 JULY 2014 Finance Bill 930

(d) for the purposes of applying section 636B(3) of ITEPA (3) After the substituted sub-paragraph (7AA) insert— 2003 in relation to the remainder of the further sum, “(7AB) Where paragraph 1A applies to the lump sum, AC is the rights to which the first part of the further sum the total of— relates are to be treated as rights that are not (a) the sums held, at the time the lump sum is paid, for the uncrystallised rights immediately before the purpose of providing the pension at that time remainder of the further sum is paid. expected to be the pension in connection with which (6) For the purposes of paragraph (1), if the circumstances are the lump sum is paid, and as described in paragraph (1)(d)(ii), the member is treated as not (b) the market value at that time of the assets held at that having become entitled to the expected pension as a result of the time for that purpose. cancelled contract having been entered into.” (7AC) Where paragraph 1B applies to the lump sum, AC is the (2) The amendment made by sub-paragraph (1) is to be treated total of— as having been made by the Commissioners for Her Majesty’s Revenue and Customs under the powers to make regulations (a) the sums held, at the time the lump sum is paid, for the conferred by section 164(1)(f) and (2) of FA 2004. purpose of providing the expected pension (see paragraph 1B(2)(b)), and Preservation of protected pension age following certain transfers of (b) the market value at that time of the assets held at that pension rights time for that purpose.” 7 (1) In paragraph 22 of Schedule 36 to FA 2004 (protection of Reporting obligations rights to take benefit before normal minimum pension age) after sub-paragraph (6) insert— 11 (1) In the Registered Pension Schemes (Provision of Information) Regulations 2006 (S.I. 2006/567) after regulation 18 “(6A) A transfer is also a block transfer if— insert— (a) it involves the transfer in a single transaction of all the sums and assets held for the purposes of, or “Modified operation of these Regulations in the case of certain representing accrued rights under, the arrangements pre-6 April 2015 lump sums under the pension scheme from which the transfer is 19 Lump sums to which paragraph 1B of Schedule 29 made which relate to the member, applies (b) the transfer takes place— ‘(1) Regulations 3 to 18 have effect subject to the following (i) on or after 19 March 2014, and provisions of this regulation. (ii) before 6 April 2015, and (2) Paragraphs (3) to (8) apply if— (c) the date mentioned in sub-paragraph (7)(a) is before (a) a lump sum is paid by a registered pension scheme 6 October 2015.” (“the paying scheme”) to a member of the scheme, (b) paragraph 1B of Schedule 29 applies to the lump sum, (2) In paragraph 23(6) of Schedule 36 to FA 2004 (meaning of and “block transfer”) after “22(6)” insert “and (6A), but for this purpose paragraph 22(6A)(c) is to be read as if its reference to (c) the member’s becoming entitled to the actual pension paragraph 22(7)(a) were a reference to sub-paragraph (7) of this mentioned in paragraph 1B(2)(h) of Schedule 29 has paragraph”. the effect that— (i) the member also becomes entitled to the lump sum, Operation of enhanced protection of pre-6 April 2006 rights to and take lump sums (ii) the member’s becoming entitled to the lump sum is 8 In paragraph 29 of Schedule 36 to FA 2004 (modifications of a benefit crystallisation event. paragraph 3 of Schedule 29 to FA 2004 for cases where there is (3) For the purposes of— enhanced protection) after sub-paragraph (3) insert— (a) reportable event 6, “(4) Paragraph 3 applies as if in sub-paragraph (8A)(a) for “is one third of” there were substituted “is— (b) regulation 3 so far as applying by virtue of that event, and VULSR × (LS + CAPP) (c) obligations under regulation 14(1), VUR the benefit crystallisation event mentioned in paragraph where VULSR, VUR and LS have the same meaning as in (2)(c)(ii) is treated as occurring— sub-paragraph (1), and CAPP is”. (i) in respect of the scheme to which the transfer (5) Paragraph 3 applies as if in sub-paragraph (8A)(b) for “is mentioned in paragraph 1B(2)(g) of Schedule 29 was one third of the sums, plus one third of” there were substituted made (“the receiving scheme”) and not in respect of “is— VULSR the paying scheme, and × (LS + EP) VUR (ii) when the member becomes entitled to the actual where VULSR, VUR and LS have the same meaning as in pension or, if later, on 5 August 2014. sub-paragraph (1), and EP is the total of the sums, and”.” (4) For the purposes of regulations 15(2)(a) and 17(5)(a)(i) and (7)(a)(i), that benefit crystallisation event is treated as occurring Protected lump sum entitlement following certain transfers of in respect of the receiving scheme and not in respect of the pension rights paying scheme. 9 In paragraph 31(8) of Schedule 36 to FA 2004 (“block (5) For the purposes of— transfer” has meaning given by paragraph 22(6) of Schedule 36 to FA 2004)— (a) reportable event 7 (but not its definition of “the entitlement amount”), (a) after “22(6)” insert “and (6A)”, and (b) reportable event 8, and (b) at the end insert “, and reading paragraph 22(6A)(c) as (c) regulation 3 so far as applying by virtue of either of if its reference to paragraph 22(7)(a) were a reference those events, to sub-paragraph (3) of this paragraph.” the lump sum is treated as having been paid— 10 (1) In paragraph 34(2) of Schedule 36 to FA 2004 (modifications required by paragraph 31 in cases involving (i) by the receiving scheme and not by the paying scheme, protected entitlements to lump sums) the sub-paragraphs treated and as substituted in paragraph 2 of Schedule 29 to FA 2004 are (ii) when the member becomes entitled to the actual amended as follows. pension or, if later, on 5 August 2014. (2) In the substituted sub-paragraph (7A), in the definition of (6) For the purposes of reportable event 7 “the entitlement AC, for “(7AA) and (7B))” substitute “(7AA) to (7B))”. amount” is the total of— 931 Finance Bill2 JULY 2014 Finance Bill 932

(a) the sums held, at the time the lump sum is actually “(3A) For the purposes of subsection (3)(b) “the permitted paid, for the purpose of providing the expected maximum”, in the case of a lump sum paid to an individual, is pension mentioned in paragraph 1B(2)(b) of the amount that in accordance with paragraph 2 of Schedule 29 Schedule 29, and would be the permitted maximum for that lump sum if the (b) the market value at that time of the assets held at that individual became entitled at the time the lump sum is paid to the time for that purpose. pension at that time expected to be the pension in connection with which the lump sum is paid.” (7) The scheme administrator of the paying scheme is to provide the scheme administrator of the receiving scheme with (3) In section 268 of FA 2004 (discharge of liability to scheme the following information— sanction charges etc) after subsection (7) insert— (a) the date the lump sum was paid, “(7A) Subsection (7) applies with the omission of its paragraph (a) if the scheme chargeable payment is a payment of (b) the amount of the lump sum, a lump sum where the conditions in paragraph 1B(2)(a) to (g) of (c) the total of— Schedule 29 are met.” (i) the sums held, at the time lump sum is paid, for the (4) In the Taxation of Pension Schemes (Transitional purpose of providing the expected pension Provisions) Order 2006 (S.I. 2006/572) in article 18 (which mentioned in paragraph 1B(2)(b) of Schedule 29, provides for paragraph 1(1)(b) of Schedule 29 to FA 2004 to be and omitted in certain cases) at the end insert “, and section 239 has (ii) the market value at that time of the assets held at effect in the case of a lump sum paid to that individual as if its that time for that purpose, and subsection (3)(b) did not include a reference to paragraph 1(1)(b) (d) a statement that no further pension commencement of Schedule 29”. lump sum may be paid in connection with that (5) The amendment made by sub-paragraph (4) is to be treated expected pension. as made by the Treasury under the powers to make orders (8) The scheme administrator of the paying scheme is to conferred by section 283(2) of FA 2004. comply with its obligations under paragraph (7) before— Power to make further adjustments (a) the end of 30 days beginning with the date of the 13 In section 166 of FA 2004 (payments by registered pension transfer mentioned in paragraph 1B(2)(g) of schemes: the lump sum rule) after subsection (4) insert— Schedule 29, or “(5) The Commissioners for Her Majesty’s Revenue and (b) if later, the end of 3 September 2014. Customs may by regulations amend Part 1 of Schedule 29, or 20 Lump sums to which paragraph 1B of Schedule 29 fails Part 3 of Schedule 36, in connection with cases involving a lump to apply sum within subsection (6). ‘(1) Regulations 3 to 18 have effect subject to the following (6) A lump sum is within this subsection if— provisions of this regulation. (a) the sum is paid on or after 19 September 2013 and (2) Paragraph (3) applies if— before 6 April 2015, or (a) a lump sum is paid by a registered pension scheme (b) the sum is paid before 19 September 2013, a contract (“the paying scheme”) to a member of the scheme, for a lifetime annuity is entered into to provide the (b) paragraph 1B of Schedule 29 does not apply to the pension in connection with which the sum is paid, lump sum, but the conditions in paragraph 1B(2)(a) and on or after 19 March 2014 the contract is to (g) are met in the case of the lump sum, and cancelled. (c) as at the end of 5 October 2015 it is the case that the (7) The provision that may be made under subsection (5) lump sum is to be taken as having been an includes provision altering the effect of amendments made by the unauthorised member payment. Finance Act 2014.” (3) For the purposes of reportable event 1, and regulation 3 so 14 In section 282(1) and (2) of FA 2004 (making of regulations far as applying by virtue of that event, the lump sum is treated as and orders) for “Board of Inland Revenue” substitute having been paid— “Commissioners for Her Majesty’s Revenue and Customs”. (a) by the receiving scheme and not by the paying scheme, Commencement and 15 The amendments made by paragraphs 1 to 5, 6(1), 7 to 10, (b) on 6 October 2015.” 11(1) and 12(1) to (4) of this Schedule are to be treated as having (2) The amendment made by sub-paragraph (1) is to be treated come into force on 19 March 2014.”—(Mr Gauke.) as having been made by the Commissioners for Her Majesty’s Brought up, and added to the Bill. Revenue and Customs under such of the powers cited in the instrument containing the Regulations as are applicable. Scheme sanction charges New Clause 10 12 (1) In section 239(3) of FA 2004 (cases where person other than scheme administrator is liable for a scheme sanction REVIEW OF REFORM TO THE ANNUAL INVESTMENT charge)— ALLOWANCE (a) after “But” insert “— “(1) The Chancellor of the Exchequer shall, within three (a) ”, and months of the passing of this Act, undertake a review of the impact on business investment of changes to section 51A of the (b) at the end insert “, and Capital Allowances Act 2001 made by Finance Act 2011. (b) in the case of a payment of a lump sum to a member where the conditions in paragraphs (2) The Chancellor of the Exchequer must publish the report (Catherine 1(1)(b) and (d) and 1B(2)(a) to (g) of Schedule 29 of the review and lay the report before the House.”— McKinnell.) are met, the person liable to the scheme sanction charge so far as relating to any part of the lump Brought up, and read the First time. sum within the permitted maximum is the scheme administrator of the registered pension scheme to 2.15 pm which the transfer mentioned in paragraph 1B(2)(g) of Schedule 29 is made.” Catherine McKinnell (Newcastle upon Tyne North) (2) In section 239 of FA 2004 (scheme sanction charges) after (Lab): I beg to move, That the clause be read a Second subsection (3) insert— time. 933 Finance Bill2 JULY 2014 Finance Bill 934

New clause 10 takes us back to 2010 and the heady reverse it”—but it had catastrophic implications. As the first few months of this Government. It takes us back to hon. Gentleman’s question indicates, they had to think a time when the coalition, having inherited a growing again. economy from the Labour Government, choked that recovery off by adopting an anti-growth, short-termist, Sheila Gilmore: I am sure that my hon. Friend, like short-sighted approach to supporting business and jobs. me, welcomes the Government’s conversion and the As hon. Members will be aware, one of the Chancellor’s way in which they have changed their policy. However, first moves in government was to announce in the June it is reasonable for us to question why the original 2010 Budget that he was cutting Labour’s annual investment decision was taken. allowance. The new clause asks the Government to undertake a proper review of the impact on business investment of that terrible decision. We need to learn Catherine McKinnell: We can only speculate on what the lessons from that dreadful mistake. on earth was going through the Chancellor’s mind when he slashed an incentive that was clearly supporting Before we consider the new clause in more detail I those businesses in the very manufacturing industries want to remind hon. Members of the background to that he claims to champion in making long-term this important issue. The annual investment allowance investments, and creating and safeguard the jobs that was announced as part of the 2007 Budget by the we need so desperately. former Chancellor of the Exchequer, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath Mr Gauke: This policy was part of a package that (Mr Brown). It was introduced as part of a package of included a significant reduction in corporation tax rates, reforms to enhance Britain’s international competitiveness, which more than offset any impact on investment from encourage investment and promote innovation and growth. the changes to the annual investment allowance. The The new allowance replaced first-year capital allowances Labour party has made it clear that it would increase and meant that from April 2008, under the Labour corporation tax. This week, it has set out its test, which Government, businesses were able to offset up to 100% is to have the lowest corporation tax rate in the G7. of expenditure on general plant and machinery in any That would enable a future Labour Government to given year against taxable profits, up to a limit of increase corporation tax to 26%. Will she rule out a £50,000. Labour Government increasing corporation tax to 26%? We recognised the value of this important allowance to companies up and down the country in supporting Catherine McKinnell: Once again, Conservative them to invest for the long term, and in helping them to Members, and indeed the Minister, want to brush over create and safeguard jobs. That is why Labour took the this inconvenient part of their so-called plan. They decision to double it as part of a series of measures clearly made a bad decision in 2010. The purpose of the announced in the March 2010 Budget—in order to new clause is to show that. If the reduction in the “support start-ups and small and medium sized annual investment allowance was offset by the reduction enterprises…to position the UK as a leading centre for in corporation tax, as the Minister argues, why did they research and innovation, and to ensure that the UK is revisit the decision and increase the allowance again? equipped with skills for growth and the infrastructure it That would not have been necessary if their only plan needs to be successful in a low-carbon economy.”The for supporting business up and down the country, which March 2010 Red Book stated: was to reduce corporation tax, had been successful. We supported that plan, but it was not enough on its own to “In order to provide further cash flow support and an incentive offset the damaging uncertainty created by slashing the to increase business investment, the Government will increase the threshold of the AIA to £100,000 for expenditure incurred from annual investment allowance from £100,000 to £25,000 April 2010.” in one fell swoop. That announcement was hugely welcome to businesses up and down the country. Charlie Elphicke: Will the hon. Lady rule out an increase in corporation tax under the next Labour Government, should one ever be elected—yes or no? Charlie Elphicke (Dover) (Con): Will the hon. Lady say what the allowance is today—is it £100,000 or has it Mr Geoffrey Robinson (Coventry North West) (Lab): gone up? We are not discussing that.

Catherine McKinnell: We are still at 2010; we will get Catherine McKinnell: My hon. Friend makes a fair to the present day in due course, but the hon. Gentleman point: that is not what we are discussing. However, I am seems to miss the point somewhat. Obviously, the interested to know whether the hon. Gentleman will Conservative party would like to airbrush out the unpleasant rule out slashing the annual investment allowance with blip in 2010, when it almost abolished the investment no notice if the Conservatives are re-elected in 2015. allowance, and all the impacts that flowed from that, Will he confirm that—yes or no? which were evident from the fall in business investment. That is the point that our new clause reinforces. The Charlie Elphicke: I hate to disappoint the hon. Lady, decision taken at that time was terrible. I do not know but I am not part of the Government. It is not for me, a what the thinking was behind it—whether it had been Back Bencher, to rule anything in or out. I am proud planned for a long time by the Conservatives while they that the Government have set the annual investment were in opposition, or whether it was simply a case of allowance at £250,000 and have massively reduced spitefully thinking, “It’s a Labour policy, so we will corporation tax. That is really great for business. 935 Finance Bill2 JULY 2014 Finance Bill 936

Catherine McKinnell: The hon. Gentleman is obviously Mr Gauke: Our plans on the annual investment allowance not able to rule in or rule out any slashing of the annual are clear: this is a temporary increase until December investment allowance, but we have had so much chopping 2015. If the hon. Lady disagrees with that and has a and changing that there is major uncertainty over whether different policy, I would be grateful to hear what it is. the Chancellor and other Conservative Ministers have a She talks about certainty. She has repeated the position sensible approach to investment. It is as though they do that her party has taken this week, which is that this not understand that chopping and changing—slashing country should have the lowest corporation tax rate in the annual investment allowance from £100,000 to £25,000 the G7. The second lowest corporation tax rate in the and then increasing it again—is the worst approach if G7 is 26.5% in Canada. That would allow a future we are trying to encourage business investment in this Labour Government to increase corporation tax not country. That is the kind of uncertainty that we have just from 20% to 21%, but up to 26%. Is that the policy seen under this Government. Although the hon. Gentleman of the Labour party? cannot rule anything in or out, I am interested to hear whether the Minister will rule out any further chopping Madam Deputy Speaker (Dame Dawn Primarolo): or changing on this policy. Order. As interesting as some Members might find the debate on corporation tax and the future policy, that is Gordon Birtwistle (Burnley) (LD): I am in favour of not the subject of the new clause that we are discussing. capital allowances. I had an engineering company, and Although the subject is linked to the question of allowances, we believed that the Government should support successful it is not the substantive point. I would be grateful if engineering and manufacturing companies. Does the Members addressed their remarks mainly to the new hon. Lady accept that a capital allowance of £50,000 on clause. They may use supporting arguments, but they its own is not enough to encourage growth in the must not allow those supporting arguments to become economy? Under the Labour Government, from 2007 the only things that are debated. onwards, GDP went down by 7% in the manufacturing sector, and probably by even more in some manufacturing Catherine McKinnell: Thank you, Madam Deputy sectors. I accept that we should have capital allowances, Speaker, for your sage guidance. I agree that the Minister but they should be linked to other things. Does she appears to be diverting the discussion away from the agree with that? issue of concern: the Government’s approach to the Catherine McKinnell: That is very much the point annual investment allowance, which is the subject of that I was making and that we have made all along. We the new clause. It calls for a review of the impact of the had a financial crisis in 2008, and the Labour Government Government’s decisions on the allowance. He seems did everything that could be done in those difficult very reluctant to address that issue. times to support businesses in order to maintain investment levels, safeguard jobs and lay the foundations for the Mr Robinson: Strictly on the annual investment allowance, jobs of the future. That is why Labour decided to bring is my hon. Friend not absolutely on the button when in the investment allowance, and then to double it in the she says that the question under discussion is not Budget in March 2010. We knew that businesses needed corporation tax or anything of the kind, but rather the certainty at that difficult time in the economic cycle to AIA and the strictly temporary nature of the Government’s make investment decisions. That proved successful. increase and extension of it? Will the Government The U-turn by this Government was not quick enough. commit to extending the AIA beyond the election, or is We called for it in every Finance Bill. Their eventual this just another election ploy? U-turn proved that the annual investment allowance was a successful policy, because they recognised that it 2.30 pm needed to be reinstated. We have had these debates many times. We have supported the reductions in the Catherine McKinnell: My hon. Friend raises an important corporation tax rate as part of a package of measures point, and that is the first time we have heard a Government to support investment, jobs and growth. Unfortunately, Minister confirm that this is a temporary measure. I the Government thought that corporation tax rates think that reinforces the argument in the new clause, would do the job on their own. That is why they decided which is that we should analyse the impact of the to slash the investment allowance, and to put all their various changes to the AIA, year on year—it has gone eggs in one basket—the corporation tax basket. We up, down and all around—on businesses and their have made it clear that we support a competitive rate investment decisions. Hopefully, that will inform any within the G7 and the current rate, in order to provide decisions on the allowance, whether by a future Conservative the competitiveness that will create jobs and growth. Government or, as is more likely, a future Labour The hon. Member for Burnley (Gordon Birtwistle) is Government. right that that has to be part of a package of measures. Charlie Elphicke: The temporary nature of the investment One key issue that businesses always raise is certainty. allowance is clearly set out in a press release issued on 1 In chopping and changing this policy, the Government January 2013, and I am staggered that the hon. Lady have undermined the certainty that is needed to give says this is the first time she knew about it. The Labour businesses the confidence to invest for the future. party ought to brief itself better than that. Mr Gauke: Will the hon. Lady give way? Catherine McKinnell: Well, it simply reinforces the Catherine McKinnell: I will give way again, but I hope impression—in fact, the reality—that the Government that it is in order for the Minister to confirm that the are perfectly well disposed to chopping and changing Tory party will rule out any further chopping and their policy and approach to the annual investment changing on the annual investment allowance. allowance. That is the point we are trying to make, and 937 Finance Bill2 JULY 2014 Finance Bill 938 the point behind the new clause. The Government should In evidence to the Treasury Committee on the June stop and take a look. I have heard from businesses that 2010 Budget, John Whiting, then tax policy director at they would rather have no investment allowance than the Chartered Institute of Taxation and now director of have chopping and changing of the AIA, because that the Office of Tax Simplification, expressed his concern can be destabilising for investment decisions. They would that the measure would particularly hit medium-sized rather have a more stable approach to policy making firms. than that being displayed by the Government. The June 2010 Budget cut the annual investment Returning to the history of the investment allowance, allowance to £25,000 from April 2012 on the grounds the previous Labour Government doubled it, recognising that, in the Chancellor’s view, only 5% of firms would its importance to giving businesses confidence to invest be affected. We then had two autumn statements and for the future, and to be supported within the tax two Budgets, at which we put these arguments to the system to make such decisions. What happened after it Government, before the Chancellor announced in the was doubled? We know that, in his infinite wisdom, the autumn statement 2012, again to great fanfare, that he Chancellor decided as part of his emergency Budget—or would “temporarily” increase the AIA—the one he had so he called it—in June 2010, to announce to great just cut to £25,000—to £250,000 from January 2013. fanfare that the annual investment allowance would be What happened to business investment between the cut. However, it would not just be cut. At a time when June 2010 Budget and the 2012 autumn statement that the economy was growing after the financial crisis, the drove the Chancellor to move from feeling perfectly Chancellor decided that the best way to secure the comfortable in slashing the annual investment allowance, recovery and back British businesses and jobs was to because more than 95% of businesses would be unaffected, slash the annual investment allowance to just £25,000 to announcing in 2012 a significant increase in the AIA from April 2012, as in the Finance Act 2011. He sought to £250,000? Let us cast our minds back to what the to reassure us that the impact of that reduction from Chancellor said when he announced that decision in £100,000 to £25,000 would be limited because: autumn 2012. He said he was increasing the annual “Over 95% of businesses will continue to have all their qualifying investment allowance because: plant and machinery expenditure fully covered by this relief.”—[Official Report, 22 June 2010; Vol. 512, c. 175.] “It is a huge boost to all those who run a business and who aspire to grow, expand and create jobs.”—[Official Report, 5 December In other words, the Chancellor believed in June 2010 2012; Vol. 554, c. 881.] that only 5% of firms were receiving any benefit from the annual investment allowance. HMRC’s tax information What exactly does that say about the Chancellor’s cavalier note at the time stated: approach back in 2010? Surely the complete opposite— [Interruption.] I see Government Members rolling their “Over 95 per cent of businesses are expected to be unaffected eyes, but unfortunately they need to face the truth. as any qualifying capital expenditure will be fully covered by the new level of AIA (£25,000).” It went on to clarify that Dr Thérèse Coffey: The hon. Lady is right—I should not roll my eyes; I should get up and engage in debate. “between 100,000 and 200,000 businesses will have annual capital expenditure of over £25,000”. We know about the note left by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne): “There is no Therefore, in the Chancellor’s terms, only 5% of businesses money left”. Since then, the Office for National Statistics would have been affected by his decision to slash the has confirmed that the recession was even deeper than allowance. In anyone else’s terms, however, that is somewhere expected. The Government made choices at the time, between 100,000 and 200,000 firms. That is a significant and there was a clear intention to start to reduce the number of businesses that are employing—or potentially rate of corporation tax in the grand fiscal regime. employing—a significant number of people, while also Nevertheless, there has certainly been a successful indirectly supporting employment through their supply demonstration of industrial strategy, and many more chains. That seems to ring true of the Government’s millions of jobs are now being created. It is right that approach because when they speak about being pro- we put our backing behind reinvestment in capital business, they seem to forget the many businesses out allowances. there that do not fit the Tory vision of what businesses are, and it seems that those 100,000 or 200,000 firms did not feature on the Chancellor’s radar. Catherine McKinnell: It is a little desperate to try to Let us remind ourselves briefly of some of the views justify what is proven to have been a flawed decision-making expressed at the time about the decision the Chancellor process back in 2010. By the Chancellor’s own accounts, took. The independent Institute for Fiscal Studies the measure was a huge blow to all those businesses that commented that losers from the cut aspire to grow, invest for the long term and create jobs. “would be those firms with capital intensive operations—with long lasting equipment and machinery—that currently benefit Sheila Gilmore: Does my hon. Friend agree that it most from the capital allowances. While this is likely to apply to seems odd to suggest that the chopping and changing more firms in the manufacturing and transport sectors, it may was due to a sudden discovery that the economy was also be true for some capital intensive service sector firms.” improving? The decision, in effect, to reintroduce the A senior economist at the manufacturers association, allowance was taken in 2012, when growth was extremely the Engineering Employers Federation, said that financing low. It would appear from these plans that, having cuts to corporation tax by declared an intention to increase the allowance briefly “cuts to investment allowances will be a heavy price to pay, to £500,000 for one year only, it could drop down to especially for smaller companies. It might be a positive signal for £25,000 in January 2016. What kind of investment large companies, but not for their suppliers.” planning are companies able to do on that basis? 939 Finance Bill2 JULY 2014 Finance Bill 940

Catherine McKinnell: As ever, my hon. Friend makes 2.45 pm an insightful intervention and raises the key question. The Government need to take a step back and look at Gordon Birtwistle: The hon. Lady is being very generous. the impact their decision-making is having on businesses Does she accept that if a company is not making a and their ability to make the long-term decisions necessary profit, it will not have the capital resources to purchase to secure the jobs, economic growth and the rebalancing the assets against which they can get the capital allowance? of the economy that we all wish to see. What is the point of the Chancellor making it available if companies, which are coming out of recession and The Chancellor and his Treasury Ministers cannot really struggling with cash flow, will not be able to find have it both ways: either the annual investment allowance the cash to buy the assets to claim the allowance against? supports growth and the creation of jobs or it does not. Surely it is better saving it until companies are beginning Labour welcomed the decision to increase the allowance to make cash profits. They can then buy the assets to from January 2013 to £250,000, because we know it is improve the profitability of the company and claim the important to support business growth and to foster asset back. long-term investment. However, we are concerned—this is why we have tabled new clause 10—about the Chancellor’s Catherine McKinnell: I think the hon. Gentleman is erratic and, frankly, bizarre approach to this important rather confused. The purpose of the allowance is to issue. Slashing the allowance from £100,000 to £25,000 enable companies to invest and to take advantage of tax and then announcing that they would temporarily increase support. If they are not able to take advantage of the it to £250,000, all in the space of just two and a half annual investment allowance, there is no cost to the years, does not, and did not, inspire confidence in the taxpayer, so why chop and change the regime and create Government’s long-term approach and strategy for uncertainty? Businesses need, from one year to the next, supporting growth and investment. to be able to project and say, “This year we cannot afford to make an investment, but next year we can afford to invest so much in plant and machinery and we Gordon Birtwistle: As I said, I fully support any will be able to offset so much of that against tax.” The funding that goes into capital allowances, but we have Government, however, have been chopping and changing to remember that in 2010 companies were not making the allowance. Companies cannot make long-term much profit. They were mainly on their knees from the investment decisions from one year to the next without recession that had been created previously. Companies knowing exactly what their tax position will be. can only set their allowance against profit, so if they are The hon. Gentleman is actually making a very good not making a profit there is no allowance to claim. The argument for new clause 10 and I will be very surprised Inland Revenue was probably right to say that only 5% if he does not support us in the Lobby this afternoon. of companies were taking it up, because we were coming He speculates on companies that may or may not be out of recession. A lot more companies are now busy able to invest and take advantage of the annual investment working hard and making a profit, so the capital allowance allowance. Our new clause asks the Government to is more beneficial to them as they are getting it back undertake a proper review of the impact of slashing the against the tax that they are paying now that they were annual investment allowance and then increasing it on a not paying in 2010. temporary basis. Many businesses have said to me—I am sure they have said it to the hon. Gentleman—that it is that uncertainty that creates the difficult environment for businesses to invest. They do not know, from one Catherine McKinnell: I know the hon. Gentleman’s year to the next, what any tax allowance might be. We interest in this issue is sincere. The Treasury may or may want to get to the bottom of that, so the mistakes the not have been right in its assessment that only 5% of Chancellor made in 2010 will not be repeated. businesses would be affected, but that is still 100,000 to 200,000 businesses—not to mention the supply chain. Andrew Gotch of the Chartered Institute of Taxation The new clause seeks an assessment of the impact of commented on the increase announced at the 2012 the decision taken at the time. How much of an impact autumn statement: did it have? “This is a very generous increase that will be warmly welcomed by many small businesses...However, we note that it is only a The hon. Gentleman says that, as we come out of temporary increase. Business would really welcome some stability recession, some businesses will be making more profit in this area. In recent years, the allowance has fallen from £100,000 and will therefore be able to make more use of the to £25,000. Now it will rise to £250,000 before, apparently, coming back to £25,000. Businesses like certainty above everything annual investment allowance. That was exactly the point and the chopping and changing of the AIA has been a problem”. of bringing in the allowance in 2010. We had been through a global financial crisis and we knew that many Hon. Members do not need to take it from me, but from businesses would be very uneasy about making the sort a whole range of sources who have raised this as a of long-term financial investments, on which they would concern. The Institute of Chartered Accountants in not see a return immediately, that are necessary to England and Wales welcomed the increase to the allowance, create jobs. The intention of introducing and doubling but said: the allowance in 2010 was to give businesses the confidence “We are less enthusiastic about the frequency of the change to to invest. We know that it was welcomed by business at this amount.” the time and we know that this Government’s decision Let me be clear, the Opposition welcomed the 2013 to slash it to £25,000 was abhorrent to many businesses, increase in the annual investment allowance to £250,000, particularly in the manufacturing sector. They needed but we share the very serious concerns about the extremely the support and confidence to make the investments complex manner in which that was implemented. As that we need to start seeing the benefits of now. hon. Members may be aware, many organisations and 941 Finance Bill2 JULY 2014 Finance Bill 942 individual businesses raised concerns that the increase by now. Instead, it has grown by just 4.6%—far slower to £250,000 would run from January 2013 to January than in the United States or Germany. Indeed, GDP 2015, rather than over companies’ usual accounting growth this year is still expected to be lower than the periods, making it problematic for firms, particularly Office for Budget Responsibility forecast in 2010. small ones, to administer. Indeed, as the Association of On Monday, my right hon. Friend the shadow Chancellor Taxation Technicians neatly put it at the time, made an important speech about Labour’s approach to “the chopping and changing of capital allowances will lead to developing a business tax system that promotes long-term error, confusion and higher professional costs for small businesses.” investment, supports enterprise and innovation and, The Opposition also welcomed the Chancellor’s most importantly, provides a stable and predictable announcement in Budget 2014 to extend the period of policy framework for business, which is founded on the temporary increase to 31 December 2015, with the fairness. Yesterday, my right hon. Friend, the Leader of allowance being temporarily increased again to £500,000 the Opposition set out how a future Labour Government from April 2014. The straight fact, however, is that the will mend Britain’s fractured economy and develop a Chancellor and his Government have tied themselves in genuinely long-term approach to backing growth in knots over this vital issue. Just last year, when we every part of this country to ensure rising prosperity for considered in Committee what is now the Finance all. Act 2013, the then Economic Secretary to the Treasury, It is this long-term approach to growth and backing the Secretary of State for Culture, Media and Sport, the Britain’s business and jobs that has been so lacking right hon. Member for Bromsgrove (Sajid Javid), explained from this Government, and nothing illustrates it better why the increase in the allowance to £250,000 from than their shambolic and chaotic approach to the annual January 2013 would be a temporary measure only. He investment allowance since 2010. For that reason, I urge said: hon. and right hon. Members to back new clause 10 this “We recognise that the change follows quite soon after the afternoon, to ensure that the Government understand decrease in the annual investment allowance to £25,000 that was the impact of the Chancellor’s dreadful decision making announced in the June 2010 Budget and implemented in the back in 2010, and that they do not make the same Finance Act 2011, which took effect from April 2012. The mistakes ever again. Government’s central position has not changed and remains that, in general, a lower corporation tax rate with fewer reliefs and fewer allowances will provide the best incentives for business Charlie Elphicke: This new clause highlights two problems investment, with the fewest possible distortions. That is why we relating to its proposers and their party. The first is that have announced a further reduction in the main rate of corporation they are stuck in the past. They have talked about the tax, as we discussed earlier, from April 2015 and is also why the past and completely failed to set out their case for the current 10-fold increase in the maximum annual investment allowance future and the kind of Britain they would like to create. is time limited rather than permanent.”––[Official Report, Finance They just want to talk about something that happened Public Bill Committee, 16 May 2013; c. 145.] previously. This is another one of the instrumentalised A matter of months later, at Budget 2014, the Chancellor nuggets of attack, policy and press strategies referred to decided to about-turn once again, and extended and by Labour’s head of policy. temporarily increased the annual investment allowance further—before, presumably, he intended it to return to Catherine McKinnell: Let me correct the hon. Gentleman. £25,000 from 1 January 2016. As the Chartered Institute He seems not to have been paying attention to my final of Taxation put it so well, the one thing businesses need comments, which were very much about Labour’s strategy most, particularly in challenging economic times, is for boosting economic growth and sustaining long-term certainty. They need long-term stability and predictability economic stability for the future. The purpose of new to give them the confidence to invest, to make plans for clause 10 is to reflect back on past mistakes, of which the future and to take on more staff. What they have got we believe the Government need to take account. from this Government, however, is a continual chopping and changing, with U-turn after U-turn and what seems Charlie Elphicke: Let us be clear what we are talking to be a complete lack of strategic thinking. about. Labour and the hon. Lady want to spend two What we need to hear from the Minister today is hours of the time available to debate this Bill talking confirmation that the Treasury and his Government about a period of nine months that happened nearly have taken seriously the impact of their decisions on two years ago. In 2008, Labour introduced the annual business confidence, investment and jobs. We need to investment allowance—an interesting point to which I know that they have learned from the Chancellor’s shall return. It was set first at £50,000; then raised to mistake back in 2010, and that they will properly review £100,000; in April 2012, it was reduced to £25,000, its impact to ensure that the same mistake is not made which lasted nine months until January 2013, when it again. went up to £250,000—a far greater amount than under the legacy left by Labour. What assessment has the Minister made of the number of businesses that were not able to grow after the annual rose— investment allowance was slashed? How many jobs Catherine McKinnell could have been created during the last three years of flatlining growth while we have undergone the slowest Charlie Elphicke: Let me develop my point, and I recovery for 100 years? How many households could shall give way again in a few moments. have been better off as a consequence, but will find It is important and instructive that this Government themselves worse off in 2015 than they were back in have incentivised investment. What the hon. Member 2010? Let us not forget that in 2010, back when the for Newcastle upon Tyne North (Catherine McKinnell) Chancellor was slashing the annual investment allowance, did not develop during the debate is what underpins the he said that the economy would have grown by 9.25% whole issue of investment allowances and capital allowances. 943 Finance Bill2 JULY 2014 Finance Bill 944

[Charlie Elphicke] and the annual investment allowance should all be reduced. It was clear that a reduction in corporation tax Why we need capital allowances takes us to the whole was being funded by a reduction in capital allowances. issue of business investment. The challenge we all face, Less tax, less reliefs: that was a very classic, sensible, and have done for a very long time, is the rising corporate free-market, pro-growth, pro-business approach. Lowering cash balances—about £750 billion—and the desire of the headline rate reduced the complexity of the tax us all to see that money spent. system. Let us look at the Government’s policy in this area. I do not think that the hon. Member for Newcastle They initially announced a reduction to £25,000 from upon Tyne North (Catherine McKinnell) is right to April 2012. The hon. Lady’s first argument was that look back into the past; I think that she would do better that created some form of uncertainty. The traditional to look into the future. Rather than viewing one small argument goes, “We need to give businesses time to plan nugget of Government policy in isolation, whether ahead; otherwise, we create uncertainty.”Well, the reduction instrumentalised or not, we should look across the piece was part of the June 2010 Budget, and it was about two to establish what was really going on. I hope that, as years after the policy was announced before it came recovery builds, we shall see more business investment, into effect, so I do not think that the certainty argument and that the £750 billion on which companies are succeeds. The Government increased the amount currently sitting will go into the economy to drive our substantially after only a short period of time, highlighting growth agenda. their concern to ensure investment. Mr Robinson: I am very pleased to be able to contribute The second problem I have with the hon. Lady’s case to a debate whose purpose we seem to lose sight of from is that it is high risk to consider a policy on setting an time to time. The purpose of the new clause is to review investment allowance or a capital allowance on its own, the reforms of the annual investment allowance that as the Minister argued in an intervention. It is instructive have taken place since the Government came to power, that when Labour introduced the investment allowance, and to see what lessons—in very simple terms—can be they funded the initial £50,000 by reducing general learnt from them. I do not see why the hon. Member for capital allowances from 25% to 20%. All policies need Redcar (Ian Swales) should not see fit to join us in the to be seen in a package taken together; they cannot Lobby when we vote on the new clause, as I understand properly be considered and debated unless the other we shall do in due course. pieces in the jigsaw are taken into account. No doubt the Exchequer Secretary will recall our Stewart Hosie: That argument is fine as far as it goes, Committee discussions in 2010, which were mentioned but in the space of seven years, we went from the by the hon. Member for Dover (Charlie Elphicke). In abolition of the industrial buildings allowance to having 2010 we were discussing measures to be introduced in an annual investment allowance of £100,000, which was 2012, and while we considered that to be an appropriate then reduced to £25,000 followed by the very welcome period in which the Government could introduce the increase to £250,000 for two years—and then there was changes that they wanted to make, we strongly opposed another change. Of course making that many changes those changes. I think that we were sensible to do so, in such a short period of time is going to have an impact and I think that we have been proved right. on planning for investment. Surely the hon. Gentleman It has proved to be a long road to Damascus for the can understand that. Government. Many arguments can be made for a broadly neutral approach to taxation matters, and I believe that Charlie Elphicke: The hon. Gentleman reinforces my that is a long-standing aim of the Treasury. Indeed, we point, which is that under Labour there were substantial were very much on that tack ourselves when we came to reductions and changes to capital allowances that were office. However, the realities of government, and the part of the 2008 package. As I said, the main rate of realities of the Government’s own Budget of 2010, capital allowances was reduced from 25% to 20%, followed should have informed them that they could not be so by the creation of what was effectively the old first-year purist in their theory as to ignore the fact that, during allowance—initially at £50,000. A number of other the five or so years to which the Budget looked ahead, changes went on in parallel, including the phased withdrawal they would require a massive increase in investment in of the industrial and agricultural buildings allowances—IBA order to sustain the increased levels of growth that they and ABA. We need to look at all policies in context and wanted and the whole country needed, and that to think about what else was going on, and that includes secure that increased investment it would be necessary, the changes that the Government announced in the in turn, to generate a massive, unprecedented level of Budget of June 2010. No policy can be viewed in a exports. We made that case ourselves, but it did not vacuum. carry the day. I believe that it was the then Exchequer Secretary who said, “We do not really see what is wrong with 3pm companies just investing their depreciation levels.” I The decision to cut the annual investment allowance pointed out to him that that would barely replace the from £100,000 to £25,000 from 2012 was made as part assets in real terms, and that it was not the way in which of a general, much wider reform of corporation tax, to generate an increase in growth, far less the increase in which was set out capably at the time by Stuart Adam productivity on which the exports could be based. Heaven of the Institute for Fiscal Studies in his slides presentation knows, we need the productivity now more than ever, “Business and capital taxes”. Writing about corporation given that sterling is relatively high. In certain markets tax reform, he said that the headline rate should be cut we are up against considerable competitive pressures, from 28% to 24% over four years, and that the small which we can only fight with real productivity, which is companies rate, the allowance for plant and machinery, dependent on investment. 945 Finance Bill2 JULY 2014 Finance Bill 946

We made the case for some element of discrimination has declined under this Government as a proportion of in relation to investment, and that remains the Labour GDP—which it probably has not, because GDP has party’s preference. While, as the hon. Member for Dover still not reached the level at which it stood back in 2007. said, there may have been—and may still be, for all we Generally speaking, however, manufacturing has been know—massive cash hoards among the bigger companies on a long-term slide, arguably since 1870 and certainly in the economy, much of the investment that we need from the 1960s onwards, irrespective of which party has must come from the small and medium-sized enterprises, been in power. which I do not think are so rich in cash, especially the small-company element. Although the relatively small Ian Swales: Will the hon. Gentleman give way? sum of £100,000 was not to be sneezed at, we welcome the Government’s conversion to £500,000. Why that is Mr Robinson: I will come to the hon. Gentleman, if to last only until the election I cannot imagine, unless it he will just be patient. is due to some very short-term electoral consideration Inherent in the problem is the disinclination of the on the Government’s part, which I do not think is British economy as a whole to invest. Germany can be realistic even in my wildest dreams. I am slightly taken as a paragon of virtue in this respect. The Germans reminded—although I must not digress—of our recent save more than us, and they generally invest more. They debate on the Office for Budget Responsibility, when, have better plant and equipment and higher productivity. for purely party-political reasons, the Government refused They invest more in plant and equipment, but also in to extend the OBR’s remit to an audit. industrial relations. Their industrial work force is better Be that as it may, we are discussing something else equipped technically, from the top to the bottom, and now, namely the fact that the Government will not tell better physically equipped with modern plant and us whether they will maintain the same level of AIA machinery and computers. beyond the election—which ought to be possible—and Why is that? No one knows. There is a deep-lying for how long it could be maintained beyond the election. cultural factor. However, it seems to me that if we are to After all, the Government have plans. They have a offset it, the more we can afford to encourage investment forward look, and in that forward look must feature the the better, as long as that is intelligently done. I think proposed level of AIA. They might have to disentangle that the dangers of misapplication can be much exaggerated, it from the accounts in due course, but a simple statement and that the loss of potential output through increased from the Exchequer Secretary would set a lot of minds productivity can be underestimated. at rest, and provide the element of forward certainty If the hon. Member for Redcar still wants me to give that is so important to small and medium-sized companies, way to him, I will do so. whose investment programmes often run over several years. Smaller companies in particular may not be able Ian Swales: I have enormous respect for the hon. to afford a massive investment all at once. As I am sure Gentleman’s experience in this regard. He has spoken of we shall hear later from the hon. Member for Dundee the importance of long-term certainty. I struggled in East (Stewart Hosie), one advantage of the annual vain to find in the major speech made by his leader investment allowance relates to the setting off of past yesterday any mention of this issue, or indeed any losses against future profits, and there are other instances mention of manufacturing. I wonder what he is saying in which they can be most helpful. I will not go into to businesses that may be concerned about the potential them, however, because I know that the hon. Gentleman for a future Labour Government. wants to do so. Let me return to the question of why the Government’s Mr Robinson: I wish I had not given way, because approach is still so short-term. I must tell my hon. when I do we always get into this tiresome point. The Friend the Member for Newcastle upon Tyne North Government seek to find refuge by going back nearly (Catherine McKinnell) that my only reservation about five years. The Minister has been at the Treasury for the review is that the Government have chopped and four and a half years now, and his party has been in changed so much, so quickly and, in fact, so excessively government for that long. They own the situation now, over the past four years that I wonder whether anyone although I know they do not want to, as all they want to would get any meaningful information out of it. I fear do is airbrush the last four and a half years out of not. However, we should be happy about the Government’s existence—they did that again today—and concentrate apparent damascene conversion. At least they have on where they are now as if they took power just six come round to the idea of annual investment allowances months ago. When we are having a narrow debate on in principle, particularly for smaller companies. the question of our having a review of a particular failed policy of the Government that is relevant to this Ian Swales: Will the hon. Gentleman give way? issue, the hon. Gentleman wants to bring in the whole of Labour party policy. That is tiresome and irrelevant Mr Robinson: I will in a moment. and a waste of this House’s time. I am sure that when We may well see some element of discrimination in the Minister replies to the debate, he will not get into favour of smaller companies in the pattern. We do not that. want too much discrimination, because it could lead to We are discussing a very important point. If there is complication, but I nevertheless feel that the Government genuine change introducing some element of discrimination should be thinking along those lines, which they probably in favour of investment for the reasons I have given, we are. No doubt the Exchequer Secretary will tell us when will welcome that. Indeed, we welcome the commitment he winds up the debate. However, at present we have a on £250,000 and £500,000. We will welcome it doubly if short-term view of what is essentially a long-term problem. the Minister will extend that commitment beyond the It is not that the level of investment has fallen under this election, to put it bluntly to him. I do not know what Government or the last Government, or that manufacturing our policy on that will be—or whether we will go into 947 Finance Bill2 JULY 2014 Finance Bill 948

[Mr Robinson] can have a capital allowance against a new machine that you want to buy, but we are not prepared to give you the such detail in the manifesto—but I will certainly support confidence to do that because we are going to increase such a proposal, both in principle now and as party our taxes so you aren’t going to make any money—so policy if it finds such favour. The Government, however, why would you really want to invest in the UK?” We can do something about this now. Will the Minister tell need to create an environment whereby companies will us whether there is a change of policy and a change of say, “We’ll invest in the UK because the tax regime in principle on their part? If so, why will they not maintain the UK is good. We’ll invest in the UK because we feel the amount of the allowance and achieve the levels of that the training programmes in the UK will train our investment, productivity and exports on which our future young people to do the jobs. We’ll invest in the UK depend? because of the apprenticeship programme that is going ahead, and because we know we will have the future Gordon Birtwistle: As a businessman, I had an work force to deliver products that we will be able to sell engineering company that required a lot of investment. around the world.” We had to invest heavily to ensure that we were competitive in the markets of the late 1990s and early 2000s. To me, Dr Whiteford: The hon. Gentleman is right to say the most important things for investment are confidence people will make investment decisions on a range of and cash. If companies have the confidence to invest, issues, but does he agree that stability is a very important and the cash to invest from the profits they are making, component of that? they will invest. The capital allowances that the Government allow them to have against their profits is very helpful Gordon Birtwistle: Absolutely: stability, confidence, and it does persuade—it persuaded me on a number of cash, training programmes, and an economic strategy occasions to buy some very expensive computer-controlled for the future are vital for companies to decide to invest. engineering machines. But when there is no confidence and when there is very little cash around, not many I agree with, and certainly do not have any real companies think about how much capital allowance objections to, the Opposition proposal, but it is not they will get if they invest. linked to anything. If the Labour party wants to put forward a new economic or industrial strategy that links The country was in a mess in 2007. There was a to this, I would be the first to support it, but this is just reduction of over 7% in GDP in 2007-08, so nobody one element of a major programme that needs to be put was confident enough to take the step to invest. The in place. confidence had to be put back into the industries to persuade managing directors to invest. We know that billions of pounds were stored in banks waiting to be Ian Swales: I pay tribute to my hon. Friend’s experience invested, but the confidence was not there to invest. on this issue, and his campaigning, which lay at the heart of the increase to £250,000. Does he agree that tax If Members look at Hansard, they will see that the allowances alone do not prevent investment, and in fact Chancellor complimented me for putting pressure on capital allowances are a time-shift—in other words, one him to bring back capital allowances, and my hon. still gets the tax allowance, but one just gets it later? Friend the Minister will remember the meetings I had when I was the Parliamentary Private Secretary to the Chief Secretary to the Treasury. At every meeting we Gordon Birtwistle: My hon. Friend is right. We must had I was constantly on to him about the need to try to remember that claiming a capital allowance on a profit give confidence to companies, to persuade them to is time-lagged, because companies will have worked for invest in the future of manufacturing in the UK. The a full year and will have produced products at, it is to be answer came back, “There is no confidence at the hoped, a profit, and it then takes a full year for the moment, but we hope there will be soon, but we have all accountants to go through the profits, so that is two this money stashed away in banks, which is moderately years from the start, and at the end of the second year safe.” It was not totally safe, because the banks were not the company knows from its audited accounts how out of the mess they were in, but companies felt it was much profit it has made and how much it can invest. safer there, rather than invested in capital plant in This does not all happen on day one or even at the end manufacturing industry. of the trading year, because they do not know just how much can be offset against tax in respect of purchases using capital allowances. 3.15 pm My constituency has a high proportion of manufacturing, Chris Williamson (Derby North) (Lab): Will the hon. and unemployment has gone down from more than Gentleman touch on why he objects to the proposal of 10% to 4.7%. That is because we are manufacturers. We my hon. Friend the Member for Newcastle upon Tyne make things. We create the wealth for the country. One North (Catherine McKinnell)? I have not heard any company in my constituency, Lupton and Place, was criticism or, indeed, any reference to it so far. contemplating buying a new injection moulding machine—it makes aluminium castings for the automotive Gordon Birtwistle: As I said to the shadow Minister, industry—and it thought about that for quite a long capital allowances are very close to my heart. I believe time. I had meetings with it to discuss various schemes they are the way to go, but they have to be linked to that might assist it to do that, but no such scheme was other financial policies, which the Government have to available. However, as soon as we announced the new put in place to work with them. Capital allowances on capital allowances, it immediately ordered the machine. their own are no good. We must have other structures It cost ¤400,000. It did not get the capital allowance within the Government’s scheme of things to ensure against the whole lot, but it did get the capital allowance companies have confidence. It is no good saying, “You against £250,000, as the sum was at the time. Although 949 Finance Bill2 JULY 2014 Finance Bill 950 there was some money that it did not get a capital Chris Williamson: The Minister has just asserted that allowance against, under our strategy it was able to the economy is growing strongly, but I am surprised by write the rest of it off against depreciation of the that. Will he help the House by comparing that “strong machine over the next few years. growth” with the growth that took place in the 1950s, I accept the need for capital allowances, therefore, 1960s, 1970s and even in the 1980s, at a time, before the and I hope the Minister takes that back to the Chancellor, regrettable election of Margaret Thatcher, when regulation as I have done on many occasions, to ensure that was significantly greater than it is today and when trade companies keep investing in this country. However, the unions were more numerous than they are now? How main factor before people invest in anything is does this “strong growth” compare with what happened confidence—confidence that the country is going forward, in the period I have just outlined? and that there is growth and companies can see profits coming. People are not going to invest anything in Mr Gauke: It is a little difficult to compare a period anything unless they get a return. Returns are important in the 1980s before the election of Margaret Thatcher, for shareholders, business owners and partners in business, given that she was elected in 1979. What I say to the and if there is not going to be a return on the investment, hon. Gentleman is that we are forecast to have the they are not going to invest. If the confidence to invest fastest growth in the G7 this year. Clearly, Members on is there and the cash is there to support the purchase, both sides of the House should welcome that, but we either from their own resources or from banks to ensure must not be complacent because we have further to go that the investment is made, capital allowances will be a and we need to ensure that we stick to the plan to major player in the investments that take place. On their deliver that growth on a sustainable basis. own, they are not enough; they need to go with an overall industrial strategy. I am pleased to say that I Stewart Hosie: The Minister has said he has plans for believe that is happening. low corporation tax, and fewer reliefs and allowances—I understand the strategy. He will be aware that the Mr Gauke: It is a pleasure to respond to this debate, argument is that it helps to establish profitable businesses and in particular to follow my hon. Friend the Member but is less helpful to growing, investing businesses. Even for Burnley (Gordon Birtwistle), who has been a great if he was right, that would rather argue against the advocate for manufacturing industry over the years he Government increasing the annual investment allowance has been in Parliament. He has provided a strong voice to £250,000. Therefore, is the report envisaged in the on the issue of capital allowances. new clause not precisely what is required to identify Labour’s new clause asks that the Chancellor review whether that allowance is at the correct level? the impact on business investment of changes to the Capital Allowances Act 2001 made by the Finance Mr Gauke: I am grateful to the hon. Gentleman for Act 2011. The new clause is identical to the new clause 5 returning me to the subject matter before us, and no we opposed in Committee and we will be opposing this doubt you are, too, Madam Deputy Speaker. new clause for the same reasons. As set out in our The Office for Budget Responsibility forecast in the corporate tax reform road map, the Government’s central June 2010 Budget stated that the cuts in the corporation objective is to secure a low corporation tax rate, with tax rate would more than offset the reduction in investment fewer reliefs and allowances. We remain of the view that allowances such that the that strategy provides the best incentives for business “cost of capital for new investment is lower for all non-financial investment. As part of that approach we reduced the companies, and the rate of return from the existing capital stock annual investment allowance to £25,000 a year in the is higher”. Finance Act 2011, at the same time as we were setting That very important point could easily be missed from out our plans to reduce corporation tax—we have extended this debate. However, we also recognise that in the those plans and as of next April our corporation tax current economic climate, businesses face particular rate will be 20%, the lowest in the G20. challenges. Having got the corporation tax rate down significantly, making a temporary boost to support and Chris Williamson: The Minister is trying to set out encourage increased investment was both appropriate the Government’s position, which he would assert is and desirable. That is why we introduced a temporary one of success. If their policies are really so effective, generous increase in the annual investment allowance at how does he explain the fact that we are living through the 2013 Budget, and we have gone on to double its the slowest economic recovery for more than 100 years? generosity a year later. Mr Gauke: If the hon. Gentleman wants to debate that, I am happy to do so. We faced a crisis in the Bob Stewart (Beckenham) (Con): Would the Minister eurozone and we had to deal with the impact of the like corporation tax to come down below 20%, if possible? financial crisis that occurred on the last Government’s Is that ever envisaged? watch. Clearly that had a considerable impact on the growth of the UK economy and the economies of other Mr Gauke: My hon. Friend raises an interesting developed countries, but the reality is that our economy point, which I could spend some time discussing. Some is now growing strongly, and we need to ensure that that challenges are involved in reducing corporation tax continues to be the case. There are risks to a recovery, below 20% in terms of ensuring that such a tax cut is but if we are to compete and succeed, we need to ensure well focused in encouraging increased investment. He that we have a competitive tax system, the conditions will be aware of some of the difficulties that occurred for growth and credible fiscal plans, all of which this when the previous Government temporarily introduced Government are delivering as part of our long-term a 0% corporation tax rate for smaller businesses; that economic plan. resulted in quite a lot of tax-motivated incorporation. I 951 Finance Bill2 JULY 2014 Finance Bill 952

[Mr Gauke] Mr Gauke: As always, the hon. Gentleman’s questions are interesting and could take me in a number of will not detain the House for long on this point, so I will directions. Let me just say this: it is important that the just say that some issues would need to be addressed in United Kingdom has a competitive tax system. It is the respect of that. case that corporation tax will continue to play an important What would certainly be damaging would be to reverse part in our tax system, and it is important that it is the considerable progress we have made on reducing properly enforced. Indeed, the UK is leading the way on corporation tax. The hon. Member for Newcastle upon international reform to ensure that we have an international Tyne North (Catherine McKinnell) placed great emphasis tax system that takes a contribution from companies. In on providing certainty for businesses, and I would agree the end, however, it is always individuals who pay on that, but what we have done in reducing the corporation tax—whether it is the shareholder, consumer or employee. tax rate from 28% to 21%, and then to 20% as of next All tax is paid by people even if the cheque is written by April, has undoubtedly helped the UK’s competitiveness the company. position. One could quote survey after survey demonstrating Let me return to the measures that we have set out. that the UK is now viewed much more favourably as a The Office for Budget Responsibility has said that the place in which to do business because of our corporate measure to extend the AIA is expected to bring forward tax regime, and it would be damaging were we to reverse another £1 billion of business investment in the short this. Labour is on the record as wanting to put corporation and medium term. Although the Government rightly tax back up to 21%. That would be the first increase, as keep all tax policy under review, there is limited merit in a revenue raiser, in corporation tax since the 1960s, and conducting an evaluation in the way that the amendment we have heard a significant hint this week that Labour suggests, and there are also a number of obstacles that may even increase it to 26%. make it impossible. Her Majesty’s Revenue and Customs will not have the relevant data to conduct such an Catherine McKinnell rose— evaluation for another year, and as the hon. Member for Coventry North West (Mr Robinson) said, it would Mr Gauke: I hope that is not the case and I am be extremely difficult to isolate the impact of this change delighted to give Labour’s Front Bencher an opportunity from the other factors influencing business investment, to put an end to such suggestions. and from subsequent changes, in the ex-post data. An important point was made by my hon. Friend the Catherine McKinnell: Once again, the Minister is Member for Burnley (Gordon Birtwistle), who said that trying to change the subject from the annual investment a number of factors are involved in business investment, allowance to corporation tax. Given that he acknowledges not least confidence. As my hon. Friend the Member the importance of certainty in this area and that a for Dover (Charlie Elphicke) pointed out, the AIA has reduction of the AIA back down to £25,000 is already been set at various levels over this period; identifying a on the horizon, does he accept that it would be beneficial direct link between the level of AIA and business investment for the Government, for Members of this House and is extremely difficult. for members of the public to have an assessment of the impact of that slashing to £25,000 in 2010, in order to Dr Whiteford: The Minister is quite right to point out inform the Government’s decision making in the future? that there have been dramatic fluctuations in these types of allowances over a long period, but surely that emphasises Mr Gauke: That is the fourth opportunity the hon. the point about trying to get better at assessing their Lady has had to provide some reassurance to businesses impact. If these allowances are a good thing at the and investors looking to the UK as a place in which to moment, the Government might be well advised to do business that a future Labour Government, should consider bringing some stability to the system and that misfortune occur, would not increase corporation committing to them over a slightly longer period. tax to 26%. That is the fourth time she has ducked that opportunity. Corporation tax is linked very heavily with the annual investment allowance; they are not separate Mr Gauke: The point I was making is that it was this issues. If our debate is about ensuring that we have Government who introduced a corporate tax road map certainty for investment in the UK, it is a very salient in 2010. That road map has provided a great deal of point. certainty to businesses and set out our plans for corporation tax. Given that we have been able to make progress with corporation tax rates in the current circumstances, although 3.30 pm businesses feel uncertain about the challenges that lie ahead, including the referendum in Scotland and the Chris Williamson: I am interested in the Minister’s possibility that an anti-business Government might be comments. Will he comment on the fact that corporation elected at the next general election, it would be helpful tax in the United States is up to 35%? Furthermore, to have an annual investment allowance in place. does he believe that businesses have a responsibility to contribute to public services and infrastructure investment in our country? If we enter into this arms race and Catherine McKinnell: The Minister seems to be continue to reduce corporation tax, we end up in a completely obsessed with corporation tax. Whatever situation where we either put the burden of funding our question is put to him about annual investment allowances, public services and infrastructure investment on ordinary he responds with an answer on corporation tax. I wonder taxpayers, or are forced to make even deeper cuts than whether that reinforces our call for the Government to we have seen under this Government over the past four be forced to look at the issue of annual investment years. allowances—the chopping and changing of them, and 953 Finance Bill2 JULY 2014 Finance Bill 954 the lack of certainty—so that they address AIA as a 2015. We heard a lot about an allowance for corporate serious issue that concerns businesses up and down the equity, but I do not think that I heard anything at all country. from the Opposition on this subject. If it is so important to them, why do they not have a policy in this area? Mr Gauke: The hon. Lady does not seem to recognise Indeed, at one point, it seemed to come as a surprise to that there is a link between the annual investment the hon. Member for Newcastle upon Tyne North that allowance and corporation tax; it is an allowance set off this was a temporary measure, although subsequently against corporation tax. The two are not separate subjects. in her speech it became clear that she was aware of that. Of course, if we are discussing certainty within our tax What is Labour’s position? If Labour Members feel so system, one has to look at the bigger picture, and this strongly about this issue and it is a priority for them, Government, through the corporate tax road map, have why have they said nothing on the subject? On that provided much greater certainty for businesses in this point, I urge the House to reject new clause 10 if it is put country. The biggest threat to the certainty of our tax to a vote. system at the moment appears to be a Labour party that is at least considering increasing corporation tax to Catherine McKinnell: It is absolutely clear that the 26%, which would be a huge increase and deeply damaging Government have tied themselves in knots over the for the UK’s competitiveness. annual investment allowance. They have tried at every turn during this debate to change the subject, and not to Chris Williamson: Let me return the Minister to the deal with the catastrophic decision taken in Budget historical context. He keeps implying that a Labour 2010 to slash the investment allowance from £100,000 Government would be anti-business, but I challenge to £25,000. That was followed by a welcome U-turn him to compare the economic growth record of previous that moved it back up to £250,000, and now they have Labour Governments with that of this Conservative promised to double it to £500,000. I accept that it is a Government. I think he will find that the Labour record temporary measure, but the point that I was trying to compares extremely favourably. The truth is that Labour make, which the Minister seems to have missed, is that Governments have invested in our economy; what we the very fact that it is a temporary measure perpetuates should be concerned with in this place is improving the the uncertainty, and we know, because businesses have living standards for the British people, and they have told us, that that uncertainty undermines their confidence always achieved that. to invest. The hon. Member for Burnley (Gordon Birtwistle) Mr Gauke: We saw the economy shrink by 7% in a made a speech that I know was sincere, as he is aware of year or so under the Labour Government. That is not a the importance of the manufacturing industry and of record of which to be proud. certainty in the tax landscape, particularly regarding the annual investment allowance, in enabling businesses Chris Williamson rose— to make investment decisions, to invest in plant and machinery, and to expand to create jobs for the future. Mr Gauke: I will give way one last time. However, I might also say that he made a typical Liberal Democrat speech, in that he sat on the fence Chris Williamson: The Minister seems to imply that and would not acknowledge that the Government need the worldwide downturn—the economic recession that to take stock of the impact on investment decisions of was a consequence of the banking crash—was the chopping and changing this policy. responsibility of the previous Labour Government. It is a ludicrous assertion. Surely he will accept that there Ian Swales rose— was an international banking crash that led to the economic difficulties with which the Labour Government Catherine McKinnell: I give way to another fence-sitting were faced in 2007. Liberal Democrat.

Mr Gauke: Let me summarise the hon. Gentleman’s Ian Swales: I thank the hon. Lady for giving way, and position: when the economy grows under a Labour she will be pleased to know that I will not sit on the Government, the Labour Government get the credit, fence on this issue. Investment decisions about plant but when it shrinks under a Labour Government, that is and machinery are one-off decisions, and the annual to do with international factors. At least we know where investment allowance is only needed once for each he stands. investment decision. What we need is certainty around a specific decision, not long-term certainty. We have heard a lot of criticism of the reduction in the annual investment allowance, and I have attempted Catherine McKinnell: That flies in the face of the to try to put that in the context of what we have advice given by the EEF, the Chartered Institute of generally done within our tax system. The impression Taxation and the Institute of Chartered Accountants in given by the hon. Member for Newcastle upon Tyne England and Wales, which all feel that the Government’s North at all times was that it was a disastrous decision chopping and changing on this policy has been damaging that resulted in business investment being slashed. I do to investment. Someone might want to make a decision not accept that position at all, and I have made it clear, to invest this year, next year, or the year after, but by putting this in the context of what we are doing with obviously if they do not know what the Government’s corporation tax, that we are encouraging investment. policy will be in 12 or 24 months’ time, they might well Just this week, the Labour party set out its plans for not have that confidence and not take that decision. The business tax. As far as I am aware, nothing was said in hon. Member for Burnley acknowledged that, but the those plans about the annual investment allowance, or hon. Member for Redcar (Ian Swales) seems to be about extending the increase to £500,000 beyond December completely at odds with what industry has been saying. 955 Finance Bill2 JULY 2014 Finance Bill 956

Mr Gauke: The hon. Lady says that her concern is vote, because we believe that the Government need to that business will not know where it stands on the take stock and learn from their mistakes, and that this annual investment allowance when making decisions, has been an absolute disaster of a policy, in terms of the but, much more importantly, if a business does not Chancellor’s indecision. know whether the corporation tax rate will be 20%, 21% Question put, That the clause be read a Second time. or 26%, that will surely have a much bigger effect on investment in this country. Can she provide some clarity The House divided: Ayes 247, Noes 306. on that? Division No. 30] [3.47 pm

Catherine McKinnell: I agree that business needs AYES certainty about taxation to make investment decisions, Abbott, Ms Diane Dobbin, Jim and that is why we have committed to maintaining one Abrahams, Debbie Dobson, rh Frank of the most competitive tax rates in the G7, but today’s Ainsworth, rh Mr Bob Docherty, Thomas theme seems to be that the Government wish to talk Alexander, rh Mr Douglas Donohoe, Mr Brian H. only about corporation tax, and to airbrush out their Alexander, Heidi Doran, Mr Frank catastrophic mistakes with the annual investment allowance. Ali, Rushanara Doughty, Stephen The hon. Member for Dover (Charlie Elphicke) made a Allen, Mr Graham Dowd, Jim valiant speech, but I felt it was dreadfully misguided. Ashworth, Jonathan Doyle, Gemma He was in quite a bit of trouble trying to defend the Austin, Ian Dromey, Jack Government’s record in this respect, but frankly the Bailey, Mr Adrian Dugher, Michael decision making has been erratic and completely Bain, Mr William Durkan, Mark Balls, rh Ed Eagle, Ms Angela indefensible. Banks, Gordon Eagle, Maria I pay tribute to my hon. Friend the Member for Barron, rh Kevin Edwards, Jonathan Coventry North West (Mr Robinson), who made a very Bayley, Hugh Efford, Clive thoughtful and considered speech in which he set in the Beckett, rh Margaret Elliott, Julie historical pre-2010 context some of the rationale behind Begg, Dame Anne Ellman, Mrs Louise the Government’s decision making in this regard, but he Benn, rh Hilary Engel, Natascha also highlighted the irrational aspects. Benton, Mr Joe Esterson, Bill Berger, Luciana Evans, Chris Betts, Mr Clive Farrelly, Paul 3.45 pm Blenkinsop, Tom Field, rh Mr Frank We take very seriously the need to ensure that businesses Blomfield, Paul Fitzpatrick, Jim have the right environment, the confidence and the Blunkett, rh Mr David Flello, Robert Bradshaw, rh Mr Ben Flint, rh Caroline certainty that they need to make investment decisions Brown, rh Mr Gordon Flynn, Paul for the future. We are concerned about the Government’s Brown, Lyn Fovargue, Yvonne erratic approach to the annual investment allowance. Brown, rh Mr Nicholas Gapes, Mike We think that a proper report needs to be produced to Brown, Mr Russell Gardiner, Barry ascertain exactly what the impacts of chopping and Bryant, Chris Gilmore, Sheila changing this policy have been. That would ensure that Buck, Ms Karen Glass, Pat this Government do not make these mistakes in future, Burden, Richard Glindon, Mrs Mary that any future Government can learn from the mistakes Burnham, rh Andy Goodman, Helen of this Government, and that we have a proper annual Byrne, rh Mr Liam Green, Kate investment allowance strategy for the future that supports Campbell, rh Mr Alan Greenwood, Lilian the jobs and growth that this economy so desperately Campbell, Mr Gregory Griffith, Nia needs. Campbell, Mr Ronnie Gwynne, Andrew Champion, Sarah Hain, rh Mr Peter Chapman, Jenny Hamilton, Fabian Sheila Gilmore: Does my hon. Friend want to reflect Clarke, rh Mr Tom Hanson, rh Mr David on the suggestion made earlier that it did not really Clwyd, rh Ann Harman, rh Ms Harriet matter to people whether the investment allowance was Coaker, Vernon Harris, Mr Tom clear? Surely, when putting forward a formal business Connarty, Michael Havard, Mr Dai plan, people are not necessarily just working on a Cooper, Rosie Healey, rh John year-to-year basis; they want to know what, if things go Corbyn, Jeremy Hepburn, Mr Stephen on as they are, they could do in a year’s time, two years’ Crausby, Mr David Hermon, Lady time, or three years’ time. Creagh, Mary Heyes, David Creasy, Stella Hillier, Meg Catherine McKinnell: My hon. Friend makes an Cruddas, Jon Hilling, Julie absolutely valid point. Businesses do not work in electoral Cryer, John Hodge, rh Margaret cycles or annual tax return cycles; they plan for the Cunningham, Alex Hodgson, Mrs Sharon future. Businesses have told us how unhappy they have Cunningham, Mr Jim Hoey, Kate been with the chopping and changing of this policy. Cunningham, Sir Tony Hood, Mr Jim Curran, Margaret Hopkins, Kelvin I am very surprised that the hon. Member for Redcar Dakin, Nic Hosie, Stewart takes such a strong stance in supporting what has Danczuk, Simon Howarth, rh Mr George clearly been a disastrous Government policy. I would David, Wayne Hunt, Tristram have thought he would have liked to distance himself Davidson, Mr Ian Irranca-Davies, Huw from it, but he has obviously tied himself to this mast, Davies, Geraint Jackson, Glenda and I am disappointed that he will not come through De Piero, Gloria James, Mrs Siân C. the Lobby with us. We will push our new clause to a Denham, rh Mr John Jamieson, Cathy 957 Finance Bill2 JULY 2014 Finance Bill 958

Jarvis, Dan Pound, Stephen Baldry, rh Sir Tony Ellison, Jane Johnson, rh Alan Powell, Lucy Baldwin, Harriett Elphicke, Charlie Johnson, Diana Qureshi, Yasmin Barclay, Stephen Evans, Graham Jones, Helen Raynsford, rh Mr Nick Baron, Mr John Evans, Jonathan Jones, Mr Kevan Reed, Mr Jamie Barwell, Gavin Evans, Mr Nigel Jones, Susan Elan Reed, Mr Steve Bebb, Guto Evennett, Mr David Kane, Mike Reeves, Rachel Bellingham, Mr Henry Fabricant, Michael Kaufman, rh Sir Gerald Reynolds, Emma Benyon, Richard Farron, Tim Keeley, Barbara Reynolds, Jonathan Beresford, Sir Paul Featherstone, Lynne Kendall, Liz Riordan, Mrs Linda Berry, Jake Field, Mark Khan, rh Sadiq Ritchie, Ms Margaret Bingham, Andrew Foster, rh Mr Don Lammy, rh Mr David Robertson, Angus Binley, Mr Brian Fox,rhDrLiam Lazarowicz, Mark Robertson, John Birtwistle, Gordon Freer, Mike Leslie, Chris Robinson, Mr Geoffrey Blackman, Bob Fuller, Richard Lewell-Buck, Mrs Emma Rotheram, Steve Blackwood, Nicola Gale, Sir Roger Llwyd, rh Mr Elfyn Roy, Lindsay Blunt, Crispin Garnier, Sir Edward Long, Naomi Ruane, Chris Boles, Nick Garnier, Mark Love, Mr Andrew Ruddock, rh Dame Joan Bottomley, Sir Peter Gauke, Mr David Lucas, Caroline Sawford, Andy Bradley, Karen George, Andrew Lucas, Ian Seabeck, Alison Brady, Mr Graham Gibb, Mr Nick MacNeil, Mr Angus Brendan Shannon, Jim Brake, rh Tom Gilbert, Stephen Mactaggart, Fiona Sharma, Mr Virendra Bray, Angie Gillan, rh Mrs Cheryl Mahmood, Mr Khalid Sheerman, Mr Barry Brazier, Mr Julian Glen, John Mahmood, Shabana Sheridan, Jim Bridgen, Andrew Goldsmith, Zac Malhotra, Seema Shuker, Gavin Brine, Steve Goodwill, Mr Robert Mann, John Skinner, Mr Dennis Brokenshire, James Graham, Richard Marsden, Mr Gordon Slaughter, Mr Andy Brooke, Annette Grant, Mrs Helen McCabe, Steve Smith, rh Mr Andrew Browne, Mr Jeremy Gray, Mr James McCarthy, Kerry Smith, Angela Bruce, Fiona Grayling, rh Chris McClymont, Gregg Smith, Owen Bruce, rh Sir Malcolm Green, rh Damian McCrea, Dr William Spellar, rh Mr John Buckland, Mr Robert Grieve, rh Mr Dominic McDonagh, Siobhain Straw, rh Mr Jack Burley, Mr Aidan Griffiths, Andrew McDonald, Andy Stringer, Graham Burns, Conor Gummer, Ben McDonnell, John Stuart, Ms Gisela Burrowes, Mr David Gyimah, Mr Sam McFadden, rh Mr Pat Sutcliffe, Mr Gerry Burstow, rh Paul Halfon, Robert McGovern, Alison Tami, Mark Burt, rh Alistair Hames, Duncan McGovern, Jim Thomas, Mr Gareth Byles, Dan Hammond, rh Mr Philip McGuire, rh Mrs Anne Thornberry, Emily Cable, rh Vince Hammond, Stephen McKechin, Ann Timms, rh Stephen Cairns, Alun Hancock, Matthew McKenzie, Mr Iain Trickett, Jon Cameron, rh Mr David Hands, rh Greg McKinnell, Catherine Turner, Karl Campbell, rh Sir Menzies Harper, Mr Mark Meale, Sir Alan Twigg, Derek Carmichael, rh Mr Alistair Harrington, Richard Mearns, Ian Twigg, Stephen Carmichael, Neil Harris, Rebecca Miller, Andrew Umunna, Mr Chuka Carswell, Mr Douglas Hart, Simon Mitchell, Austin Vaz, rh Keith Cash, Sir William Harvey, Sir Nick Moon, Mrs Madeleine Vaz, Valerie Chishti, Rehman Haselhurst, rh Sir Alan Morden, Jessica Walley, Joan Chope, Mr Christopher Heald, Oliver Morrice, Graeme (Livingston) Watson, Mr Tom Clappison, Mr James Heath, Mr David Morris, Grahame M. Weir, Mr Mike Clark, rh Greg Heaton-Harris, Chris (Easington) Whiteford, Dr Eilidh Coffey, Dr Thérèse Hemming, John Mudie, Mr George Whitehead, Dr Alan Collins, Damian Henderson, Gordon Munn, Meg Williamson, Chris Colvile, Oliver Hendry, Charles Murphy, rh Mr Jim Wilson, Phil Cox, Mr Geoffrey Hinds, Damian Murphy, rh Paul Winnick, Mr David Crabb, Stephen Hoban, Mr Mark Murray, Ian Winterton, rh Ms Rosie Crockart, Mike Hollingbery, George Nandy, Lisa Wishart, Pete Crouch, Tracey Hollobone, Mr Philip Nash, Pamela Wood, Mike Davies, David T. C. Holloway, Mr Adam O’Donnell, Fiona Woodcock, John (Monmouth) Hopkins, Kris Davies, Glyn Horwood, Martin Onwurah, Chi Woodward, rh Mr Shaun Osborne, Sandra Davies, Philip Howarth, Sir Gerald Wright, David Owen, Albert Davis, rh Mr David Howell, John Wright, Mr Iain Paisley, Ian Dinenage, Caroline Hughes, rh Simon Pearce, Teresa Tellers for the Ayes: Djanogly, Mr Jonathan Huppert, Dr Julian Perkins, Toby Mr David Hamilton and Dorrell, rh Mr Stephen Hurd, Mr Nick Phillipson, Bridget Susan Elan Jones Dorries, Nadine Jackson, Mr Stewart Doyle-Price, Jackie James, Margot NOES Drax, Richard Jenkin, Mr Bernard Adams, Nigel Arbuthnot, rh Mr James Duddridge, James Jenrick, Robert Duncan, rh Mr Alan Johnson, Gareth Afriyie, Adam Bacon, Mr Richard Duncan Smith, rh Mr Iain Johnson, Joseph Aldous, Peter Baker, Norman Dunne, Mr Philip Jones, Andrew Andrew, Stuart Baker, Steve Ellis, Michael Jones, rh Mr David 959 Finance Bill2 JULY 2014 Finance Bill 960

Jones, Mr Marcus Prisk, Mr Mark Williams, Mr Mark Wright, Simon Kawczynski, Daniel Pritchard, Mark Williams, Stephen Yeo, Mr Tim Kelly, Chris Pugh, John Williamson, Gavin Young, rh Sir George Kennedy, rh Mr Charles Raab, Mr Dominic Wilson, Mr Rob Zahawi, Nadhim Kirby, Simon Randall, rh Sir John Wilson, Sammy Tellers for the Noes: Knight, rh Sir Greg Reckless, Mark Wollaston, Dr Sarah Claire Perry and Kwarteng, Kwasi Redwood, rh Mr John Wright, Jeremy Jenny Willott Lamb, Norman Rees-Mogg, Jacob Lancaster, Mark Reid, Mr Alan Lansley, rh Mr Andrew Rifkind, rh Sir Malcolm Question accordingly negatived. Latham, Pauline Robathan, rh Mr Andrew Laws, rh Mr David Robertson, Mr Laurence The Minister for Skills and Enterprise (Matthew Leadsom, Andrea Rogerson, Dan Hancock): On a point of order, Madam Deputy Speaker. Lee, Jessica Rosindell, Andrew Given that the Office for National Statistics has confirmed Lee, Dr Phillip Rudd, Amber this afternoon that four fifths of new jobs have been Leech, Mr John Ruffley, Mr David created outside London, and given that the Leader of Lefroy, Jeremy Russell, Sir Bob the Opposition may inadvertently have misled the House Leigh, Sir Edward Rutley, David by saying that the number of people waiting more than Leslie, Charlotte Sanders, Mr Adrian four hours in A and E has risen by over 300% when this Letwin, rh Mr Oliver Scott, Mr Lee is not accurate, may I take your advice on how the Lewis, Brandon Selous, Andrew Leader of the Opposition may be brought before the Liddell-Grainger, Mr Ian Shapps, rh Grant Lidington, rh Mr David Sharma, Alok House to retract these inaccuracies and apologise? Lilley, rh Mr Peter Shelbrooke, Alec Lloyd, Stephen Shepherd, Sir Richard Madam Deputy Speaker (Mrs Eleanor Laing): No, Lopresti, Jack Skidmore, Chris the hon. Gentleman may not take my advice. It is not Loughton, Tim Smith, Chloe the position of the Chair to advise hon. Members, far Luff, Sir Peter Smith, Henry less the Leader of the Opposition, on the content of Lumley, Karen Smith, Julian their speeches, but the hon. Gentleman has put his facts Macleod, Mary Smith, Sir Robert on the record, and I am sure that they have been noted Main, Mrs Anne Soames, rh Sir Nicholas on both Front Benches. Maynard, Paul Soubry, Anna McCartney, Jason Spelman, rh Mrs Caroline Chris Leslie (Nottingham East) (Lab/Co-op): Further McCartney, Karl Spencer, Mr Mark to that point of order, Madam Deputy Speaker. Is there McIntosh, Miss Anne Stanley, rh Sir John anything that you can do to stop these eager Front McLoughlin, rh Mr Patrick Stevenson, John Benchers seeking Cabinet preferment in the forthcoming McPartland, Stephen Stewart, Bob reshuffle from making spurious points of order, when Menzies, Mark Stewart, Iain what they should do with statistics is allow the Office Metcalfe, Stephen Stewart, Rory Miller, rh Maria Stride, Mel for Budget Responsibility to audit these— Mills, Nigel Stuart, Mr Graham Milton, Anne Stunell, rh Sir Andrew Madam Deputy Speaker: Order. The hon. Gentleman Mitchell, rh Mr Andrew Sturdy, Julian knows that that is not a point of order, nor could it be Moore, rh Michael Swales, Ian further to a point of order, as there was no point of Mordaunt, Penny Swayne, rh Mr Desmond order. Morgan, rh Nicky Swinson, Jo Morris, Anne Marie Swire, rh Mr Hugo Ian Swales: On a point of order, Madam Deputy Morris, David Syms, Mr Robert Speaker. I made a point of order earlier today regarding Morris, James Thornton, Mike a figure used yesterday by the hon. Member for Mosley, Stephen Thurso, John Birmingham, Ladywood (Shabana Mahmood). The 2010 Mowat, David Tomlinson, Justin figure that I gave was correct, but I am now aware that Mundell, rh David Tredinnick, David the hon. Lady was using a figure derived on a new basis, Munt, Tessa Turner, Mr Andrew so the comparison that I drew was incorrect. I felt that Murray, Sheryll Tyrie, Mr Andrew that should be put on the record. Murrison, Dr Andrew Uppal, Paul Neill, Robert Vaizey, Mr Edward Newmark, Mr Brooks Vara, Mr Shailesh Madam Deputy Speaker: I am grateful to the hon. Newton, Sarah Vickers, Martin Gentleman—[Interruption.] Order. I am grateful to the Nokes, Caroline Villiers, rh Mrs Theresa hon. Gentleman. That is a point of order. He has put Norman, Jesse Walker, Mr Charles the record straight, and the House is grateful to him. Nuttall, Mr David Walker, Mr Robin Offord, Dr Matthew Walter, Mr Robert Debbie Abrahams (Oldham East and Saddleworth) Ollerenshaw, Eric Ward, Mr David (Lab): On a point of order, Madam Deputy Speaker. Opperman, Guy Watkinson, Dame Angela Could you advise me, please, with reference to the Ottaway, rh Sir Richard Weatherley, Mike inaccurate information that was given by the Prime Parish, Neil Webb, Steve Minister about waiting lists for A and E, and the fact Patel, Priti Wharton, James that in 48 out of the past 52 weeks, A and E targets have Penrose, John White, Chris been missed by this Government— Percy, Andrew Whittaker, Craig Phillips, Stephen Whittingdale, Mr John Madam Deputy Speaker: Order. I have already reminded Pincher, Christopher Wiggin, Bill the House that the content of Ministers’ speeches is not Poulter, Dr Daniel Willetts, rh Mr David a matter for the Chair, and that is not a point of order. 961 Finance Bill2 JULY 2014 Finance Bill 962

New Clause 1 However, the rules are triggered in limited circumstances where conditions are agreed or imposed on a group by OIL CONTRACTOR ACTIVITIES: RING-FENCE TRADE ETC the Government or a statutory body. That is clearly unintended. ‘Schedule (Oil contractors: ring-fence trade etc) contains provision about the corporation tax treatment of oil contractor The clause proposes a restricted amendment to activities.’—(Mr Gauke.) section 169(2) of the Corporation Tax Act 2010 to Brought up, and read the First time. exclude from the definition of “arrangements” situations where conditions are agreed or imposed by the Government. Mr Gauke: I beg to move, That the clause be read a That will ensure that the anti-avoidance rules are more Second time. effectively targeted for the future and that companies involved in these specific commercial arrangements will Madam Deputy Speaker (Mrs Eleanor Laing): With have improved access to group relief. The amended this it will be convenient to discuss the following: rules will continue to ensure that they prevent manipulation Government new clause 2—Determination of beneficial of company control and group status and will continue entitlement for purposes of group relief. to restrict access to group relief where appropriate. Government new clause 3—General Block Exemption That will maintain the fairness and consistency of the Regulation. tax system. Government new clause 4—Co-operative societies etc. Government new clause 3 and amendments 42 and Government new clause 5—Tax relief for theatrical 43 make a number of changes to three capital allowances: production. enhanced capital allowances for zero-emission goods Government new clause 6—Exclusion of incentivised vehicles; enhanced capital allowances for enterprise zones; electricity or heat generation activities. and business premises renovation allowances. All are state aids designed to comply with the general block Government new schedule 1—Oil contractors: ring-fence exemption regulation. The existing regulation ended on trade etc. 30 June and a new one took effect from 1 July. Although Government new schedule 2—General Block Exemption it is similar to its predecessor, the new regulation contains Regulation. a number of differences that need to be reflected in Government new schedule 3—Taxation of co-operative those reliefs. The new clause and the amendments do societies etc. that. Broadly, they ensure that various definitions found Government new schedule 4—Tax relief for theatrical in those reliefs refer to the new general block exemption production. regulation. Government amendments 42, 43, 5, 6, 1, 2, 4, 11 to In the case of enterprise zone allowances, it also 14, 7 to 10, 15 to 41, 3 and 44 to 66. excludes expenditure on energy generation, distribution or infrastructure, and broadband networks; restricts Mr Gauke: I will attempt to speak briefly to this long qualifying expenditure incurred by large companies in list of Government new clauses, new schedules and certain enterprise zones to new economic activities; and amendments, although I will respond later in the debate requires companies that make a production process if any questions are raised. more efficient to ensure that the qualifying expenditure New clause 1 and new schedule 1 make changes to exceeds by value at least three years’ depreciation of the provide a fair amount of taxation for activities carried machines being replaced. out on the UK continental shelf in connection with the New clause 4 and new schedule 3 make technical UK’s oil and gas resources. The Government are committed changes to the tax legislation applying to co-operative to maximising the benefits that the North sea can bring and community benefit societies, industrial and provident to the UK economy while ensuring that all companies societies, European co-operative societies and credit benefiting from the UK’s natural resources, either directly unions to ensure that the definitions used in the legislation or indirectly, pay their fair share of tax. are clear, up to date and work as intended. There has The UK is not currently receiving a fair amount of been no policy change on the taxation of the various tax from companies that provide drilling rigs and societies or the reliefs available to them, or indeed their accommodation vessels to the oil and gas industry. members. There will be no effect on their tax position, Many of those companies own their assets in lower tax but the changes we are making will ensure that the jurisdictions overseas. Those assets are then leased to legislation is accurate and fully in accordance with the associated entities operating on the UK continental policy intention. shelf through specialised leasing arrangements know as New clause 5 will introduce an additional corporate bareboat charters, giving rise to a large deductible leasing tax deduction and payable tax credit for theatre production expense in the UK. That results in up to 90% of operating costs. Production companies will be eligible for a payable profit made in the UK being moved overseas. tax credit worth up to 25% of qualifying expenditure This measure will cap the amount the UK base for touring productions and 20% for all other productions. contractor can claim as a deductible expense for those These provisions will be available from September for leasing payments. It will ensure that companies pay a producers of a wide range of theatre and performance, fair amount of tax for the activities they carry out in supporting plays, musicals, dance, ballet, opera and connection with the UK’s valuable natural resources. circus. New clause 2 makes changes to corporation tax group relief rules to remove an unintended restriction that has Andrew Bingham (High Peak) (Con): I welcome this been identified in current anti-avoidance legislation. particular measure, because the very well known Buxton That legislation is well targeted and limits the opportunities opera house is in my constituency of High Peak and it for avoidance, for example through artificial groupings. hosts lots of touring theatrical companies. Offering 963 Finance Bill2 JULY 2014 Finance Bill 964

[Andrew Bingham] all references to industrial and provident societies across the Taxes Acts. The restriction will also not apply where different types of performances to the area engages the electricity is generated by anaerobic digestion or by people in going to the theatre and promotes the local hydropower, nor where heat is generated, or gas or fuel economy, so the measure’s benefits will be broader than produced, by anaerobic digestion. The measure will we may have thought at first. apply in respect of both UK ROC and RHI schemes and overseas equivalents. It will make the tax-advantaged Mr Gauke: I am delighted to hear of the benefits that venture capital scheme better targeted and effective in my hon. Friend’s constituency and the Buxton opera supporting small and growing, higher-risk businesses. house will experience. Amendments 5 and 6 make technical changes to clause 73, which will restore sense and fairness to air Sir Peter Luff (Mid Worcestershire) (Con): Circus is a passenger duty by reforming the destination banding performing art invented in the United Kingdom and it and introducing a simple to understand two-band system. provides many children with their introduction to the As the House will know, we have devolved the power to performing arts and leads them to a love of theatre. set rates on direct long-haul flights from Northern May I therefore welcome my hon. Friend’s decision to Ireland to the Northern Ireland Assembly, which set the include circuses in those areas covered by the tax relief rates at £0 in the Air Passenger Duty (Setting of Rate) in new clause 5? The travelling circus industry welcomes Act (Northern Ireland) 2012. As the structure of the that decision, which is already leading directly to new tax, including the number and composition of investment in travelling circuses. the destination bands, remains a matter for the UK—the Northern Ireland legislation refers to the UK legislation— Mr Gauke: Again, I am delighted to hear that. My the Northern Ireland Executive have asked us to make hon. Friend lobbied us and made representations on the consequential amendments needed to their legislation behalf of his constituents for the inclusion of circuses. so that it aligns with the UK legislation. As a consequence of the consultation process and listening to the points raised by my hon. Friend and others, I am 4.15 pm delighted that circuses will benefit from this tax relief. We had an extensive debate in Committee on clauses 192 to 211, which introduce follower notices designed to Debbie Abrahams: It is important to support this tackle would-be tax avoiders who attempt to frustrate area, but would the Exchequer Secretary like to comment efforts to resolve their cases. At the time, I emphasised on the National Audit Office and Public Accounts that taxpayers have full rights of appeal to the tribunal Committee’s recent reports criticising the Government against any penalty charged under the rules, and I and Her Majesty’s Revenue and Customs for not properly mentioned a particular ground for making an appeal. monitoring the tax reliefs in this area? We have continued to receive suggestions for clarifying the legislation, particularly on how it could be improved Mr Gauke: The Government will respond formally to by more clearly spelling out the grounds for making an that, but I believe that well-designed, well-focused and appeal against the follower notice penalty. targeted tax relief, which is what we have, can help the I am grateful to those who made such points. Having economy grow and help particular sectors. Indeed, I am considered them further, I concluded that it would be delighted that two examples have just been provided to helpful to table amendments 1 to 3. Amendment 1 us. This Government have successfully lowered rates, specifically sets out the grounds for making an appeal including corporation tax, which we have debated this against any penalty charged under the rules. I emphasise afternoon, and, if particular sectors can be supported that the taxpayer is not obliged to settle their dispute in by a well-targeted tax relief, we should do that. We response to a follower notice. The amendment makes it believe that, overall, our tax system is working to enhance clear that if the taxpayer has reasonable grounds to the UK’s competitiveness. This Government have a continue their dispute, it is open to them to appeal good record in the creative sector in particular, and I am against the penalty and for the tribunal to discharge the delighted that, through new clause 5 and new schedule penalty on that basis. Amendment 2 makes it clear that 4, that will continue. that does not mean that the original follower notice and New clause 6 amends the list of excluded activities in any associated accelerated payment notice were issued the tax-advantaged venture capital schemes—the seed incorrectly. Finally, amendment 3 amends schedule 27 enterprise investment scheme, the enterprise investment to apply those clarifications to partnerships. scheme and venture capital trust schemes—so that a I will take the opportunity briefly to clarify some company whose trade consists substantially of the points made when clauses 192 to 211 were debated in generation of electricity or heat that attracts renewable Committee. I mentioned then that 22 responses had obligation certificates or payments under the renewable been received to the January consultation on the draft heat incentive will no longer qualify for investment legislation. Some commentators have subsequently under those schemes, with limited exceptions. questioned whether the number was not in fact higher. As in the case with the feed-in-tariff exclusion, The draft legislation on follower notices was issued in community interest companies, community benefit societies, two separate documents in January, one of which was co-operative societies and Northern Irish industrial and on tackling marketed tax avoidance. Although we received provident societies will not be affected by the restrictions. a total of more than 800 responses, the vast majority The exceptions for co-ops will also apply to European related to accelerated payments, and only 22 specifically co-operative societies, in line with the changes being related to the draft legislation on follower notices that introduced as part of the “taxation of co-operative was published at the same time. I hope that that provides societies” amendment, which aims to align and update clarification. 965 Finance Bill2 JULY 2014 Finance Bill 966

In Committee, I was asked whether the accelerated that the trust is for the benefit of all employees and that payments regime would control of the business passes to the trustees before the “reach back to disputed tax liabilities relating to periods prior to relief is available. the introduction of the DOTAS reporting?”––[Official Report, Clearly it would not be an effective use of public Finance Public Bill Committee, 17 June 2014; c. 507.] money to give the relief if a trust broke the rules soon I said that it would not. I want to clarify that an after it was created, denying the employees, the business accelerated payment notice may not be issued to a and the economy the long-term benefits of employee taxpayer with a pre-DOTAS tax dispute where DOTAS— ownership. Amendments 44 to 66 therefore ensure that disclosure of tax avoidance schemes—is the only criterion if the employee-ownership structure fails or does not available. Even though a scheme may have come into abide by the rules for relief at any time during either the DOTAS after its introduction, anyone using it before tax year in which the shares are disposed of or the DOTAS will not be subject to accelerated payment following tax year, relief may not be claimed, and any on DOTAS alone. However, accelerated payment based relief which has been given will be withdrawn and the on a follower notice can apply to pre-DOTAS cases capital gains tax position will be restored to what it because the notice does not depend on the DOTAS would have been if no claim had been made. disclosure. I am grateful for the opportunity to provide I urge the House to support the amendments, new clarification. clauses and new schedules. The Government have tabled amendment 4 so that clause 291 more clearly reflects the Supreme Court’s Catherine McKinnell: I thank the Minister for introducing decision on the limitation period where direct tax has the 60 or so proposals that the Government have tabled been charged contrary to EU law. The amendment for consideration at the end of proceedings on the recognises that the ruling of the Supreme Court in the Finance Bill. [Interruption.] I hear some tutting behind franked investment income group litigation is not confined me. The House will be relieved to hear that although I to claims based on free movement, but applies to all have a number of questions they relate mainly to new cases in which tax has been charged contrary to EU law. clauses 1, 5 and 6, new schedule 4 and amendment 2. Schedule 6, introduced by clause 48, gives effect to I will start with new clause 1. It is important to take recommendations from the Office of Tax Simplification the opportunity to scrutinise what are fairly significant to replace HMRC approval of tax advantaged employee changes. They have been introduced by the Government share schemes with a new self-certification arrangement at a fairly late stage in the Bill’s progress. Will the for businesses setting up such schemes. Amendments 11 Minister comment on why that is the case? The measures to 14 make final consequential amendments to remove were first announced in the autumn statement but the references to approval of schemes in tax legislation. Government were still consulting on them some five Schedule 7, introduced by clause 49, implements months later while we were scrutinising the Bill clause several OTS recommendations, including provisions to by clause in Committee. simplify the tax treatment of employment-related securities Perhaps the most controversial of the Government’s awarded to internationally mobile employees. Under announcements on North sea oil and gas over the past the schedule, a small number of internationally mobile year is contained in new clause 1 and new schedule 1, employees who receive share awards overseas and later which make changes to the UK continental shelf oil come to the UK could be placed in a worse tax position and gas fiscal regime. As the Minister set out, they than their UK resident colleagues, possibly suffering relate specifically to leasing arrangements between oil double taxation. Amendment 7 corrects that, and, with and gas contractors and oil and gas licence holders on amendments 8 to 10, ensures that certain income received the UK continental shelf—arrangements that are commonly overseas is treated in the same way as similar UK known as bareboat chartering. Oil and gas service income. companies often lease drilling rigs, vessels and other Amendments 15 to 41 amend schedules 9 and 10 to equipment from overseas related parties on a bareboat extend the new tax relief for social investment, the basis—that is, without operating personnel—and the SITR, to investment in social impact bonds, which are associated rental costs are claimed as a deduction against payment-by-results contracts between public sector bodies the UK profits of the service company when it uses the and service providers, and are an innovative way of equipment to provide services to oil and gas licence financing better delivery of public services. The providers holders on the UK continental shelf. are often charities or social enterprises. The measures As the Red Book sets out, will support further increases in the number of social “the government is concerned about the use of” impact bonds by providing incentives to private individuals such leasing arrangements who invest in them. Tax relief will be available only “to move significant taxable profit outside the UK tax net”. where a company has been accredited by the Cabinet I would be interested to hear from the Minister what Office and secondary legislation providing details of the estimate his Department has made of the total taxable accreditation process will be laid in September. profit that has been moved outside the UK tax net as a Amendments 44 to 66 will protect a new capital gains result of these leasing arrangements. More importantly, tax relief from abuse. Schedule 33, introduced by clause what evidence does HMRC have that such profit shifting 283, encourages the creation and maintenance of or transfer pricing is avoidance activity, as the Government employee-ownership trusts, under which all employees seem to suggest? of a business can have a stake in its value, growth and success. One way it does so is by allowing full relief Sir Malcolm Bruce (Gordon) (LD): When the Minister from capital gains tax to people who transfer their is answering those questions, I wonder whether he will shares in the company carrying on the business to an also say what impact the measures will have on drilling employee-ownership trust. There are rules to ensure activity in the UK. 967 Finance Bill2 JULY 2014 Finance Bill 968

Catherine McKinnell: The right hon. Gentleman raises against profits that arise from activities outside the ring an important question. I hope that the Minister addresses fence. The tax information impact note suggests that it in his response. I will come on to that issue. those changes will yield £135 million to the Exchequer In May, a Reuters report on these measures suggested this financial year, with similar revenue yields—slowly that HMRC had declining—forecast for the next four years. “allowed an industry with annual revenues of 2 billion pounds to I understand that the measures have changed pay almost no corporation tax for two decades”. substantially from those originally set out in December, It also suggested that such arrangements have allowed following what was—quite rightly—an extensive drilling operators in the North sea consultation with the industry. Although the Opposition support any attempt to clamp down on tax avoidance, “to operate almost tax free for 20 years or more”. there still seem to be substantial concerns about those It would be useful to know why the Government are measures from within the industry, particularly regarding acting now on those arrangements. I hope that the how the Government have approached the changes, as Minister will elaborate on that. well as what impact they will have on an industry that The Chancellor made an announcement in last year’s makes a vital contribution to the public purse and, of autumn statement that appears to have come as a course, the UK’s energy security. surprise to many. He proposed the introduction of a On the Government’s approach, I remind the House cap on the deduction that is available to UK service of the last time the Chancellor made significant changes companies on bareboat charters from connected companies. to the UK continental shelf fiscal regime, which was He also announced plans to ring-fence profits from described by the Financial Times as “clumsy”, and other business activities so that the taxable profit could “handled in the least helpful way possible.” not be reduced by other tax losses. It appears that, because of the considerable lack of consultation before In Budget 2011, the Chancellor announced an increase those announcements were made, the Government have in the supplementary charge—an additional tax on significantly altered the plans to take account of the ring-fenced profits from oil and gas extraction—from views of the industry. 20%, which was the rate set by the last Labour Government, to 32%—a 12% increase. He argued that any tax increase The final proposals that are before us today will was in the interests of fairness and cited rising oil prices, introduce a cap on the amount that service companies but in reality the Chancellor needed to raise revenue to can deduct from their taxable profits through such pay for the delays in planned fuel duty rises, and scrapping leasing arrangements. The leasing deduction will be the fuel duty escalator. limited broadly by reference to a cap of 7.5% on the original cost of the asset or equipment. The cap was In the autumn statement last year, the Chancellor originally set at 6.5% but has been changed following announced major changes to the oil and gas fiscal the extensive consultation with the industry. Again as a regime—effectively tax increases on both occasions— result of the consultation, the cap will apply only to without any prior discussion with the industry. As my drilling rigs and accommodation vessels, which are otherwise hon. Friend the Member for Bristol East (Kerry McCarthy) known as “flotels”. pointed out at the time, the charge was “poorly targeted, has potentially serious unintended consequences for the industry, and is certainly not a policy that they got “right Mr Mike Weir (Angus) (SNP): I am listening carefully first time”, and all because the Government did not consult on to what the hon. Lady is saying. Does she agree that, their decision.”—[Official Report, 3 May 2011; Vol. 527, c. 600.] although the cap applies only to drilling rigs and In 2011, HMRC conceded that the increase in the accommodation vessels, drilling rigs are the crucial supplementary charge would risk the economic viability matter? There is a worldwide shortage of drilling rigs, of some marginal oil fields. We therefore tabled an so the cap might mean that they are used elsewhere, amendment to last year’s Finance Bill, calling on the rather than in the North sea. Government to conduct a proper review of the impact of the tax increase. The tax information impact note for Catherine McKinnell: The hon. Gentleman raises an those measures states: important point. Again, it would be helpful if the Minister addressed that concern in his response. I will “The measure could increase the day rates by up to 10% on new contracts for drilling rigs and accommodation vessels”, come on to that matter a little later. yet goes on to suggest that such increases will be New schedule 1 introduces a new form of ring fence “insignificant”to companies—those on the UK continental that is similar to that imposed in respect of ring fence shelf may disagree. The final sentence of the tax information corporation tax for companies that operate on the impact note states that the Government will review the continental shelf. The ring fence will be applicable to impact of those measures in a year’s time—perhaps a the composite activity that is the subject of this measure. tacit acknowledgement that they could be more detrimental That means that, although profits within the ring fence than the Government’s optimistic assessment seems to will only be taxed at the standard corporation tax rates suggest. and not the higher rates that apply to oil and gas producers, it will no longer be possible to reduce those Considering the many similar concerns about the profits through other tax reliefs that are derived from impact that the changes will have on certain fields and activity outside the UK continental shelf. their economic viability—including from within the Treasury—I would be grateful if the Minister would inform the House how many fields, already marginal, 4.30 pm his Department has estimated will become uneconomically To summarise, lease rental payments will be capped unviable as a result? Considering that such assessments at 7.5% of the original cost of the asset being rented, were carried out in 2011, presumably they have also and even those capped rental costs may be offset only been made on this occasion. 969 Finance Bill2 JULY 2014 Finance Bill 970

When the Government increased the supplementary formula based on the original cost of the asset, effectively charge in the 2011 Budget, The Times reported that big imposes a legislatively fixed benchmark price that overrides oil firms such as Statoil and Centrica were freezing their the arm’s length principle. An article for Tax Journal in investment decisions—reportedly worth more than February highlighted this issue and concluded: £6 billion—or temporarily closing fields as a result. “these measures are reflective of the Treasury’s willingness to Again, there are concerns in the industry that if the introduce special measures where it perceives that the application additional tax costs are passed on in higher day rates—and of the arm’s length principle fails to determine an appropriate many, including the Government, expect that they will allocation of profits in cross-border transactions.” be—that will lead to higher exploration costs in the Will the Minister say whether this reflects the Treasury’s sector as a result of the increased cost of renting drilling willingness to intervene and override the arm’s length rigs. principle, where it deems the application of such to be As Oil & Gas UK has pointed out, driving drilling inadequate? The main reason why the Government’s rigs out of the UK continental shelf may only compound abandonment of the arm’s length principle is of such the problem of low levels of exploration and production. concern is the possibility that other countries may follow As the Wood review recently identified, exploration is suit and introduce their own special measures; something now at a critically low level. Even more worryingly, that the OECD and its members, through the arm’s production fell by 38% between 2010 and 2013. length principle, are at pains to prevent. It would be useful to hear from the Minister whether the Government Sir Robert Smith (West Aberdeenshire and Kincardine) have taken account of international reactions to these (LD): The hon. Lady is making an important point: measures and their potential detrimental impact. maximising exploration is crucial to future revenues. As the Minister well knows, and as we have put on Unless oil is produced out of the ground, we will not see the record in this House on countless occasions, the any tax revenue. Opposition support the Government on any steps they take to tackle tax avoidance. However, a number of Catherine McKinnell: That is an ambition that I concerns remain as to how the Government have believe the Chancellor has expressed himself. It is vital approached implementing these measures. We welcome the Government get this right and that is why we are the Government’s consultations with the industry, belated asking these questions today. I hope we will receive though they are, but I would be interested to hear from reassurance from the Minister. the Minister whether he and his officials believe that Production fell by 38% between 2010 and 2013, which they have, in the final version of the Bill, fully addressed is the equivalent of 500 million fewer barrels of oil the concerns of industry. The feedback I have received being produced. Critically low exploration has meant from the industry suggests otherwise. that 150 million fewer barrels of oil equivalent have After the debacle of the autumn statement last year been discovered in the past two years. with regard to this unexpected announcement, Ministers This clearly has wider implications for the UK’s oil have finally, three years after they made the same mistake, and gas sector. As the hon. Gentleman points out, it learned the lessons of turning to the North sea oil and also has serious implications for the Exchequer. Just gas industry to plug holes in their books, and coming yesterday, there was a report in the Financial Times up with policy on the hoof. In 2011, we saw the detrimental highlighting the fact that North sea oil and gas tax impact such unilateral action can have, particularly in receipts decreased by 60% in the past two years alone, an increasingly marginal industry—that was, perhaps, and are now at their lowest level since 2004. Some of reflected in the Financial Times report yesterday. We that can be accounted for by significant investment in can only hope that the Government have fully considered the past few years—the fiscal regime was designed in the impact of the latest changes and properly accounted such a way, under the previous Labour Government, to for them. Finally, the measures seem to diverge from the encourage such activity and therefore be less liable to Government’s general approach to transfer pricing and tax—but these figures are still reflective of the wider the arm’s length principle, but I hope the Minister can issues facing our North sea oil and gas sector, as I provide clarification on that. outlined previously. New clause 5 and new schedule 4 provide for further I want to draw the attention of the House to concerns, tax relief for the creative sector—based, of course, on expressed by numerous tax specialists, that these measures the last Labour Government’s highly successful film tax represent the Government abandoning the application relief. They introduce a tax relief for theatrical productions, of the arm’s length principle in determining transfer and the relief will operate in almost exactly the same pricing in the oil and gas sector. Just to explain the way as it does for high-end television and animation background, OECD member countries have agreed that productions, but with one small difference. It allows to achieve a fair division of taxing profits, and to qualifying companies engaged in theatrical productions address international double taxation, transactions between to claim an additional deduction in computing their connected parties—for example, intra-group companies— taxable profits. Where that additional deduction results should be treated for tax purposes by reference to the in a loss, they have to surrender it for a payable tax amount of profit that would have arisen had the same credit. Both the additional deduction and payable credit transaction been executed by unconnected or independent are calculated on the basis of UK core expenditure parties. The arm’s length principle is enshrined in article capped at 80% of total core expenditure by the qualifying 9 of the OECD model, treaty or convention. company. The Government apparently support the arm’s length The Minister set out the provisions in some detail, principle, but the Chartered Institute of Taxation has and they received some welcoming comments, particularly expressed concern that imposing such a cap, as new from Government Back Benchers, but I have a few schedule 1 would provide for, calculated through a queries about the new relief; I hope the Minister will be 971 Finance Bill2 JULY 2014 Finance Bill 972

[Catherine McKinnell] reviewing the operation and take-up of this tax relief each year to ensure that HMRC is fully aware of how it able to resolve any outstanding ones. The first relates to is being used, and, more important, whether it is being measures contained in new schedule 4, and it is important abused. to ensure that the measure is not open to abuse. Such reliefs as these—or tax expenditures, to use Treasury- 4.45 pm speak—well-intentioned though they are, have increasingly My second query relates to the interaction of not-for- come in for criticism from the Public Accounts Committee profit productions, which are often registered as charities, and the National Audit Office. We have already discussed and this tax relief. In its press release on the publication the number of both known and potentially unknown of the consultation document in March, Arts Council tax avoidance schemes generated around the reliefs and England pointed out that the majority of theatre the subsequent criticism of them. I do not think it productions which receive funds from it are registered would be helpful to hold this discussion again here on as charities, not companies, and are therefore not liable the Floor of the House; Members will be able to read for corporation tax. It seems that such concerns were the Hansard to see the extensive debates and discussions also raised throughout the consultation, with many we had in the Public Bill Committee. wondering how the numerous not-for-profit productions Following the consultation process, the Government to which this tax relief would be hugely valuable would appear to have taken on board the views of the Chartered still be able to benefit. The press release suggested that Institute of Taxation, which suggested in its consultation such registered charities would have to set up a trading submission that any evidence of abuse should be promptly subsidiary in order to benefit from the tax relief. identified and acted on by using the general anti-abuse The Government’s response to the consultation, which rule. New schedule 4 provides for a general anti-abuse I believe was published last week, noted those concerns rule based on the GAAR, but the Chartered Institute of and suggested that the Government had worked closely Taxation suggested that this tax relief should be properly with stakeholders to ensure that such charities could monitored and reviewed by the Government. The benefit without incurring significant additional Government’s consultation response suggests HMRC administrative costs. However, it remains unclear whether will “continue to monitor” for abuse, but can the Minister Arts Council England’s suggestion about the setting up give a specific commitment in this respect? of trading subsidiaries is the Government’s favoured Ian Swales: Does the hon. Lady join me in welcoming approach. The document merely states that HMRC the fact that the arrangements in HMRC are to give intends to publish “comprehensive guidance”. Clearly, specific permission on a production-by-production basis? in the light of recent reports from the Public Accounts I hope that HMRC will be staffed up accordingly, but Committee and the National Audit Office, the right that should avoid some of the abuses that took place balance must be struck between making this welcome under the previous film arrangements. relief available to those at whom it is aimed, and ensuring that such well-intentioned reliefs are not open to widespread Catherine McKinnell: I hope that will happen and abuse. I hope that the Minister will be able to provide that HMRC will have the resources available to it, as we some clarity and reassurance. know that it has faced significant reductions in staffing. Let me now say something about the definition of That does not necessarily mean that it will not be able to “touring productions” for the purposes of a payable tax undertake the sort of monitoring we would like to see credit. As the Minister helpfully explained, two levels of under the scheme, but it would be useful to hear from tax credit are available to touring productions that the Minister that HMRC has the resource, capacity and surrender their losses—if they have losses, of course—in systems to ensure that this does not become just another order to give further incentives to the bringing of vehicle for tax abuse. productions to areas that are, as the response puts it, “under utilised”. If a production does tour, an enhanced Helen Goodman (Bishop Auckland) (Lab): In the rate of tax credit is available, amounting to 25% of case of the film tax credits, the British Film Institute losses surrendered. For all other productions—those has a role in assessing whether the criteria are met, and that do not tour—the payable tax credit is 20%. it obviously has great expertise in that area. It would be helpful to know whether this work is going to be contracted The Government’s consultation response indicates out in any way or whether any particular expertise is that they have changed the definition of “touring needed by Revenue officials in doing this job. production” following suggestions that many smaller productions do not present as many as 14 performances Catherine McKinnell: My hon. Friend raises a very in a single venue, or perform the same show in 12 different important point. I have not specifically considered it, venues, which were the previous criteria. The Government but it fits well with some of the additional concerns put have now decided that productions are defined as “touring” to me, which I am now putting to the Minister, about if they meet one of two criteria: they must either defining who should qualify for the relief and how it perform in at least six separate premises or present at should be assessed by HMRC. It would be interesting to least 14 performances in at least two different premises. hear whether consideration has been given to using the It is the second criterion that has caused concern, expertise of outside bodies to ensure that HMRC gets because it remains unchanged even following the its assessments right first time in administering this tax consultation. I should be interested to hear the Minister’s relief. justification for that. The Government have clearly In the light of the National Audit Office’s recent responded to concern about the number of different report that HMRC monitors just 10% of its “tax venues on a tour, but perhaps he can explain the thinking expenditures”—there are more than 1,000—it would be behind the classing of a production as being “on tour” reassuring if the Government committed themselves to if it performs in just two different venues. Even if it puts 973 Finance Bill2 JULY 2014 Finance Bill 974 on a number of shows at those two venues, I wonder if David Mowat: Does the hon. Lady not think it right that really could be classed as a tour. What is to prevent that we incentivise these renewables projects through a production from moving from one side of the road to contracts for difference and all the mechanisms the the other, for example, in order to benefit from an Department of Energy and Climate Change has brought enhanced tax credit? forward rather than these sorts of EIS schemes? Therefore, Concerns have also been raised by the National Centre it is rational to do what the Government have done, and for Circus Arts, which is worried about the definition of that of itself should not make any difference to the “theatre”. Although the word “circus” is specifically propensity to go ahead with these things. mentioned, the centre thinks that the definition is still too narrow to reflect the nature of many contemporary Catherine McKinnell: We would always hope that the performances, not least those in circuses. It would welcome Government would behave rationally in respect of these confirmation that all circus performances will qualify matters. I am pleased that the hon. Gentleman has for the tax relief. It feels that the new clause refers to a absolute confidence in that, but I would be grateful if dramatic production in which the Minister could provide some reassurance because “the performers are to give their performances wholly or mainly the Government’s record on these issues has not always through the playing of roles”. been entirely rational and I do not share the confidence That wording could exclude a great many excellent of the hon. Member for Warrington South (David shows which the centre feels that the Minister would Mowat) in this regard. want to encourage and which, in the nature of circus, On follower notices and accelerated payments, showcase superb skills of dexterity and athleticism, but amendment 2 inserts subsection (8A), which provides may not involve a narrative or character acting as we that if a tribunal finds that a penalty should not have might understand it to be, in the context of a traditional been charged because it was reasonable for the taxpayer play. Is the Minister prepared to provide some clarity to continue his dispute, the follower notice on which it and reassurance, or alternatively to meet the National was based remains valid, as does any accelerated payment Centre for Circus Arts to discuss how HMRC can best notice or partner payment notice related to it. Concerns evolve the guidance that is supposed to flow from this have been raised that if a penalty is cancelled on the Bill, and which people are still awaiting, to ensure that grounds specified in clause 207, the validity of the as wide a range of circuses that do not involve the use of follower notice—or related accelerated payment notice wild animals are eligible for the relief? As has been said, or partner payment notice—is not affected by the circus originated in this country, and this new tax relief cancellation of the penalty. HMRC has confirmed that could help it grow internationally also. the intention is that if the penalty is cancelled on other As the Labour party introduced this tax relief for the grounds specified in subsection (2A), the follower notice, creative industry, we fully support another tax relief of and any related accelerated payment notice or partner a similar nature. However, there has been only a short payment notice, would be cancelled. That is clearly the time to reflect on the issue, and there are some outstanding logical result of a successful appeal against the penalty. queries, on which I hope the Minister will be able to give However, a few questions have been raised about this, some reassurance. so will the Minister say in what circumstances the New clause 6 is on the exclusion of incentivised grounds of appeal in clause 207(2A)(d) might be used, electricity and heat generation activities. It removes and why if successful, the FN and related APN or PPN more renewables activities from being eligible for would not be cancelled? When will guidance be published the enterprise investment scheme—although it still allows on this and the rest of the legislation on FNs and anaerobic digestion and hydro-power remain to be APNs, bearing in mind how important the guidance covered—unless carried out by a community company. will be in helping taxpayers and their advisers to understand This was announced a little while ago. It is worth how this legislation is intended to operate? When will reiterating some of the points we made on clause 53. We HMRC be publishing a list of the disclosure of tax have a particular concern regarding the impact on avoidance schemes that will be issued with an APN, as investment in the renewable energy sector. New we know that there is a lot of concern about the section 257MS explicitly rules out enterprises that benefit implementation of some of the Government’s proposed from Government renewables subsidies, including feed-in changes? On that very technical note, I conclude my tariffs, renewable obligation certificates and the heat queries to the Minister and I look forward to receiving incentive scheme. Given the well-publicised need for reassurances from him in his response. alternative sources of energy, it seems very strange that the Government are content to disincentivise this activity, Christopher Pincher (Tamworth) (Con): I welcome because it could result in a big slow down in investment the chance to make a brief contribution to the debate in the renewable energy sector in Britain, and potentially on this group of amendments. It was a pleasure to serve jeopardise our chances of meeting European renewable on the Public Bill Committee with the Exchequer Secretary; energy targets and climate change targets. It could also it was certainly an educational experience for me. It was limit the ability of communities to invest in localised also a pleasure to serve with the hon. Member for renewable energy schemes. Newcastle upon Tyne North (Catherine McKinnell), In addition, funds already invested in renewable energy although her professed determination to scrutinise the projects may have to be returned. It has been estimated legislation line by line did at times make it feel as that, for anaerobic digestion alone, the sum is over though she was scrutinising it word by word. £130 million. Considerable anxiety has been expressed I should like to speak briefly to Government over the past four years about this Government’s slightly amendments 1 and 2, which affect clause 207, encompassing erratic approach to renewable energy and renewable clauses 192 to 212. As the Minister and the shadow energy generation, so it would be helpful if the Minister Minister have said, those provisions deal with follower could provide some reassurance in that regard. notices and the accelerated payments regime. I was 975 Finance Bill2 JULY 2014 Finance Bill 976

[Christopher Pincher] that the Government are continuing with the bareboat charter measure. They believe that it is ill-conceived and heartened to hear that the Minister is spelling out the should have been dropped in its entirety. The backdrop ground rules for appeal in respect of follower notices, to its introduction is a period in which operating costs but he will know that there remains some residual have increased sharply. Last year’s cost increases of concern, to say the least, about the retrospective nature more than 15% led to an all-time record high of almost of accelerated payment notices. £9 billion in costs. I understand that new developments A number of people and their advisers have made in the North sea are facing similar cost pressures, so it is what they believe to be a proper disclosure, particularly illogical to introduce this measure at this point, especially after the increase in the fine for non-disclosure from as drilling rigs and accommodation vessels alone are £5,000 to £1 million, erring on the side of caution and included in the scope of the legislation. over-disclosing. They are concerned that they will now We are looking at a part of the sector where the be caught up by that disclosure and will find themselves return on capital is only 8% or 9%, and the cash with retrospective tax liabilities, perhaps dating back to break-even on a drilling rig or an accommodation platform 2004. The Minister was good in Committee in making it is typically 15 years. These are large investments, with clear that he would continue to consult the industry and investors taking substantial long-term risks, and we taxpayers, because the original consultation was brief. I cannot understand why the Government want to put hope that he will do that, and will continue the dialogue that at risk at this particular point. with the industry and with taxpayers to ensure that nobody is caught up unfairly, having tried to do the Mr Weir: My hon. Friend makes a very good point. right thing, by these proposals. I look forward to hearing Does he also recognise that there is a shortage of rigs? him make the position clear in his remarks . By applying this measure specifically to drilling rigs, we are adding another disincentive for investment in the Stewart Hosie: I rise to speak against new clause 1 North sea that would maximise our oil and gas recovery. and the introduction of the bareboat chartering regime. I heard the Minister’s comment that this is about trying to get a fair tax return from this small but important Stewart Hosie: Indeed; I recognise all those points, sector. It tells us that at the moment it is paying about and the pressures that are being applied to finite and £200 million a year in tax and national insurance. At a very mobile resources, such as rigs and accommodation yield of about £100 million, the tax return from this vessels, but I will come back to some of that later. small sector will be increased by about 50%—that seems This measure not only penalises the drilling and a substantial increase in a short period. accommodation vessel sector, but potentially impacts I would like to say that this bareboat chartering on the entire £35 billion upstream oil and gas supply regime was a one-off stand-alone bad measure, but it chain. Derek Henderson from Deloitte UK said: does not stand in isolation. It is part of a pattern of “While it doesn’t affect operators directly, many expect that the ill-judged, disjointed and sclerotic decisions that this costs will be passed on to them and could discourage drilling.” Government have taken, and it typifies their attitude to That would impact on the entire support and supply the North sea. Some years ago, we had the massive hike chain that is dependent on drilling activities. in North sea corporation tax supplementary charge, which absolutely stifled investment and brought it to a Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) grinding halt. That led the Government, in panic, to (SNP): On the point about making other jurisdictions make some kind of correction through the introduction more attractive, are the Government not actually helping of a large series of complicated new and enhanced field Scotland’s competitors by ensuring that rigs, of which allowances. there is a shortage, go to more sympathetic jurisdictions?

5pm Stewart Hosie: Indeed, and Malcolm Webb from Oil Mr Weir: My hon. Friend makes a very good point. and Gas UK made a near-identical point when he said: Given that the Government have so recently and so “It is perplexing…that the Government has chosen to proceed enthusiastically embraced the Wood review, does he not with the bareboat measure. This can only increase costs on the” think that it is an odd measure to introduce, as it will hit UK continental shelf. He also said: the maximisation of the recovery of our oil and gas “we fear that this move will drive drilling rigs, already in short reserves? supply, out of the UKCS.” Stewart Hosie: That is an extremely good point. It is That would be a ridiculous thing to do. not just the International Association of Drilling What makes this measure all the more peculiar is that Contractors that has welcomed the Government’s approach the bareboat charter arrangements are commercial to accepting the full recommendations of the Wood arrangements that are widely used across a range of review, but the overall trade body, Oil and Gas UK. industries, and not just in the oil and gas sector. The Indeed, the Scottish National party thinks that it is a arrangements we are talking about are used internationally, good thing, too. Both the industry and the SNP have and have formed a consistent part of the UK continental also welcomed some of the field allowances that the shelf operation for 40 years. So why pick now to take an Government were forced to introduce, particularly the extra £500 million or £600 million out of the North sea ultra-high-temperature, high-pressure field allowance over the next five years? The Treasury’s decision in the for mixed gas and oil fields. That kind of measure is Budget to apply this measure only to the oil and gas incredibly sensible, but as my hon. Friend says, and as industry, and only now, to a few specific vessel types, is Oil and Gas UK points out, there is huge disappointment utterly illogical. 977 Finance Bill2 JULY 2014 Finance Bill 978

I do not want to detain the House too long, so I think written questions from my right hon. and learned Friend that the key thing to do is to consider the points that the the Member for Camberwell and Peckham (Ms Harman), International Association of Drilling Contractors makes the Government have told us that the film tax credit has about the measure. This is not a gentle criticism of a supported 1,200 films, provides 46,000 jobs, and has mildly inconvenient tax; it is an excoriating critique of brought in £1 billion of investment. Obviously, therefore, what the UK Government have done. The association a theatre tax relief is a good idea in principle, but it is says: worth considering whether the drafting of the new “The measure is unfair and a unilateral deviation from international clause will achieve all the desired objectives. If it is not best practice…with no ability for contractors to reset prices,” drafted sufficiently generously, the positive benefits to it the theatre industry and to the British economy will not be achieved, but if it is drafted too loosely, it can “amounts to retrospective and double taxation”, become open to abuse. In either of those instances, we and in a real and practical sense, it does. It says: will have to come back and revisit the drafting, and the “The measure will depress economic activity. The…changes industry will face an unstable regime that is not helpful affect the cost base of the drilling industry”, to its planning. In one respect, the drafting is a bit too with all the impact that might have. It goes on: loose and in another respect it might be a little too tight. “The measure targets a single, specialist sector for additional rent…Specialist international companies that have relocated” Sir Nick Harvey (North Devon) (LD): I strongly to the UK “will be particularly hit”, when they and support the hon. Lady’s thesis that it is essential to get their investment should be welcomed instead. the wording right. At the moment, there seems to be a practice on the part of HMRC investigators to assume The association argues: that any investment—certainly by private individuals “The government has manipulated the introduction of the taking advantage of this facility—is, by definition, improper. measure to avoid proper scrutiny.” There is far too much of an assumption that people are In a particular criticism, it goes on to say: on the fiddle. I share her view that it is an entirely valid “It is not appropriate for legislation as complex as this to be form of tax allowance and that it is important to get the published in initial draft form” definitions absolutely bang on the nail. on the day it was due to come into effect. That is a preposterous way for the UK Government to behave. Helen Goodman: I am grateful to the hon. Gentleman. The association continues: It is slightly unfortunate that the Government have “The consequences of the measure have not been properly brought the new clause and new schedule to the House assessed by HRMC”, now, because this is the only opportunity we are going and it says that there are reports that up to £2 billion to get to scrutinise this. could be lost from the continental shelf. It also says: The object is obviously to support the development “The measure is deliberately discriminatory...all vessels bar of British theatre and, in particular, to support touring. drilling rigs and accommodation units have been exempted for We have some of the best theatre in the world; we all reasons that are far from clear.” know that. It all began with having the best playwright To put that another way, only two sorts of vessels in the world. We have built on that over time, and our remain included in the scope of the measure, which theatre is one of the major attractions for inward visitors appears to be the usual sort of smash-and-grab cash and a major export industry. I point out to the Minister raid that this Government make on the North sea. that we can draw a distinction—it is a little crude—between There appear to be a great many reasons why the two parts of the current theatre industry. The commercial bareboat chartering regime is wrong. There appears to part is a series of chains of theatres producing successful, be an illogicality about the way it is being introduced, as profitable plays that are often sold to New York and well as a complete lack of transparency and time properly have very long runs, particularly in the west end of to assess the long-term impact, not just on drilling rigs London. and accommodation vessels, but on the entire supply If the sole benefit of the tax relief was to make those chain. Little concern appears to have been felt about the companies more profitable, that would be very nice for consequential impact on growth and jobs in the sector them, but it would not achieve what the Minister is and in the economy in general. That is quite a scathing aiming for—namely, to support the development of the set of criticisms to make of this Government, although industry. We therefore need to look at whether the relief it is not unique and could apply to any number of other supports the part of the theatre that is not always things that they have done. profitable and is supported by the public purse. That is why the question that my hon. Friend the Member for I look forward to hearing what the Minister has to Newcastle upon Tyne North (Catherine McKinnell) say, but unless there is a very credible explanation of the asked about whether the allowance will be claimable by amount of tax that he believes is lost, and of how the companies that are charities is very pertinent. Large proposals will help, rather than having the consequences parts of the subsidised theatre sector, the Minister that I have described, I fear that we might divide on new hopes, will be getting a tax subsidy instead of a public clause 1. spending subsidy; I appreciate that that is his aim. However, that will not happen if their legal structure is Helen Goodman: I should like to speak to new clause 5 not in line with what the Bill provides for. It is rather and new schedule 4 on the theatre tax relief and to set disappointing that we are being asked to agree this this in the context of the current state of British theatre. primary legislation when the guidelines on the definitions The Government’s own documents point out that the have not yet been published and so it has not yet been film tax credit introduced by the previous Labour possible for them to be scrutinised by people in the Government has been a significant success. In answer to industry who understand this very well. 979 Finance Bill2 JULY 2014 Finance Bill 980

5.15 pm To return to the point that my hon. Friend the To take a concrete example, the National Theatre is a Member for Darlington (Jenny Chapman) raised, it is publicly supported theatre, and the publicly supported my understanding that in Darlington, the theatre is theatre, by and large, is more innovative, more adventurous, what is called a receiving house. That means that new puts on more new productions and, as some might say, plays are not being made in Darlington. Companies is more interesting. That theatre has a wider portfolio of come on tour to Darlington and their productions are riskier and more different productions, and sometimes, shown for several days. There are many very good some of them turn out to be extremely popular and can producing houses in the regions as well; one good transfer into the commercial sector. The most obvious example would be the Nottingham Playhouse, where recent example is “War Horse”, which has done very they make plays and tour them, and sometimes they well indeed. It started at the National, it went to the tour them to London—they have just had something on west end and now it has been on in New York as well. at the Almeida. We obviously want more of that. A receiving house will not get the benefit of this tax The Minister must tell us more about who can claim relief; it is the producing company that gets the benefit. the relief if he is to convince us of its effectiveness. He Of course, it may be that if they get the tax relief or the also needs to understand that we will not accept that it tax credit, they could offer the production to the receiving completely cancels out the effect of the public spending house for slightly less money, which might ease the cuts that the present Government have imposed on the situation in a place like Darlington, but there will not be theatre. Yesterday, Arts Council England announced its a direct benefit, as I understand it. new set of national portfolio organisations; it has had My next question is whether the definition of touring to cut the number because the Department for Culture, is the right one and whether the measure will address Media and Sport has taken a £70 million cut. the regional imbalance. As my hon. Friend the Member for Newcastle upon Tyne North pointed out, it is completely Jenny Chapman (Darlington) (Lab): My hon. Friend sensible to say that the extra relief is given if the play is has spoken about how the changes might apply to the taken to more than six places, but we must question National Theatre. Is she intending to move on to talk whether 14 productions in two places is an appropriate about regional theatre and how those changes may or definition of touring. Some of those who responded to may not benefit somewhere such as the Darlington the Government’s consultation said it would be a good Civic Theatre? idea to have a geographical definition of touring, and I do not understand why the Minister has not done that. I Helen Goodman: I am, because I know that my hon. think he is risking some revenue leakage on this point. Friend has a keen interest in that, as do people up and To give a concrete example, a play could be on on one down this country. side of Shaftesbury avenue for 14 nights, then move to So we have had big cuts to the Arts Council. The the other side of Shaftesbury avenue for 15 or 25 nights Government have also imposed big cuts on local and it would benefit, but the Government would not government, and from answers that I have received to have achieved their policy objective of ensuring that the freedom of information requests, we now know that on theatrical experience took in a new, wider audience. average local authorities are cutting their arts provision I think there is a problem and I am disappointed by by even more—some 14%. So, given the estimates in the the way the Minister has drafted the provision; it is a Red Book of the value of this tax relief rising from weak spot. On the other hand, he might be being too £5 million to £20 million per year, we can immediately restrictive in the number of production companies that see that it does not compensate for the reductions that can benefit, although we do not yet know how the have been experienced in public support. guidelines will operate. In principle, of course it is a My hon. Friend is right: there is a big issue about good idea to support British theatre. It is a great industry, what is going on in the regions. The “Rebalancing our we are very good at it and we have some of the best Cultural Capital” report suggested that the Government actors and theatre companies in the world, so in principle, were supporting cultural institutions to the tune of it is a good idea to have a theatre tax relief, but I do have 14 times as much per person in London as elsewhere, those two questions about those two parts of the new and that is not conscionable in the long term for this clause and the schedule. country. It is clearly because of that concern about regional imbalance that the Minister has decided to Mr Aidan Burley (Cannock Chase) (Con): I have a provide a slightly more generous relief for touring. couple of questions for the Minister about the accelerated payment of tax and avoidance cases. I have written to Simon Kirby (Brighton, Kemptown) (Con): Will the him about this and received a letter from him, and also hon. Lady be very clear: is she opposed to the cuts in the met him subsequently. Others have mentioned this issue, DCMS, and if so, would Labour reverse them? which has caused a lot of concern, especially within the accounting community. Many of my constituents who Helen Goodman: I think it must be a matter of regret are accountants and who run businesses have written to to everybody in the House that DCMS has taken 36% cuts. me and met me to voice their concern about what they Of course, the question whether they can be restored is, believe is retrospective legislation, with no right of as the hon. Gentleman knows, a completely separate independent appeal. I hope the Minister will be able to question. I am just pointing out that the tax relief, if the reassure my constituents and those of other Members. legislation is properly drafted, will not cancel out the effect The first question is about the oft-quoted 80% success of those cuts. I am hoping that no one on the Government rate in tax avoidance cases tried at court. The Minister side is trying, through some sleight of hand, to give has quoted that statistic, and HMRC has quoted similar such an impression. figures, but we have yet to discover the source of that 981 Finance Bill2 JULY 2014 Finance Bill 982 statistic, nor do we have a list of the cases on which it is In addition, recent Government incentives have resulted based. Many of those who have contacted me feel that in record investment in the UK continental shelf. It is the figure is unsubstantiated. Will the Minister tell us right that action is taken to ensure a fair amount of tax the source of that 80% success rate statistic? from activities carried out in connection with the Secondly, there is a strong view that this law is being exploitation of the UK’s natural resources, and HMRC implemented retrospectively, with no right of independent ensures that all businesses pay the tax due in accordance appeal. I know the Minister has said it is not retrospective with the tax law. legislation, but he knows that that opinion is not shared by the accountancy profession, the legal profession, the Mr Brian H. Donohoe (Central Ayrshire) (Lab): I CBI or even the Treasury Select Committee. Will he have a constituent who is on a ship that serves the comment on that? North sea. He is the only member of the crew who has had his national insurance contributions changed in the It is predicted that the legislation will result in some last round. He is an electrical engineer. The mechanical 150,000 redundancies, and the loss of future tax revenues engineer, the captain and the bosun are still on the old from companies going to the wall, including some in my rate, but the electrical engineer is not. Can the Minister constituency, is estimated to be £50 billion, all to collect explain to me why an electrical engineer is being a mere £4 billion in unpaid revenues over the next five discriminated against on a North sea supply vessel? years. That seems to me to be a very bad bang for your buck. Does the Minister believe it is worth such loss and Mr Gauke: The hon. Gentleman raises a somewhat unemployment? different point from the one that I am addressing, but if he writes to me in respect of the individual case— Mr Gauke: We have had, unsurprisingly, a wide ranging [Interruption.] If he has already written to me, I am debate. I shall try to respond to the points raised by delighted to hear that. HMRC may be better placed to hon. Members in our debate, starting with those relating respond to the particular case, but we are taking action to new clause 1 and new schedule 1 on oil and gas. I in respect of intermediaries to ensure that the national outlined the measure in my opening remarks, and a insurance contribution system works fairly. This is another number of questions have been raised. The question area where we are making sure that businesses that that gets to the heart of the matter concerns the impact benefit from our natural resources make a fair contribution on drilling activity and how that affects the UK’s in tax. competitiveness. The Government’s support for the sector over the 5.30 pm past few years through field allowances and decommissioning relief certainly has helped to encourage With regard to whether evidence of profit shifting record levels of investment—£14.4 billion in 2013 alone— constitutes tax avoidance, this measure is designed to and supported the market for rigs in the UK continental provide a fair amount of taxation for activities carried shelf, where rates are driven by demand. Rig rates in the out in connection with the UK’s valuable natural resources. UK are among the highest globally, so we are not The current arrangements result in significant profits convinced that this measure will drive rigs from the UK from activity on the UK continental shelf moving out continental shelf. In fact, recent press coverage indicates of the UK tax net. This measure is designed to prevent that rigs continue to be attracted to the UK continental that. As for the argument that it could result in a loss of shelf after the measure’s introduction. tax revenue, we expect it to raise £535 million over the scorecard period, on revenues of £1.75 billion, and that In addition, the Government do not accept that they has been certified by the independent Office for Budget should seek to address the issue of rising costs by Responsibility. accepting an unfair tax system where a small group of companies are able to pay almost no UK tax. The new We do not expect this measure to result in a decline in oil and gas authority which the Government announced activity.The Government are fully committed to supporting as part of their implementation of Sir Ian Wood’s investment in oil and gas. The work that we are doing recommendations will aim to identify ways to ensure with the industry, for example by introducing new that Government and industry can work together to allowances and providing certainty on decommissioning address cost escalation. relief, as I mentioned earlier, has helped unlock billions of pounds worth of investment in the UK. That is the Stewart Hosie: That is a valid point to make, but right way to support investment. I do not think that the having had the chartering regime in place in the North right way would be to accept an unfair tax system that sea for 40 years, why introduce change now and why allows some highly profitable companies to pay almost restrict it to rigs and accommodation vessels, affecting no tax in the UK; there are better ways to ensure that only one industry? we are competitive in this area. With regard to the concern that this measure is Mr Gauke: On the question why now, it is worth somehow being rushed through, the Government have pointing out that following a refocusing of the UK consulted widely with industry. Unlike many measures corporation tax regime to a more territorial basis over aimed at correcting unfairness, this one was not introduced recent years, and in view of increasing recognition, with immediate effect in the autumn statement. We through the base erosion and profit shifting OECD welcomed the industry’s responses to the consultation, initiative, that transfer pricing and other international which resulted in a number of changes to the approach rules do not always provide a fair or consistent outcome, adopted. As a result of the evidence received, the scope the Government have decided that the need to protect of the measure has been limited to drilling rigs and the tax take from those who benefit indirectly from the accommodation vessels and we have increased the deduction exploitation of the UK’s natural resources requires cap. We have also announced that we will review the domestic action now. measure in a year. 983 Finance Bill2 JULY 2014 Finance Bill 984

With regard to the concerns over fiscal stability, the of the named exclusions, other types of performing arts tax rules that apply to contractors have been in place can benefit, provided that those giving the performance since 1973, and I think that we must look at this in that can demonstrate that they are wholly or mainly playing context. I think that it is right that we correct an a role and that each performance is live and that the unfairness. The Government are aware of the concerns presentation of live performance is the main object, or about exploration, which is why the Chancellor announced one of the main objects, of the theatre production in the Budget that one of the new oil and gas authority’s company’s activities. The Government believe that using first tasks will be to report on how we can encourage that definition, which considers the nature of the exploration. The new allowance for ultra-high pressure, performance, is more appropriate than listing types of high temperature clusters, which was also announced in performing arts. In cases where further clarity may be the Budget, is being designed specifically to incentivise required, companies should seek professional advice or exploration activity around new developments. contact HMRC. On the subject of HMRC, I was asked I do not accept that an unfair tax system that allows about its resources. The House may be pleased to know some highly profitable companies to pay almost no that a specialist unit has been provided to assist businesses corporation tax in the UK is necessary to boost exploration. with making claims under this relief. We are seeing no evidence of projects being cancelled. The definition of “touring” has been raised and We are aware that there are marginal projects on the whether more should be done in terms of relating it to UK continental shelf, but that is why we have introduced geographical location. A production can qualify as the field allowances. That is the correct way to maximise “touring” if there is an intention to perform at six or economic recovery. more separate premises or to present 14 performances The hon. Member for Newcastle upon Tyne North in two or more premises. The hon. Member for Bishop (Catherine McKinnell) asked about setting aside the Auckland (Helen Goodman) is right to say that we arm’s length principle for transfer pricing. The UK considered alternative definitions of “touring,” including remains committed to the arm’s length principle. At the the use of geographical restrictions, but we believe that heart of transfer pricing is the requirement to find the our definition provides a simple and effective way to price that would arise at arm’s length. However, very support the range of types and sizes of tours that take few transactions of the type targeted by this measure place. That is why we have gone with that definition. take place between unconnected parties. That gives rise On the question whether this will cause a significant to uncertainty over the allocation to specific jurisdictions administrative burden for charities or not-for-profit of the overall global profits made by the contractor. I theatre companies, minimising complexity and ensuring hope that those points of clarification on the matter are straightforward compliance was one of the central helpful. considerations in designing the relief. That is why we are A number of questions were asked about theatre tax basing it on the film tax relief model, which is also used relief. Let me seek to answer them. Members raised successfully for other creative industry tax reliefs. We concerns that the relief could be abused and asked have worked closely with industry in determining the whether we will review the measure in future. We consider design of the relief, to ensure that it works for the that effective anti-avoidance rules are critical to the industry, particularly the not-for-profit sector. Officials long-term success and stability of theatre tax relief, a continue to engage with industry, including by attending view that I think has been expressed on both sides of events to help and advise in the run-up to companies the House. The Government will include rules similar starting to make claims in September. Ultimately, detailed to those applied under film tax relief to prevent artificial guidance will be published on the HMRC website to inflation of claims. In addition, there will be a general ensure that companies and charities get the support anti-avoidance rule, based on the general anti-abuse they need. rule, denying relief where there are tax-avoidance arrangements relating to the production. Of course, Mark Field (Cities of London and Westminster) (Con): HMRC will monitor for abuse once the regime has been Is it the Treasury’s intention, for the sake of simplicity introduced. and certainty, to ensure that the definition of “touring” is a nationwide one? In central London, which has a lot Simon Kirby: Is the Exchequer Secretary any clearer of theatres, it would be very easy to suggest that performing than I am about whether the Labour party will reverse in only two or three theatres would not be a tour. the cuts to the Department for Media, Culture and Sport, because I am still not sure whether it intends to or not? Mr Deputy Speaker (Mr Lindsay Hoyle): Order. It is not good for Members just to walk in and intervene, in Mr Gauke: I am grateful to my hon. Friend for fairness to those who have been here throughout. I another example of Labour opposing yet another measure know that the hon. Gentleman has a great interest in that this Government have taken to try to reduce the this issue, but may I ask Members to please not just deficit. At least Labour Members did not make another walk in and intervene? I am sure, however, that the spending pledge on this occasion, but we will, of course, Exchequer Secretary would like to take the question on continue to monitor their remarks very closely because board, because it is such a good intervention. they frequently do make spending pledges. [Interruption.] Perhaps the presence of the shadow Chief Secretary, Mr Gauke: I will do so, Mr Deputy Speaker, because the hon. Member for Nottingham East (Chris Leslie), my hon. Friend makes an interesting point. I have set has instilled some uncharacteristic discipline in Labour out the definition of touring. We think that the right Front Benchers. approach is to use that definition, for the sake of Let me turn to the question of why some circuses are simplicity, rather than to try to come up with something excluded and some points of definition. With the exception more complicated. 985 Finance Bill2 JULY 2014 Finance Bill 986

A question was asked about how a business not work and about the amount of any tax liability will not subject to corporation tax can qualify for relief. The be changed. The taxpayer would have already paid the new relief is available only to companies subject to money had they not entered an avoidance scheme. The corporation tax: it is a corporation tax relief. As I have taxpayer can continue to dispute the case, and will be said, it is modelled on the successful reliefs that already paid back with interest should they win. We are not exist for the creative sector, and it is designed to give the restricting people’s rights. Prudent taxpayers should relief to producers while minimising the scope for abuse. recognise that tax avoidance carries a significant risk of The Government recognise that not-for-profit companies not working and that the tax might become payable, so make up a valuable and substantial part of the theatre they should make plans for such an outcome. industry, and we are confident that the sector will be able to access the relief without significant additional Christopher Pincher: My hon. Friend is being very administrative burdens. A concern was expressed about generous with his time. I am pleased that he has made whether setting up a trading subsidiary is complicated the position clear. Will he also make it clear that he will for charities. As I have said, we have tried to minimise continue the dialogue with the tax advice industry and complexity, and we have based the relief on what is with taxpayers who are concerned about the issue? The already in place. We believe that charities will get the Treasury Committee has described the measure as a support they need. retrospective piece of legislation. I know that he has received representations from the noble Lord Flight, David Mowat: Will the Minister give way? and I trust that he will also take those on board. Mr Deputy Speaker: A man who has been here all the time. Mr Gauke: I have received a number of representations on the matter, but I have been clear as to why the David Mowat: I have, indeed, been here all the time, Government do not consider the measure to be Mr Deputy Speaker. retrospective. It is right that in these circumstances the The hon. Member for Bishop Auckland (Helen disputed tax should be held by the Revenue. Goodman) asked whether the relief will apply to The hon. Member for Newcastle upon Tyne North blockbuster successes, such as “Les Misérables”, on asked about the grounds for a penalty appeal. We have which massive amounts of money are made. Indeed, the introduced amendments to provide extra clarity on return on capital for such ventures is far higher than that. They separate cases in which the penalty is cancelled that for contractors in the North sea. Can the Minister because the notice should not have been issued from give us any assurance that the relief will not be those cases in which the notice was appropriate but the disproportionately skewed towards such companies? taxpayer has reasonable grounds to continue the dispute— Mr Gauke: The point is that the relief is designed to for example, because they could reasonably argue that support the range of theatre productions across the different grounds are relevant. Then it will be for the UK, in both the subsidised and commercial sectors. We tribunal to decide. HMRC is on course to publish the worked closely with the subsidised sector when developing guidance and the DOTAS list in time for Royal Assent. the policy, and we are confident that it will benefit from To answer the question from my hon. Friend the the relief. Member for Cannock Chase about the follower notices, Let me turn to the points made about measures to there is no appeal against the requirement to pay the deal with tax avoidance schemes, including the accelerated accelerated payment. That would simply substitute one payments regime and follower notices. My hon. Friend dispute over the substance of the scheme for another. the Member for Tamworth (Christopher Pincher) asked HMRC is not making a decision about whether the whether taxpayers who have not used a true tax avoidance avoidance scheme works, which would have full rights scheme will be caught, perhaps with a precautionary of appeal, and the rules do not change that situation; notification having been made under the DOTAS regime. rather, the requirement imposed on the taxpayer relates Any unintended consequences for compliant taxpayers solely to the timing of the payment. If payment of the will be minimal. Where the taxpayer has used a relief tax is a problem because the taxpayer cannot afford the correctly, but a DOTAS disclosure has been triggered, full amount immediately, HMRC will use its normal there would not normally be any tax in dispute, and approaches, including appropriate payment arrangements. there will therefore be no accelerated payment. If a The source for the HMRC success rate of 80% is the taxpayer has used a relief largely as intended, but some list of tribunal and court decisions. Those decisions are elements are disputed, then an accelerated payment—if all published and people can read for themselves HMRC’s one is required—would be confined to the disputed continued success in these cases. elements. Let me be clear that the accelerated payment The hon. Member for Newcastle upon Tyne North is the amount of tax that the taxpayer can expect to pay asked whether we are withdrawing support for investment if their avoidance fails, taking account of their overall in renewables. The change we are making is not an tax position. It is not some arbitrary amount, as has attack on renewables. It will simply end double subsidy been alleged by those who have tried to discredit the of companies that are at lower risk because they will measure. benefit from Department of Energy and Climate Change My hon. Friend asked whether the measure will be support, and will ensure that the venture capital schemes retrospective in effect, as did my hon. Friend the Member remain well targeted and operate in a fair and sustainable for Cannock Chase (Mr Burley). We had an extensive way. The Government continue to support the renewables debate on that point in Committee, and the Committee sector more generally and have set out the amount of reached a sensible conclusion, but let me set out the support we will allocate to low-carbon generation up to issue again. The measure is not retrospective. The rules 2020-21, when it will reach £7.6 billion. The Government about whether the taxpayer’s scheme does or does not continue to offer generous incentives to the sector. 987 Finance Bill2 JULY 2014 Finance Bill 988

[Mr Gauke] Hague, rh Mr William Maynard, Paul Halfon, Robert McCartney, Jason The hon. Lady asked whether funds already invested Hames, Duncan McCartney, Karl in renewable energy schemes will have to be returned to Hammond, rh Mr Philip McCrea, Dr William investors. I can reassure her that new clause 6 will have Hammond, Stephen McIntosh, Miss Anne effect only for shares issued by companies on or after Hancock, Matthew McLoughlin, rh Mr Patrick Hands, rh Greg McPartland, Stephen Royal Assent to the Bill. Existing schemes and investors Harper, Mr Mark Menzies, Mark will not be affected by the changes. Harrington, Richard Metcalfe, Stephen With those points of clarification, I hope the House Harris, Rebecca Miller, rh Maria will support the proposals. Hart, Simon Mills, Nigel Question put, That the clause be read a Second time. Harvey, Sir Nick Milton, Anne Haselhurst, rh Sir Alan Mitchell, rh Mr Andrew The House divided: Ayes 301, Noes 7. Heald, Oliver Moore, rh Michael Division No. 31] [5.48 pm Heath, Mr David Mordaunt, Penny Heaton-Harris, Chris Morgan, rh Nicky Hemming, John Morris, Anne Marie AYES Henderson, Gordon Morris, David Adams, Nigel Cox, Mr Geoffrey Hendry, Charles Morris, James Afriyie, Adam Crabb, Stephen Hinds, Damian Mosley, Stephen Aldous, Peter Crockart, Mike Hoban, Mr Mark Mowat, David Alexander, rh Danny Crouch, Tracey Hollingbery, George Mundell, rh David Andrew, Stuart Davies, David T. C. Hollobone, Mr Philip Munt, Tessa Arbuthnot, rh Mr James (Monmouth) Holloway, Mr Adam Murray, Sheryll Bacon, Mr Richard Davies, Glyn Hopkins, Kris Murrison, Dr Andrew Baker, Norman Davies, Philip Horwood, Martin Neill, Robert Baker, Steve Davis, rh Mr David Howarth, Sir Gerald Newmark, Mr Brooks Baldry, rh Sir Tony Dinenage, Caroline Howell, John Newton, Sarah Baldwin, Harriett Djanogly, Mr Jonathan Hughes, rh Simon Nokes, Caroline Barclay, Stephen Dorrell, rh Mr Stephen Hunt, rh Mr Jeremy Norman, Jesse Barwell, Gavin Dorries, Nadine Huppert, Dr Julian Nuttall, Mr David Bebb, Guto Doyle-Price, Jackie James, Margot Offord, Dr Matthew Beith, rh Sir Alan Drax, Richard Jenkin, Mr Bernard Ollerenshaw, Eric Bellingham, Mr Henry Duddridge, James Jenrick, Robert Opperman, Guy Benyon, Richard Duncan, rh Mr Alan Johnson, Gareth Ottaway, rh Sir Richard Beresford, Sir Paul Duncan Smith, rh Mr Iain Johnson, Joseph Paisley, Ian Berry, Jake Dunne, Mr Philip Jones, Andrew Parish, Neil Bingham, Andrew Durkan, Mark Jones, rh Mr David Patel, Priti Binley, Mr Brian Ellis, Michael Jones, Mr Marcus Penrose, John Birtwistle, Gordon Ellison, Jane Kawczynski, Daniel Percy, Andrew Blackman, Bob Elphicke, Charlie Kelly, Chris Phillips, Stephen Blackwood, Nicola Evans, Graham Kennedy, rh Mr Charles Pickles, rh Mr Eric Blunt, Crispin Evans, Jonathan Kirby, Simon Pincher, Christopher Bottomley, Sir Peter Evans, Mr Nigel Knight, rh Sir Greg Prisk, Mr Mark Bradley, Karen Evennett, Mr David Kwarteng, Kwasi Pritchard, Mark Brady, Mr Graham Fabricant, Michael Lamb, Norman Pugh, John Brake, rh Tom Fallon, rh Michael Lancaster, Mark Raab, Mr Dominic Bray, Angie Farron, Tim Lansley, rh Mr Andrew Randall, rh Sir John Brazier, Mr Julian Featherstone, Lynne Latham, Pauline Reckless, Mark Bridgen, Andrew Field, Mark Laws, rh Mr David Redwood, rh Mr John Brine, Steve Foster, rh Mr Don Leadsom, Andrea Rees-Mogg, Jacob Brokenshire, James Fox,rhDrLiam Lee, Jessica Reid, Mr Alan Brooke, Annette Freer, Mike Lee, Dr Phillip Robathan, rh Mr Andrew Browne, Mr Jeremy Fuller, Richard Leech, Mr John Robertson, Mr Laurence Bruce, Fiona Gale, Sir Roger Lefroy, Jeremy Rogerson, Dan Buckland, Mr Robert Garnier, Sir Edward Leigh, Sir Edward Rosindell, Andrew Burns, Conor Garnier, Mark Leslie, Charlotte Rudd, Amber Burrowes, Mr David Gauke, Mr David Letwin, rh Mr Oliver Ruffley, Mr David Burstow, rh Paul George, Andrew Lewis, Brandon Russell, Sir Bob Burt, rh Alistair Gibb, Mr Nick Lewis, Dr Julian Rutley, David Byles, Dan Gillan, rh Mrs Cheryl Liddell-Grainger, Mr Ian Sanders, Mr Adrian Cairns, Alun Glen, John Lidington, rh Mr David Scott, Mr Lee Campbell, rh Sir Menzies Goldsmith, Zac Lilley, rh Mr Peter Selous, Andrew Carmichael, rh Mr Alistair Goodwill, Mr Robert Lloyd, Stephen Shapps, rh Grant Carmichael, Neil Graham, Richard Long, Naomi Sharma, Alok Carswell, Mr Douglas Grant, Mrs Helen Lopresti, Jack Shelbrooke, Alec Cash, Sir William Gray, Mr James Loughton, Tim Shepherd, Sir Richard Chishti, Rehman Grayling, rh Chris Lucas, Caroline Simpson, Mr Keith Chope, Mr Christopher Green, rh Damian Luff, Sir Peter Skidmore, Chris Coffey, Dr Thérèse Greening, rh Justine Lumley, Karen Smith, Henry Collins, Damian Griffiths, Andrew Macleod, Mary Smith, Julian Colvile, Oliver Gummer, Ben Main, Mrs Anne Soames, rh Sir Nicholas 989 Finance Bill2 JULY 2014 Finance Bill 990

Soubry, Anna Villiers, rh Mrs Theresa (3) In section 188 (other definitions for Part 5), in subsection Spelman, rh Mrs Caroline Walker, Mr Charles (1), in the definition of “company” for “section 156(2A)” Spencer, Mr Mark Walker, Mr Robin substitute “sections 156(2A) and 169(3)”. Stanley, rh Sir John Walter, Mr Robert (4) The amendments made by this section have effect in Stevenson, John Ward, Mr David relation to accounting periods ending on or after 1 January Stewart, Bob Watkinson, Dame Angela 2015.”—(Mr Gauke.) Stewart, Iain Weatherley, Mike Brought up, and added to the Bill. Stewart, Rory Webb, Steve Stride, Mel Wharton, James New Clause 3 Stuart, Mr Graham White, Chris Stunell, rh Sir Andrew Whittaker, Craig GENERAL BLOCK EXEMPTION REGULATION Sturdy, Julian Whittingdale, Mr John Schedule (General Block Exemption Regulation) makes Swales, Ian Wiggin, Bill provision in relation to Commission Regulation (EU) No 651/ Swayne, rh Mr Desmond Willetts, rh Mr David 2014 (General block exemption Regulation).”—(Mr Gauke.) Swinson, Jo Williams, Mr Mark Brought up, and added to the Bill. Swire, rh Mr Hugo Williams, Stephen Syms, Mr Robert Willott, Jenny New Clause 4 Tapsell, rh Sir Peter Wilson, Mr Rob CO-OPERATIVE SOCIETIES ETC Teather, Sarah Wright, Jeremy Thurso, John Wright, Simon Schedule (Taxation of co-operative societies etc) makes provision about the tax treatment of co-operative, community Tomlinson, Justin Yeo, Mr Tim Tredinnick, David benefit and industrial and provident societies and credit Young, rh Sir George Turner, Mr Andrew unions.”—(Mr Gauke.) Zahawi, Nadhim Tyrie, Mr Andrew Brought up, and added to the Bill. Uppal, Paul Tellers for the Ayes: Vara, Mr Shailesh Claire Perry and New Clause 5 Vickers, Martin Mr Sam Gyimah TAX RELIEF FOR THEATRICAL PRODUCTION Schedule (Tax relief for theatrical production) contains NOES provision about relief in respect of theatrical productions.”— Bruce, rh Sir Malcolm Weir, Mr Mike (Mr Gauke.) Hosie, Stewart Whiteford, Dr Eilidh Brought up, and added to the Bill. MacNeil, Mr Angus Brendan Tellers for the Noes: Robertson, Angus Pete Wishart and New Clause 6 Smith, Sir Robert Jonathan Edwards EXCLUSION OF INCENTIVISED ELECTRICITY OR HEAT GENERATION ACTIVITIES Question accordingly agreed to. ‘(1) ITA 2007 is amended as follows. New clause 1 read a Second time, and added to the Bill. (2) In section 192 (EIS: meaning of “excluded activities”)— (a) in subsection (1), omit the “and” at the end of 6.1 pm paragraph (ka) and after that paragraph insert— Proceedings interrupted (Programme Order, 1 July). “(kb) the subsidised generation of heat or subsidised production of gas or fuel, and”, and The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that (b) in subsection (2), omit the “and” at the end of paragraph (f) and after paragraph (g) insert “, and time (Standing Order No. 83E). (h) section 198B (subsidised generation of heat and subsidised production of gas or fuel).” New Clause 2 (3) In section 198A (excluded activities: subsidised generation or export of electricity)— DETERMINATION OF BENEFICIAL ENTITLEMENT FOR (a) for subsection (3) substitute— PURPOSES OF GROUP RELIEF “(3) The generation of electricity is “subsidised” if— ‘(1) CTA 2010 is amended as follows. (a) a person receives a FIT subsidy in respect of the (2) In section 169 (interpretation of provisions to determine electricity generated, proportion of beneficial entitlement)— (b) a renewables obligation certificate is issued in (a) in subsection (2), for the definition of “arrangements” connection with the generation of the electricity, or substitute— (c) a scheme established in a territory outside the United ““arrangements”— Kingdom, and corresponding to that set out in a (a) means arrangements of any kind (whether or renewables obligation order under section 32 of the not in writing), but Electricity Act 1989, operates to incentivise the (b) does not include a condition or requirement generation of the electricity.”, imposed by, or agreed with, a Minister of the (b) in subsection (6), omit the “or” after paragraph (c) and Crown, the Scottish Ministers, a Northern after paragraph (d) insert “, or Ireland department or a statutory body,”, and (e) an SCE formed in accordance with Council Regulation (b) after that subsection insert— (EC) No 1435/2003 on the Statute for a European Cooperative Society.”, and “(3) In subsection (2) “statutory body” means a body (other than a company as defined by section 1(1) of the Companies (c) in subsection (9), at the end insert— Act 2006) established by or under a statutory provision for the ““renewables obligation certificate” means a certificate purpose of carrying out functions conferred on it by or under a issued under section 32B of the Electricity statutory provision, except that the Treasury may, by order, Act 1989 or Article 54 of the Energy (Northern specify that a body is or is not to be a statutory body for this Ireland) Order 2003.” purpose.” (4) After that section insert— 991 Finance Bill2 JULY 2014 Finance Bill 992

“198B Excluded activities: subsidised generation of heat (a) a scheme established by regulations under section 100 and subsidised production of gas or fuel of the Energy Act 2008 or section 113 of the Energy (1) This section supplements section 192(1)(kb). Act 2011 (renewable heat incentives), or (2) The generation of heat, or production of gas or fuel, is (b) a similar scheme established in a territory outside the “subsidised” if a payment is made, or another incentive is given, United Kingdom, under— in respect of the heat generated or gas or fuel produced. (a) a scheme established by regulations under section 100 (3) But the generation of heat, or production of gas or fuel, is of the Energy Act 2008 or section 113 of the Energy not to be taken to fall within section 303(1)(kb) if Condition A Act 2011 (renewable heat incentives), or or B is met. (b) a similar scheme established in a territory outside the (4) Condition A is that the generation or production is carried United Kingdom, on by— in respect of the heat generated, or gas or fuel produced. (a) a community interest company, (3) But the generation of heat, or production of gas or fuel, is (b) a co-operative society, not to be taken to fall within section 192(1)(kb) if Condition A (c) a community benefit society, or B is met. (d) a NI industrial and provident society, or (4) Condition A is that the generation or production is carried (e) an SCE formed in accordance with Council Regulation on by— (EC) No 1435/2003 on the Statute for a European (a) a community interest company, Cooperative Society. (b) a co-operative society, (5) Condition B is that the plant used for the generation of the (c) a community benefit society, heat, or production of the gas or fuel, relies wholly or mainly on (d) a NI industrial and provident society, or anaerobic digestion. (e) an SCE formed in accordance with Council Regulation (6) Section 309A(9) (definitions) applies for the purposes of (EC) No 1435/2003 on the Statute for a European this section as for the purposes of section 309A.” Cooperative Society. (8) The amendments made by subsections (2) to (4) have effect (5) Condition B is that the plant used for the generation of the in relation to shares issued on or after the day on which this Act heat, or production of the gas or fuel, relies wholly or mainly on is passed. anaerobic digestion. (9) The amendments made by subsections (5) to (7) have effect (6) Section 198A(9) (definitions) applies for the purposes of in relation to a relevant holding issued on or after the day on this section as for the purposes of section 198A.” which this Act is passed.”—(Mr Gauke.) (5) In section 303 (VCTs: meaning of “excluded activities”)— Brought up, and added to the Bill. (a) in subsection (1), omit the “and” at the end of paragraph (ka) and after that paragraph insert— “(kb) the subsidised generation of heat or subsidised New Schedule 1 production of gas or fuel, and”, and (b) in subsection (2), omit the “and” at the end of “OIL CONTRACTORS: RING-FENCE TRADE ETC paragraph (f) and after paragraph (g) insert “, and CTA 2010 (h) section 309B (subsidised generation of heat and 1 CTA 2010 is amended as follows. subsidised production of gas and fuel).” 2 In section 1 (overview of Act), in subsection (3), after (6) In section 309A (excluded activities: subsidised generation paragraph (a) insert— or export of electricity)— “(aa) oil contractor activities (see Part 8ZA), (a) for subsection (3) substitute— (ab) profits arising from the exploitation of patents etc “(3) The generation of electricity is “subsidised” if— (see Part 8A),”. (a) a person receives a FIT subsidy in respect of the electricity generated, 3 In Chapter 4 of Part 8 (oil activities: calculation of profits), after section 285 insert— (b) a renewables obligation certificate is issued in connection with the generation of the electricity, or “Hire of relevant assets (c) a scheme established in a territory outside the United 285A Restriction on hire etc of relevant assets to be Kingdom, and corresponding to that set out in a brought into account renewables obligation order under section 32 of the ‘(1) This section applies if— Electricity Act 1989, operates to incentivise the (a) oil contractor activities are, or are to be, carried out, generation of the electricity.”, and (b) in subsection (6), omit the “or” after paragraph (c) and after paragraph (d) insert “, or (b) a company that carries on a ring fence trade makes, or is to make, one or more payments under a lease of a (e) an SCE formed in accordance with Council Regulation relevant asset, or part of a relevant asset, which is, or (EC) No 1435/2003 on the Statute for a European is to be, provided, operated or used in the relevant Cooperative Society.”, and offshore service in question. (c) in subsection (9), at the end insert— (2) The total amount that may be brought into account in ““renewables obligation certificate” means a certificate respect of the payments for the purposes of calculating the issued under section 32B of the Electricity company’s ring fence profits in an accounting period is limited to Act 1989 or Article 54 of the Energy (Northern the hire cap. Ireland) Order 2003.” (3) The “hire cap” is an amount equal to the relevant (7) After that section insert— percentage of TC for the accounting period, subject to “309B Excluded activities: subsidised generation of heat subsection (4). and subsidised production of gas or fuel (4) If payments in relation to which subsection (2) or (1) This section supplements section 303(1)(kb). section 356N(2) (restriction on hire for oil contractors under (2) The generation of heat, or production of gas or fuel, is Part 8ZA) applies are also made, or to be made, by one or more “subsidised” if a payment is made, or another incentive is given, other companies in respect of the relevant asset or part, the “hire under— cap” is to be such proportion of the amount mentioned in 993 Finance Bill2 JULY 2014 Finance Bill 994 subsection (3) as is just and reasonable, having regard (in (b) otherwise carried on in, or in connection with, the particular) to the amounts of the payments made, or to be made, provision by the contractor of a relevant offshore by each company. service. (5) The “relevant percentage” and TC are to be determined in (3) The contractor provides a “relevant offshore service” if the accordance with section 356N(5) to (16). contractor provides, operates or uses a relevant asset in, or in (6) To the extent that, by virtue of this section, payments connection with, the carrying on of exploration or exploitation within subsection (1)(b) cannot be brought into account for the activities in a relevant offshore area by the contractor or any purposes of calculating the company’s ring fence profits in an other associated person. accounting period, the payments may be— (4) “Exploration or exploitation activities” means activities (a) allowed as a deduction from the company’s total carried on in connection with the exploration or exploitation of profits for the accounting period, or the seabed and subsoil and their natural resources. (b) treated as a surrenderable amount of the company for (5) “Relevant offshore area” means— the accounting period for the purposes of Part 5 (a) the territorial sea of the United Kingdom; (group relief) (see section 99(7)) as if they were a (b) the areas designated by Order in Council under trading loss, section 1(7) of the Continental Shelf Act 1964. but this is subject to subsection (7). 356LA “Relevant asset” (7) No deduction may be made by virtue of subsection (6) (1) In this Part “relevant asset” means an asset within from total profits so far as they are ring fence profits or subsection (2) in respect of which conditions A and B are met. contractor’s ring fence profits. (2) An asset is within this subsection if it is a structure that— (8) If the company or an associated person enters into arrangements the main purpose or one of the main purposes of (a) can be moved from place to place (whether or not which is to secure that subsection (2) does not apply in relation to under its own power) without major dismantling or one or more payments to any extent, that subsection applies in modification, and relation to the payments to the extent that it would not otherwise (b) can be used to— do so. (i) drill for the purposes of searching for, or extracting, (9) In subsection (8) “arrangements” includes any agreement, oil, or understanding, scheme, transaction or series of transactions (ii) provide accommodation for individuals who work (whether or not legally enforceable). on or from another structure used in a relevant (10) In this section— offshore area for, or in connection with, exploration or exploitation activities (“offshore “associated person” has the meaning given by workers”). section 356LB; “contractor’s ring fence profits” has the meaning given (3) But an asset is not within subsection (2)(b)(ii) if it is by section 356LD; reasonable to suppose that its use to provide accommodation for “oil contractor activities” and “relevant offshore offshore workers is unlikely to be more than incidental to service” have the meaning given by section 356L; another use, or other uses, to which the asset is likely to be put. “relevant asset” has the meaning given by section (4) In subsection (2)— 356LA; “oil” means any substance capable of being won under “lease” has the meaning given by section 868.” the authority of a licence granted under Part 1 of 4 After Part 8 (oil activities) insert— the Petroleum Act 1998 or the Petroleum (Production) Act (Northern Ireland) 1964; “PART 8ZA “structure” includes a ship or other vessel. (5) Condition A is that the asset, or any part of the asset, is OIL CONTRACTORS leased (whether by the contractor or not) from an associated person other than the contractor. CHAPTER 1 (6) Condition B is that the asset is of the requisite value. INTRODUCTION (7) The asset is of the “requisite value” if its market value is 365K Overview of Part £2,000,000 or more. (1) This Part is about the corporation tax treatment of oil (8) The Treasury may by regulations modify the meaning of contractor activities. “requisite value”. (2) Chapter 2 contains basic definitions used in this Part. (9) Regulations under subsection (8) may— (3) Chapter 3 treats oil contractor activities as a separate trade. (a) amend this section, (4) Chapter 4 makes provision about the calculation of profits (b) make different provision for different cases or different from oil contractor activities. purposes, and (5) For the meaning of oil contractor activities, see (c) make incidental, consequential, supplementary or section 356L. transitional provision or savings. 356LB “Associated person” CHAPTER 2 (1) For the purposes of this Part each of the following is an BASIC DEFINITIONS “associated person”— 356L “Oil contractor activities” etc (a) the contractor, (1) The definitions in this section have effect for the purposes (b) any person who is, or has been, connected with the of this Part. contractor, (2) “Oil contractor activities” means activities carried on by a (c) any person who has acted, acts or is to act, together company (“the contractor”), which are not oil-related activities with the contractor to provide a service, and (within the meaning of section 274), but are— (d) any person who is connected with a person falling within paragraph (b) or (c). (a) exploration or exploitation activities in, or in connection with, which the contractor provides, (2) A person does not act together with the contractor to operates or uses a relevant asset (see section 356LA) provide a service by reason only of leasing an asset, to any in a relevant offshore service, or person, which is provided, operated or used in the service. 995 Finance Bill2 JULY 2014 Finance Bill 996

356LC “Lease” (10) Subsection (11) applies if the relevant asset or part— In this Part “lease” has the meaning given by section 868 and (a) is leased by an associated person from a person who is “leased” and “leasing” are to be construed accordingly. not an associated person, and 356LD “Contractor’s ring fence profits” (b) has never been owned by an associated person. In this Part the “contractor’s ring fence profits”, in relation to (11) OC is the sum of— an accounting period, means the contractor’s income arising (a) the consideration that it is reasonable to suppose from oil contractor activities for that period. would have been given for the acquisition of the relevant asset or part, if it had been acquired by an CHAPTER 3 associated person by way of a bargain at arm’s length at the time it was first leased as mentioned in subsection (10)(a), and DEEMED SEPARATE TRADE (b) the expenses (other than the costs of financing the 356M Oil contractor activities treated as separate trade acquisition) that it is reasonable to suppose would If the contractor carries on oil contractor activities as part of have been incurred by an associated person in a trade, those activities are treated for the purposes of the charge connection with such an acquisition. to corporation tax on income as a separate trade, distinct from This is subject to subsections (12) and (13). all other activities carried on by the contractor as part of the trade. (12) If the relevant asset or part was first acquired by an associated person, or (as the case may be) first leased as mentioned in subsection (10)(a), before the beginning of the CHAPTER 4 accounting period, OC does not include any part of the consideration mentioned in subsection (9)(a) or (as the case may CALCULATION OF PROFITS be) (11)(a) that it is reasonable to attribute to anything that no Hire of relevant assets longer forms part of the relevant asset or part at the beginning of the accounting period. 356N Restriction on hire etc of relevant assets to be brought into account (13) If the relevant asset or part was first acquired by an associated person, or (as the case may be) first leased as (1) This section applies if the contractor makes, or is to make, mentioned in subsection (10)(a), in the accounting period, OC one or more payments under a lease of— for the accounting period is— (a) a relevant asset, or DDBA− (b) part of a relevant asset. OC × D (2) The total amount that may be brought into account in respect of the payments for the purposes of calculating the where— contractor’s ring fence profits in an accounting period is limited D is the total number of days in the accounting period, to the hire cap. DBA is the number of days in the accounting period (3) The “hire cap” is an amount equal to the relevant before the day on which the relevant asset or part percentage of TC for the accounting period, subject to was first acquired or first leased, and subsection (4). OC is the amount given by subsection (9) or (as the case may be) (11). (4) If payments in relation to which subsection (2) or section 285A(2) (restriction on hire for company carrying on a ring fence (14) CE is capital expenditure on the relevant asset or part trade under Part 8) applies are also made, or to be made, by one (other than capital expenditure in respect of its acquisition or the or more other companies in respect of the relevant asset or part, acquisition of a lease of it) incurred by an associated person— the “hire cap” is to be such proportion of the amount mentioned (a) after it was first acquired by an associated person or in subsection (3) as is just and reasonable, having regard (in (as the case may be) was first leased as mentioned in particular) to the amounts of the payments made, or to be made, subsection (10)(a), and by the contractor and each other company. (b) before the end of the accounting period. (5) Subject to subsection (7), the “relevant percentage” is— This is subject to subsections (15) and (16). UROS × 7.5% (15) CE does not include any capital expenditure mentioned in TU subsection (14) that is— where— (a) incurred before the beginning of the accounting period, and UROS is the number of days in the accounting period that the relevant asset is provided, operated or (b) not reflected in the state or nature of the relevant asset used in a relevant offshore service, and or part at the beginning of the accounting period. TU is the number of days in the accounting period that (16) If any capital expenditure mentioned in subsection (14) is the relevant asset is provided, operated or used incurred on a day in the accounting period, the amount of CE (whether or not in a relevant offshore service). for the accounting period in respect of that capital expenditure is— (6) Accordingly, the relevant percentage is zero if the relevant DDBI− asset is not provided, operated or used in the accounting period. CEA × (7) If the accounting period is less than 12 months, the D relevant percentage is to be proportionally reduced. where— (8) TC is— D is the total number of days in the accounting period, OC+CE DBI is the number of days in the accounting period before the day on which that capital expenditure (9) Unless subsection (11) applies, OC is the sum of— is incurred, and (a) any consideration given for the acquisition of the CEA is the amount of that capital expenditure. relevant asset or part when it was first acquired by an associated person, and 356NA Restriction on hire: further provision (b) any expenses incurred by an associated person in (1) The Treasury may by regulations modify the “relevant connection with that acquisition (other than the costs percentage” for the purposes of section 356N or 285A. of financing the acquisition). (2) Regulations under subsection (1) may— This is subject to subsections (12) and (13). (a) amend section 356N or section 285A, 997 Finance Bill2 JULY 2014 Finance Bill 998

(b) make different provision for different cases or different (6) References in this section to a loan relationship, in relation purposes, and to the borrowing of money, do not include a relationship to (c) make incidental, consequential, supplementary or which Chapter 2 of Part 6 of CTA 2009 (relevant non-lending transitional provision or savings. relationships) applies. 356NC Restriction on credits to be brought into account (3) To the extent that, by virtue of section 356N, payments within subsection (1) of that section cannot be brought into (1) Credits in respect of exchange gains from the contractor’s account for the purposes of calculating the contractor’s ring loan relationships may not be brought into account for the fence profits in an accounting period, the payments may be— purposes of Part 5 of CTA 2009 (loan relationships) in any way (a) allowed as a deduction from the contractor’s total that results in an increase of what would otherwise be the profits for the accounting period, or contractor’s ring fence profits, but this is subject to subsections (2) to (4). (b) treated as a surrenderable amount of the contractor for the accounting period for the purposes of Part 5 (2) Subsection (1) does not apply so far as a loan relationship (group relief) (see section 99(7)) as if they were a is in respect of money borrowed by the contractor which has trading loss, been— subject to subsection (4). (a) used to meet expenditure incurred by the contractor in carrying on oil contractor activities, or (4) No deduction may be made by virtue of subsection (3) (b) appropriated to meeting expenditure to be so incurred from total profits so far as they are contractor’s ring fence profits by the contractor. or ring fence profits for the purposes of Part 8. (3) Subsection (1) does not apply, in the case of credits falling (5) If an associated person enters into arrangements the main to be brought into account as a result of section 329 of CTA purpose or one of the main purposes of which is to secure that 2009 (pre-loan relationship and abortive expenses) in respect of a section 356N(2) does not apply in relation to one or more loan relationship that has not been entered into, so far as the payments to any extent, that provision applies in relation to the relationship would have been one entered into for the purpose of payments to the extent it would not otherwise do so. borrowing money to be used or appropriated as mentioned in (6) In subsection (5) “arrangements” includes any agreement, subsection (2). understanding, scheme, transaction or series of transactions (4) Subsection (1) does not apply, in the case of credits in (whether or not legally enforceable). respect of a loan relationship to which Chapter 2 of Part 6 of Loan relationships CTA 2009 (relevant non-lending relationships) applies, so far 356NB Restriction on debits to be brought into account as— (1) Debits may not be brought into account for the purposes of (a) the payment of interest under the relationship is expenditure Part 5 of CTA 2009 (loan relationships) in respect of the incurred as mentioned in subsection (2)(a), or contractor’s loan relationships in any way that results in a (b) the exchange gain arising from the relationship is in reduction of what would otherwise be the contractor’s ring fence respect of a money debt on which the interest payable profits, but this is subject to subsections (2) to (4). (if any) is, or would be, such expenditure. (2) Subsection (1) does not apply so far as a loan relationship (5) If a credit— is in respect of money borrowed by the contractor which has (a) falls to be brought into account for the purposes of been— Part 5 of CTA 2009 in respect of a loan relationship (a) used to meet expenditure incurred by the contractor in of the contractor, but carrying on oil contractor activities, or (b) as a result of this section cannot be brought into (b) appropriated to meeting expenditure to be so incurred account in a way that results in any increase of what by the contractor. would otherwise be the contractor’s ring fence profits, (3) Subsection (1) does not apply, in the case of debits falling to be brought into account as a result of section 329 of CTA the credit is to be brought into account for those purposes as a 2009 (pre-loan relationship and abortive expenses) in respect of a non-trading credit despite anything in section 297 of that Act. loan relationship that has not been entered into, so far as the (6) Section 356NB(6) applies for the purposes of this section. relationship would have been one entered into for the purpose of borrowing money to be used or appropriated as mentioned in Relief subsection (2). 356ND Management expenses (4) Subsection (1) does not apply, in the case of debits in No deduction under section 1219 of CTA 2009 (expenses of respect of a loan relationship to which Chapter 2 of Part 6 of management of a company’s investment business) is to be CTA 2009 (relevant non-lending relationships) applies, so far allowed from the contractor’s ring fence profits. as— 356NE Losses (a) the payment of interest under the relationship is expenditure incurred as mentioned in subsection (2)(a), or Relief in respect of a loss incurred by the contractor may not be given under section 37 (relief for trade losses against total (b) the exchange loss arising from the relationship is in profits) against the contractor’s ring fence profits except so far as respect of a money debt on which the interest payable the loss arises from oil contractor activities. (if any) is, or would be, such expenditure. 356NF Group relief (5) If a debit— (1) On a claim for group relief made by a claimant company in (a) falls to be brought into account for the purposes of relation to a surrendering company, group relief may not be Part 5 of CTA 2009 in respect of a loan relationship allowed against the claimant company’s contractor’s ring fence of the contractor, but profits except so far as the claim relates to losses incurred by the (b) as a result of this section cannot be brought into surrendering company that arose from oil contractor activities. account in a way that results in any reduction of what (2) In section 105 (restriction on surrender of losses etc within would otherwise be the contractor’s ring fence section 99(1)(d) to (g)) the references to the surrendering profits, company’s gross profits of the surrender period do not include the debit is to be brought into account for those purposes as a the company’s relevant contractor’s ring fence profits for that non-trading debit despite anything in section 297 of that Act. period. 999 Finance Bill2 JULY 2014 Finance Bill 1000

(3) The company’s “relevant contractor’s ring fence profits” for 9 (1) A company may be given relief under section 45 of CTA that period are— 2010 (carry forward of trade loss against subsequent trade (a) if for that period there are no qualifying charitable profits) for a loss made in an accounting period ending before the donations made by the company that are allowable commencement date against profits of a ring fence trade so far as under Part 6 (charitable donations relief), the (and only so far as) the loss would have been a loss of the ring company’s contractor’s ring fence profits for that fence trade had section 356L of that Act had effect in relation to period, or activities carried out before the commencement date and Part 8ZA therefore applied. (b) otherwise, so much of the contractor’s ring fence profits of the company for that period as exceeds the (2) In sub-paragraph (1) “ring fence trade” means oil amount of the qualifying charitable donations made contractor activities that constitute a separate trade (whether by by the company that are allowable under section 189 virtue of section 356M of that Act or otherwise).”— for that period. (Mr Gauke.) (4) In this section “claimant company” and “surrendering Brought up, and added to the Bill. company” are to be read in accordance with Part 5 (group relief) (see section 188). New Schedule 2 356NG Capital allowances A capital allowance may not to any extent be given effect “GENERAL BLOCK EXEMPTION REGULATION under section 259 or 260 of CAA 2001 (special leasing) by deduction from the contractor’s ring fence profits.” 1 CAA 2001 is amended as follows. 5 In Schedule 4 (index of defined expressions), insert the 2 (1) Section 45DB (exclusions from allowances under section following entries at the appropriate places— 45DA) is amended as follows. (2) In subsection (3)(a), for “a firm in difficulty for the “associated person (in Part 8ZA) section 356LB” purposes of the Community Guidelines on State Aid for “contractor (in Part 8ZA) section 356L(2)” Rescuing and Restructuring Firms in Difficulty (2004/C 244/02)” substitute “an undertaking in difficulty for the purposes of the “contractor’s ring fence profits (in Part 8ZA) section 356LD” General Block Exemption Regulation”. “exploration or exploitation activities (in section 356L(4)” (3) In subsection (4)(a), for “Council Regulation (EC) Part 8ZA) No 104/2000” substitute “Regulation (EU) No 1379/2013 of the “lease (in Part 8ZA) section 356LC” European Parliament and of the Council”. “oil contractor activities (in Part 8ZA) section 356L(2)” (4) In subsection (11), in the definition of “General Block “relevant asset (in Part 8ZA) section 356LA” Exemption Regulation”, for “(EC) No 800/2008” substitute “relevant offshore area (in Part 8ZA) section 356L(5)” “(EU) No 651/2014”. “relevant offshore service (in Part 8ZA) section 356L(3)” (5) In subsection (12), for paragraph (c) substitute— “(c) Regulation (EU) No 1379/2013 of the European Commencement etc Parliament and of the Council,”. 6 This Schedule is to be treated as having come into force on 3 In section 45K (expenditure on plant and machinery for use in 1 April 2014 (“the commencement date”). designated assisted areas), after subsection (8) insert— 7 Section 356L of CTA 2010 has effect in relation to activities “(8A) Condition C is met by virtue of subsection (8)(c) only if carried out on or after the commencement date. the amount of the expenditure exceeds the amount by which the 8 (1) If, on the commencement date, a company was carrying relevant plant or machinery is depreciated in the period of on a trade that consisted of, or included, carrying out oil 3 years ending immediately before the beginning of the contractor activities, an accounting period ends (if it would not chargeable period in which the expenditure is incurred. otherwise do so) with 31 March 2014. (8B) “Relevant plant or machinery” means the plant or (2) Sub-paragraph (3) applies if— machinery being used at the end of the period of 3 years mentioned in subsection (8A) for the purposes of the product, (a) but for sub-paragraph (1), a company would have had process or service mentioned in subsection (8)(c).” an accounting period that began before the commencement date and ended on or after that date 4 (1) Section 45M (exemptions from allowances under (“the split accounting period”), and section 45K) is amended as follows. (b) the company’s accounting period beginning with (2) In subsection (1), for “(6) or (7)” substitute “(7) or (7A)”. 1 April 2014 ends when the split accounting period (3) In subsection (3)(a), for “a firm in difficulty for the would have ended but for that sub-paragraph. purposes of the Community Guidelines on State Aid for (3) For the purposes of Chapter 4 of Part 22 of CTA 2010 Rescuing and Restructuring Firms in Difficulty (2004/C 244/02)” (surrender of tax refund within group)— substitute “an undertaking in difficulty for the purposes of the General Block Exemption Regulation”. (a) the company is to be treated as having the split accounting period, (4) In subsection (4)— (b) any tax refund due to the company for— (a) in paragraph (a), for “Council Regulation (EC) No 104/2000” substitute “Regulation (EU) No 1379/ (i) the accounting period ending with 31 March 2014, 2013 of the European Parliament and of the or Council”, and (ii) the accounting period beginning with 1 April 2014, (b) after paragraph (b) insert— is to be treated as if it were a tax refund due to the “(ba) in the transport sector or related infrastructure, company for the split accounting period, and (bb) relating to energy generation, distribution or (c) if the company surrenders a tax refund that is so infrastructure, treated (or part of such a refund), the references in (bc) relating to the development of broadband networks,”. section 964(6) of CTA 2010 to the date on which corporation tax became due and payable are to be (5) After that subsection insert— treated as references to the date on which “(4A) Expressions used in subsection (4)(b), (ba), (bb) or (bc) corporation tax would have become due and payable and in the General Block Exemption Regulation have the same had the company had the split accounting period. meaning as in that Regulation.” 1001 Finance Bill2 JULY 2014 Finance Bill 1002

(6) Omit subsection (6). (a) in sub-paragraph (2), after “Co-operative and (7) After subsection (7) insert— Community Benefit Societies Act 2014” insert “or a society registered or treated as registered under the “(7A) Expenditure is within this subsection if— Industrial and Provident Societies Act (Northern (a) the area by reference to which the condition in section Ireland) 1969”, and 45K(1)(a) is met is not an area which falls within (b) in sub-paragraph (3), after “Co-operative and Article 107(3)(a) of the Treaty on the Functioning of Community Benefit Societies Act 2014” insert “, a the European Union, society registered or treated as registered under the (b) the condition in section 45K(8)(a) is not met in relation Industrial and Provident Societies Act (Northern to the expenditure, and Ireland) 1969”. (c) at the time the expenditure is incurred the company is 4 In paragraph 48 (which amends section 140F of TCGA 1992) not an SME for the purposes of the General Block after “Co-operative and Community Benefit Societies Act 2014” Exemption Regulation.” insert “or a society registered or treated as registered under the (8) In subsection (12)— Industrial and Provident Societies Act (Northern Ireland) 1969”. (a) in the first definition, for the words from ““coal” to 5 In paragraph 49 (which amends section 140G of TCGA 1992) “have” substitute “has”, and after “Co-operative and Community Benefit Societies Act 2014” (b) in the definition of “General Block Exemption insert “or a society registered or treated as registered under the Regulation”, for “(EC) No 800/2008” substitute Industrial and Provident Societies Act (Northern Ireland) 1969”. “(EU) No 651/2014”. 6 In paragraph 50 (which amends section 170 of TCGA 1992)— (9) In subsection (15), for paragraph (c) substitute— (a) in sub-paragraph (2), for “within the meaning of the “(c) Regulation (EU) No 1379/2013 of the European Co-operative and Community Benefits Societies Parliament and of the Council,”. Act 2014” substitute “(see section 1119 of that Act)”, 5 (1) Section 45N (effect of plant or machinery subsequently and being primarily for use outside designated assisted areas) is (b) in sub-paragraph (3), for “within the meaning of the amended as follows. Co-operative and Community Benefits Societies (2) In subsection (1)— Act 2014” substitute “(see section 1119 of CTA (a) for “designated assisted area within the meaning of 2010)”. section 45K” substitute “relevant area”, and 7 In paragraph 53 (which amends Schedule 7AC of TCGA 1992) (b) for “such a designated assisted” substitute “a for “within the meaning of the Co-operative and Community relevant”. Benefits Societies Act 2014” substitute “(see section 1119 of that Act)”. (3) After subsection (3) insert— 8 In paragraph 82 (which amends paragraph 28 of Schedule 2 to “(3A) “Relevant area” means— ITEPA 2003), in the sub-paragraph (5) substituted by sub- (a) in relation to expenditure which would be within paragraph (3)— subsection (7A) of section 45M if paragraph (a) of that subsection were omitted, a designated assisted (a) omit the “or” following paragraph (b), and area within the meaning of section 45K which falls (b) at the end of paragraph (c) insert “, or within Article 107(3)(a) of the Treaty on the (d) an SCE formed in accordance with Council Regulation Functioning of the European Union, and (EC) No 1435/2003 on the Statute for a European (b) in relation to any other expenditure, a designated Cooperative Society.”. assisted area within the meaning of section 45K.” 9 In paragraph 94 (which amends section 379 of ITTOIA 2005), 6 In section 212T(6) (cap on first-year allowances: zero-emission in the definition of “registered society” inserted by sub- goods vehicles), in the definition of “undertaking”, for “(EC) paragraph (4)— No 800/2008” substitute “(EU) No 651/2014”. (a) omit the “or” following paragraph (a), and 7 In section 212U(5) (cap on first-year allowances: expenditure (b) after paragraph (b) insert— on plant and machinery for use in designated assisted areas), in the definition of “single investment project”, for “(EC) “(c) a society registered as a credit union under the Credit No 800/2008” substitute “(EU) No 651/2014”.” Unions (Northern Ireland) Order 1985 (S.I. 1985/ 1205 (N.I. 12)), or 8 The amendments made by this Schedule have effect in relation to expenditure incurred on or after the day on which this Act is “(d) an SCE formed in accordance with Council passed.”—(Mr Gauke.) Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society,”. Brought up, and added to the Bill. 10 In paragraph 105 (which amends section 151 of ITA 2007), in the definition of “registered society” inserted by sub- New Schedule 3 paragraph (3)— (a) omit the “or” following paragraph (a), and TAXATION OF CO-OPERATIVE SOCIETIES ETC (b) at the end of paragraph (b) insert “or Taxation of Chargeable Gains Act 1992 (c. 12) (c) an SCE formed in accordance with Council Regulation 1 In section 217D of TCGA 1992 (disposal of assets on union, (EC) No 1435/2003 on the Statute for a European amalgamation or transfer of engagements), in subsection (3), Cooperative Society,”. after paragraph (a) insert— 11 In paragraph 110 (which amends section 887 of ITA 2007), in “(aa) a society registered as a credit union under the the subsection (5) substituted by sub-paragraph (5)— Credit Unions (Northern Ireland) Order 1985 (a) omit the “or” following paragraph (a), and (S.I. 1985/1205 (N.I. 12)),”. (b) after paragraph (b) insert— Co-operative and Community Benefit Societies Act 2014 (c. 14) “(c) a society registered as a credit union under the Credit 2 Schedule 4 to the Co-operative and Community Benefit Unions (Northern Ireland) Order 1985 (S.I. 1985/ Societies Act 2014 (consequential amendments) is amended as 1205 (N.I. 12)), or follows. “(d) an SCE formed in accordance with Council 3 In paragraph 47 (which amends section 140E of TCGA Regulation (EC) No 1435/2003 on the Statute for a 1992)— European Cooperative Society.”. 1003 Finance Bill2 JULY 2014 Finance Bill 1004

12 In paragraph 158 (which amends section 90 of CTA 2010), (b) set out an upper limit on relief, in connection with in the definition of “registered society” inserted by sub- State aid legislation. paragraph (3)— (7) Sections 1217LA and 1217LB are about certain cases (a) omit the “or” following paragraph (a), and involving tax avoidance arrangements or arrangements entered (b) at the end of paragraph (b) insert “or into otherwise than for genuine commercial reasons. (c) an SCE formed in accordance with Council Regulation (8) Sections 1217M to 1217MC contain provision about the (EC) No 1435/2003 on the Statute for a European use of losses of the separate trade (including provision about Cooperative Society,”. relief for terminal losses). 13 In paragraph 168 (which amends section 1119 of CTA 2010), (9) Sections 1217N and 1217NA are concerned with the in the definition of “registered society” inserted by sub- provisional nature of relief given for periods preceding the paragraph (3), for paragraph (c) and the “or” before it period in which the company ceases to carry on the separate substitute— theatrical trade. “(c) a society registered as a credit union under the Credit 1217FA “Theatrical production” Unions (Northern Ireland) Order 1985 (S.I. 1985/ 1205 (N.I. 12)), or ‘(1) In this Part “theatrical production” means a dramatic production or a ballet (and any ballet is therefore a theatrical (d) an SCE formed in accordance with Council Regulation production, whether or not it is also a dramatic production). (EC) No 1435/2003 on the Statute for a European Cooperative Society,”. But see section 1217FB. 14 In paragraph 171 (which amends section 118 of TIOPA (2) “Dramatic production” means a production of a play, 2010)— opera, musical, or other dramatic piece (whether or not involving (a) in sub-paragraph (2), after “Co-operative and improvisation) in relation to which the following conditions are Community Benefit Societies Act 2014” insert “or a met— society registered or treated as registered under the (a) the actors, singers, dancers or other performers are to Industrial and Provident Societies Act (Northern give their performances wholly or mainly through the Ireland) 1969”, and playing of roles, (b) in sub-paragraph (3), after “Co-operative and (b) each performance in the proposed run of Community Benefit Societies Act 2014” insert “, a performances is to be live, and society registered or treated as registered under the (c) the presentation of live performances is the main Industrial and Provident Societies Act (Northern object, or one of the main objects, of the company’s Ireland) 1969”. activities in relation to the production. Commencement (3) “Dramatic piece” may also include, for example, a show The amendments made by this Schedule come into force on 1 that is to be performed by a circus. August 2014.”—(Mr Gauke.) (4) For the purposes of this section a performance is “live” if it Brought up, and added to the Bill. is to an audience before whom the performers are actually present. New Schedule 4 1217FB Productions not regarded as theatrical ‘(1) A dramatic production or ballet is not regarded as a TAX RELIEF FOR THEATRICAL PRODUCTION theatrical production if—

PART 1 (a) the main purpose, or one of the main purposes, for which it is made is to advertise or promote any goods AMENDMENTS OF CTA 2009 or services, 1 Before Part 16 of CTA 2009 insert— (b) the performances are to consist of or include a competition or contest, PART 15C (c) a wild animal is to be used in any performance, (d) the production is of a sexual nature (see THEATRICAL PRODUCTIONS subsection (3)), or Introduction (e) the making of a relevant recording is the main object, 1217F Overview or one of the main objects, of the company’s ‘(1) This Part contains provision about tax relief for activities in relation to the production. production companies in respect of their theatrical productions. (2) For the purposes of subsection (1)(c) an animal is used in a (2) Sections 1217FA to 1217FC define “production company” performance if the animal performs, or is shown, in the course of and “theatrical production”. the performance. (3) Section 1217G sets out the conditions a production (3) A production is of a sexual nature for the purposes of company must meet to qualify for relief in relation to its subsection (1)(d) if the performances are to include any content theatrical production. the nature of which is such that, ignoring financial gain, it would be reasonable to assume the content to be included solely or (4) Section 1217H provides for relief by way of additional principally for the purpose of sexually stimulating any member deductions in respect of certain expenditure (and section 1217J is of the audience (whether by verbal or other means). about the amount of the additional deduction). (4) “Relevant recording” means a recording of a (5) This Part also contains provision— performance— (a) for a company that claims relief to be treated as carrying on a separate trade relating to the theatrical (a) as a film (or part of a film) for exhibition to the paying production (see section 1217H(3)), and general public at the commercial cinema, or (b) about the calculation of the profits and losses of that (b) for broadcast to the general public. trade (see sections 1217I to 1217IF). (5) In this section— (6) Sections 1217K to 1217KC— “broadcast” means broadcast by any means (including (a) provide for relief by way of payments (called “theatre television, radio or the internet); tax credits”) to be made on the company’s surrender “film” has the same meaning as in Part 15 (see of certain losses of that trade, and section 1181); 1005 Finance Bill2 JULY 2014 Finance Bill 1006

“wild animal” means an animal of a kind which is not (2) In this Part “EEA expenditure” means expenditure on commonly domesticated in the British Islands goods or services that are provided from within the European (and in this definition “animal” has the meaning Economic Area. given by section 1(1) of the Animal Welfare (3) Any apportionment of expenditure as between EEA and Act 2006). non-EEA expenditure for the purposes of this Part is to be made 1217FC “Production company” on a just and reasonable basis. ‘(1) A company is the production company in relation to a (4) The Treasury may by regulations— theatrical production if the company (acting otherwise than in (a) amend the percentage specified in subsection (1); partnership)— (a) is responsible for producing, running and closing the (b) amend subsection (2). theatrical production, (5) See also sections 1217N and 1217NA (which are about the (b) is actively engaged in decision-making during the giving of relief provisionally on the basis that the EEA production, running and closing phases, expenditure condition will be met). (c) makes an effective creative, technical and artistic 1217GC “Core expenditure” contribution to the production, and ‘(1) In this Part “core expenditure”, in relation to a theatrical (d) directly negotiates for, contracts for and pays for production, means expenditure on the activities involved in— rights, goods and services in relation to the (a) producing the production, and production. (b) closing the production. (2) No more than one company can be the production company in relation to a theatrical production. (2) The reference in subsection (1)(a) to “expenditure on the activities involved in producing the production”— (3) If more than one company meets the conditions in subsection (1) in relation to a theatrical production, the company (a) does not include expenditure on any matters not that is most directly engaged in the activities mentioned in directly involved in producing the production (for subsection (1) is the production company. instance, financing, marketing, legal services or storage); (4) If there is no company meeting the conditions in subsection (1), there is no production company in relation to the (b) does not include expenditure on the ordinary running production. of the production; but expenditure incurred on or after the date of the first performance of the Companies qualifying for relief production to the paying general public may fall 1217G How a company qualifies for relief within subsection (1)(a) (for instance, if it is incurred ‘(1) A company qualifies for relief in relation to a theatrical in connection with a substantial recasting or a production if— substantial redesign of the set). (a) it is the production company in relation to the Claim for additional deduction production, and 1217H Claim for additional deduction (b) the commercial purpose condition (see section ‘(1) A company which qualifies for relief in relation to a 1217GA) and the EEA expenditure condition (see theatrical production may claim an additional deduction in section 1217GB) are met. relation to the production. (2) There is further provision relating to subsection (1) in (2) A claim under subsection (1) is made with respect to an section 1217LA (tax avoidance arrangements). accounting period. 1217GA The commercial purpose condition (See Schedule 18 to FA 1998, and in particular, Part 9D, for ‘(1) The “commercial purpose condition” is that at the provision about the procedure for making claims.) beginning of the production phase the company intends that all, or a high proportion of, the live performances that it proposes to (3) Where a company has made a claim under subsection (1)— run will be— (a) the company’s activities in relation to the theatrical (a) to paying members of the general public, or production are treated for corporation tax purposes (b) provided for educational purposes. as a trade separate from any other activities of the company (including activities in relation to any other (2) The reference in subsection (1) to “live performances” is to theatrical production), and be read in accordance with section 1217FA(4). (b) the company is entitled to make an additional (3) A performance is not regarded as provided for educational deduction, in accordance with section 1217J, in purposes if the production company is, or is associated with, a calculating the profit or loss of the separate trade for person who— the accounting period concerned. (a) has responsibility for the beneficiaries, or (4) The company is treated as beginning to carry on the (b) is otherwise connected with the beneficiaries (for separate trade— instance, by being their employer). (a) when the production phase begins, or (4) For the purposes of subsection (3), a production company is associated with a person (“P”) if— (b) if earlier, at the time of the first receipt by the company of any income from the theatrical production. (a) P controls the production company, or (b) P is a company which is controlled by the production (5) Where the company tax return in which a claim under company or by a person who also controls the subsection (1) is made is for an accounting period later than that production company. in which the company begins to carry on the separate trade, the company must make any amendments of company tax returns (5) In this section— for earlier periods that may be necessary. “the beneficiaries” means persons for whose benefit the (6) Any amendment or assessment necessary to give effect to performance will or may be provided; subsection (5) may be made despite any limitation on the time “control” has the same meaning as in Part 10 of CTA within which an amendment or assessment may normally be 2010 (see section 450 of that Act). made. 1217GB The EEA expenditure condition (7) If the company ceases at any time to meet the conditions in ‘(1) The “EEA expenditure condition” is that at least 25% of section 1217FC(1) (meaning of “production company”) in the core expenditure on the theatrical production incurred by the relation to the production, it is treated as ceasing to carry on the company is EEA expenditure. separate trade at that time. 1007 Finance Bill2 JULY 2014 Finance Bill 1008

The separate theatrical trade ‘(1) For the purposes of this Part, the costs that have been 1217I Introduction to sections 1217IA to 1217IF incurred on a theatrical production at a given time— ‘(none) Where a company is treated under section 1217H(3)(a) (a) are those costs of the production that are represented as carrying on a separate trade (“the separate theatrical trade”), in the state of completion of the work in progress, the profits or losses of the trade are calculated for corporation but tax purposes in accordance with sections 1217IA to 1217IF. (b) do not include any amount that has not been paid 1217IA Calculation of profits or losses of separate unless it is the subject of an unconditional obligation theatrical trade to pay. ‘(1) For the first period of account during which the separate (2) In accordance with subsection (1)(a)— theatrical trade is carried on, the following are brought into (a) payments in advance of work to be done are ignored account— until the work has been carried out; (a) as a debit, the costs of the theatrical production (b) deferred payments are recognised to the extent that the incurred (and represented in work done) to date; goods or services in question are represented in the (b) as a credit, the proportion of the estimated total state of completion of the work in progress (but this income from the production treated as earned at the is subject to subsection (1)(b)). end of that period. (3) Where an obligation to pay an account is linked to income (2) For subsequent periods of account the following are being earned from the theatrical production, the obligation is not brought into account— treated as having become unconditional unless an appropriate amount of income is or has been brought into account under (a) as a debit, the difference between the amount (“C”) of section 1217IA. the costs of the theatrical production incurred (and represented in work done) to date and the amount (4) In determining for the purposes of this Part the amount of corresponding to C for the previous period, and costs incurred on a theatrical production at the end of a period of account, any amount that has not been paid 4 months after (b) as a credit, the difference between the proportion the end of that period is to be ignored. (“PI”) of the estimated total income from the production treated as earned at the end of that 1217IE Pre-trading expenditure period and the amount corresponding to PI for the ‘(1) This section applies if, before the company begins to carry previous period. on the separate theatrical trade, it incurs expenditure on activities (3) The proportion of the estimated total income treated as falling within section 1217IC(1)(a). earned at the end of a period of account is— (2) The expenditure may be treated as expenditure of the C separate theatrical trade and as if incurred immediately after the × I company begins to carry on that trade. T (3) If expenditure so treated has previously been taken into where— account for other tax purposes, the company must amend any C is the total to date of costs incurred (and represented in relevant company tax return accordingly. work done); (4) Any amendment or assessment necessary to give effect to T is the estimated total cost of the theatrical production; subsection (3) may be made despite any limitation on the time I is the estimated total income from the theatrical production. within which an amendment or assessment may normally be made. 1217IB Income from the production 1217IF Estimates ‘(1) References in this Part to income from a theatrical Estimates for the purposes of section 12171A must be production are to any receipts by the company in connection made as at the balance sheet date for each period of with the making or exploitation of the production. account, on a just and reasonable basis taking into (2) This includes— consideration all relevant circumstances. (a) receipts from the sale of tickets or of rights in the Amount of additional deduction theatrical production; 1217J Amount of additional deduction (b) royalties or other payments for use of aspects of the ‘(1) The amount of an additional deduction to which a theatrical production (for example, characters or company is entitled as a result of a claim under section 1217H is music); calculated as follows. (c) payments for rights to produce merchandise; (2) For the first period of account during which the separate (d) receipts by the company by way of a profit share theatrical trade is carried on, the amount of the additional agreement. deduction is E, where— (3) Receipts that (apart from this subsection) would be E is— regarded as being of a capital nature are treated as being of a (a) so much of the qualifying expenditure incurred revenue nature. to date as is EEA expenditure, or 1217IC Costs of the production (b) if less, 80% of the total amount of qualifying ‘(1) References in this Part to the costs of a theatrical expenditure incurred to date. production are to expenditure incurred by the company on— (3) For any period of account after the first, the amount of the (a) the activities involved in developing, producing, additional deduction is— running and closing the production, or E–P (b) activities with a view to exploiting the production. where— (2) This is subject to any provision of the Corporation Tax E is— Acts prohibiting the making of a deduction, or restricting the (a) so much of the qualifying expenditure incurred extent to which a deduction is allowed, in calculating the profits to date as is EEA expenditure, or of a trade. (b) if less, 80% of the total amount of qualifying (3) Expenditure which, apart from this subsection, would be expenditure incurred to date, and regarded as being of a capital nature only because it is incurred P is the total amount of the additional deductions on the creation of an asset (i.e. the theatrical production) is given for previous periods. treated as being of a revenue nature. (4) The Treasury may by regulations amend the percentage 1217ID When costs are taken to be incurred specified in subsection (2) or (3). 1009 Finance Bill2 JULY 2014 Finance Bill 1010

1217JA “Qualifying expenditure” (4) For the first period of account during which the separate ‘(1) In this Part “qualifying expenditure”, in relation to a theatrical trade is carried on, the available qualifying expenditure theatrical production, means core expenditure (see section is the amount that is E for that period for the purposes of section 1217GC) on the theatrical production that— 1217J(2). (a) falls to be taken into account under sections 1217IA to (5) For any period of account after the first, the available 1217IF in calculating the profit or loss of the qualifying expenditure is— separate theatrical trade for tax purposes, and E–S (b) is not excluded by subsection (2). where— (2) The following expenditure is excluded— E is the amount that is E for that period for the (a) expenditure in respect of which the company is entitled purposes of section 1217J(3), and to an R&D expenditure credit under Chapter 6A of S is the total amount previously surrendered under Part 3; section 1217K. (b) expenditure in respect of which the company has (6) If a period of account of the separate theatrical trade does obtained relief under Part 13 (additional relief for not coincide with an accounting period, any necessary expenditure on research and development). apportionments are to be made by reference to the number of Theatre tax credits days in the periods concerned. 1217K Theatre tax credit claimable if company has 1217KB Payment in respect of theatre tax credit surrenderable loss ‘(1) If a company— ‘(1) A company which— (a) is entitled to a theatre tax credit for an accounting period, and (a) is treated under section 1217H(3) as carrying on a separate trade during the whole or part of an (b) makes a claim, accounting period, and the Commissioners for Her Majesty’s Revenue and Customs (b) has a surrenderable loss in that period, (“the Commissioners”) must pay the amount of the credit to the company. may claim a theatre tax credit for that accounting period. (2) An amount payable in respect of— (2) Section 1217KA sets out how to calculate the amount of any surrenderable loss that the company has in the accounting (a) a theatre tax credit, or period. (b) interest on a theatre tax credit under section 826 of (3) A company making a claim may surrender the whole or ICTA, part of its surrenderable loss in the accounting period. may be applied in discharging any liability of the company to (4) The amount of the theatre tax credit to which a company pay corporation tax. making a claim is entitled for the accounting period is— To the extent that it is so applied the Commissioners’ liability (a) 25% of the amount of the loss surrendered if the under subsection (1) is discharged. theatrical production is a touring production, or (3) If the company’s company tax return for the accounting (b) 20% of the amount of the loss surrendered if the period is enquired into by the Commissioners, no payment in theatrical production is not a touring production. respect of a theatre tax credit for that period need be made before the Commissioners’ enquiries are completed (see paragraph 32 of (5) The company’s available loss for the accounting period (see Schedule 18 to FA 1998). section 1217KA(2)) is reduced by the amount surrendered. In those circumstances the Commissioners may make a (6) A theatrical production is a “touring production” only if payment on a provisional basis of such amount as they consider the company intends at the beginning of the production phase— appropriate. (a) that it will present performances of the production in 6 (4) No payment need be made in respect of a theatre tax credit or more separate premises, or for an accounting period before the company has paid to the (b) that it will present performances of the production in Commissioners any amount that it is required to pay for payment at least two separate premises and that the number of periods ending in that accounting period— performances will be at least 14. (a) under PAYE regulations, (7) See Schedule 18 to FA 1998 (in particular, Part 9D) for (b) under section 966 of ITA 2007 (visiting performers), or provision about the procedure for making claims under subsection (1). (c) in respect of Class 1 national insurance contributions under Part 1 of the Social Security Contributions 1217KA Amount of surrenderable loss and Benefits Act 1992 or Part 1 of the Social Security ‘(1) The company’s surrenderable loss in the accounting period Contributions and Benefits (Northern Ireland) is— Act 1992. (a) the company’s available loss for the period in the (5) A payment in respect of a theatre tax credit is not income separate theatrical trade (see subsections (2) and (3)), of the company for any tax purpose. or 1217KC Limit on State aid (b) if less, the available qualifying expenditure for the ‘(1) The total amount of any theatre tax credits payable under period (see subsections (4) and (5)). section 1217KB in the case of any undertaking is not to exceed (2) The company’s available loss for an accounting period is— 50 million euros per year. where— (2) In this section “undertaking” has the same meaning as in L is the amount of the company’s loss for the period in the General Block Exemption Regulation. the separate theatrical trade, and (3) In this section “the General Block Exemption Regulation” RUL is the amount of any relevant unused loss of the means any regulation that— company (see subsection (3)). (a) is for the time being in force under Article 1 of Council (3) The “relevant unused loss” of a company is so much of any Regulation (EC) No 994/98, and available loss of the company for the previous accounting period (b) makes, in relation to aid in favour of culture and as has not been— heritage conservation, the declaration provided for (a) surrendered under section 1217K, or by that Article. (b) carried forward under section 45 of CTA 2010 and set Anti-avoidance etc against profits of the separate theatrical trade. 1217LA Tax avoidance arrangements 1011 Finance Bill2 JULY 2014 Finance Bill 1012

‘(1) A company does not qualify for relief in relation to a (5) This section does not apply to loss surrendered, or treated theatrical production if there are any tax avoidance as carried forward, under section 1217MC (terminal losses). arrangements relating to the production. 1217MC Terminal losses (2) Arrangements are “tax avoidance arrangements” if their ‘(1) This section applies if— main purpose, or one of their main purposes, is the obtaining of a tax advantage. (a) the company ceases to carry on the separate theatrical trade, and (3) In this section— “arrangements” includes any scheme, agreement or (b) if the company had not ceased to carry on the separate understanding, whether or not legally theatrical trade, it could have carried forward an enforceable; amount under section 45 of CTA 2010 to be set against profits of that trade in a later period (“the “tax advantage” has the meaning given by section 1139 terminal loss”). of CTA 2010. 1217LB Transactions not entered into for genuine Below in this section the company is referred to as “company commercial reasons A” and the separate theatrical trade is referred to as “trade 1”. ‘(1) A transaction is to be ignored for the purpose of (2) If company A— determining a relief mentioned in subsection (2) so far as the (a) is treated under section 1217H(3) as carrying on a transaction is attributable to arrangements (other than tax separate theatrical trade in relation to another avoidance arrangements) entered into otherwise than for genuine theatrical production (“trade 2”), and commercial reasons. (b) is carrying on trade 2 when it ceases to carry on (2) The reliefs mentioned in subsection (1) are— trade 1, (a) any additional deduction which a company may make company A may (on making a claim) elect to transfer the under this Part, and terminal loss (or a part of it) to trade 2. (b) any theatre tax credit to be given to a company. (3) If company A makes an election under subsection (2), the (3) In this section “arrangements” and “tax avoidance terminal loss (or part of the loss) is treated as if it were a loss arrangements” have the same meaning as in section 1217LA. brought forward under section 45 of CTA 2010 to be set against Use of losses the profits of trade 2 of the first accounting period beginning after the cessation and so on. 1217M Application of sections 1217MA to 1217MC (4) Subsection (5) applies if— ‘(1) Sections 1217MA to 1217MC apply to a company that is treated under section 1217H(3) as carrying on a separate trade in (a) another company (“company B”) is treated under relation to a theatrical production. section 1217H(3) as carrying on a separate theatrical trade (“company B’s trade”) in relation to another (2) In those sections— theatrical production, “the completion period” means the accounting period in which the company ceases to carry on the (b) company B is carrying on that trade when company A separate theatrical trade; ceases to carry on trade 1, and “loss relief” includes any means by which a loss might (c) company B is in the same group as company A for the be used to reduce the amount in respect of which purposes of Part 5 of CTA 2010 (group relief). a company, or any other person, is chargeable to (5) Company A may surrender the loss (or part of it) to tax. company B. 1217MA Restriction on use of losses before completion (6) On the making of a claim by company B the amount period surrendered is treated as if it were a loss brought forward by ‘(1) Subsection (2) applies if a loss is made by the company in company B under section 45 of CTA 2010 to be set against the the separate theatrical trade in an accounting period preceding profits of company B’s trade of the first accounting period the completion period. beginning after the cessation and so on. (2) The loss is not available for loss relief, except to the extent (7) The Treasury may by regulations make administrative that the loss may be carried forward under section 45 of provision in relation to the surrender of a loss under subsection CTA 2010 to be set against profits of the separate theatrical trade (5) and the resulting claim under subsection (6). in a subsequent period. (8) “Administrative provision” means provision 1217MB Use of losses in the completion period corresponding, subject to such adaptations or other ‘(1) Subsection (2) applies if a loss made in the separate modifications as appear to the Treasury to be appropriate, to that theatrical trade is carried forward under section 45 of CTA 2010 made by Part 8 of Schedule 18 to FA 1998 (company tax returns: to the completion period. claims for group relief). (2) So much (if any) of the loss as is not attributable to relief Provisional entitlement to relief under section 1217H (see subsection (4)) may be treated for the 1217N Provisional entitlement to relief purposes of loss relief as if it were a loss made in the completion period. ‘(1) In relation to a company that has made a claim under (3) If a loss is made in the separate theatrical trade in the section 1217H in relation to a theatrical production, “interim completion period, the amount of the loss that may be— accounting period” means any accounting period that— (a) deducted from total profits of the same or an earlier (a) is one in which the company carries on the separate period under section 37 of CTA 2010, or theatrical trade, and (b) surrendered as group relief under Part 5 of that Act, (b) precedes the accounting period in which it ceases to do is restricted to the amount (if any) that is not attributable to so. relief under section 1217H. (2) A company is not entitled to relief under any of the (4) The amount of a loss in any period that is attributable to relieving provisions for an interim accounting period unless— relief under section 1217H is found by— (a) its company tax return for the period states the amount (a) calculating what the amount of the loss would have of planned core expenditure on the theatrical been if there had been no additional deduction under production that is EEA expenditure, and that section in that or any earlier period, and (b) that amount is such as to indicate that the EEA (b) deducting that amount from the total amount of the expenditure condition (see section 1217GB) will be loss. met in relation to the production. 1013 Finance Bill2 JULY 2014 Finance Bill 1014

If those requirements are met, the company is provisionally “core expenditure” has the meaning given by section treated in relation to that period as if the EEA expenditure 1217GC; condition were met. “costs”, in relation to a theatrical production, has the (3) In this section “the relieving provisions” means— meaning given by section 1217IC; (a) section 1217H (additional deduction), “EEA expenditure” has the meaning given by section 1217GB; (b) section 1217K (theatre tax credits), and “EEA expenditure condition” has the meaning given (c) section 1217MC (terminal losses). by section 1217GB; 1217NA Clawback of provisional relief references to “income from a theatrical production” ‘(1) If a statement is made under section 1217N(2) but it are to be read in accordance with section 1217IB; subsequently appears that the EEA expenditure condition will “production company” has the meaning given by not be met on the company’s ceasing to carry on the separate section 1217FC; theatrical trade, the company— “qualifying expenditure” has the meaning given by (a) is not entitled to relief under any of the relieving section 1217JA; provisions for any period for which its entitlement references to the “separate theatrical trade” are to be depended on such a statement, and read in accordance with section 1217I; (b) must amend its company tax return for any such “theatrical production” has the meaning given by period accordingly. section 1217FA (read with section 1217FB).” (2) When a company which has made a claim under section 1217H ceases to carry on the separate theatrical trade, the PART 2 company’s company tax return for the period in which that cessation occurs must— CONSEQUENTIAL AMENDMENTS (a) state that the company has ceased to carry on the ICTA separate theatrical trade, and 2 (1) Section 826 of ICTA (interest on tax overpaid) is (b) be accompanied by a final statement of the amount of amended as follows. the core expenditure on the theatrical production (2) In subsection (1), after paragraph (fb) insert— that is EEA expenditure. “(fc) a payment of theatre tax credit falls to be made to a (3) If that statement shows that the EEA expenditure company; or”. condition is not met— (3) In subsection (3C), for “or video game tax credit” (a) the company is not entitled to relief under any of the substitute “, video game tax credit or theatre tax credit”. relieving provisions for any period, (4) In subsection (8A)— (b) the company is treated for corporation tax purposes as if section 1217H(3)(a) (treatment as a separate trade) (a) in paragraph (a) for “or (f)” substitute “(f), (fa), (fb) or did not apply in relation to the theatrical production (fc)”, and for any period, and (b) in paragraph (b)(ii), after “video game tax credit” (c) accordingly, sections 1217MA and 1217MB insert “or theatre tax credit”. (provisions about use of losses) do not apply in (5) In subsection (8BA), after “video game tax credit” (in both relation to the theatrical production for any period. places) insert “or theatre tax credit”. (4) Where subsection (3) applies, the company must amend its FA 1998 company tax return for any period in which (or in any part of 3 Schedule 18 to FA 1998 (company tax returns, assessments and which) it was treated as carrying on a separate trade relating to related matters) is amended as follows. the theatrical production. 4 In paragraph 10 (other claims and elections to be included in (5) Any amendment or assessment necessary to give effect to return), in sub-paragraph (4)— this section may be made despite any limitation on the time within which an amendment or assessment may normally be (a) before “claims” insert “certain”; made. (b) for “or 15B” substitute “, 15B or 15C”. (6) In this section “the relieving provisions” has the same 5 (1) Paragraph 52 (recovery of excessive overpayments etc) is meaning as in section 1217N. amended as follows. Interpretation (2) In sub-paragraph (2), after paragraph (bf) insert— 1217O Activities involved in developing, producing, (bg) theatre tax credit under Part 15C of that Act,”. running or closing a production (3) In sub-paragraph (5)— ‘(none) The Treasury may by regulations amend (a) after paragraph (ah) insert— section 1217GC (core expenditure) or 1217IC (costs of (ai) an amount of theatre tax credit paid to a company for production) for the purpose of providing that activities of a an accounting period,”; specified description are, or are not, to be regarded as activities involved in developing or (as the case may be) producing, (b) in the words after paragraph (b), after “(ah)” insert “, running or closing— (ai)”. (a) a theatrical production, or 6 (1) Part 9D (certain claims for tax relief) is amended as follows. (b) a theatrical production of a specified description. (2) In paragraph 83S (introduction), after paragraph (c) 1217OA “Company tax return” insert— ‘(none) In this Part “company tax return” has the same (d) an additional deduction under Part 15C of CTA 2009, meaning as in Schedule 18 to FA 1998 (see paragraph 3(1) of that Schedule). (b) a theatre tax credit under that Part of that Act.” 1217OB Index (3) The heading of that Part becomes “”. ‘(none) In this Part— CAA 2001 “commercial purpose condition” has the meaning 7 In Schedule A1 to CAA 2001 (first-year tax credits), in given by section 1217GA; paragraph 11(4), omit the “and” at the end of paragraph (d) and “company tax return” has the meaning given by after paragraph (e) insert “, and section 1217OA; (f) section 1217K of that Act (theatre tax credits).” 1015 Finance Bill2 JULY 2014 Finance Bill 1016

FA 2007 (a) in sub-paragraph (2), omit the “or” at the end of 8 In Schedule 24 to FA 2007 (penalties for errors), in paragraph paragraph (f) and after paragraph (g) insert “, or 28(fa) (meaning of “corporation tax credit”), omit the “or” at the (h) a payment of theatre tax credit under section 1217K of end of sub-paragraph (ivb) and after that sub-paragraph CTA 2009 for an accounting period.”; insert—a theatre tax credit under section 1217K of that Act, or”. (b) in sub-paragraph (4), for “(e)” substitute “(h)”. (ivc) a theatre tax credit under section 1217K of that CTA 2010 Act, or”. 15 (1) Section 357CG of CTA 2010 (profits arising from the CTA 2009 exploitation of patents etc: adjustments in calculating profits of 9 In section 104BA of CTA 2009 (R&D expenditure credits: trade) is amended as follows. restrictions on claiming other tax reliefs), after subsection (3) (2) In subsection (3), omit the “and” at the end of paragraph insert— (c) and after paragraph (d) insert “, and “(4) For provision prohibiting an R&D expenditure credit (e) the amount of any additional deduction for the being given under this Chapter and relief being given under accounting period obtained by the company under section 1217H or 1217K (theatrical productions: additional Part 15C of CTA 2009 in respect of qualifying deduction or theatre tax credit), see section 1217JA(2).” expenditure on a theatrical production.” 10 In Part 8 of CTA 2009 (intangible fixed assets), in Chapter 10 (3) In subsection (6)— (excluded assets), before section 809 insert— (a) in the definition of “qualifying expenditure”, omit the “808C Assets representing expenditure incurred in course “and” at the end of paragraph (a) and after of separate theatrical trade paragraph (b) insert “, and (1) This Part does not apply to an intangible fixed asset held (i) in relation to a company that is the production by a theatrical production company so far as the asset represents company (as defined in section 1217FC of that expenditure on a theatrical production that is treated under Part Act) in relation to a theatrical production, has the 15C as expenditure of a separate trade (see particularly sections same meaning as in Part 15C of that Act,”; 1217H and 1217IE). (b) omit the “and” at the end of the definition of (2) In this section— “television production company” and after that “theatrical production” has the same meaning as in definition insert— Part 15C (see section 1217FA); ““theatrical production” has the same meaning as in “theatrical production company” means a company Part 15C of CTA 2009 (see section 1217FA of which, for the purposes of that Part, is the that Act), and”. production company in relation to a theatrical production (see section 1217FC).” PART 3 11 In section 1040ZA of CTA 2009 (additional relief for expenditure on research and development), after subsection (3) COMMENCEMENT insert— 16 (1) Any power to make regulations conferred on the “(4) For provision prohibiting relief being given under this Treasury by virtue of this Schedule comes into force on the day Part and under section 1217H or 1217K (theatrical productions: on which this Act is passed. additional deduction or theatre tax credit), see (2) So far as not already brought into force by sub- section 1217JA(2).” paragraph (1), the amendments made by this Schedule come into 12 In section 1310 of CTA 2009 (orders and regulations), in force in accordance with provision contained in an order made subsection (4), after paragraph (ej) insert— by the Treasury. “(ek) section 1217GB(4) (EEA expenditure condition), (3) An order under sub-paragraph (2) may make different (el) section 1217J(4) (amount of additional deduction), provision for different purposes. (em) section 1217O (activities involved in developing, 17 (1) The amendments made by this Schedule have effect in producing, running or closing a production),”. relation to accounting periods beginning on or after 1 September 2014. 13 In Schedule 4 to CTA 2009 (index of defined expressions) at the appropriate place insert— (2) Sub-paragraph (3) applies where a company has an accounting period beginning before 1 September 2014 and “commercial purpose condition (in Part 15C) section ending on or after that date (“the straddling period”). 1217OB”; (3) For the purposes of Part 15C of CTA 2009— “company tax return (in Part 15C) section 1217OA”; (a) so much of the straddling period as falls before “core expenditure (in Part 15C) section 1 September 2014, and so much of that period as 1217GC”; falls on or after that date, are treated as separate accounting periods, and “costs of a theatrical production (in Part 15C) section 1217IC”; (b) any amounts brought into account for the purposes of “EEA expenditure (in Part 15C) section calculating for corporation tax purposes the profits 1217GB”; of a trade for the straddling period are apportioned “EEA expenditure condition (in Part 15C) section to the two separate accounting periods on such basis 1217OB”; as is just and reasonable.”—(Mr Gauke.) “income from a theatrical production (in section 1217IC”; Brought up, and added to the Bill. Part 15C) “production company (in Part 15C) section 1217FC”; “qualifying expenditure (in Part 15C) section 1217JA”; Clause 207 “the separate theatrical trade (in Part 15C) section 1217OB”; APPEAL AGAINST A SECTION 201 PENALTY “theatrical production (in Part 15C) section 1217FA”. Amendments made: 1, page 138, line 23, at end insert— FA 2009 ‘(2A) The grounds on which an appeal under subsection (1) 14 In Schedule 54A to FA 2009 (which is prospectively inserted may be made include in particular— by F(No. 3)A 2010 and contains provision about the recovery of (a) that Condition A, B or D in section197was not met in certain amounts of interest paid by HMRC), in paragraph 2— relation to the follower notice, 1017 Finance Bill2 JULY 2014 Finance Bill 1018

(b) that the judicial ruling specified in the notice is not one (7B) In subsection (7)(bb) “non-UK income tax” means a tax which is relevant to the chosen arrangements, chargeable on income under the law of a territory outside the (c) that the notice was not given within the period United Kingdom that corresponds to United Kingdom income specified in subsection (6) of that section, or tax. (d) that it was reasonable in all the circumstances for P not (7C) A tax is not outside the scope of subsection (7B) by to have taken the necessary corrective action (see reason only that it— section201(4)) in respect of the denied advantage.” (a) is chargeable under the law of a province, state or other Amendment 2, page 138, line 43, at end insert— part of a country, or ‘(8A) The cancellation under subsection (7) of HMRC’s (b) is levied by or on behalf of a municipality or other decision on the ground specified in subsection (2A)(d) does not local body.”” affect the validity of the follower notice, or of any accelerated Amendment 8, page 312, line 8, at end insert— payment notice or partner payment notice under Chapter 3 11A In section 446T (securities acquired for less than market related to the follower notice.”—(Mr Gauke.) value: amount of notional loan), after subsection (3) insert— (3A) In subsection (3)(b) and (ba) the references to an amount Schedule 27 of exempt income, in a case in which the amount that constitutes, or is treated as, earnings in respect of the acquisition is not an amount of general earnings to which any of the charging FOLLOWER NOTICES AND PARTNERSHIPS provisions of Chapters 4 and 5 of Part 2 applies, includes any Amendment made: 3, page 535, line 45, at end insert— amount that would be an amount of exempt income if any of those charging provisions were to apply.” ‘(7A) Section 207(2A) applies to an appeal by virtue of sub-paragraph (7)(a) as it applies to an appeal under Amendment 9, page 312, line 10, at end insert— section 207(1).”—(Mr Gauke.) 12A In section 480 (securities options: deductible amounts), after subsection (5) insert— Clause 291 (5A) In subsection (5)(a) the reference to an amount of exempt income, in a case in which the amount that constituted earnings in respect of the acquisition was not an amount of general REMOVAL OF LIMITATION PERIOD RESTRICTION FOR EU earnings to which any of the charging provisions of Chapters 4 CASES and 5 of Part 2 applied, includes any amount that would have Amendment made: 4, page 199, leave out lines 23 been an amount of exempt income if any of those charging to 29.—(Mr Gauke.) provisions had applied.” Amendment 10, page 313, line 26, at end insert— 23A In section 149AA (restricted and convertible employment- Clause 73 related securities and employee shareholder shares), in subsection (7)— AIR PASSENGER DUTY: ADJUSTMENTS TO PART 3 OF (a) after “include” insert “— SCHEDULE 5A TO FA 1994 (a) ”, and Amendments made: 5, page 61, line 18, leave out “as (b) at the end insert “, or follows” and insert (b) in a case in which the amount that constituted, or was “in accordance with subsections (2) to (10)”. treated as, earnings was not an amount of general earnings to which any of the charging provisions of Amendment 6, page 62, line 9, at end insert— Chapters 4 and 5 of Part 2 of ITEPA 2003 applied, ‘( ) Accordingly, in section 1 of the Air Passenger Duty any amount that would have been an amount of such (Setting of Rate) Act (Northern Ireland) 2012 (setting of rate of exempt income if any of those charging provisions air passenger duty)— had applied.””—(Mr Gauke.) (a) in subsection (1)— (i) omit “(3)(a) and (b), (4)(a) and (b),”, and Schedule 6 (ii) for “(5A)(a), (b) and (c)” substitute “(5A)(c)”, and EMPLOYEE SHARE SCHEMES (b) omit subsections (2) to (5), (8) and (9).”—(Mr Gauke.) Amendments made: 11, page 273, line 29, at end insert— Schedule 7 139A (1) Section 94A of ITTOIA 2005 (costs of setting up SAYE option scheme or CSOP scheme) is amended as follows. EMPLOYMENT-RELATED SECURITIES ETC (2) In subsection (1)— Amendments made: 7, page 311, line 41, at end insert— (a) in paragraph (a) omit “that is approved by an officer of “9A (1) Section 428 (restricted securities: amount of charge) is Revenue and Customs”, and amended as follows. (b) omit paragraph (b) and the “and” before it. (2) In subsection (7), after paragraph (ba) insert— (3) In subsection (2)— “(bb) any amount that was charged to non-UK income (a) at the beginning of paragraph (a) insert “Schedule 3”, tax in respect of the acquisition of the employment- (b) at the beginning of paragraph (b) insert “Schedule 4”, related securities, but only so far as that amount and exceeds any amount within paragraph (b) or (ba),”. (c) omit the final sentence. (3) After subsection (7) insert— (4) In subsection (4) for “approval is given” (in both places) (7A) In subsection (7)(b) and (ba) the references to an amount substitute “relevant date falls”. of exempt income, in a case in which the amount that (5) After subsection (4) insert— constituted, or was treated as, earnings in respect of the acquisition was not an amount of general earnings to which any (4A) In subsection (4) “the relevant date”— of the charging provisions of Chapters 4 and 5 of Part 2 applied, (a) in relation to a Schedule 3 SAYE option scheme, has includes any amount that would have been an amount of exempt the meaning given in paragraph 40A(6) of Schedule 3 income if any of those charging provisions had applied. to ITEPA 2003, and 1019 Finance Bill2 JULY 2014 Finance Bill 1020

(b) in relation to a Schedule 4 CSOP scheme, has the (a) any requirements imposed by or under regulations, and meaning given in paragraph 28A(6) of Schedule 4 to (b) any other requirements considered appropriate by the ITEPA 2003.”” Minister of the Crown who is accrediting the Amendment 12, page 276, line 42, after “under” company concerned. insert (2) The requirements that may be imposed by virtue of “section 94A of ITTOIA 2005 or”. subsection (1) include requirements relating to the provision of information. Amendment 13, page 294, line 48, leave out “paragraph 141” and insert “paragraphs 139A and (3) Regulations may— 141”. (a) make further provision about applications for accreditation, Amendment 14, page 295, line 1, after “under” insert (b) make provision for the variation of an accreditation “section 94A of ITTOIA 2005 or”.—(Mr Gauke.) (including its provisions as to its duration), (c) make provision which, in a case where a company is or has been an accredited social impact contractor, Schedule 9 imposes or authorises the imposition of requirements on the company, or on any other party to the social TAX RELIEF FOR SOCIAL INVESTMENTS impact contract concerned, to provide information, Amendments made: 15, page 328, line 20, after “charity,” (d) make provision about the consequences of a failure to insert— comply with any requirement of an accreditation imposed by virtue of subsection (1) or with any “() an accredited social impact contractor (see section requirement imposed by virtue of paragraph (c), 257JD),” including in particular— Amendment 16, page 330, line 33, after “Part” insert (i) provision for the withdrawal of the accreditation “(except section 257JD)”. concerned with effect from the time of the failure Amendment 17, page 330, line 34, at end insert— or a later time, and (ii) provision for the imposition of penalties, 257JD (e) make provision for publication of information about “257JD Accreditation as a social impact contractor an accreditation or accredited social impact (1) In this Part “accredited social impact contractor” means a contractor, and company limited by shares that is accredited under this section as (f) make provision for reviews of, or for appeals to the a social impact contractor. tribunal against, any of the following— (2) Applications for accreditation as a social impact contractor (i) a refusal to grant or vary an accreditation, must be made to a Minister of the Crown in the form and (ii) the imposition of a requirement under manner specified by a Minister of the Crown. subsection (1)(b), (3) A Minister of the Crown is to accredit a company if, but (iii) the withdrawal of an accreditation (whether under only if, that Minister is satisfied that— section 257JD(4) or by virtue of provision made (a) the company has entered into a social impact contract under paragraph (d)(i)), and (see section 257JE), (iv) the imposition or amount of a penalty imposed by (b) the company is, and at all times since its incorporation virtue of provision made under paragraph (d)(ii). has been, established— (4) Regulations under subsection (1) or (3) may— (i) for the purpose of entering into and carrying out a (a) make provision for the making of decisions by a social impact contract, or for that purpose and Minister of the Crown as to any matter required to purposes incidental to it, but be decided for the purposes of the regulations, (ii) for no other purpose, and (b) be framed by reference to material published by, or on (c) the activities of the company in carrying out that behalf of, a Minister of the Crown after the making contract will not consist wholly, or as to a substantial of the regulations (as well as by reference to material part, in excluded activities (see section 257MQ). published before the making of the regulations), (4) If a Minister of the Crown is satisfied that the condition in (c) make different provision for different cases or subsection (3)(b) or (c) has ceased to be met in relation to a circumstances or in relation to different areas, and company that is an accredited social impact contractor, that (d) contain incidental, supplemental, consequential and Minister is to withdraw the company’s accreditation with effect transitional provision and savings. from the time the condition ceased to be met or a later time. (5) In this section— 257JE Meaning of “social impact contract” “accreditation” means accreditation under (1) In this Part “social impact contract” means a contract that section 257JD, and meets such criteria as may be specified in regulations made by the “regulations” means regulations made by the Treasury. Treasury. 257JG Period of accreditation as a social impact (2) The criteria which may be specified under subsection (1) contractor include, in particular, criteria as to a party to the contract other (1) An accreditation under section 257JD has effect for a than the company seeking accreditation. period— (3) Criteria may be specified in regulations under (a) beginning with the day specified in the accreditation, subsection (1) by reference to material published by, or on behalf and of, a Minister of the Crown after the making of the regulations (b) of a length specified in, or determined in accordance (as well as by reference to material published before the making with, the accreditation. of the regulations). (2) The day specified under subsection (1)(a) in an (4) Regulations under subsection (1) may make different accreditation may not be earlier than 6 April 2014 but subject to provision for different cases or circumstances or in relation to that— different areas. (a) may be, or be earlier than, the day it is decided to grant 257JF Accreditations: supplementary provisions the accreditation (and in particular may be, or be (1) An accreditation must be made so as to be conditional on earlier than, the day the application for the compliance with— accreditation is made), and 1021 Finance Bill2 JULY 2014 Finance Bill 1022

(b) may be earlier than the day section 257JD comes into Amendment 29, page 347, line 20, at end insert force. “257JD,” (3) This section has effect subject to sections 257JD(4) and Amendment 30, page 353, line 10, at end insert— 257JF(3)(d)(i) (withdrawal of accreditations). 257JH Functions of Ministers of the Crown under ( ) If the social enterprise is an accredited social impact sections 257JD to 257JG contractor, subsection (1) applies with the omission of its paragraph (a).” (1) A Minister of the Crown may delegate any function given to a Minister of the Crown by or under sections 257JD to 257JG Amendment 31, page 354, line 8, at end insert— other than a power of the Treasury to make regulations. ( ) If the social enterprise is an accredited social impact (2) In those sections and this section “Minister of Crown” has contractor, subsection (3) applies with the omission of its the meaning given by section 8(1) of the Ministers of the Crown paragraph (a).” Act 1975.” Amendment 32, page 355, line 8, at end insert— Amendment 18, page 331, line 1, at end insert— ( ) An order under this section may make different provision ( ) Subsection (1)(b) is subject to the provisions in for different cases or purposes.” sections 257LB and 257MJ to 257MN which provide for Amendment 33, page 372, line 31, leave out “257MA” conditions set out in those sections not to apply where the social and insert “257M”. enterprise is an accredited social impact contractor.” Amendment 19, page 334, line 44, at end insert— Amendment 34, page 373, line 24, after “sections” insert “257M,”. ( ) Subsections (2) to (4) do not apply if the social enterprise is an accredited social impact contractor.” Amendment 35, page 374, line 13, at end insert—7 Amendment 20, page 335, line 12, after “257MJ(2)(c)” (7) If the event mentioned in subsection (1) is one whose insert occurrence results in the requirement in section 257M not being met in respect of the investment, the references in subsections (2) “or is a parent company that is an accredited social impact and (3) to the social enterprise are to— contractor”. Amendment 21, page 339, line 23, at end insert— (a) the body concerned even though it has ceased to be a social enterprise, or 257M (b) the body into which the social enterprise has been “257M The continuing to be a social enterprise converted.” requirement Amendment 36, page 376, line 11, after “prevent” The social enterprise must be a social enterprise throughout the shorter applicable period.” insert Amendment 22, page 343, line 11, after “period” “— insert (a) ”. “, but this does not apply if the social enterprise is an accredited Amendment 37, page 376, line 12, at end insert— social impact contractor”. “(b) disclosure to a Minister of the Crown for the Amendment 23, page 343, line 15, after “business” purposes of functions of a Minister of the Crown insert “— under sections 257JD to 257JG, or (i) ”. (c) disclosure to a person for the purposes of functions Amendment 24, page 343, line 17, leave out “non- delegated to the person under section 257JH(1).” qualifying” and insert Amendment 38, page 376, line 18, after “Information” “non-trade activities, and insert (ii) does not consist wholly, or as to a substantial part, “originally disclosed in reliance on subsection (2)(a)”. in the carrying-on of excluded”. Amendment 39, page 376, line 19, at end insert— Amendment 25, page 344, line 14, at end insert (5) Information originally disclosed in reliance on subsection “, and (2)(b) or (c) may be disclosed in reliance on subsection (3)(a) only “non-trade activities” means activities which are for the purposes of— neither of the following— (a) activities carried on in the course of a trade, (a) functions of a Minister of the Crown under and sections 257JD to 257JG, or (b) activities carried on in the course of preparing (b) functions delegated to a person under to carry on a trade.” section 257JH(1). Amendment 26, page 345, line 26, at end insert— (6) If, in contravention of subsections (3) to (5), any revenue ( ) This section does not apply if the social enterprise is an and customs information relating to a person is disclosed and the accredited social impact contractor.” identity of the person— Amendment 27, page 346, line 19, at end insert— (a) is specified in the disclosure, or ( ) If the social enterprise is an accredited social impact (b) can be deduced from it, contractor, the preceding provisions of this section apply with section 19 of the Commissioners for Revenue and Customs the following modifications— Act 2005 (offence of wrongful disclosure) applies as it applies in (a) in subsection (1), for “28 months” substitute relation to a disclosure of such information in contravention of “24 months”, section 20(9) of that Act. (b) in that subsection, for “the funded purpose” substitute (7) In subsection (6) “revenue and customs information “the carrying out of the social impact contract relating to a person” has the meaning given by section 19(2) of concerned”, and that Act. (c) omit subsections (2), (3), (5) and (6).” (8) Subject to subsections (3) and (5), no obligation as to Amendment 28, page 347, line 7, at end insert— confidentiality or other restriction on disclosure, whether ( ) This section does not apply if the social enterprise is an imposed by an enactment or otherwise, prevents disclosure of accredited social impact contractor.” relevant information— 1023 Finance Bill2 JULY 2014 Finance Bill 1024

(a) to a Minister of the Crown for the purposes of for the purposes of determining whether the functions of a Minister of the Crown under settlement continues to meet that requirement after sections 257JD to 257JG, the disposal, and (b) to a person for the purposes of functions delegated to (b) if, at the time of the disposal, the settlement met that the person under section 257JH(1), or requirement by virtue of section 236L and later (c) to an officer of Revenue and Customs for the purpose continues to meet it otherwise than by virtue of that of assisting Her Majesty’s Revenue and Customs to section, it may not again meet the requirement by discharge their functions under the Income Tax Acts virtue of that section.” so far as relating to matters arising under this Part. Amendment 47, page 560, line 19, at end insert— (9) In subsection (8) “relevant information” means ‘(7) Section 236NA makes provision about events which information obtained— prevent a claim being made under this section and circumstances (a) by a Minister of the Crown, or in which a claim is revoked.” (b) by a person to whom functions have been delegated Amendment 48, page 563, line 46, leave out under section 257JH(1), “is treated as meeting that requirement” in the course of discharging functions under sections 257JD to and insert 257JG. “at any time is treated as meeting that requirement at that time”. (10) In this section “Minister of the Crown” has the meaning Amendment 49, page 564, line 9, leave out given by section 8(1) of the Ministers of the Crown Act 1975.” Amendment 40, page 381, line 20, leave out “by way “day of the disposal mentioned in section 236H(1)” of, or amounts” and insert and insert “time in question”. “not by way of, and does not amount”.—(Mr Gauke.>) Amendment 50, page 566, line 10, at end insert— ‘(A1) The limited participation requirement is met if Schedule 10 Conditions A and B are met.” Amendment 51, page 566, line 11, leave out INVESTMENTS IN SOCIAL ENTERPRISES: CAPITAL GAINS “The limited participation requirement is met if” Amendment made: 41, page 387, line 5, at end insert— and insert “Condition A is that”. (8) A reference in this paragraph to a social enterprise is a reference to a body that is a social enterprise for the purposes of Amendment 52, page 566, line 15, at end insert— Part 5B of ITA 2007 (see section 257J of that Act).”— ‘(1A) Condition B is that the participator fraction does not (Mr Gauke.) exceed 2/5 at any time in the period beginning with that disposal and ending at the end of the tax year in which it occurs.” Clause 61 Amendment 53, page 566, line 18, after “(1)(b)” insert “and (1A)” BUSINESS PREMISES RENOVATION ALLOWANCES Amendment 54, page 567, line 7, at end insert— Amendments made: 42, page 52, line 12, leave out “(EC) No 800/2008” and insert “(EU) No 651/2014” “236NA No section 236H relief if disqualifying event in next tax year Amendment 43, page 52, line 41, at end insert— (1) This section applies where— ‘( ) In the application of section 360L of CAA 2001 in relation (a) a disposal is made in circumstances where paragraphs to expenditure incurred before the day on which this Act is (a) and (b) of section 236H(1) are satisfied, and passed, the definition of “General Block Exemption Regulation” in subsection (6) of that section is to be treated as referring to (b) one or more disqualifying events occur in relation to Commission Regulation (EC) No 800/2008.”—(Mr Gauke.) the disposal in the tax year following the tax year in which the disposal occurs. Schedule 33 (2) A “disqualifying event” occurs in relation to the disposal if and when— COMPANIES OWNED BY EMPLOYEE-OWNERSHIP TRUSTS (a) C ceases to meet the trading requirement, Amendments made: 44, page 559, line 35, leave out (b) the settlement ceases to meet the all-employee benefit “(see sections 236J to 236L)” and insert requirement, (c) the settlement ceases to meet the controlling interest “at the time of the disposal and continues to meet that requirement, requirement for the remainder of the tax year in which that time falls (see sections 236J to 236L and subsection (4A) of this (d) the participator fraction exceeds 2/5, or section)”. (e) the trustees act in a way which the trusts, as required by Amendment 45, page 560, line 1, leave out “but does the all-employee benefit requirement, do not permit. meet it at the end of that year” and insert (3) No claim for relief under section 236H may be made in “but— respect of the disposal on or after the day on which the disqualifying event (or, if more than one, the first of them) (i) it meets that requirement at the end of that tax year, occurs. and (4) Any claim for relief under section 236H made in respect of (ii) if it met the requirement at an earlier time in that the disposal before that day is revoked, and the chargeable gains tax year (whether before or after the time of the and allowable losses of any person for any chargeable period are disposal) it continued to meet it throughout the to be calculated as if that claim had never been made. remainder of that tax year,” Amendment 46, page 560, line 7, at end insert— (5) Such adjustments must be made in relation to any person, whether by the making of assessments or otherwise, as are ‘(4A) For the purposes of subsection (4)(b)— required to give effect to subsection (4) (regardless of any (a) unless the settlement met the all-employee benefit limitation on the time within which any adjustment may be requirement by virtue of section 236L (cases in which made). all-employee benefit requirement treated as met) at (6) Section 236H(4A) (restrictions on application of the time of the disposal, that section does not apply section 236L) applies for the purposes of subsection (2)(b). 1025 Finance Bill2 JULY 2014 Finance Bill 1026

(7) Section 236N(2) applies for the purposes of subsection (ii) references in those provisions to C are to be read as (2)(d) as it applies in relation to section 236N(1)(b) and (1A).” references to the company mentioned in Amendment 55, page 567, line 11, after “occasion” section 236P(1)(b).” insert Amendment 63, page 570, line 17, leave out “The” “, after the end of the tax year following the tax year in which the and insert acquisition occurs, when”. “Subject to paragraph 2A, the”. Amendment 56, page 567, leave out lines 13 to 25 and Amendment 64, page 570, line 18, at end insert— insert— 2A In relation to disposals made on or after 6 April 2014 but ‘(2) A “disqualifying event” occurs in relation to the before 26 June 2014, TCGA 1992 has effect as if— acquisition if and when— (a) in section 236H— in section 236N— (a) C ceases to meet the trading requirement, (i) in subsection (4)(b), for the words from “at the time (b) the settlement ceases to meet the all-employee benefit of the disposal” to the end there were substituted requirement, “(see sections 236J to 236L)”, (ii) subsection (4)(c)(ii) (and the “and” before it) were (c) the settlement ceases to meet the controlling interest omitted, and requirement, (iii) subsections (4A) and (7) were omitted, (d) the participator fraction exceeds 2/5, or (iv) in subsection (A1), for “Conditions A and B are” (e) the trustees act in a way which the trusts, as required by there were substituted “Condition A is”, and the all-employee benefit requirement, do not (v) subsection (1A) were omitted, permit.” (b) section 236NA were omitted, Amendment 57, page 567, line 26, leave out “after” (c) in section 236O— and insert “before”. (i) in subsection (1) the words “, after the end of the Amendment 58, page 567, line 34, leave out “(2)(b)(i)” tax year following the tax year in which the and insert “(2)(b)”. acquisition occurs, when” were omitted, Amendment 59, page 567, leave out lines 44 to 48. (ii) for subsection (2) there were substituted— “(2) A “disqualifying event” occurs in relation to the Amendment 60, page 568, line 1, leave out acquisition if and when— “(2)(b)(ii) as it applies in relation to section 236N(1)(b)” (a) at any time after that tax year— and insert (i) C ceases to meet the trading requirement, or “(2)(b) as it applies in relation to section 236N(1)(b) and (1A)”. (ii) the settlement ceases to meet the controlling interest requirement, or Amendment 61, page 568, line 36, at end insert— (b) at any time after the acquisition— ‘(7) Section 236PA makes provision about events which (i) the settlement ceases to meet the all-employee prevent a claim being made under this section and circumstances benefit requirement, in which a claim is revoked.” (ii) the participator fraction exceeds 2/5, or Amendment 62, page 568, line 36, at end insert— (iii) the trustees act in a way which the trusts, as “236PA No section 236P relief if disqualifying event in required by the all-employee benefit next tax year requirement, do not permit.”, (1) This section applies where— (iii) in subsection (3) for “before” there were substituted “after”, (a) a deemed disposal arises in circumstances where paragraphs (a) to (c) of section 236P(1) are satisfied, (d) section 236P(7) were omitted, and and (e) section 236PA were omitted.” (b) one or more disqualifying events occur in relation to Amendment 65, page 575, line 36, leave out the disposal in the tax year following the tax year in “day of the disposal mentioned in section 236H(1)” which the deemed disposal arises. and insert “time in question”. (2) No claim for relief under section 236P may be made in respect of the deemed disposal on or after the day on which the Amendment 66, page 582, line 9, leave out disqualifying event (or, if more than one, the first of them) “date of the disposal mentioned in section 236H(1)” occurs. and insert “time in question”—(Mr Gauke.) (3) Any claim for relief under section 236P made in respect of the deemed disposal before that day is revoked, and the Third Reading chargeable gains and allowable losses of any person for any chargeable period are to be calculated as if that claim had never 6.2 pm been made. Mr Gauke: I beg to move, That the Bill be now read a (4) Such adjustments must be made in relation to any person, whether by the making of assessments or otherwise, as are Third time. required to give effect to subsection (3) (regardless of any I will keep my remarks brief, but I would like to limitation on the time within which any adjustment may be remind the House once more of the important provisions made). before us. Finance Bill 2014 delivers measures that will (5) “Disqualifying event” is to be construed in accordance with help British businesses invest and create jobs, help British subsections (2), (6) and (7) of section 236NA except that— households work and save, and help to ensure that (a) references in those subsections to the disposal are to be everyone in Britain pays their fair share of tax. The Bill read as references to the deemed disposal, and builds on the strong foundations that we have secured in (b) in applying sections 236I to 236O and 236R for this the past four years, safeguarding our economic stability, purpose— creating a fairer more efficient and simpler tax system, (i) references in those provisions to the settlement are to and driving through reforms to unleash the private be read as references to the acquiring settlement sector enterprise and ambition that is critical to our (within the meaning of section 236P(1)), and recovery. 1027 Finance Bill2 JULY 2014 Finance Bill 1028

[Mr Gauke] coalition commitment to raise the income tax personal allowance to £10,000 and we are going further to increase Let me focus first on growth and competitiveness. it to £10,500 in 2015-16. By April 2015, a typical basic When this Government took office, we inherited an rate taxpayer will be more than £500 better off than economy in crisis. We have had to make some tough under the previous Government’s plans. Taken with choices, but we have delivered our economic plan. As a previous increases, the Government will have lifted over result, the UK economy is finally getting back on track. 3.2 million people out of income tax altogether. That is The deficit is shrinking, employment is at record levels real help for hard-working people. and the our economy grew faster than that of any other The Finance Bill rewards those who want to save for advanced economy over the past year. To support the the future. We recognise that people who rely on their recovery, it is vital that the UK tax system attracts savings income have seen low returns in recent years. investment to this country and does everything possible From April 2015, the 10% starting rate of tax on to ensure that UK businesses can compete in the global savings will be abolished, and a 0% rate will be extended race. That is why, in the corporate tax road map in 2010, to the first £5,000 of savings income above the personal we set out our ambition to give the UK the most allowance. This will benefit 1.5 million people, over competitive tax regime in the G20. 1 million of whose total incomes will be below £15,500 In my conversations with financial directors and tax a year. They will pay no tax on their savings income at advisers I am told again and again of the importance of all. a low headline rate and the signal it sends. I am proud to We are delivering our promise to recognise marriage say that, as a result of this Government’s actions, the in the tax system by introducing a new transferable tax main rate of corporation tax will fall to 20% by 2015- allowance for married couples and civil partners, allowing 16—not only significantly lower than the uncompetitive spouses in households where neither partner is a higher rate of 28% we inherited from Labour, but the lowest of or additional rate taxpayer and where one partner has any major economy in the world. It is vital for our not used up the full allowance, to pay tax on up to national interest that we continue to have that low £1,050 less of their income from 2015-16. competitive rate. Altogether, by 2016, our corporation tax cuts for small and large businesses will be saving Let me deal with some of the measures we are taking businesses £9.5 billion every year. These reforms have to tackle avoidance. The vast majority of individuals been a central plank of the Government’s economic and businesses pay the tax that they owe, but there are strategy, and that strategy is working. some who continue to pursue unacceptable ways of Competitiveness is not just about the rate of corporation reducing and delaying their tax bill. This Government tax. That is why this Bill will raise the annual investment are determined radically to reduce both the incentives allowance to £500,000 with effect from April 2014 to and the opportunities for individuals and businesses to December 2015. This doubles the amount of investment engage in abusive behaviour. This Government have on which firms can get up-front tax relief. More than taken unprecedented steps to tackle avoidance and abuse. 4.9 million firms will benefit, the vast majority of which Since 2010 we have legislated to close more than 40 tax will be small and medium-sized enterprises. avoidance loopholes, and we have made major strategic reforms such as introducing the United Kingdom’s first The Bill will also reduce business and household anti-abuse rule. As a result, the market for tax avoidance energy costs by freezing the carbon price support rate to schemes is shrinking. The number of disclosures of tax £18 in 2016-17. The Government have also committed avoidance schemes fell by nearly 50% between 2011-12 to maintain the freeze until the end of the decade, which and 2012-13. will save businesses £4 billion by 2018-19. The Bill includes measures to give targeted support to the innovative However, we are not complacent. That is why the Bill sectors that will drive growth in the 21st century. We introduces a new requirement for users of avoidance will legislate further to increase the generosity of the schemes which have already been struck down by the research and development tax relief for small businesses, courts, which fall within the scope of the DOTAS rules, with an increased rate of support for loss makers of or which are being counteracted by the general anti-abuse 14.5%. This demonstrates the Government’s commitment rule to pay the disputed tax up front. That will generate to supporting research-intensive SMEs and start-ups nearly £5 billion of revenue over the next five years, and and could support up to £1 billion of investment over ensures that those who knowingly enter avoidance schemes the next five years. We will support social enterprise will not be able to hold on to the disputed tax. They will with a 30% tax relief, unlocking up to £500 million in have to pay up front like most other taxpayers. We are additional investment over the next five years, and we also cracking down on high-risk promoters of tax avoidance are making permanent our successful seed enterprise schemes by imposing minimum standards of behaviour, investment scheme to support investment in start-ups supported by onerous information powers and stiff and early-stage firms. Let me mention again the new penalties for those who do not comply. Those measures theatre tax relief, which we have just debated, that demonstrate the Government’s continued commitment recognises the unique cultural value that the theatre to swift, effective and targeted action to tackle avoidance sector brings to the whole of the UK. and aggressive tax planning. With low corporation tax rates, support for innovation The Bill may be substantial, but it contains a number and help for small business, Finance Bill 2014 sends the of provisions to clarify or simplify the tax system. It clearest possible message that Britain is open to contains proposals to simplify the tax rules and multinational companies, open to entrepreneurs, open administrative procedures for employee share schemes, to investors: Britain is open for business. and to merge the main and small-profits rates of corporation Let me deal with fairness. While the Bill supports tax. Those changes will make it easier for small businesses businesses, it also provides for individuals and helps to meet their tax obligations, and will give them greater families with the cost of living. We are delivering our certainty that their tax affairs are in order. The Bill also 1029 Finance Bill2 JULY 2014 Finance Bill 1030 follows a longer, more thorough process of policy address many of those points, though they were ably development. In December 2013 we published more assisted, I suspect, by the officials from the Treasury, than 300 pages in draft legislation for comment, and we who also put a lot of work into these Finance Bills. received more than 300 responses, which have improved The Bill is long on clauses but short on ambition, I the final legislation. am afraid. I said on Second Reading that our goal was The Bill once again delivers on the Government’s to try to improve the specifics. We have tried our best in commitment to unprecedented levels of consultation a number of areas, but I fear we have not always and scrutiny in the development of new tax proposals. succeeded in persuading Ministers to see the error of It has also undergone 31 hours of scrutiny in the Public their ways. Let us consider some of these specifics, such Bill Committee. Let me take this opportunity to thank as the crass and ill-timed tax cut for investment fund and pay tribute to the Members on both sides of the managers through the abolition of stamp duty reserve House who served tirelessly on the Committee, as I did tax. At a time when so many people in this country are not have a chance to put all my thanks on record at the struggling with cuts to tax credits, such as the bedroom end of the Committee stage. tax, and finding it difficult to make ends meet, the I particularly thank the Whips: my hon. Friend the Government’s priority was to give that support and Member for Hastings and Rye (Amber Rudd) provided help first and foremost to those poor, hard-up investment invaluable help, and I also thank the hon. Member for fund managers. It is a badge of shame that that was Scunthorpe (Nic Dakin). I thank my hon. Friend the their priority. Member for Gosport (Caroline Dinenage) for her assistance Ian Swales: Will the hon. Gentleman give way? in ensuring that inspiration flowed readily. I thank the members of the Opposition Front-Bench team, who Chris Leslie: I do not know whether the hon. Gentleman probed diligently. We did not necessarily agree, and is an investment fund manager who has done well out of Ministers certainly did not accede to any of their endless this, but I will give way and find out. requests for reports and reviews, but they put their case in, for the most part, reasonable terms. Ian Swales: The hon. Gentleman is repeating something I thank the hon. Members for Birmingham, Ladywood we have discussed over and over again. Does he not (Shabana Mahmood), for Kilmarnock and Loudoun understand that the money from the change in stamp (Cathy Jamieson) and for Newcastle upon Tyne North duty goes to the investment funds, not the manager, and (Catherine McKinnell)—not forgetting, of course, the that, in fact, millions of ordinary people up and down hon. Member for Nottingham East (Chris Leslie), who the country benefit from this change? at least was there at the beginning and is here at the end. That is half the skill of dealing with a Finance Bill, as Chris Leslie: I am sure those investment fund managers far as I can see. have absolutely no interest in the abolition of SDRT in any way! I thought the hon. Gentleman was once a I thank the Financial Secretary to the Treasury and Liberal Democrat. Before the general election, the Liberal the Economic Secretary to the Treasury for their help in Democrats used to pretend they were in favour of setting out the Government’s case. I also thank my hon. standing up for the vast majority of people, against the Friends on the Back Benches, whose contributions were vested interests in society who tend to look after their generally both valuable and brief: I am grateful for that. best interests, yet here he is again, voting for tax cuts for I fear that my time is almost up, Mr Deputy Speaker, investment fund managers. This is a specific element of so I shall draw my remarks to a close. The 2014 Finance the Bill that we opposed. We tried to persuade the Bill rewards hard work, and restores our private sector’s Government to drop that measure, but we were competitiveness. It encourages investment, tackles avoidance, unsuccessful. and helps those on low incomes. This is a Bill that takes difficult steps but delivers real change, and I commend Mark Field: I feel I must stand up for investment it to the House. fund managers, not least because their business brings significant amounts of money to the UK. I reiterate the sensible words of the hon. Member for Redcar (Ian 6.14 pm Swales): ultimately it is all of us who are investors in Chris Leslie: Now that we have reached the final such funds who will reap the benefits of ensuring that stages of consideration of the Finance Bill, may I join this business comes to these shores, rather than to many the Minister in commending all hon. Members in all other globally competitive financial centres. parts of the House who took part in the scrutiny, and in considering all the details? As he said, there were 31 hours Chris Leslie: The hon. Gentleman represents very of consideration of the Bill. I particularly pay tribute to many of those investment fund managers. He is doing my hon. Friends the Members for Kilmarnock and the job he was sent to do, but this is a matter of Loudoun (Cathy Jamieson), for Newcastle upon Tyne priorities, and I have to say that the Opposition just North (Catherine McKinnell), and for Birmingham, disagree. The Treasury has finite resources at its disposal, Ladywood (Shabana Mahmood). Let us be honest: and at a time of pressures, cuts, and rises in tax—through they did the heavy lifting in Committee and on Report, VAT and in other ways—that hit the least well-off in as did—in an equal but perhaps less audible way—my society, I just disagree with Ministers and Members on hon. Friend the Member for Scunthorpe (Nic Dakin), the Government Benches that this should have been the the Opposition Whip, who made sure we kept to time priority. and that everything was pursued diligently. Many hon. There were other specific areas where we tried to Members, certainly from the Opposition side of the persuade the Government to improve the Bill, such as Chamber, pushed Ministers and probed on specific the proposal to give shares to employees in exchange for matters of policy, and I grant that Ministers tried to employment rights. We believe that undermines what 1031 Finance Bill2 JULY 2014 Finance Bill 1032

[Chris Leslie] should have been a focus in the Finance Bill. It should have focused more on housing, as we have a crisis in this should be a healthy approach to employee share ownership, country, whereby demand exceeds supply and we have because it gives the sense that something is being taken the lowest level of house building since the 1920s. Yet away, and that there is a disadvantage. That point was Ministers seem intent on structuring a lopsided recovery voiced not just by Opposition Members, but by some in our housing market, failing to deliver the 200,000 Government Members. Again, however, we could not properties a year we should be aiming towards by 2020. persuade the Government on that. In addition, many tenants are being ripped off by So many tax loopholes need to be addressed, and the lettings agencies in our private rented sector. We need Finance Bill should have been the opportunity to tackle reforms to deal with those sorts of things and the some of them, not least the notorious quoted eurobond Budget ducked those issues, as did the Finance Bill. exemption, which is costing taxpayers hundreds of millions The Bill could have dealt with some of the exploitative of pounds. Ministers ought to have had the courage to zero-hours contracts. It should have contained measures take on that issue. Some of the Bill’s proposals for to help small and medium-sized enterprises with business pensions flexibility are sensible, but big questions remain rates, because many firms in our constituencies are about the advice we will be able to give retirees to make finding it difficult to get by. We should make sure that sure that they get the guidance they need, at that most we help them, not just with business rates but by making crucial point in their financial lives, to make the right sure that the banks do their job and provide credit. choice, if they are not purchasing an annuity. Ministers Those are the sorts of reforms that would make a big have not lived up to the challenge of ensuring that that difference, but again, they were not in this Finance Bill. guidance and advice is possible. In the debate, I heard that that guidance may currently equate to 15 minutes Mr Brooks Newmark (Braintree) (Con): The hon. of face-to-face advice—perhaps I should say face-to-faces Gentleman should at least acknowledge that we dropped advice, because the Minister with responsibility for the small business rate by at least 1p, which has helped pensions is now saying, “We will give you some guidance, businesses. Will he guarantee before the House that he but it might be as part of a group of people.” The would not increase corporation tax should the country Government have to improve the legislation in this area. be unfortunate enough to see a Labour Government in The Bill contains a proposal for a married couples power after 2015? allowance. The Chief Secretary to the Treasury and, I suspect, the Chancellor personally disagree with it, but Chris Leslie: That is already on the record. Our view in a coalition they have to throw a bit of meat to the is that the proposed change in corporation tax from Back Benchers. The allowance discriminates between next April—from 21p to 20p—should not proceed. forms of partnership and does not help many married That help, instead of going to 2% of companies, should couples at all, as we see when we look at the total go to 98% of businesses, including the small and medium- number who will benefit. If we have tax cuts to give, sized companies that are the backbone of our economy they should be given to as many people as possible. and that form the bedrock of enterprise in this country. Of course, we also tried to improve the specifics and Funnelling that resource through business rates is our dissuade the Government from continuing their tax cut preferred choice, but we will set out all our plans in a for millionaires—the reduction from 50p to 45p in tax manifesto, as I suspect the Minister will do as well. We on earnings of more than £150,000. Again, that is a sign had a debate on this matter earlier, in which we focused of their priorities: they stand up for those who already on annual investment allowances—the capital allowances have significant wealth in society, but do not respond to for businesses. As we all know, the Minister cut that the needs and requirements of the least well-off. allowance to a very small level straight after the general election, causing great chaos for very many businesses. We tried our best to improve the Bill, but it missed a Amazingly, it is going up again, in time, coincidently, number of opportunities. Significant reforms should for the next general election. He revealed in the small have been in it, but are conspicuous by their absence. print today that it is a temporary change, so the allowance Why did the Treasury not put the cost of living concerns will presumably go back down again. front and centre in this legislation? I am not just talking about making sure that energy companies stop ripping off households up and down the country, or about Mr Gauke rose— passing on wholesale price reductions to ordinary households; the Bill should have contained, for example, Chris Leslie: I will give way to the Minister if he will steps towards a 10p starting rate of tax. There are a tell us what that investment allowance will fall back number of ways in which cost of living issues should down to in 2015. Will he tell us? have been far higher up in this legislation. Mr Gauke: It is hardly in the small print. It was in the Mr Jim Cunningham (Coventry South) (Lab): The announcement that was made when we extended and Conservative Government of the early 1970s recognised increased the annual investment allowance until December that there was a cost of living problem in this country, 2015. After that, it is a rate of £25,000. That rate is in and they gave a cost of living payment, through the the public domain, and, presumably, it is the rate that wage packet, to the low-paid in industries. the Opposition have as well. As the hon. Gentleman did not quite respond to the Chris Leslie: One would have thought that by now question from my hon. Friend the Member for Braintree Ministers would have twigged that for all the talk of (Mr Newmark), let me ask it again. The Labour party growth and the recovery, their constituents, never mind has given a heavy hint this week that it could increase ours, are not seeing the benefits in their daily lives. That corporation tax up to 26%, as that would still be the 1033 Finance Bill2 JULY 2014 Finance Bill 1034 lowest rate in the G7—that is the test that it has set talk about. They want it to be a “steady as she goes” itself. Will he provide some reassurance today that a Finance Bill. They do not want to address the problems Labour Government would not increase corporation of the bedroom tax or to supply real help to the tax to 26%? long-term unemployed through starter jobs to give them the opportunity to repair their CVs and get a foot on Chris Leslie: We know the Minister’s game. He is the ladder. Repeating the bankers bonus tax would have again trying to scare firms and businesses with various supplied the revenue for that. There are funded ways of suggestions on tax. We have made it very clear that we doing those things; despite how Ministers seem to want need to ensure that corporation tax levels remain at to portray it, this is not about unfunded commitments their most competitive among the G7. We will set out or borrowing. There are clear, practical and well-costed our tax plans in a manifesto, as the Minister will be ways of delivering real improvements to people’s lives, required to do as well. If my hon. Friends think that but Ministers refused to do them. VAT is due to stay at 20% under a Conservative Why are Ministers missing the opportunity offered Government, they should think again. I have heard that by this Bill? As far as they are concerned, everything is the Conservatives may wish to increase VAT to 21% or fine with the economy. It is all going perfectly well. That 22%. I will give way to the Minister if he can rule it out is their view, but I am afraid that we disagree on that for us right now, here in the Chamber, that he does not point. As far as Ministers are concerned everything is have any plans to increase VAT in the next Parliament. fine with living standards, but the OBR has said that Will he rule that out? people will be worse off in real wage terms in 2015 than they were in 2010. Ministers think that everything is Mr Gauke: I will tell the hon. Gentleman what we can fine in the welfare system, but they do not realise that do: we can continue to reduce the deficit without increasing the welfare bill is rising because they are not tackling taxes. That is more than he can offer. Unlike his party, the root causes of welfare inflation, such as rising rents, we have not given a heavy hint that the test based on the long-term unemployment and the subsidies required for most competitive rate in the G7. Canada has a rate of low wages. Those are the sorts of challenges that should 26.5%. If the Labour party imposed a rate of 26%, it have been covered in the Finance Bill but are not. raises the question of whether it would be complying with that commitment. On the deficit and the national debt, Ministers think that everything is fine even though the past couple of Chris Leslie: Let the record show that the Conservative months have seen the deficit rise. It is going in the Minister did not rule out increasing VAT to above 20%. wrong direction. They have added a third to the national It is telling that he gave a heavy hint that that remains debt, which is now at £1.2 trillion. If interest rates go up open as an option. We can have these discussions and even by 25 basis points—0.25%—an extra £2 billion of examine these particular issues, but I am looking at the public expenditure will be required to service the debt missed opportunities—the things that should have been that they will be accumulating. in the Finance Bill. We are now on its Third Reading, Ministers think that everything is fine with productivity, and it is time that Ministers realised that people from yet infrastructure output is down by 10% compared across the country are crying out for significant changes with in 2010. They think that everything is fine in the and improvements that will affect their lives. housing market, yet we can see by the lopsided nature I am thinking, for example, of the 5 million people in of what is happening in the economy that there are real low pay and the incentives to deliver a living wage. That risks that mortgage rates might well rise prematurely could have been part of the Finance Bill, but it is not. I because of how they have failed to recognise the need to am thinking of those families who are struggling with match demand and supply more effectively. They might the high cost of child care, which is increasing at a rate be satisfied with the state of the economy, but we are higher than inflation. If only the Minister had designed not. his bank levy properly in the first place and collected the £2.5 billion that he promised the country, we could Mr Jim Cunningham: It is interesting that my hon. afford to move from 15 hours of free child care for Friend has mentioned interest rates, because, one way working parents of three and four-year-olds to 25 hours. or another, they are bound to go up over the next 12 to That is the sort of reform that could make a big and 18 months. That will have a major effect on negative appreciable difference to the lives of working people up equity for people who have bought their houses, but, and down the country. more importantly, it can affect small businesses that want to borrow money and are not getting much help Mr Jim Cunningham: Once again, it comes back to from the banks at the moment. The Government spend helping families with the cost of living. The Government half their time blaming a Labour Government for the cut Sure Start, nursery places and so on. Although they mess that the banks created. They have never attacked boast that they expanded that provision, they did not—they the bankers, who made the economic situation worse, cut it, although we do not have the exact figures. The not better. They are apologising for the bankers and situation is exacerbated for a lot of families by the blaming us. bedroom tax, which is forcing people into more expensive accommodation and thereby driving rents up. There is Chris Leslie: Government Members and Ministers do also a lack of social house building in this country. not understand how important it is that we ensure that the recovery is sustained and sustainable. A premature Chris Leslie: That is my point. The Press Gallery is rise in interest rates has considerable risks. Three quarters not bursting at the seams because the Government do of credit and debt is floating, so if interest rates do rise not want people to think about what could have been in prematurely, significant harm will come to many the Finance Bill. That is not something they want to householders. Even a quarter point rise in interest rates 1035 Finance Bill2 JULY 2014 Finance Bill 1036

[Chris Leslie] country with the ordinary finances of households up and down the country. I urge my hon. Friends to vote will cost the typical householder £240 per year. against the Finance Bill and to send this Bill and these [Interruption.] The hon. Member for Suffolk Coastal Ministers back to the Treasury drawing board. (Dr Coffey) may be relaxed, as the Chancellor is relaxed, about interest rates. The Chancellor says that he is not bothered—that he is relaxed about rising interest rates. 6.38 pm Is the hon. Lady relaxed about rising interest rates? I Mark Field: I am glad that I am looking more youthful will give way to her if she is. and Conservative this afternoon, Mr Deputy Speaker. This is a very good Bill containing much that I agree Dr Thérèse Coffey: All I will say is thank God we with. The Minister has rightly pointed out that it does have not had a Labour Government for the past four some important things, particularly on something close years, because I expect that interest rates would now be to my heart—the theatre industry in my own at 10% and people would be handing back their keys constituency—but also on technology, which is one of and hoping that the hon. Gentleman does not get into the big growth areas for the future prosperity of this power next year. country. I want to talk about an ongoing concern of mine. The Chris Leslie: I do not know what evidence the hon. Minister will be aware of what I am about to say. Barely Lady has for that spurious assertion. a fortnight ago, Her Majesty’s Revenue and Customs We will see what happens in the coming months. We began writing to some 5.5 million taxpayers to confess will make sure that mortgage customers in the hon. that it had got things wrong. Errors in the pay-as-you-earn Lady’s constituency know that the increases in interest calculation had led the taxman to charge some 2 million rates are partly related to the condition of the housing fellow citizens too much tax and a further 3.5 million market, which is causing significant risk. The Governor Britons had been assessed too leniently. That latter of the Bank of England is trying to deal with this very group now faces the prospect of several years of repayments. lopsided situation. Of course, it is a matter for him to All this is in spite of expensive IT and personnel reforms decide on. Government Members need to speak to the that were meant to improve the system’s accuracy. Chancellor to get him to pull his finger out on the That news came at a time when the House was housing market and make sure that this is pursued scrutinising this Finance Bill, which proposes bestowing correctly. They do not understand why it is important ever more powers upon that organisation—in my view, for the recovery to be fair for all—to be something that an unjust reward for yet another year of error-strewn everybody in every part of the country benefits from. performance. Meanwhile, a consultation is now under The richest 1% having been doing especially well in the way as to whether HMRC should be given direct access past year. to UK citizens’ bank accounts so that it can claim from source any tax that it believes it is owed. I share the view Mr Gauke: The hon. Gentleman says that it is important of many people on the Government Benches who are that the whole country benefits from the recovery, and I concerned that this coalition Government are overseeing entirely agree. Does he accept that three out of four new the transfer of very considerable powers to the state. I jobs created in the past year have been outside London? fear that a precedent will be set for a future Labour Government, which we all hope will not come any time Chris Leslie rose— soon. However, such a Government might well be minded to expand further the taxman’s remit. Mr Deputy Speaker (Mr Lindsay Hoyle): Just to be Will the Minister reconsider the new accelerated payments helpful, there are three more speakers to come. The regime that is proposed in the Bill—other Members debate that is ping-ponging across the Chamber is very have spoken on that in the past couple of days—about interesting, but I would like to hear from Back Benchers which I raised my own concerns at Second Reading? It as well. is vital that the Treasury considers carefully the impact of granting such powers to an organisation that, I am Chris Leslie: You are completely right, Mr Deputy afraid, has proven itself time and again to have incorrectly Speaker. We have had this debate going on throughout calculated tax on a grand scale. the day. The Minister is a Member of Parliament for Mr Gauke: Since 1944, there has been an end-of-year Hertfordshire. If his constituents find work in London, reconciliation under the PAYE system, because not all under one set of statistics the jobs are classified as the information necessary to calculate the PAYE amount located in London, but under the set of statistics he is available to HMRC during the year. To some extent, prefers, they are located in Hertfordshire and not London. the PAYE amount is a provisional one, which is corrected We can talk about the methodology used in relation to at the end of the year. Notifying people at the end of these things. the year quickly is not the system failing; that is how the Ultimately, this Finance Bill is not focused on the PAYE system operates. It is not errors; that is the long-term best interests of this country. It is not a system. long-term Finance Bill for stability and for the vast majority of this country; it is a short-term Finance Bill Mark Field: I do appreciate that, but the Minister will from a part-time Chancellor who is more concerned also appreciate that trust in many institutions, whether about getting from here to election day than building a Government, banks or this House, has been at an sustained recovery that is fair for all. The defining all-time low in recent decades. If we are going to pass challenge of our times is to reconnect the wealth of our on more powers to such institutions we— 1037 Finance Bill2 JULY 2014 Finance Bill 1038

Mrs Mary Glindon (North Tyneside) (Lab): Will the they contained precisely this type of anti-avoidance hon. Gentleman give way? legislation with retrospective elements. We have to recognise that considerable hardship is imposed on many of those Mark Field: If the hon. Lady will excuse me, I will who are affected by such provisions. make some progress, as there are other Members who I addressed these issues in an article in The Daily want to speak. Telegraph several months ago. I was and continue to be We are now looking at drawing tax avoidance measures inundated with letters and e-mails from ordinary people so widely. It has been common practice for investors to across the country who are utterly dismayed that a err on the side of caution and sign up, as the Minister Conservative-led Government would initiate such a change knows, to the HMRC’s own disclosure of tax avoidance in law. Let me highlight some of their comments, so that schemes—DOTAS—register. Currently, if the UK tax the Minister is fully aware of the impact of the proposal. authorities wish to challenge the legitimacy of a DOTAS- One correspondent advised me: registered scheme in court, the taxpayer is permitted to “If this goes through, HMRC will be able to demand immediate hold on to the disputed tax while the case is being and upfront payment of the money it says I owe as a result of resolved. The Government believe that that incentivises their changing the law retrospectively—but without me even scheme promoters to sit back and delay resolution, so being able to present any arguments to the tax courts in my they propose extending the accelerated payments measure defence. If this were to happen I would need to lose my home in to existing DOTAS-registered schemes. That will mean order to pay the bill. It is a monstrous injustice.” that disputed tax is paid up front to the HMRC, and Another correspondent wrote: will be returned if a scheme is subsequently found to be “If one was to listen to the Government, it could easily be legitimate. believed that users of the structures declared under the DOTAS I quite understand why the Minister has felt tempted are malicious, super rich individuals, out to escape payment of their ‘fair share’, in contrast to ‘honest taxpayers’. I have been an to explore that route. There is, I understand, a desperate employee of a company that provided a remuneration structure need for money to shore up the public finances, which duly registered under the DOTAS. are still far less rosy than any of us would wish, with a In the aftermath of the most severe economic crisis in generations, recovery that remains somewhat fragile. There is also, the IT industry, in which I work, got hit very hard. I have been understandably and justifiably, a consciousness of the subjected to rate cut after rate cut since 2009, and for me, nominal need to deal more quickly with the tens of thousands of income is only going in one direction: down. Yet, if I listen to” outstanding mass-marketed avoidance cases that are the Government, currently clogging up the courts. “it sounds like complying with an ‘accelerated payment’ will be However, there is also a vital issue of principle at but a well-deserved inconvenience, forcing me maybe to sell one stake. The Government have been celebrating and espousing of my numerous yachts or…homes. I am shocked and appalled at their reverence for the eight-centuries-old principles set the cynical discourse that consists of creating this false image. I out in Magna Carta. It was that charter that established personally feel deeply insulted…. I am not a rich person by any the supremacy of the law by dictating that no Englishman stretch of the imagination; my partner and I rent a one bedroom could be punished without first going through the proper apartment, and we live modestly.” legal process. That set in train a constitutional revolution What is slightly depressing is that this sort of scrutiny that has seen billions across the globe having their has not really happened. I well understand why the rights expanded and protected against an all-powerful Labour Opposition feel they do not want to stand up state. for those individuals affected by the accelerated payments Yet at the same time, our Government are now overseeing regime. I ask the Minister once again in the implementation the creation of a law that will permit HMRC to confiscate of the Bill to consider an exception in the case of a citizen’s property before the courts have established existing DOTAS-registered schemes whose promoters who is legitimately entitled to it. The DOTAS register have taken all reasonable measures to enable a dispute was a good idea. It was designed to promote openness to be brought before the statutory appeals tribunal. I and transparency in investors’ relations with the HMRC. think there should also be a right to appeal against an It is now, in effect, introducing retrospective legislation, accelerated payment on the ground that the money is with DOTAS declaration being used as a stick with not due, or that a follower notice or accelerated payment which to beat legitimate investors—those who had never notice is not applicable. planned on having the liquid assets to meet disputed Although the Government say the legislation is not liabilities. retrospective, as it does not change an underlying tax No doubt the Government—any Government—feel liability, it will in fact apply with retrospective effect they can railroad those proposals through on a wave of over the past 10 years to anyone who currently has an popular demand for new measures to tackle tax avoidance, open appeal or inquiry. In my view, if the provision is to but although I agree that we have to clamp down on come into effect, it should be applied only in cases illegitimate tax avoidance, I worry about the potentially involving tax planning carried out after Royal Assent to very wide-ranging consequences, including the fundamental this Finance Bill. undermining of the Government’s overarching aim to I am sorry if I sound a little churlish. The Minister is make Britain a place that is open for business. I support well aware, because we have discussed this privately as many of the underlying measures in the Bill that are well as on the Floor of the House, that I think there is focused on that aim, but this measure expands a profoundly much that is good in the Bill, but it is right that these anti-Conservative notion of retrospective legislation. things are properly scrutinised and that scrutiny is The Minister and I have both been shadow Ministers; ongoing. We are putting into place certain measures we know the number of Finance Bills proposed by the that I think set a potentially dangerous precedent and erstwhile Labour Administration in the latter half of run counter to a principle that should be close to all our the last decade that we expressed concern about because hearts: that the British tax system and the British economy 1039 Finance Bill2 JULY 2014 Finance Bill 1040

[Mark Field] All the headlines following the Budget were about pension reform. Yes, annuities need to be reformed, and should be open for business and open to the opportunities I support increased flexibility for people in retirement that we all want our constituents to benefit from as we and reform of the pension market so that people get a move into a strong economic recovery in the years better deal. However, the Labour party has consistently ahead. called for reforms to the annuities market and a cap on pension fund charges over the past three years. The 6.49 pm Government have failed to reform the private pensions market to stop people being ripped off and to create a Chris Evans (Islwyn) (Lab/Co-op): It is a pleasure to system that savers can trust. The Government are failing follow the hon. Member for Cities of London and to prevent savers from being ripped off by delaying Westminster (Mark Field), who always speaks with bringing in a cap on charges. This is costing savers up to great expertise in his field. I served on the Bill Committee—I £230,000. The Government are failing to make tax relief have not missed a Finance Bill Committee since I entered on pensions fair, with 15% of all relief—£4 billion—going the House. On the first Committee on which I served in to the richest 1% of taxpayers. 2010 I was full of enthusiasm and, having listened to the When we talk about the reform of pension markets Minister, I am still filled with that enthusiasm as he has and the ending of annuities, I believe we should set negotiated a thousand different ways to say no. I pay three tests. The first is the advice test. Is there robust tribute to all the Members who served on that Committee. advice for people providing for their retirement, with As we approach the general election, the public are measures to prevent mis-selling? Forget the patronising crying out for help to ease their burdens as the economy “buy a Lamborghini”. I do not believe the people of belatedly shows some green shoots of recovery. People Britain are so naïve as to go out and buy a Lamborghini. around their kitchen tables wondering how they will As a former financial adviser, I am talking about good pay their bills, those in the workplace who are worried advice. With the reform of the annuities market there about their job security, and those running a small will be new products—products that we have not thought business will judge the Bill on three tests—are taxes fair of before, such as bonds, investment trusts and all sorts for my family and myself, do business taxes encourage of vehicles that people can invest in. Those will be growth and are they fair, and how will pensions reform— complicated and people will need advice, but that will not be achieved by 15 minutes of guidance, where Mel Stride (Central Devon) (Con): The hon. Gentleman advisers cannot sell. mentions business taxes. The shadow Minister was The second test is fairness. The new system must be repeatedly pressed to say whether business taxes might fair, with those on middle and low incomes still being rise under the next Government. We know from what able to access products that give them the certainty they the Opposition have said that business taxes could rise want in retirement. The billions we spend on pension to 26.5%, the level that they are at in Canada. Does the tax relief must not benefit only those at the very top. hon. Gentleman share my concern that that could be a The third test is cost. The Government should ensure major brake on business development in the future? that this does not result in extra costs to the state, either through social care or through pensioners falling back Chris Evans: Of course I share the hon. Gentleman’s on means-tested benefits, such as housing benefit. The concern. I shared the concern that the very first act in Treasury must publish an analysis of the risks it considers the very first Budget of this Government was to put when costing this policy. I was deeply concerned when VAT up to 20%, increasing the tax burden by 2.5% for the Minister said this afternoon that this change, which businesses all over the country. That was not exactly is the biggest ever to the pensions market, is still to be pro-business, but I am not here to talk about what the worked out and that a consultation on advice is still Tory Government have done or not done. running. For those facing this change, advice is vital. Let us deal with facts. Working people have seen their I talked for little short of half an hour yesterday on wages fall by £1,600 a year on average under this the other major change introduced in the Bill: exchanging Government. Real wages will have fallen by 5.6% by the employment rights for company shares. I will try to end of the Parliament. People feel worse off. On growth— break it down into two fundamental arguments. First, if the one test that the Tories said they would achieve—after an employer has an employee they are suspicious of, three years of a flatlining economy, we see the economy why would they give them shares in the company? growing by only 4.6%. The Chancellor does not talk Equally, if a company wants to trade shares for rights, about his forecast that the economy would grow by does that mean it trusts the employee? Will they be 9.2% in 2010. Our present rate of growth is far slower hard-working and industrious for that company? Secondly, than that of America at 6.6% or Germany at 5.7%. GDP if a company is going to dismiss an employee, why growth this year is still expected to be lower than the would it give them shares in the company anyway? independent Office for Budget Responsibility forecast Surely share save schemes should be used to reward in 2010. employees for hard, industrious work, but that is not On borrowing, on which the Conservatives attacked happening. We still need reform. the Labour Government, the present Government promised We have talked about a report and analysis. Even to balance the books by 2015, but borrowing will be though the statistics now show that after a 33-week £75usb billion that year. Over this Parliament borrowing consultation only five of the 200 companies that responded is forecast to be £190 billion more than planned at the said that they were interested in taking up the scheme, time of the first spending review. National debt as a the Government still say that it is far too early to even percentage of GDP is not forecast to start falling until think about a report. 2016-17, breaking one of the Government’s own fiscal As we bring to a conclusion our consideration of the rules. Finance Bill, which I am sure all of us who served on 1041 Finance Bill2 JULY 2014 Finance Bill 1042 the Bill Committee are excited about, the one question Baldry, rh Sir Tony Evennett, Mr David we have to ask ourselves is this: is it fair to the people of Baldwin, Harriett Fabricant, Michael Britain? Based on the statistics, it is not. I will therefore Barclay, Stephen Featherstone, Lynne be joining my colleagues in the Lobby tonight and Barwell, Gavin Field, Mark voting against the Bill. Bebb, Guto Foster, rh Mr Don Beith, rh Sir Alan Fox,rhDrLiam 6.56 pm Bellingham, Mr Henry Freer, Mike Benyon, Richard Fuller, Richard Mr Newmark: It is always a privilege to follow the Beresford, Sir Paul Gale, Sir Roger hon. Member for Islwyn (Chris Evans). I want to focus Berry, Jake Garnier, Sir Edward on one small aspect of the Bill, new clause 10, which I Bingham, Andrew Garnier, Mark know Opposition Members hold dear to their hearts. A Binley, Mr Brian Gauke, Mr David couple of years ago the Government extended the £25,000 Birtwistle, Gordon George, Andrew rate tenfold to £250,000. I told the Chancellor that that Blackman, Bob Gibb, Mr Nick was going down extremely well with small businesses Blackwood, Nicola Glen, John Blunt, Crispin Goldsmith, Zac and asked whether there was any chance that we could Boles, Nick Goodwill, Mr Robert extend it a little longer. He said, “I can do better than Bottomley, Sir Peter Graham, Richard that; I’ll double it again, to £500,000.” That takes in Bradley, Karen Grant, Mrs Helen pretty much 99% of companies, which is a good thing. Brady, Mr Graham Gray, Mr James For some reason, Labour wanted to enshrine in law Brake, rh Tom Grayling, rh Chris the need to review the impact of the annual investment Bray, Angie Green, rh Damian allowance, which I find peculiar. I do not think it is Brazier, Mr Julian Greening, rh Justine necessary at all. Governments review every year what is Bridgen, Andrew Grieve, rh Mr Dominic going on and whether tax cuts or increases work. I see Brine, Steve Griffiths, Andrew no need to introduce that requirement into law. Brokenshire, James Gummer, Ben Brooke, Annette Gyimah, Mr Sam However, I thought that it might be helpful for Browne, Mr Jeremy Halfon, Robert Opposition Members if I offered a quick review of what Bruce, Fiona Hames, Duncan we have done for business. I have come up with 10 points. Bruce, rh Sir Malcolm Hammond, rh Mr Philip First, we have lowered corporation tax. Secondly, we Buckland, Mr Robert Hammond, Stephen have cut the business rate by extending the small business Burley, Mr Aidan Hancock, Matthew rate relief scheme. Thirdly, we have brought in electronic Burns, Conor Hands, rh Greg invoicing. Fourthly, we have raised the threshold for the Burrowes, Mr David Harper, Mr Mark enterprise investment scheme. Fifthly, we have introduced Burstow, rh Paul Harrington, Richard the seed enterprise investment scheme, helping small Burt, rh Alistair Harris, Rebecca businesses get a kick start. Sixthly, we have brought in Byles, Dan Hart, Simon the employment allowance, saving businesses £2,000. Cairns, Alun Harvey, Sir Nick Campbell, rh Sir Menzies Haselhurst, rh Sir Alan Seventhly, we have cut national insurance contributions Carmichael, rh Mr Alistair Heald, Oliver for under-21-year-olds, saving businesses £500 per young Carmichael, Neil Heath, Mr David person they employ. Eighthly, we have introduced the Carswell, Mr Douglas Heaton-Harris, Chris Small Business, Enterprise and Employment Bill. Ninthly, Cash, Sir William Hemming, John we have frozen fuel duty, making it cheaper for people Chishti, Rehman Henderson, Gordon to go back and forth to work. Finally, we have improved Chope, Mr Christopher Hendry, Charles the research and development relief for businesses. We Clark, rh Greg Hinds, Damian have done a lot for businesses. Coffey, Dr Thérèse Hoban, Mr Mark What has the impact been on businesses? The confidence Collins, Damian Hollingbery, George index is at an all-time high. We have rebalanced the Colvile, Oliver Hollobone, Mr Philip Cox, Mr Geoffrey Holloway, Mr Adam economy, with growth of 3% in construction, services Crabb, Stephen Hopkins, Kris and manufacturing. We do not need to enshrine in law Crockart, Mike Horwood, Martin the need to review the impact of the investment allowance Crouch, Tracey Howarth, Sir Gerald on business, because actions speak louder than words. Davies, David T. C. Howell, John The Government’s long-term economic plan is working (Monmouth) Hughes, rh Simon and Britain is back in business. Davies, Glyn Hunt, rh Mr Jeremy Davies, Philip Huppert, Dr Julian 7pm Dinenage, Caroline Jackson, Mr Stewart Debate interrupted (Programme Order, 1 July). Djanogly, Mr Jonathan James, Margot Dorrell, rh Mr Stephen Jenkin, Mr Bernard The Speaker put forthwith the Question already proposed Dorries, Nadine Jenrick, Robert from the Chair (Standing Order No. 83E), That the Bill Doyle-Price, Jackie Johnson, Gareth be now read the Third time. Drax, Richard Johnson, Joseph The House divided: Ayes 289, Noes 228. Duddridge, James Jones, Andrew Division No. 32] [7 pm Duncan Smith, rh Mr Iain Jones, rh Mr David Dunne, Mr Philip Jones, Mr Marcus AYES Ellis, Michael Kawczynski, Daniel Ellison, Jane Kelly, Chris Adams, Nigel Andrew, Stuart Elphicke, Charlie Kennedy, rh Mr Charles Afriyie, Adam Arbuthnot, rh Mr James Evans, Graham Kirby, Simon Aldous, Peter Bacon, Mr Richard Evans, Jonathan Knight, rh Sir Greg Alexander, rh Danny Baker, Norman Evans, Mr Nigel Lancaster, Mark 1043 Finance Bill2 JULY 2014 Finance Bill 1044

Lansley, rh Mr Andrew Rogerson, Dan NOES Latham, Pauline Rosindell, Andrew Abbott, Ms Diane Ellman, Mrs Louise Laws, rh Mr David Rudd, Amber Abrahams, Debbie Engel, Natascha Leadsom, Andrea Ruffley, Mr David Ainsworth, rh Mr Bob Esterson, Bill Lee, Jessica Russell, Sir Bob Alexander, Heidi Evans, Chris Lee, Dr Phillip Rutley, David Allen, Mr Graham Farrelly, Paul Leech, Mr John Sanders, Mr Adrian Ashworth, Jonathan Field, rh Mr Frank Lefroy, Jeremy Scott, Mr Lee Austin, Ian Fitzpatrick, Jim Leigh, Sir Edward Selous, Andrew Bailey, Mr Adrian Flello, Robert Leslie, Charlotte Sharma, Alok Bain, Mr William Flint, rh Caroline Lewis, Brandon Shelbrooke, Alec Balls, rh Ed Flynn, Paul Lewis, Dr Julian Shepherd, Sir Richard Banks, Gordon Fovargue, Yvonne Liddell-Grainger, Mr Ian Simpson, Mr Keith Barron, rh Kevin Gapes, Mike Lidington, rh Mr David Skidmore, Chris Bayley, Hugh Gardiner, Barry Lloyd, Stephen Smith, Henry Beckett, rh Margaret Gilmore, Sheila Lopresti, Jack Smith, Julian Begg, Dame Anne Glass, Pat Loughton, Tim Smith, Sir Robert Benn, rh Hilary Glindon, Mrs Mary Lumley, Karen Soames, rh Sir Nicholas Benton, Mr Joe Goodman, Helen Macleod, Mary Soubry, Anna Berger, Luciana Green, Kate Main, Mrs Anne Spelman, rh Mrs Caroline Betts, Mr Clive Greenwood, Lilian Maynard, Paul Spencer, Mr Mark Blears, rh Hazel Griffith, Nia McCartney, Jason Stanley, rh Sir John Blenkinsop, Tom Gwynne, Andrew McCartney, Karl Stevenson, John Blomfield, Paul Hamilton, Mr David McIntosh, Miss Anne Stewart, Bob Blunkett, rh Mr David Hamilton, Fabian McPartland, Stephen Stewart, Iain Bradshaw, rh Mr Ben Hanson, rh Mr David Menzies, Mark Stewart, Rory Brown, rh Mr Gordon Harris, Mr Tom Metcalfe, Stephen Stride, Mel Brown, rh Mr Nicholas Havard, Mr Dai Miller, rh Maria Stuart, Mr Graham Brown, Mr Russell Healey, rh John Mills, Nigel Stunell, rh Sir Andrew Bryant, Chris Hepburn, Mr Stephen Milton, Anne Sturdy, Julian Burden, Richard Heyes, David Mitchell, rh Mr Andrew Swales, Ian Byrne, rh Mr Liam Hilling, Julie Moore, rh Michael Swayne, rh Mr Desmond Campbell, rh Mr Alan Hodge, rh Margaret Mordaunt, Penny Swinson, Jo Campbell, Mr Ronnie Hodgson, Mrs Sharon Morgan, rh Nicky Swire, rh Mr Hugo Champion, Sarah Hoey, Kate Morris, Anne Marie Syms, Mr Robert Chapman, Jenny Hood, Mr Jim Morris, David Tapsell, rh Sir Peter Clarke, rh Mr Tom Hopkins, Kelvin Morris, James Teather, Sarah Coaker, Vernon Hosie, Stewart Mosley, Stephen Thurso, John Connarty, Michael Howarth, rh Mr George Mowat, David Tomlinson, Justin Cooper, Rosie Hunt, Tristram Mundell, rh David Tredinnick, David Cooper, rh Yvette Irranca-Davies, Huw Munt, Tessa Turner, Mr Andrew Corbyn, Jeremy Jackson, Glenda Murray, Sheryll Uppal, Paul Crausby, Mr David James, Mrs Siân C. Murrison, Dr Andrew Vara, Mr Shailesh Creagh, Mary Jamieson, Cathy Neill, Robert Vickers, Martin Creasy, Stella Jarvis, Dan Newmark, Mr Brooks Villiers, rh Mrs Theresa Cruddas, Jon Johnson, rh Alan Newton, Sarah Walker, Mr Charles Cryer, John Johnson, Diana Nokes, Caroline Walker, Mr Robin Cunningham, Alex Jones, Graham Norman, Jesse Walter, Mr Robert Cunningham, Mr Jim Jones, Helen Nuttall, Mr David Ward, Mr David Curran, Margaret Jones, Mr Kevan Ollerenshaw, Eric Watkinson, Dame Angela Dakin, Nic Kane, Mike Opperman, Guy Weatherley, Mike Danczuk, Simon Kaufman, rh Sir Gerald Ottaway, rh Sir Richard Webb, Steve David, Wayne Keeley, Barbara Paice, rh Sir James Wharton, James Davidson, Mr Ian Kendall, Liz Parish, Neil White, Chris De Piero, Gloria Lavery, Ian Patel, Priti Whittaker, Craig Denham, rh Mr John Lazarowicz, Mark Penrose, John Whittingdale, Mr John Dobbin, Jim Leslie, Chris Percy, Andrew Wiggin, Bill Dobson, rh Frank Lewell-Buck, Mrs Emma Phillips, Stephen Willetts, rh Mr David Docherty, Thomas Love, Mr Andrew Pickles, rh Mr Eric Williams, Mr Mark Donaldson, rh Mr Jeffrey M. Lucas, Caroline Pincher, Christopher Williams, Stephen Donohoe, Mr Brian H. Lucas, Ian Prisk, Mr Mark Wilson, Mr Rob Doran, Mr Frank MacNeil, Mr Angus Brendan Pritchard, Mark Wollaston, Dr Sarah Doughty, Stephen Mactaggart, Fiona Pugh, John Wright, Jeremy Dowd, Jim Mahmood, Mr Khalid Raab, Mr Dominic Wright, Simon Doyle, Gemma Mahmood, Shabana Randall, rh Sir John Yeo, Mr Tim Dromey, Jack Malhotra, Seema Reckless, Mark Young, rh Sir George Dugher, Michael Mann, John Redwood, rh Mr John Zahawi, Nadhim Durkan, Mark Marsden, Mr Gordon Rees-Mogg, Jacob Eagle, Ms Angela McCabe, Steve Reid, Mr Alan Tellers for the Ayes: Eagle, Maria McCarthy, Kerry Robathan, rh Mr Andrew Claire Perry and Edwards, Jonathan McDonald, Andy Robertson, Mr Laurence Jenny Willott Efford, Clive McDonnell, John Elliott, Julie McFadden, rh Mr Pat 1045 Finance Bill 2 JULY 2014 1046

McGovern, Alison Ruddock, rh Dame Joan Question agreed to. McGovern, Jim Sawford, Andy Motion made, and Question put forthwith (Standing McGuire, rh Mrs Anne Seabeck, Alison McKechin, Ann Shannon, Jim Order No. 118(6)), McKenzie, Mr Iain Sharma, Mr Virendra McKinnell, Catherine Sheerman, Mr Barry DEFENCE Meale, Sir Alan Sheridan, Jim That the draft Armed Forces Act (Continuation) Order 2014, Mearns, Ian Shuker, Gavin which was laid before this House on 13 May 2014, in the last Miliband, rh Edward Skinner, Mr Dennis Session of Parliament, be approved.—(Mark Lancaster.) Miller, Andrew Slaughter, Mr Andy Question agreed to. Mitchell, Austin Smith, rh Mr Andrew Moon, Mrs Madeleine Smith, Angela Motion made, and Question put forthwith (Standing Morden, Jessica Smith, Owen Order No. 118(6)), Morrice, Graeme (Livingston) Spellar, rh Mr John Morris, Grahame M. Straw, rh Mr Jack LEGAL AID AND ADVICE (Easington) Stringer, Graham That the draft Legal Aid, Sentencing and Punishment of Mudie, Mr George Stuart, Ms Gisela Offenders Act 2012 (Amendment of Schedule 1) Order 2014, Munn, Meg Sutcliffe, Mr Gerry which was laid before this House on 31 March 2014, in the last Murphy, rh Mr Jim Tami, Mark Session of Parliament, be approved.—(Mark Lancaster.) Murphy, rh Paul Thomas, Mr Gareth The Speaker’s opinion as to the decision of the Question Murray, Ian Thornberry, Emily being challenged, the Division was deferred until Wednesday Nandy, Lisa Timms, rh Stephen 9 July (Standing Order No. 41A). Nash, Pamela Trickett, Jon O’Donnell, Fiona Motion made, and Question put forthwith (Standing Onwurah, Chi Turner, Karl Order No. 118(6)), Osborne, Sandra Twigg, Derek Twigg, Stephen Owen, Albert INTERNATIONAL IMMUNITIES AND PRIVILEGES Vaz, rh Keith Paisley, Ian That the draft African Legal Support Facility (Legal Capacities) Vaz, Valerie Pearce, Teresa Order 2014, which was laid before this House on 6 May 2014, in Perkins, Toby Walley, Joan the last Session of Parliament, be approved.—(Mark Lancaster.) Pound, Stephen Watson, Mr Tom Powell, Lucy Whiteford, Dr Eilidh Question put and agreed to. Qureshi, Yasmin Williamson, Chris Raynsford, rh Mr Nick Wilson, Phil ELECTORAL COMMISSION (MOTION) Reed, Mr Jamie Winnick, Mr David Ordered, Reed, Mr Steve Winterton, rh Ms Rosie Reeves, Rachel Wishart, Pete That the Motion in the name of Mr Andrew Lansley relating Reynolds, Emma Wood, Mike to the Electoral Commission shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 Reynolds, Jonathan Woodcock, John (Delegated Legislation Committees) in respect of which notice Riordan, Mrs Linda Woodward, rh Mr Shaun Robertson, Angus has been given that the instrument be approved.—(Mark Lancaster.) Wright, David Robertson, John Wright, Mr Iain Robinson, Mr Geoffrey PETITIONS Rotheram, Steve Tellers for the Noes: Roy, Lindsay Bridget Phillipson and Ruane, Chris Susan Elan Jones Bus Services for Beacon Heights (Walsall)

Question accordingly agreed to. 7.15 pm Bill read the Third time and passed. Valerie Vaz (Walsall South) (Lab): The petition is from the residents of Beacon Heights park homes. A Business without Debate petition in similar terms has been signed by 65 people. The petition states: The Petition of a resident of Beacon Heights Park Homes DELEGATED LEGISLATION Park, Motion made, and Question put forthwith (Standing Declares that following the removal of the 934 and 936 bus Order No. 118(6)), services from Beacon Road, Walsall after 7pm and on Sundays many elderly people who do not drive cannot access public transport at those times and further that the Petitioner calls for a HOUSING bus service or minibus to be introduced to replace the 934 and 936 That the draft Housing (Right to Buy) (Maximum Percentage bus service. Discount) (England) Order 2014, which was laid before this The Petitioner therefore requests that the House of Commons House on 5 June, be approved.—(Mark Lancaster.) urges the Government to take all possible steps to encourage Question agreed to. Walsall Metropolitan Borough Council to consider the objections Motion made, and Question put forthwith (Standing of the local residents. Order No. 118(6)), And the Petitioners remain, etc. [P001363] LOCAL GOVERNMENT That the draft Openness of Local Government Bodies Regulations Mr Speaker: It is a splendid thing when somebody 2014, which were laid before this House on 3 April 2014, in the who introduces a petition has a brother behind her in last Session of Parliament, be approved.—(Mark Lancaster.) support. 1047 Business without Debate 2 JULY 2014 1048

NHS Service Provision in Middlesbrough South and Nigeria (Abducted Girls) East Cleveland Motion made, and Question proposed, That this House do now adjourn.—(Mark Lancaster.) 7.16 pm Tom Blenkinsop (Middlesbrough South and East 7.17 pm Cleveland) (Lab): The petition states: Mr Gordon Brown (Kirkcaldy and Cowdenbeath) The Petition of residents of the United Kingdom, (Lab): I am grateful to you, Mr Speaker, for permitting Declares that the Petitioners object to the closure of the Park me to raise the desperate and continuing plight of more End Clinic, Skelton Medical Centre, and Skelton NHS walk-in than 200 Nigerian girls who were abducted from school centre; further that the Petitioners object to the proposed closure on 14 April and have been held in captivity for the past of minor injuries units at East Cleveland and Guisborough Hospitals; further that the Petitioners are concerned these reductions 80 days, with no sign of their imminent release. These in provision of primary care services will increase demand on the wholly innocent young girls—Lugwa Abuga, Rhoda Accident and Emergency Department at James Cook University John, Comfort Amos, Maryamu Yakubu and 200 others— Hospital; further that the Petitioners believe that Ministers in the are now incarcerated in the forest areas of Borno state. Department of Health should meet with the honourable Member Some have perhaps been dispersed across three other for Middlesbrough South and East Cleveland to discuss these countries: Niger, Cameroon and Chad. Their physical closures, and regret that Ministers have not committed to such a and mental health is a worry for everyone. meeting. We now know that the girls were kidnapped by the The Petitioners therefore request that the House of Commons urges Ministers to meet with the honourable Member for terrorist group, Boko Haram, whose name in Hausa Middlesbrough South and East Cleveland to discuss these changes means “western education is a sin”. They are being held in service provision, and encourages NHS England and the South hostage simply because they wanted an education. Their Tees NHS Clinical Commissioning Group to abandon these only crime in the eyes of Boko Haram is that they closures. wanted to be at school. Eleven weeks in captivity will And the Petitioners remain, etc. seem like an eternity for young, once-optimistic 14, 15 [P001364] and 16-year-old girls, whose future was all ahead of them until that day. I am sure that everybody in the Chamber would accept that such an outrage is every parent’s nightmare: your child leaves home and goes to school, but never comes home again; you wake up every morning not knowing whether your child is dead or alive, and spend every waking hour of the day not knowing whether your child is being molested, raped, trafficked or sold into slavery; and you have the terrible truth brought home to you that schools are no longer safe havens for your children, but theatres of war. Boko Haram’s perversion of its faith is so profound that it is apparently unperturbed by practising violence against young girls, even rape that causes unwanted pregnancies—damage to young girls that will endure and be lifelong, and that cannot be wished away even if they are returned safely to their homes. As we heard only a few minutes ago, in a Committee Room of the House of Commons, from Ngozi Okonjo- Iweala, Finance Minister and Co-ordinating Minister of the Economy—my grateful thanks to you, Mr Speaker, for chairing the event—across the country, tragedy is being piled on tragedy. There has been series of attacks: a wave of bombings in Borno state yesterday; an explosion in a shopping mall in Abuja last week, which killed 24 people; a medical college raid last week in Kano, killing eight; a hotel bombing in Bauchi city, killing 10; and attacks on four churches, killing 24. Residents of remote villages in northern Nigeria are fearful of night raids and running short of food and supplies. They are fleeing to the mountain caves, or to bigger towns. With more than 1,000 reported abductions in the past year alone, and more than 5,000 deaths at the hands of Boko Haram in the past five years, the governor of Borno state, who has courageously spoken out, is warning that failure to help his embattled schools and families will spell disaster for the rule of law in the whole of Nigeria. The 200 girls, whose faces and names are now known to the world, thanks to the efforts of the brave chairman of the Chibok community council, are not the only 1049 Nigeria (Abducted Girls)2 JULY 2014 Nigeria (Abducted Girls) 1050 victims. There is another, less obvious, set of victims: constituents, I want to share the right hon. Gentleman’s the thousands of girls, and many boys, who can no concerns publicly in the Chamber today. There has been longer go to school. Schools are closed in many parts of an unwillingness, or perhaps the Nigerian Government Borno state, and teachers are in fear of their lives. have been unable, to respond in the way that we back Education International, the global teachers’ union, home think they should. Is that because they are unable which is well organised and engaged with this problem, to seek the covert assistance that they need in order to has reported in the past few years on the murder of 171 ascertain where the schoolchildren are and bring them teachers who were shot, usually in their own home and back? Does he feel that perhaps the covert assistant that in front of their families, who were then kidnapped by this Government could offer is one way forward? gunmen. Their crime was to dare to teach girls at all. We therefore have another emergency in Nigeria: education in Borno state is coming to a standstill for fear of Mr Brown: I am grateful for the support of the terrorists, and that demands an international and domestic Churches in the hon. Gentleman’s constituency and response. elsewhere. Support from around the world is giving succour and confidence to the Nigerian people. I met In the days immediately after the abduction, I and schoolchildren who have been writing letters to the many others tried to secure international attention Nigerian President in support of Nigeria’s efforts to try and the widest possible global support for the Nigerian to capture the terrorists and release the girls. He is girls. A month ago, an enormous wave of concern was absolutely right that there is a real problem. If the girls expressed in every capital of the world. There was, have been dispersed to a number of different places, a as we know, a period of intense publicity, and a rescue mission for one group would immediately put the worldwide campaign to bring back our girls secured other groups at risk. That is the dilemma that confronts 1 million supporters, but once again the attention the Nigerian Government, as I understand it. That is span of the world has proved limited, and interest has why they need additional support to monitor what is ebbed. Even when it was reported last week that happening and, if it is necessary to intervene, the troops, another 90 children—60 girls and 30 boys—had been security services and the air cover to do so. kidnapped, there was only a flicker of attention across the world. There is a second thing that we can do to help. We cannot have safe schools if we do not have safe communities. Following the speech by Finance Minister Ngozi In addition to the rising military and security presence Okonjo-Iweala this evening, I wanted a debate before in these towns, we need to allocate extra resources to the summer recess—thanks to you it has happened, reassure parents, teachers and children that they can go Mr Speaker—because it is time to wake up fully not just to school. The safe schools initiative, launched this to the horror of what is happening, but to the ramifications afternoon in Britain by Finance Minister Ngozi Okonjo- for children, Nigeria and that part of Africa if nothing Iweala, is a plan to rebuild the burnt-out schools that is done. A few terrorists can never be allowed at any have been the casualties of terrorist incursions, starting time to blackmail a whole nation. We must do more to with the Chibok school. Our promise must be that it help the Nigerian Government back up the endeavours will be rebuilt immediately and made safe, so that when of President Goodluck Jonathan to secure the rescue of the girls are returned to their homes, their school at the girls and make inroads into the advances made by Chibok is safe for them to learn in without fear. The the terrorists. worry for many in northern Nigeria is that their school I am here to thank the Government for what they will be the next to face a terrorist raid. have done so far, and for their moral, physical and military support to the Nigerian people. I know that the Mr Tom Clarke (Coatbridge, Chryston and Bellshill) President of Nigeria wishes to give thanks for the offers (Lab): I am very grateful to my right hon. Friend for of support from China, the United States, France and securing such an excellent debate. Does he agree that in Israel, as well as Britain. I have met the President on the north some of the problems arise from illiteracy, three occasions recently, and he has sent an additional from the fact that people cannot find jobs, and from 5,000 troops to the Borno state and is ready to do more. extreme poverty? Sadly, this is encouraging some people As a result of his pleas to the international community, to move towards religious fundamentalism. Nigeria, Benin, Cameroon, Chad, Niger, Britain and the US have already established an external intelligence response unit to share security information. While it is Mr Brown: I am grateful to my right hon. Friend. He right to recognise that there has been a great deal of has a very honourable record in fighting for the causes international support, it is also right to acknowledge of poor people in Africa, Asia and every part of the that in its hour of need, Nigeria requires more helicopter world, and I want to acknowledge the work that he has support, more aircraft cover, and more surveillance done over many years. He is absolutely right. Ngozi, the equipment. I believe that we should also support President Finance Minister, referred to that point only a few Jonathan’s call for a better co-ordinated system for minutes ago. The Government of Nigeria have to do sharing intelligence across borders, and for, if necessary, more—she says they will do more—to help young the use of special forces and law enforcement agencies unemployed people to get work, and to enable young to help Nigeria confront terrorism. ambitious girls and boys to complete their education by having safe schools, and universities and colleges, to Jim Shannon (Strangford) (DUP): I sought the right go to. hon. Gentleman’s permission to intervene, and I thank The whole world should help Nigeria in this emergency. him for bringing this matter to the House. The House is It has to make its schools safer, so that there is confidence filled with Members who are equally concerned about among pupils and families that children can go to this issue, and on behalf of the Church groups and my school. That may mean better perimeter fencing, walls, 1051 Nigeria (Abducted Girls)2 JULY 2014 Nigeria (Abducted Girls) 1052

[Mr Gordon Brown] liberation struggle that has yet to establish, in every country of the world, every girl’s right to life, education lighting, and communication and security systems to and dignity. It is falling to girls themselves to lead the keep people in touch. We have to reassure people that fight for rights, largely because of the failure of us as everything possible is being done, otherwise we will give adults, who should be discharging our responsibility for a propaganda advantage to the terrorists. and to them. The Safe Schools fund has already attracted $10 million A few days ago, there was a youth takeover of the from the Nigerian Government, $10 million from the African Union in Addis Ababa; then 20 parliamentary business community, £1 million from the UK and takeovers by young people who occupied, with the $1.5 million from Norway. Money is coming from other permission of the parliamentarians, national assemblies countries in the EU, and there are promises from the in support of Chibok girls. This was backed up by United States of America. I hope that one outcome of demonstrations in cities across the world, including in the debate will be to convince the Government that it is Rio, Lagos, Hanoi, Cairo and Islamabad. These young worth providing more than £1 million. Without this people still need the world to see their problem and initiative, many of the other measures in which we are their fight for what it is. engaged to help education in Nigeria cannot be successful. The bigger truth is that for years we have somehow The United Nations has just passed a Security Council assumed a clear, if often rocky, pathway towards human resolution that says that schools should have the same rights and universal education, but today in Pakistan legal protection in conflict areas as hospitals. The Global the Council of Islamic Ideology is calling for all age Coalition to Protect Education from Attack is calling limits on girl brides to be abolished; India has just on each nation to introduce and integrate guidelines passed up on yet another chance to outlaw child labour; into their military manuals’ rules of engagement and countries all across Africa are failing to act on genital operational orders, so that schools have the chance of mutilation; and progress to get 58 million out-of-school being safe havens, rather than being militarised. I hope children into school has stalled in recent years. We the Government can encourage every Administration in should not and must not stand by as many countries in Africa to do that. the world lurch backwards when it comes to the imposition, As we heard this evening from Ngozi, and in speeches preservation and upholding of girls’ rights. by the Secretary of State for International Development, In northern Nigeria today, we have on the one side the deputy leader of the Labour party and the Chair of terrorists, murderers, rapists and cowards hellbent on the Select Committee on International Development, acts of depravity, and on the other side we have the the kidnaps are part of a wider problem. In the last few defiant, relentless, brave beyond comprehension young weeks alone, we have seen reports of young girls raped people who are desperately fighting for a future but are and then murdered in India, and we have seen public too often oblivious to our attention. We must be clear outrage at the death sentence passed on a young Sudanese that in the battle between the girls of the world and the mother simply because a woman is considered to have backward-looking extremists, there will, in the end, be no right to choose her own religion. Attention is now only one winner, but we should not have to wait another moving to Iraq, where extreme Islamists are fighting for half-century with millions of lives ruined, millions of demands that include changing the Iraqi constitution to dreams destroyed, millions of hopes and aspirations legalise marriage for girls at the age of eight. This week crushed, for the world to deliver—as we must for the and every week, around 200,000 school-age girls—some Nigerian girls, and for girls everywhere—the opportunities only 10, 11 or 12—are married off against their will that should be and are every girl’s birthright. because they have no rights that properly protect them. For many, child marriage will be preceded by genital mutilation—still to be successfully outlawed in many 7.34 pm African countries. The Minister of State, Foreign and Commonwealth A total of 7 million school-age children as young as Office (Mr Hugo Swire): I am most grateful to the right eight or nine will be in full-time work, some of it slave hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) labour in fields and in domestic service, and many will for securing this evening’s important debate, which unites be trafficked into prostitution as part of a subterranean the House. I would like to take the opportunity to world of international trade in girl slave labour when praise the right hon. Gentleman’s ongoing work as UN they should be at school. As a result, 32 million school-age Special Envoy for Global Education to promote the girls are not going to school today, or any other day. vital importance of education. I pay tribute to The basic right to be in education is denied to 500 million the determination he has shown in helping Nigeria face girls who will never complete their education. the scourge of gender-based violence and terrorism. I Thus the abductions, the killings, the rapes, the am aware of the meeting that he had earlier—chaired mutilations, the trafficking, the exclusion from opportunity by you, I believe, Mr Speaker—with the Nigerian Finance and the kidnaps are not isolated incidents, but part of a Minister, Ngozi Okonjo-Iweala, and my right hon. Friend pattern whereby girls’ rights are not taken seriously the Secretary of State for International Development, enough in many countries, or indeed by the international among others. community as a whole. The violation of girls’ rights is I know that Members on both sides of the House will commonplace. In the end, in some countries, rights are join me in utterly condemning the actions of Boko only what the rulers decree, so that the opportunities for Haram. Its members prey on, and deliberately target, girls are no more than what a few patriarchs are prepared the weak, the innocent and the vulnerable. They have no to bestow. Seventy years after the universal declaration regard for religion, ethnicity, gender or human life, and, of human rights, we are, in my view, in the midst of as we have just heard, they are bringing untold misery what I see as a great global civil rights struggle—a to Nigerians and people throughout the region. The 1053 Nigeria (Abducted Girls)2 JULY 2014 Nigeria (Abducted Girls) 1054 appalling Chibok abductions may have focused the dormitory, set it on fire, and killed the boys who tried to attention of the world on Boko Haram’s activities, but escape the flames. Those left inside were burned alive. that is, alas, just one example of the death and devastation that it is inflicting on northern Nigeria. It is 79 days The international community has mobilised to help since the abductions—79 days, and 219 schoolgirls are Nigeria face this threat. Last week the UN listed Boko still missing; 79 days during which at least another Haram leader Abubakar Shekau and the terrorist 200 people, women, girls, boys and young men, have organisation Ansaru on the al-Qaeda sanctions list. been abducted. This followed the listing of Boko Haram on 22 May. It is now an offence for any individual or entity to I commend the right hon. Member for Kirkcaldy and provide financial or material support to Ansaru, Shekau Cowdenbeath for his important work in spearheading or Boko Haram, including the provision of arms or the safe schools initiative, which was designed to protect recruits. children at school. In recognition of the vital work that it will undertake, and of the potential that education These latest listings were among a series of commitments has to transform Nigeria and the lives of individual made at the London ministerial to strengthen regional children, my right hon. Friend the Prime Minster and international co-ordination, and reaffirm our announced on 17 May that the United Kingdom would commitment to the fight against Boko Haram. Nigeria contribute £1 million of support directly to the initiative. and her neighbours Chad, Cameroon, Benin and Niger That will be in addition to existing commitments to participated, with the US, France, Canada, the EU, and support education throughout Nigeria. our international partners the UN and the African As my right hon. Friend the Foreign Secretary said at Union. Given the Chibok abductions, it was fitting that the 12 June London Ministerial on security in Nigeria, this ministerial was held in the margins of the summit to end sexual violence in conflict. “We want to make sure that Boko Haram does not succeed in its twisted mission to deny education to girls.” Nigeria and her neighbours agreed to establish a So—in addition to our support for the safe schools regional intelligence fusion unit to share and process initiative, and in the first partnership of its kind in intelligence. Chad, Cameroon, Nigeria and Niger will Nigeria—the Department for International Development each contribute a battalion to the multinational joint and USAID will work to share resources and experiences taskforce and increase the frequency of simultaneous to provide safe places in which children can learn. As a or co-ordinated border patrols. The UK, the US result, an additional 1 million children will receive a and France will between them provide support to the better education in northern Nigeria by 2020, and more regional intelligence-sharing arrangement and training than half of those children will be girls. During the for the taskforce battalions, and we, the participants at current financial year, DFID will spend approximately the ministerial, were united in our agreement that any £20 million on education projects in Nigeria. That is a effective response must be fully in accordance with signal of our determination to demonstrate that education human rights. is a right, not a privilege, and that it should be free from British commitments, in addition to the pledge to the fear of terrorism and abduction. Overall, we have bring a million more boys and girls into basic education seen a dramatic increase in DFID’s investment in education in northern Nigeria by 2020 that I mentioned a few as a result of the steps that we have taken to meet our moments ago, include: significantly expanding our training commitment of 0.7% of gross national income to and assistance to the Nigerian armed forces, particularly international development. helping to train those units deployed on counter-insurgency The search for the schoolgirls—led by the Nigerian operations, to strengthen their capacity to tackle Boko Government, but supported by the international Haram; and support for the Nigerian presidential initiative community—continues. British experts are working in for the north-east—PINE—supporting development and Nigeria alongside others from the United States, prosperity, including the provision of basic services and France, Canada and elsewhere to analyse and process infrastructure to those communities most at risk. the available intelligence and supply advice to the Nigerian authorities. We have provided, and will continue to I am sure the right hon. Gentleman, and indeed the provide, surveillance support. The resolve of the United whole House, will agree with me that the UK should be Kingdom and the international community to continue proud of its contribution to the fight against Boko the search and reunite the girls with their families Haram and in standing alongside Nigeria in the face of remains unwavering. However, to ensure that the tragedy extremism and mindless violence. Our commitment, of Chibok cannot be repeated, we must end the scourge and that of the international community, to defeating of Boko Haram. Boko Haram, to ending the scourge of terrorism in Nigeria, to securing the safe return of the missing Last week Abuja was shaken by another bomb attack, schoolgirls, to preventing sexual violence in conflict, the third in as many months. More than 200 died in an and to the empowerment and education of women and attack in Jos on 20 May. A suicide bomber attacked a girls was underlined last month at the ministerial meeting university in Kano on 23 June. Even those watching the here in London. World cup in public have been callously targeted and killed. Meanwhile, the murderous reported Boko Haram In the wake of the heinous abduction of the Chibok attacks in the north-east of Nigeria continue. The latest schoolgirls, I am pleased that the countries of the occurred yesterday: a car bomb attack in Maiduguri. region have all endorsed the ending sexual violence in More than 2,000 people are believed to have died at the conflict declaration. It underlines the importance of hands of Boko Haram or others connected to them eliminating this horrific practice around the world, and since the beginning of this year, including 59 boys who the right hon. Gentleman will no doubt be supportive were murdered at the federal government college in of the Prime Minister’s initiative to host a girls summit February, when militants blocked the exits of a boys’ later this month. This will seek global commitment on 1055 Nigeria (Abducted Girls)2 JULY 2014 Nigeria (Abducted Girls) 1056

[Mr Hugo Swire] Office Minister that events overtake events and it is too easy to forget those that matter. This is one that most issues the right hon. Gentleman raised in his speech this surely does. evening, such as early forced marriage and female genital Question put and agreed to. mutilation. I am most grateful to the right hon. Gentleman for keeping this issue very much in the thoughts of everyone 7.44 pm in this House. I have discovered in my role as a Foreign House adjourned. 235WH 2 JULY 2014 Cross-border Rail Services in Wales 236WH

choice: pay the Severn bridge toll—which is too expensive Westminster Hall and should be reduced, although that is a topic for another debate and I am sure we will return to it—or Wednesday 2 July 2014 run the gauntlet of an often overcrowded and inconvenient train service. Unsurprisingly, given the cost of fuel and the fact that the Severn tolls are whacked up every year, [MRS LINDA RIORDAN in the Chair] people are increasingly opting for the train service. Partly as a result of that, we have seen substantial Cross-border Rail Services in Wales growth in passenger numbers. The Welsh Affairs Committee report “Crossing the border: road and rail links between Motion made, and Question proposed, That the sitting England and Wales”, which was completed a couple of be now adjourned.—(John Penrose.) years ago, picked up on that: “Cross-border services have seen significant growth in passenger 9.30 am numbers in recent years, and it is expected that demand will Jessica Morden (Newport East) (Lab): It is a pleasure further increase in the future. First Great Western said that its to serve under your chairmanship, Mrs Riordan. I thank Cardiff to Bristol service had seen particularly high growth”. other hon. Members and hon. Friends from Wales for According to the Office of Rail Regulation, the number showing up, and I know that more hon. Members of passengers going to and from Severn Tunnel Junction would be here if it were not for the fact that the Select station has increased by 72% in the past seven years. Committee on Welsh Affairs is considering other business. That growth is partly caused by commuters, students Transport debates, by their nature, can be extremely and tourists connecting from places such as Chepstow parochial, but I make no apology for introducing this and Lydney. Connections have increased by 192% over debate on rail issues that affect my constituents, because the same period. That is a huge growth in usage, and it those issues are a big concern for the commuters I increases every year. represent. I will concentrate on overcrowding and problems At the Monmouthshire end of my constituency, there with the franchise in my area, but other hon. Members are several new housing developments and more are might want to make more general remarks about the planned. The same is true of Chepstow and Gloucester. franchise, the electrification of the valleys lines and Many occupants of those new homes will commute to related funding issues. Bristol and other cities in England, and they will end up Like many hon. Members, I receive a lot of complaints at Severn Tunnel Junction station to catch connecting from constituents who are frustrated by the day-to-day trains, but the rail service has not kept up with demand. problems they face when they commute or travel for For many years, we have received complaints from leisure. My constituency is near the border, so many of commuters, but the service remains the same or even my constituents travel to the south-west, Bristol and gets worse. The main reason I applied for the debate Bath and to London. The debate is born out of great was frustration with the lack of response from First frustration with train companies and train operators, Great Western to the chronic overcrowding on our which is felt by me, by the excellent Severn tunnel action commuter routes to Bristol; demand for services to group—I know I am biased, but I believe that it is the Bristol has greatly increased. In fairness to First Great best rail users’ campaign group out there—and by their Western, I should say that I have finally got a meeting fellow rail campaigners in the next village, the Magor with the company next Monday. action group on rail. Our frustrations are overcrowding, After having received many complaints, I recently lack of connecting services and lack of information on went out with Severn tunnel action group members to electrification. We need to ensure that those concerns survey users on those commuter trains, and I am in no are heard as we approach the renewal of the franchises. doubt about how frustrated they are. One of my constituents The debate is a chance to get some of that on record. calls the service “the sardine express”. Commuter trains The Severn tunnel action group was set up after the are always overcrowded and, sadly, it is not uncommon last Greater Western franchise, because its members felt for large numbers of passengers to be left on the station that cross-border services were poorly covered. They because there is no space in the carriages. The 07.55 First have campaigned tirelessly for the reinstatement and Great Western service has been recorded as leaving protection of services, and their aim is to develop more than 30 passengers behind at Severn Tunnel Junction Severn Tunnel Junction station, one of the stations in station. Some of those passengers have paid more than my constituency, to encourage more people on to rail £1,500 for an annual season ticket, so it is easy to from cars by providing better services. They are a imagine their frustration and anger. I will share a few constructive and positive lot who have a lot of rail comments from commuters whom I surveyed: expertise, but I sense real frustration with the lack of “Members of my family catch the 07.55 train from this station engagement by rail companies. I want to convey that to as they commute to Bristol. For several months now, the train has the Minister as we approach the new franchises. been made up of only two coaches instead of what used to be five. We have experienced overcrowding, standing room only, people The latest figures from the Office of Rail Regulation unable to board, etc, etc. I have written to First Great Western on highlight the importance of cross-border journeys to all more than one occasion to complain in the strongest terms, but Welsh rail users, with around a third of the 27 million no avail.” annual journeys crossing the Wales-England border. Another said: Many of those journeys are back and forth to and from “I sometimes catch a train on the opposite platform and have the south-west and London. My constituents commute counted some 100 or so persons waiting on the 07.55 to Bristol! to cities such as Bristol, which offer big employment When there are only two carriages, the train is full before it arrives opportunities, so we need reliable and affordable public at Severn Tunnel. Completely unacceptable, particularly considering transport. However, all too often, people face an unenviable the exorbitant ticket costs in this country.” 237WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 238WH

[Jessica Morden] for renewal at a similar time. I am sure that the Minister is aware of that, and that forward planning is being Another person recently reported that a passenger had done. Does my hon. Friend agree that there is a need for fainted: a direct link from Liverpool to Holyhead, which would “FGW must be in breach of health and safety standards at the bring Dublin and Liverpool closer together? We need to very least. Something must be done about this.” look at the big picture, and we have time to plan to do Another commuter directly linked the situation to the so before the franchises are renewed. effect of the Severn bridges: Jessica Morden: I thank my hon. Friend for his “It’s all inefficient. I can’t jump into my car because of the intervention. He is exactly right: with the franchises Bridge Tax of £120 per month on the most expensive toll in the country. If I could drive instead I would in an instant. I’ve coming up for renewal, we must think strategically. The suffered the pain of these trains for only 12 months. There is no Government and the Welsh Government must work innovation, no new trains, no new operators and prices are set together for the good of the transport system. They high.” must be constructive so that we can iron out some of I have many more examples, but will end on this e-mail the problems. I also agree with his point about the link from a constituent: between Liverpool and Holyhead. “They just need an extra coach on each train—it’s not rocket We all support electrification and hope that we will science!” benefit from it soon. As the Welsh Affairs Committee Why is that so hard to deliver? pointed out, it has been an example of good collaborative working and has demonstrated what can be achieved There is an obvious lack of rolling stock, which has when the two Governments work together on transport— led to a lack of carriages on peak services. There should apart from the row over funding the valleys lines. For be five carriages, as constituents have said, on the 07.55 constituencies such as mine, which will suffer much, it train, but frequently there are three or sometimes even would helpful if the Minister let us know early on what two. I understand that the train company has looked the disruption will be, when the work is to be carried into hiring additional rolling stock to address the shortfall out and what form it will take. We hear talk of the while some of its stock could be away for months on closure of some stations so that work can be carried out heavy overhaul, but that has not happened. We can only on the bridges, but the lack of concrete information is surmise that, as a private business, its financial model causing confusion. When can we let communities know means that to do so would not be financially viable, so it what will be going on as a consequence of electrification? has decided not to go ahead. Will the Minister take the Staff in my office have asked for information and timetables, matter up with First Great Western following the debate? but so far we have heard nothing. If would be helpful to Does he agree that it is not acceptable for the company know when local commuters will be informed fully. to ignore the problem and to ignore complaints from commuters who have legitimate concerns about services An example of the uncertainty caused is that commuters they have paid for? at Severn Tunnel Junction raised the issue of the safety of the passenger footbridge, which many rail users feel My second complaint is the perennial problem of is unsafe. In fact, an Arriva fire inspector expressed poor connections, which was covered in the Welsh concerns a few weeks ago and Network Rail was forced Affairs Committee report on cross-border transport a to do remedial work. If it is unsafe, it must be sorted couple of years ago, but which has still not improved. out, but the latest letter we received from Network Poor connections are not only a problem for those of us Rail—it has been a lengthy correspondence—said that who live on the border; they have knock-on implications the delay in sorting it out was due to the electrification for those further into Wales. Commuters from Caldicot, plans. We have been chasing information about the Chepstow or Lydney may face a lengthy wait for a bridge for some time, but the situation is now critical. connecting service, and poor connections at peak The new bridge is funded under the Department for commuting times are common. For instance, there are Transport’s Access for All scheme, but is clearly unsuitable no trains from Caldicot between 7.40 am and 9.40 am, as it is now. Will the Minister please intervene with which is bad for people who are trying to get to work. Network Rail, because his Department is funding the Stations such as Caldicot have huge potential, particularly improvements? We need action quickly. among people who want to use them for work, but we I want to discuss the renewal of the Great Western need a service that is fit for purpose. Lots of people franchise. We have all recently been asked to respond to want to use that service. What can the Minister and his the consultation on the franchise, which I have done. Welsh counterparts do to ensure that the First Great Rail groups in my constituency want to reiterate to the Western service connects better with the Wales and Minister that whoever is awarded the contract needs to borders franchise, which is up for renewal in 2018? meet commuter demands. In my area that would include Better connections is a constant grumble, and the matter a half-hourly or better train service from south Wales to has been raised by the Welsh Affairs Committee. We Bristol Temple Meads and Bath; an additional hourly need action on better connecting services. service from Ebbw Vale via Newport and Severn Tunnel Junction to Bristol Parkway, which would provide new Albert Owen (Ynys Môn) (Lab): I congratulate my journey-to-work opportunities to take advantage of the hon. Friend on securing the debate and on the work on development and employment sites planned for the area connectivity that she does on behalf of her constituents. around Bristol Parkway; a minimum of five coaches on In the north, we now have better services; there has the peak services from south Wales to Bristol; a commitment been huge investment on the west coast over many to ensure that train capacity is sufficient for future years, which has provided extra trains. Does my hon. demand; and greater emphasis in the franchise on working Friend agree that the connectivity between the franchises in partnership on interchanges, and on rail companies must be looked at? In north Wales, both are coming up working together on timetables. 239WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 240WH

Getting rail services right in my constituency is an and chose to go elsewhere—to Spain and France. That important part of the effort to increase economic and left a big hole in the north Wales economy for a 40-year employment opportunities, but we should also give period, and we are only just beginning to put that right. commuters the service they deserve, given how much The challenge for the 21st century in north Wales is they pay for it. The debate is focused on getting the better connectivity between north Wales and the north-west cross-border services right, but I should also mention of England. There are 650,000 people living in north the great work that the Welsh Government are doing on Wales, and 6.5 million people live in the north-west—it the metro system, which could be of great benefit to is a huge population centre, and if a bit more of the communities in my area, such as the people of Magor area across the Pennines is included, it becomes even who are campaigning for a new station through the bigger. That was an opportunity in the past, it is an Magor action group on rail. opportunity in the present and it is an opportunity for It is so important for constituencies such as mine that the future. We must improve train and transport the two Governments work together on rail as we connectivity. depend on a properly co-ordinated approach and properly thought out train services. I know that other Members Mark Tami (Alyn and Deeside) (Lab): Does my hon. will make more general points about other cross-border Friend agree that we must think about that now for the rail issues, but I am grateful to the Minister for listening future? One problem is that rail has been something of to my speech and hope that he will address some of my an afterthought. Industry and a lot of other things have specific concerns about the franchise. come, but the rail system is not up to the standard required to serve industry and the people of our area. 9.44 am Chris Ruane: I agree with my hon. Friend to a certain Chris Ruane (Vale of Clwyd) (Lab): At the risk of degree, but he is no great user of the train, unlike me sounding like Monty Python’s “Four Yorkshiremen”, and my north Wales colleagues. I have witnessed a vast the first job I ever had, at the age of seven, was casing transformation from when I became an MP in 1997 and on Rhyl railway station with my older cousins. We it took me four hours to arrive in London from Rhyl in would take a pram, and the trains would roll in, 10 to my constituency. The trains then were grubby and had 14 carriages long, and disgorge their passengers. People not been cleaned; there was chewing gum on the old did not have cars back in the 1960s—or not many and faded seats. Now, we have Pendolino and Voyager working class people did—so they would place their trains. There has been massive investment, for which I cases on our prams and we would take them to the am grateful to Virgin and Arriva. There has been guesthouses, hotels and caravan parks in Rhyl and improvement, but I agree with my hon. Friend that we round about. must not rest on our laurels. The train has been good to Rhyl and Prestatyn. The Huge investment—something like £45 billion—is coming train arrived in Rhyl, my hometown, in 1849. I was from HS2. I want to ensure that my area, the north recently talking to a 94-year-old local historian from Wales coast, gets its fair share of that investment—that Prestatyn, Fred Hobbs, who has researched the topic. we are electrified and our stations are improved. Big He told me that when the train came to Prestatyn, it progress has been made: Chester, Flint and Prestatyn opened up the Welsh seaside towns to the industrialists stations have been improved—a huge investment of and merchants of Manchester and Liverpool, who came £7 million was spent on Prestatyn. Last week Arriva, and lived in Rhyl and Prestatyn and commuted to Network Rail and Denbighshire county council started Liverpool and Manchester. They brought with them a £2.5 million improvement programme for Rhyl railway their wealth and investment, and our local towns prospered. station. Improvements have been made, but we must Rhyl was just a fishing village back in the 1840s, but it not rest on our laurels. We must push for further investment grew and grew: between 1849 and 1900, there were in our stations along the north Wales coast. 900 hotels and guesthouses. The train brought great The big cities of Liverpool and Manchester were wealth to the town. The west ward of Rhyl was one of totally transformed under a Labour Government, and the richest wards in Wales because of the investment in we did not make enough of that. Those cities were hotels and guesthouses. Unfortunately, those ex-hotels derelict and riot-strewn in the 1980s, and they are now and ex-guesthouses are responsible for the deprivation vibrant communities. Manchester has one of the biggest of seaside towns, as they have now been turned into student population bases in Europe, with 45,000 students. houses of multiple occupation, but that is a discussion Liverpool is the same. Two principal airports serve for another day. north Wales, Liverpool and Manchester, and they have The train has been good to the coastal towns of both grown exponentially over the past 10 years. They north Wales, and especially to Holyhead. The route are the local airports for north Wales, and we need planned in the 1840s went from London to Dublin, connectivity to them. It is difficult to get directly to which was still part of the British empire in those days. those airports by train, so we need to consider a dedicated It was a very important route. We want to ensure that transport link from the north Wales coast to Liverpool the primacy of that route in the 19th century is re-established and Manchester airports. in the 21st century. The trains and transport links to Liverpool and Manchester have huge population bases north Wales brought wealth and investment right through and huge research capacity at Manchester and Liverpool the 20th century, up until the 1960s when I was casing universities. We need to connect those universities with to make a few bob on a Saturday morning. The downturn businesses in north Wales such as Airbus, the OpTIC came to the north Wales coast in the 1970s, when people incubation and research centre in St Asaph in my stopped coming to coastal towns for their traditional constituency and Bangor university. We need more two-week bucket-and-spade holidays in a coastal town co-operation, which would increase and improve if we 241WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 242WH

[Chris Ruane] bridge at Rhyl harbour. We need to make the most of the investments that have come to my town and north had proper transport links. Connecting the science base Wales by connecting them to rail users, which is a of the north-west with the science base of north Wales challenge for all of us. We have two well performing would be helped tremendously by a proper transport train companies. Virgin has massively improved the system. service over the past 14 or 15 years, and we north Wales North Wales not only needs to be better connected Labour MPs campaigned to ensure that Virgin did not with England; we need better connections inside Wales, lose the franchise. We were highly concerned when it including with the constituency of my hon. Friend the looked as if a second-rate company was going to take Member for Alyn and Deeside (Mark Tami) in north-east over the franchise, and I hope that Virgin continues to Wales. In 1998, the Labour Government made a £0.5 invest. Arriva Trains Wales is also investing heavily in billion launch aid investment in Airbus, with the Welsh north Wales, but we need to put pressure on the train Government investing £25 million. That was a public-private companies to ensure that they deliver not for the past or partnership that produced one of the most expansive for the present but for the future. factories in western Europe. There are 6,000 engineering jobs at Airbus making the biggest wings in the whole 9.56 am world. We have to ensure that our population base in north Wales, especially in the bigger coastal towns that Ian Lucas (Wrexham) (Lab): It is a pleasure to take have large numbers of unemployed people, is better part in this debate and to hear my hon. Friend the connected to the job opportunities at Airbus and the Member for Vale of Clwyd (Chris Ruane) tell us about Deeside industrial estate in my hon. Friend’s constituency. Rhyl station. Big changes have happened in north Wales Tens of thousands of jobs have been created and will be and in the rest of the country over the past 30 or created, and they need to be made available to unemployed 40 years. For the benefit of the Minister, it is important and underemployed people along the north Wales coast. to appreciate that north-east Wales, and its economy, is Ten years ago, the Department for Work and Pensions among the most successful and progressive areas of the provided transport grants that helped people get to country. North-east Wales has world-beating companies work. We should be drawing down grant money, European in the aerospace, automotive and pharmaceutical sectors funding, DWP funding or Welsh Government funding that compete internationally to secure jobs and high-quality to ensure that we have dedicated pull-in stations and investment for British industry. In a globalised economy, dedicated trains early in the morning to take those it is important that the world knows we have infrastructure workers to the huge factories in north-east Wales. that is competitive, enabling those businesses and people I will conclude on modal points, where trains connect in north Wales to journey to north-west England and with airports and hovercraft. I am probably one of only beyond. two MPs who can claim to have a constituency that has There is good news for my constituency of Wrexham, been, or will be, served by a hovercraft. The first passenger because the Welsh Government are investing some hovercraft service in the whole world was between Rhyl £44 million in dualling the line between Wrexham and in my constituency and Wallasey. I mentioned that fact Chester. In the 1980s, the Conservative Government in a debate in this Chamber in December, and within made the absurd decision to limit the infrastructure for three days, three hovercraft companies contacted me rail services between the largest town in north Wales, about restarting the service. The time taken to travel Wrexham, and Chester, which therefore inhibited regular from Rhyl to Liverpool by train is one-and-a-half hours, rail services. Ever since, we have been able to have only possibly involving two changes. The time taken for a one train an hour between Wrexham and Chester. In hovercraft connection to Liverpool would be 34 minutes. fact, we re-established an hourly service only in 2007—the I would like to see people coming along the north Wales impact had been so negative that rail usage substantially coast by rail, stopping at Rhyl railway station and diminished. getting on the hovercraft for a direct passage to Liverpool. Since the reintroduction of hourly services in 2007, The proposal is for a hover link that takes people from there has been a massive increase in the use of rail north Wales, through Rhyl, to Liverpool airport. That services, which I see every week when I travel to London. is a fantastic opportunity, but we need to ensure that we The economy of this important economic area has have the facilities to take people by rail, by car or by bus developed, Glyndwr university has been established and from Rhyl to Liverpool. we have seen a large increase in rail usage. We are also blessed in Wales with a fine coastal path. It is important that we use this opportunity to introduce We are the only country in the UK that has committed three trains an hour between Wrexham and Chester, to, and delivered, a path along the whole coast. Walkers which would provide a major boost to the local are coming to Wales, and in my constituency we are manufacturing and retail economies by increasing the blessed with being at the northern end of the Offa’s connectivity between Wrexham and Chester. Businesses Dyke footpath. We need to ensure that walkers can that operate on both sides of the border would benefit come to Rhyl or Prestatyn by train to do their rambling—I from access to new markets. Such investments are hope I am not rambling, but I intend to finish soon. important, and there are massive further opportunities Mark Tami: You are hovering. in the immediate area of north-east Wales. Another cross-border line runs between Wrexham Chris Ruane: Yes, I am hovering about rambling. and Liverpool, and my hon. Friends from north Wales Thanks very much. will forgive me for mentioning it again. It runs from In Wales we are also blessed with fine cycleways, most Wrexham, the largest town in north Wales, by the of which are along the coast. The Sustrans bid for Big Deeside industrial estate, which has businesses such as Lottery funding delivered a £4.5 million dedicated cycle Toyota, and goes through the constituency of my hon. 243WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 244WH

Friend the Member for Alyn and Deeside (Mark Tami), lines such as Wrexham and Chester and Wrexham and up through the Wirral, very close to the GM factory at Liverpool would facilitate investment in the rail system, Ellesmere Port, then up through to Birkenhead, and which would support business and jobs in the local links in to Liverpool. The service is interrupted by a economy. Give us the responsibility, authority and power necessary change at the Bidston interchange. Direct to make decisions, and we will continue to deliver a access along that line would be a massive boost for powerful economy in north-east Wales that will be able north-east Wales, the Wirral and north-west England as to compete in future. a whole, so it is important that we consider looking at that line again and designing an improved infrastructure. 10.5 am In my role as a shadow Foreign Affairs Minister, I visit other countries, particularly in the middle east and Glyn Davies (Montgomeryshire) (Con): Thank you, Africa, and it is striking to see the investment and Mrs Riordan, for calling me to speak in an important support for infrastructure that our competitors are debate on an important issue in mid-Wales. I, too, introducing to their economies. Those people are keen congratulate the hon. Member for Newport East (Jessica to secure the jobs that our own constituents have at the Morden) on securing the debate. She spoke about services moment and that our young people wish to have in in south Wales and there have been contributions on future, so we must focus on delivering improvements to north Wales, but I specifically want to talk about the our infrastructure. Although we have had some services that serve not only my constituency of improvements, particularly on the longer journeys from Montgomeryshire, but mid-Wales. north Wales to London, which my hon. Friend the The line from Aberystwyth, on the extreme west Member for Vale of Clwyd mentioned, the connectivity coast of Wales, to London runs in two parts: from between north-west England and north Wales is still Aberystwyth to Birmingham, and the direct service limited and needs to be much better. from Shrewsbury to London. They overlap to some Focusing on the airports is massively important. The extent, but the two lines are particularly important for airports that serve north Wales are Manchester and that rail journey. As other Members have said, the line Liverpool, but it is virtually impossible to travel to is very important for the economy of mid-Wales. Perhaps either by public transport. The region has an increasingly more so than in other parts of Wales, the railway choked road system that was essentially designed in the tackles the perception of remoteness, which has always 1970s and 1980s, and in substance has not changed been a negative factor in attracting business. since. It is absolutely imperative that we focus on delivering My purpose today is not to make demands of the an improved public transport system to service the Minister. I am highlighting the importance of both airports and to increase connectivity. If we do not do parts of the line, and I want to make certain that the so, we will lose out in the longer term to our competitors. long overdue good news that we have had about the For me the real frustration over the years has been intention to invest in both parts comes to fruition and is the investment system, which is too centralised to be beneficial. able to deliver local transport projects. I am pleased by First, on the Aberystwyth to Birmingham line, I have the tone and content of the Adonis review, which was been involved in the campaign for an upgrade for about issued yesterday and talked about the importance of 30 years, so I have a reasonable right to call this a long much more regional approaches to investment across overdue investment. The first issue was upgrading the England. The lesson also applies in Wales. We cannot line with passing places to enable an hourly train service. have a top-down system only in Whitehall or Cardiff There has been only a two-hourly service, which is Bay—away from the localities that actually understand hopelessly inadequate. The campaign started 20 or 30 years the need for local investment and how to facilitate ago, and money has been invested. It has taken a long it—determining investment in regional rail projects. time, but we now have a commitment from Arriva That is one of the major reasons why our infrastructure Trains and the Welsh Government that an hourly service system is so bad. will be introduced. I think the various people associated Contrast that with, for example, Frankfurt in Germany. with running the trains are now being trained. The On a recent visit, I saw the connectivity between the rail service is due to run from May 2015, just in time to system and the airport system. The city is a major bring the newly elected Members in the general election regional power player in Germany. There is a regionalised of 2015 from mid-Wales to London. system of cities such as Hamburg, Munich and Berlin, The second part of the line is the Shrewsbury to which all contribute massively to their regional economies. Euston connection, which is hugely important to mid-Wales. The fact is that in the United Kingdom—this issue People will be able to drive to Shrewsbury, park, and affects all our constituents—there is a massive focus on then catch the direct service to London. Having to south-east England. The major transport infrastructure change is incredibly inconvenient and it discourages investments have gone to south-east England. That is people from using the line. I would prefer to use the unbalancing the economy throughout the country. It train and not drive to London, but that is simply is a central issue not only for our constituents, but for inconvenient for me. However, the hourly train service the whole United Kingdom. will change that. A tide is flowing in all political parties that recognises Such a service used to run, but it was stopped. We the importance of that issue. The practical impact of had a promise that it would run when there was an the policies we are pursuing is that we do not have the agreement with FirstGroup to provide a west coast regional investment to facilitate projects that could main line service. The franchise was let, but it was create world class infrastructure. It is important that we cancelled. Now, of course, there is an agreement with have the capacity and the authority in north Wales to Virgin Trains that the line will run from December. develop regional infrastructures. The development of Perhaps the Minister will confirm how often that train 245WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 246WH

[Glyn Davies] risk of closure because the railway line follows the coastline, which is exposed to the elements, and it will will run and at what times. It is hugely important that it need continuing investment. I stress that that needs to runs at convenient times that enable people who wish to be UK Government investment, because this line connects work in and travel to London to use it. Otherwise, we London with Ireland. would deliver on a promise but not deliver on the actual I look forward to electrification and remind those need. present that the Labour Government had a commitment So, there are two aspects. One is the line within Wales, to electrify as far as Swansea. I am sure that my hon. which we anticipate will come into effect in May next Friend the Member for Swansea West (Geraint Davies) year. I very much hope that that is the case. There is no will speak at greater length about what has happened reason why it should not happen, but we must always be since then and about the uncertainty over electrification. vigilant to ensure that it does. Secondly, the Minister I understand fully why we are not going for bimodal here today has responsibility for the direct line from trains—trains that can be both diesel and electric. They Shrewsbury to Euston, and I very much hope that that are heavier than other trains and any investment in line comes to fruition later this year, with times and them would be a major investment, for what I hope frequency that are convenient for the people of mid-Wales. would be only the short term. I want electrification to come not only to Bristol, Cardiff and Swansea, but 10.10 am right through west Wales. However, there will be an issue when part of the line is electrified: when that Nia Griffith (Llanelli) (Lab): I congratulate my hon. happens, where will we change trains and how will that Friend the Member for Newport East (Jessica Morden) change work? on securing the debate, which is extremely important to all of us in Wales. To my mind, addressing that issue will be crucial to First, I will speak about the main line that goes from keeping passengers loyal to the service, because if the London to Fishguard, connecting to ships going over to process of electrification is messed up and we end up Rosslare in Ireland. The line goes right through my with yet another, perhaps inconvenient change—bearing constituency, passing through the stations of Llanelli, in mind that we already have one change for west Bury Port and Kidwelly. It is absolutely vital that we are Wales—that will make things very difficult. part of the trans-European network and that we have I would like there to be only one change—a change good connections on the line. off the train from where the line has been electrified up Recently, the Welsh Government made significant to and on to another train to take people all the way to investment in the Loughor bridge, which has enabled it west Wales. Whether that happens to be at Swindon or to take two-way traffic, but what grieves me is how few at Bristol, there should be only one change so that we through trains we have. I hope that, with the new do not end up with people having to make two changes franchise, the fact that we have this new bridge will to reach west Wales. enable us to have much greater connectivity and far The line that goes from Pembrokeshire up to Manchester more through trains. To have only one train from west Piccadilly can be a useful service if I am going to Wales up to London and only one from London to west conference, but I do not meet many passengers who go Wales per day is not good enough, and even those trains all the way from Pembrokeshire to Manchester. The go only as far as Carmarthen; they do not go right up to argument that the train will not stop in some local the Pembrokeshire coast. stations such as Kidwelly because it is trying to get from The problem that that poses for people is the lack of Pembrokeshire to Manchester as quickly as possible connectivity. There is the inconvenience of having to seems to be completely fallacious. If someone is going change trains and the fact that, often, the trains run by to spend six or seven hours on a train anyway, an extra First Great Western are late, so people end up having to 10 minutes is neither here nor there. The fact that this wait at stations for long periods—usually Cardiff, Port train is going through stations at a very low speed but Talbot or Swansea—because there is simply no way to does not always stop at them is extremely annoying. If get from west Wales to London without changing, it stopped just on request, that would be a help. The except for two trains, one each way, per day. argument about not stopping is fallacious, and I understand that some towns on the English side of the border are Let me give an example. If I got the 5.25 am train also concerned about the fact that some of those trains from Llanelli to come up to London morning, I would do not stop at their station. hope that I could make a 10 am meeting in London by getting to London at 9 am. However, only recently I had I reiterate the comments on overcrowding made by the experience of sitting on that 5.25 am train, which my hon. Friend the Member for Newport East. I have had been five minutes late, and being told that we were constituents who commute to Filton Abbey Wood and waiting outside Port Talbot station to let the First Great to Bristol, and they have to change and catch very Western train go through, so the very train that I overcrowded trains. If they cannot get on those trains, needed to catch to get to London was passing by my they are disadvantaged as they are unable to get connecting window. My only option, therefore, is to get the 3.25 am trains back to west Wales, so they are very concerned train if I want to get to an early morning meeting in about overcrowding. London, which is quite inconvenient. We need a much greater number of Sunday services, Rail is also vital for freight. We have refineries in particularly in winter, when it is impossible to get from Milford Haven and obviously the steel industry also my constituency to important places such as Twickenham, uses the railway line. Last winter, storm damage closed where rugby matches happen. People cannot get there this line for three or four days. Mercifully, that was all on a Sunday, and I am sure the Minister understands the time it was closed for. However, there is significant the importance of such sporting events. Not to be able 247WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 248WH to get from west Wales to London on a Sunday in time need to think about that. Some £5,000 per head is spent to get to a match is obviously very much a disadvantage in London, versus £500 elsewhere. It is important to nowadays, when people do so much on a Sunday, from people from Wales—certainly, those from south Wales—to shopping to—of course—going away on holiday. link up to the city regions in south Wales, which are also That brings me to the issue of the train that, last year, networked into the city regions in the south-west. As it got stuck in remotest Wiltshire for six hours. It was a happens, my father was the head of economic development First Great Western train coming from the west country, in the Welsh Office many years ago—Rhodri Morgan but it could equally well have been a train from west used to work for him, interestingly enough—when a Wales. I wrote to the Minister asking what lessons had study was done showing that, in respect of the invoice been learned from that case, or perhaps I put down a network, the economy of south Wales was linked more parliamentary question, but it was too early to get a to the south-west than to north Wales. Clearly, infrastructure response because a report on the case had not been investment in rail and road connectivity should follow produced by that time. I hope that that report has now that. been produced; I could not understand how that case There has been talk about HS2 connecting to north happened. We all allow for First Great Western trains Wales, but KPMG has suggested that it will be different being at least an hour late, if not two or three hours late, in south Wales and that we in Swansea, for example, but when people are going away on holiday they do not will be losing some £16 million a year and Cardiff will allow time for a train to be six hours late. People were lose £70 million a year. There is a case for a Barnett kept on that train without adequate water for all that consequential of approaching £2 billion to help connectivity time. to south Wales. I understand that it was not necessarily possible to I appreciate that the Minister will mention electrification, get a bus up to where the train had stopped, but it and I was pleased that the Prime Minister promised to would have been possible to get other trains along the electrify the railway from Paddington to Swansea, but I track, which would either have allowed passengers to be should like some clarification on that, because there is a decanted and taken on or allowed water to be taken to bit of a spat going on with the Welsh Government. It the passengers. A six-hour delay is completely unacceptable, now seems that the Government are saying that they and I hope that steps have been taken so that my will electrify as far as Cardiff and then from Bridgend constituents do not have to face such a situation if they to Swansea, but not from Cardiff to Bridgend. The are going away and hoping to get to Heathrow airport issue is who pays for the electrification of the valleys or are going to London for any other reason this lines. In my mind, the bit that runs from Cardiff to summer. Bridgend, which is not the valleys, does not seem to I will make one last point that may not seem terribly be involved this spat and should be paid for by the relevant to this cross-border debate, but is terribly relevant Prime Minister’s undertaking. Although we welcome if people have to change trains: on Cardiff station and electrification, we will be worse off downstream in inward on Port Talbot station, it is impossible to get into a investment, as I have already said. ladies toilet cubicle with a very large suitcase, probably My focus is on acknowledging that we should be because the cubicles are made to a specific design that making connections between the economic clusters in, came from one book. I would suggest that some quite for example, Neath-Port Talbot, Swansea and Lllanelli, large or portly women might find it difficult to get and Cardiff and the valleys, so that we can stimulate themselves into those cubicles. Of course, it becomes economic growth. My hon. Friend the Member for necessary for people to use the cubicles if they have to Newport East (Jessica Morden) mentioned tolls. Today change trains, and for some passengers—in particular, is not the time to talk about tolls, but, again, that is a some older passengers—using toilets on trains is quite cost for south Wales that is not faced elsewhere. difficult. We have a second-class service. In that regard, hon. Will the Minister take note of the fact that, whenever Members have mentioned the frequency of trains, which stations are being redesigned, consideration should be is arguably equivalent to train speeds. From Swansea, given to that issue, so that we do not end up with the there are two trains an hour to London Paddington, situation we used to have in Paddington, whereby people one at 28 minutes past the hour and one at five minutes had not only to go down stairs, but get their suitcases to the hour, and people have to change at Cardiff from over a turnstile before they could get to a cubicle. That one of those trains. However, on the way back, at has now been put right, and people can use the disabled various times, particularly in the afternoon, there is toilet on the platform. Nevertheless, those issues need only one train an hour. An inward investor thinking of to be taken into consideration. investing, and going back and forth between Swansea and London, might have to wait nearly an hour at 10.19 am Paddington before getting a train, and they will then Geraint Davies (Swansea West) (Lab/Co-op): I noticed spend three hours on the train—a total of four hours. I an advert in London the other day that mentioned a urge the Minister to work with the Welsh Government Virgin train from London to Manchester costing just on train timetabling. For example, in the other direction—I £19 and taking two hours and nine minutes, a train do not mean to be too parochial—people get the from London to Birmingham taking one hour and Manchester Piccadilly train one way, get off at Cardiff 24 minutes and costing £7.50 and, of course, one from and then pick up another train and go on. On the way London to Swansea that takes three hours and costs back, why can they not get the Cardiff train, then pick £78. up the Manchester Piccadilly train or even a Bath train? The Government have decided to invest more than Hon. Members mentioned connectivity with Manchester. £40 billion in High Speed 2. There is an issue about Looking at traffic flows, the economic network is, as I geographical equity in economic development, and we mentioned earlier, with the south-west, not with Manchester. 249WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 250WH

[Geraint Davies] In passing, let me mention some other rail projects. We should look more imaginatively at opportunities for It would be better to have much better, regular connectivity some trains to go directly to Swansea from Cardiff between Swansea and Bath and the south-west than without stopping, or from Cardiff to Port Talbot Parkway, connectivity with Manchester. Traffic flow and volume with a light rail route going all the way through to the make the economic case for frequency and connectivities. Mumbles. I appreciate that it would involve working with the The Minister may or may not know about the Welsh Government to get the train timetabling right. conversations about the Swansea tidal lagoon. I saw a That is a simple thing that could be done within the next presentation recently about it—three new lagoons would weeks, and overnight we could end up with an assurance be provided, stretching across Swansea bay city region, of having two trains an hour from Paddington to Swansea. but not the whole way across. It would not go as far as That would make a big difference to me when talking to Swansea bay itself, so as not to distort the view towards inward investors who might want to go to Swansea bay the Mumbles. There would be a reconfiguration of the city region. road and rail networks and a visitor centre that would There has been talk about nationalising Arriva Trains generate, in the view of the plan’s originator, some and about public ownership of various franchises. The 3 million visitors a year. Minister knows that the east coast main line is in public Will the Minister explain whether the planning regime control and we are saving something like £700 million a is merely some sort of incremental process of upgrading, year. It is worth looking at such cases around Britain. extending or reducing existing networks, or whether it is I understand that in Wales, we are spending some part of a more creative vision of economic development, £170 million a year of taxpayers’ money on Arriva which perhaps embraces a vision of Swansea—the area Trains. Again, the Welsh Government should look at I represent—as not only an economic and academic that, not for the sake of it, but to deliver best value for hub, with its universities and traditional industry, but a money for the taxpayer. quality tourist destination, building on the city of culture bid, Dylan Thomas and so on? That vision is of a place I appreciate that Deutsche Bahn, the biggest railway in a global marketplace, in which increasing numbers of company in Europe, has command over our freight people from China, India, Russia and Brazil want to go system and, with a turnover of £39 billion, has the to English-speaking non-sun cultural destinations. How economic muscle to make the investment. I am particularly should that infrastructure be planned? How should we interested in investment in the south Wales rail network provide multi-modal connectivity with road, rail and to make it part of the transnational transport network the development of Cardiff airport to ensure that that acknowledged by Europe. As Members will know, South vision works in a holistic way, rather than keeping an Wales is not on the map of strategic European rail incremental, slightly pedestrian approach to transport routes that people are willing to invest in; the connectivity planning? just goes up the spine of England, not to south Wales, and one reason is that the criteria for such investment 10.31 am include core ports and airports. Lilian Greenwood (Nottingham South) (Lab): It is In respect of the Silk report, there is a case for always a pleasure to serve under your chairmanship, nationalisation of ports in Wales, in particular—the Mrs Riordan. I begin by congratulating my hon. Friend Minister may think this is an ideological point—so that the Member for Newport East (Jessica Morden) on Swansea port and the port at Port Talbot would be securing this important debate. Indeed, I thank all my regarded as one port. Then we could increase the amount hon. Friends for their contributions. Clearly, the transport of freight to that port, triggering a process to make it a infrastructure linking Wales and England is of great core port and in turn triggering its becoming part of the importance. In many ways the debate represents a transnational rail network. That in turn would trigger continuation of the ongoing parliamentary scrutiny of European funding to provide connectivity that would cross-border transport links. It follows the publication then extend, transnationally, over to Ireland. My hon. of the Welsh Affairs Committee’s 2012 report on cross- Friend the Member for Llanelli (Nia Griffith) made border road and rail connections, which was debated in those points. Westminster Hall in February and the Westminster Hall debate in November on transport infrastructure in north The trouble is that, if the only way to get rail investment Wales, which was ably led by my hon. Friend the is on the basis of its being demand-led as opposed to Member for Alyn and Deeside (Mark Tami). supply-led, we will always have a problem in Wales. The reality of the economics of transport is that, when a rail My hon. Friend the Member for Newport East set or tube link, or whatever, is provided, more people use it out the real challenges for her constituents, including and more people buy houses, so house prices increase those who commute over the border. She spoke about and there is more economic activity. To a certain extent, the difficulties of aligning timetables so that connections we have to lead with greater frequency and greater can be made, and the overcrowding that some passengers investment, and I certainly want to see that. still experience. I am familiar with some of those services, because the CrossCountry trains from Cardiff terminate I am asking the Minister about extra investment in in my constituency at Nottingham station. I have a Wales, so that we get our fair share; about the frequency sense of how overcrowded those trains can be. Clearly, of trains; about whether he has a balanced view of however, there are significant issues with some First whether the public or the private sector should run Great Western services in her constituency. It is clear particular train franchises; and about whether he is from her contribution that more needs to be done, and willing for the public sector to bid in, as with the east it is important that the Department look closely at the coast main line. That would, of course, be a question rolling stock issues that she raised, which are giving rise for the Welsh Government. to that overcrowding. 251WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 252WH

A similar message may well apply to all rail services the models under discussion to the control that the in Wales and cross-border services. In the past 20 years, Scottish Government exercise over the ScotRail franchise? passenger numbers in Wales have more than doubled, What proposals has he put forward for managing risk, and the increase in the number of people travelling and what protections would be in place for English between Wales and England has been almost as impressive. customers whose services are provided by Arriva Trains As my hon. Friends the Members for Vale of Clwyd Wales? His answers will be of keen interest to passengers (Chris Ruane) and for Wrexham (Ian Lucas) said—in and transport planners on both sides of the border. fact, I think everybody has said this—it is vital that Further discussions have so far yielded more heat people in Wales can connect to airports and the jobs than light from the Westminster Government, and I and educational opportunities available in places such hope that the Minister will provide some illumination. as Manchester and Liverpool. Similarly, good connections In the official response to the Welsh Affairs Committee’s are needed in south Wales to Bristol, Bath and other 2012 report, the Government said that they would places in the south-west. The Welsh Assembly Government “work with the Welsh Government to explore how Wales can get have successfully opened the Ebbw Vale line, where the most out of the new national high speed rail network.” passenger numbers have exceeded all expectations, and My hon. Friend the Member for Swansea West (Geraint there was the welcome news in April that hourly peak Davies) spoke about maximising Wales’s benefits from services will be funded between Aberystwyth and investment. Will the Minister update us on that work? Shrewsbury, starting next year. The hon. Member for We have heard Members speak about how High Speed 2 Montgomeryshire (Glyn Davies), who is no longer in will bring direct benefits to Wales and its cross-border his place, noted that that would be just in time to carry services—in particular, I have in mind the contributions newly elected Labour MPs. The internal devolution of my hon. Friend the Member for Clwyd South (Susan within Network Rail is an important step towards achieving Elan Jones)—but can we expect to see a strategy document a more cost-efficient railway that is more responsive to from the Government? In the same official response, the local issues. My hon. Friend the Member for Wrexham Government stated: described the welcome investment in the Wrexham-Chester line, and we have also seen funding committed for “The UK Government will continue to work with the Welsh greatly improved cross-border inter-city services through Government and train operators to identify cases where the frequency of cross-border rail services could be increased, without investment in electrification and the new intercity express the need for additional public subsidy.” programme trains. Will the Minister tell us what progress has been made in There are, however, real obstacles to overcome. The that area? The Welsh Government have committed to cuts of the Beeching era, a long time ago now, still cast a funding hourly peak services from Aberystwyth to long shadow. The Heart of Wales line only narrowly Shrewsbury in 2015, but have any additional cross-border evaded closure. It is well known that a rail journey from services been identified by the UK Government since south Wales to the north is by necessity a cross-border that commitment was made last May? trip, as passengers must travel into England first. As we have heard, there have been problems with timetabling On transport investment, it is certainly true that the onward connections. Given the number of services that Welsh Administration have looked at additional projects, cross the border at some point on their journey, there is but it must be recognised that they are doing so in an a continuing need for close co-operation between extremely challenging climate. The Tory-led Westminster Governments and transport authorities. One cross-border Government have cut the Welsh capital budget by almost operator was lost in 2011, when Wrexham & Shropshire a third, which has constrained the ability of Welsh failed. Passengers as well as some of the excellent local Ministers to deliver important investment projects, and rail user groups that have been mentioned hope that it is difficult to resist the conclusion that those restraints existing services can be improved across Wales. I know are holding back growth. My hon. Friend the Member from colleagues that it can sometimes cause frustration for Wrexham described the importance of improving if we talk about north and south Wales in isolation, but transport infrastructure to support economic regeneration, it is important that future service specifications take and the strong desire for more local decision making, into account the needs of passengers in mid-Wales and closer to those who understand the population’s needs, west Wales. My hon. Friend the Member for Llanelli is well known. (Nia Griffith) described some of the frustrations facing Notwithstanding the improvements that have already her and her constituents and touched on issues to do been secured, we believe that the Government’s proposals with freight operations. for devolution, as set out in the Wales Bill, do not go far Welsh Ministers have spoken of their desire to play enough. In particular, Ministers have not explained why an active role in shaping service priorities after the Wales must have a borrowing cap that is more constrained, Wales & Border franchise expires in 2018, and the on a like-for-like basis, than that of Scotland. The Silk National Assembly for Wales will be entitled to act as commission concluded that the Welsh Government should co-signatory under the Railways Act 2005. However, in have their submission to the Silk commission of March last “the capacity to borrow for capital investment on a prudent basis year the Government said that the Department for subject to limits agreed with HM Treasury.” Transport That investment could well be in public transport schemes, “is in discussion with the Welsh Government to assess the feasibility such as the rapid transit proposals for Cardiff mentioned of devolving franchise responsibilities, the financial and legal today which have secured additional funding. Such requirements of doing so and how the UK Government’s interests projects could attract investment to deprived areas and in services affecting locations in England could be protected.” deliver much needed skilled jobs, but the allocation of Will the Minister update the House on any progress that funding should be decided by Welsh Ministers arising from those discussions? What form does he and the Welsh National Assembly. Long-term funding envisage that devolution taking, and would he compare settlements could deliver the certainty needed to keep 253WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 254WH

[Lilian Greenwood] many people across the country. I congratulate the hon. Member for Newport East (Jessica Morden) on securing costs low and to ensure that projects are actually delivered, the debate. as would the political stability that would be established Many of the questions that hon. Members have were the Welsh Government’s powers moved from a posed this morning reflect the challenges of success. conferred to a reserved basis, as my colleagues in the Since the Conservative Government took the decision shadow Wales team have set out. to privatise the railways back in 1993, the number of That desire for stability contrasts with the reality people using the railways has doubled. The hon. Lady under this Government. Electrification of the great raised issues of great importance to the economic western main line is a case in point. Despite the previous development of both England and Wales. From her Labour Government committing to the project in 2009, service as a member of the Select Committee on Welsh it was paused after May 2010. We then faced a drawn-out Affairs, she will know that cross-border links have been process by which the plans were slowly reconfirmed. the subject of several inquiries, as have tolls on the Electrification to Newbury was announced in November Severn bridge, and I am grateful that she did not raise 2009, but the project’s extension to Cardiff was not that matter today. announced until March 2011. Ministers said then that I will now address several of the points that hon. the line to Swansea would not be electrified, as originally Members have raised during the debate. The hon. Member planned. A year later and in the face of public pressure, for Newport East asked some specific questions about however, they agreed that the route to Swansea would her constituency, some of which I will answer in writing, be electrified after all. In other words, thanks to the if I may. On timetabling, however, franchise agreements Government’s prevarication, a project initially announced require train operating companies to co-ordinate services, in July 2009 was not confirmed until three years later. but that co-ordination clearly has not been as strong in Following the delay in bringing forward that investment, certain areas as it might. There has been dialogue will the Minister offer an assurance that the reported between the Severn tunnel action group, Arriva Trains hold-ups in the initial works elsewhere on the line will Wales, Arriva and the Welsh Government, but I am not cause the timetable for electrification to Wales to disappointed that no sensible conclusion has been reached slip? I hope that he will also assure my hon. Friends the thus far. I urge the groups to continue to talk, because Members for Swansea West and for Llanelli about meeting the obligation is possible. future services and connections. On connectivity, some of which is determined by Similarly, the Government’s position on valley lines constraints on the Cardiff to Cheltenham and Birmingham electrification has also changed somewhat. Ministers to Bristol routes, if there is a solution, which is possible, need to demonstrate that they are working in a spirit of it will require some substantial work by Network Rail, constructive collaboration with their counterparts in the TOCs and the Welsh Government to investigate the Cardiff, and I hope that the Minister will provide an options and then agree on one. update on progress in the talks between the two The hon. Lady also mentioned her constituents’ desire Governments and answers to the questions posed by my to be able to use the Bristol service to work there. Some hon. Friends. substantial work has been done with local authorities in Finally, I have a technical question for the Minister. the west of England to fund additional services, including Level 2 European rail traffic management system those to Portishead, which will introduce a metro service technology—ERTMS—has been trialled on the Cambrian to the area. While that is of benefit to the Bristol area, line, but teething problems have been reported. What as the hon. Lady is right to say, we are currently conclusions have been drawn from the trial? Is ERTMS encouraging the Welsh Government and the West of fully operational again on the line following the extreme England local enterprise partnership to talk to ensure weather damage in January and the reopening of the greater connectivity between the two schemes, which line to Harlech in May? would be of benefit to her constituents. In conclusion, the railways helped to forge the industrial The hon. Member for Vale of Clwyd (Chris Ruane) strength of both England and Wales. As my hon. Friend spoke of his time as a casing boy, as I think he described the Member for Vale of Clwyd described in interesting it. Although probably not as glamorous as that of the terms, the tourism industry in Welsh seaside towns hon. Gentleman, I too had a job on the railways and depended on the development of the railways—and spent two rather hot summers as a carriage cleaner obviously provided employment for young boys in Rhyl. many years ago during my university career. He was From the world’s first passenger rail services on the right to mention the potential of connectivity to Airbus Swansea and Mumbles railway to Brunel’s Severn tunnel, in Deeside to generate jobs, but that is unfortunately a Wales has a railway heritage to be proud of. Cross-border matter for the Welsh Government, so I urge him to take services make a vital contribution to the modern economy the matter up with them to see whether it can be of Wales and those of its neighbouring English city improved. regions. It is clear from today’s debate that hon. Members of all parties want to see those services improved. Chris Ruane: The Minister will recall that I said that the Department for Work and Pensions had grants available 10 years ago to improve transport from areas 10.43 am of high unemployment to areas of employment. Is that The Parliamentary Under-Secretary of State for Transport not another possible source of funding? (Stephen Hammond): It is a pleasure to serve under your chairmanship, Mrs Riordan. Today’s debate has shown Stephen Hammond: Most issues concerning rail services the importance of transport and the rail industry to wholly inside Wales are now a matter for the Welsh economic growth and the lives and livelihood of so Government, which is the key point here. 255WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 256WH

The hon. Member for Alyn and Deeside (Mark Tami), Stephen Hammond: I absolutely disagree. The east who is no longer in his place, suggested that rail is an coast franchise, however, will be out of public hands afterthought. That may or may not have been the case and back into private hands as a result of the franchising. previously, but it is certainly not the case under this By the end of the year, we will have announced the Government. Rail is at the heart of both our economic winner of that competition. and transport strategies. The hon. Gentleman must have noted the Rail Delivery The hon. Member for Wrexham (Ian Lucas) referred Group report that came out on Monday, which pointed to the scale of investment that he had seen elsewhere. out that, since privatisation, the level of private sector The scale of investment proposed in the current control profits for the rail companies has fallen, while the period between now and 2019 dwarfs any of the investment premium going to the Government has risen by more that he has seen in any other country, because £38 billion than £400 million. The facts show not only that privatisation is being invested in this country’s rail system. On top of has seen a doubling of passenger numbers, but that that, £30 billion is going towards the road system. He franchising has benefited both passenger and taxpayer. mentioned regional input, and we will soon be announcing He should agree that those facts bear out the point that local growth funds, into which local authorities will bid. the process is not ideologically based at all. We have also encouraged local authorities to come up The hon. Member for Llanelli (Nia Griffith) talked with local rail projects, and there is also the local pinch about the Pembrokeshire to Manchester stopping service, point fund, so there is much local activity. but that is a matter for the Welsh Government, because the stops would be inside Wales. I am sure that the The hon. Gentleman also referred to the Wrexham to Welsh Government will read her comments, and I hope Bidston line, and I recognise and understand his desire that they will take them on board. As hon. Members for its electrification. At the moment, however, the know, it is true that co-operation on and, where appropriate, aspiration should be to get a more frequent diesel co-ordination of transport matters between the Department service so that plans can move forward. The hon. Gentleman for Transport and the Welsh Government is important is right to have such hopes and I promise to work with to the success of cross-border links. Relationships have him, because increasing frequency on that line would be advanced significantly and co-operation under the joint of substantial benefit to his constituents. parties agreement occurs regularly.The Welsh Government My hon. Friend the Member for Montgomeryshire and the Department have a good working relationship. (Glyn Davies) spoke of his campaign for an hourly Officials can therefore provide Ministers with the best service from mid-Wales so that newly elected Conservative advice possible to deliver some of the aspirations that MPs can actually get to London, and I am delighted we are discussing. that that service is in place. He also asked about the new Co-operation between the two Governments is clearly Virgin direct award deal and direct services from Shrewsbury vital if we are to secure the best possible benefit from to Euston. I confirm that he is absolutely right: there the record levels of investment now going into the rail would be little point in putting in place a service that network. The investment for 2014 to 2019 that I did not allow for economic growth and for easy movement mentioned—the details were published in July 2012—is from London to Shrewsbury, and the other way around, built around four priorities: further electrification; increased to do a day’s work. The first train in the morning leaves capacity and faster journey times between key cities; before 6.30 am, but gets into London by 9.15 am; the facilitating commuter travel between and into major last train back in the evening leaves around 6.30 pm—I urban areas; and improving the major railway links to think at 6.32 pm—which gets someone back into ports and airports. More specifically in Wales, the strategy Shrewsbury for 9 o’clock, allowing a full day’s work in includes the £1.35 billion electrification of the Great London if necessary. Western main line between London and Cardiff, on The hon. Member for Swansea West (Geraint Davies) which services are expected to be electric by late 2017, made a number of points, some of which I will cover and the electrification of the valley lines, which is due to later in my speech. He talked a little about his aspiration be completed by 2019. Furthermore, the UK Government for renationalisation of certain parts of the line. I am are specifying and funding electrification of the line not entirely sure where that fits with the shadow Chancellor from Bridgend to Swansea, thereby completing the ruling it out on the television on Sunday. I am happy to 47-mile main line electrification from Cardiff to Swansea. reaffirm to him, however, that the Government’s view is Geraint Davies: Is there, therefore, an undertaking for that franchising, and the creation of partnerships between the Government to finance it all the way from Paddington the public and private sectors, is the best way to get to Swansea? The Minister also seems to be suggesting value for money and better services for the fare payer the valley lines will be included, but is there now at least and the customer, as well as the taxpayer. That is clear. a commitment that the UK Government will pay from Paddington all the way through to Swansea? Is there Geraint Davies: What I was getting at was that the clarification of who is paying for the valleys bit? east coast main line is now in public ownership, or Stephen Hammond: As the hon. Gentleman knows, publicly run, and we are saving £700 million, so does the that discussion is ongoing. The Welsh Government have Minister have an open mind on individual franchises? raised issues about the arrangement signed with my There was a basis for competitive tendering to include right hon. Friend the Member for Putney (Justine the public sector, so that we got the best value for Greening), who was Secretary of State for Transport at money. I am not talking about total nationalisation for the time. the sake of it; I want best value for the taxpayer. Does he agree with that, or does he want to give money away Nia Griffith: Will the Minister flag up in all franchise willy-nilly to the private sector because he is the one discussions the issue of people having to change trains that is ideologically driven, not me? as the line is gradually electrified, so that we do not end 257WH Cross-border Rail Services in Wales2 JULY 2014 Cross-border Rail Services in Wales 258WH

[Nia Griffith] and they carry out the day-to-day management of the franchise and have the powers to fund improvements. up with more changes than necessary? We want one Train operators are of course free to run additional simple change, if necessary, in Swindon, Bristol or services if they consider that is the right thing to do. Cardiff, according to how far the electrification has The Department is working with Arriva Trains Wales to gone, and then to go right through to west Wales. provide additional cross-border services from December 2014. Stephen Hammond: With regard to that and to First Great Western, we have undertaken a consultation this On Silk and further devolution, which came up several year about what the services might be and how they times, the Government support the decision to devolve might be improved in the next direct award. I hear what Welsh services in the Wales and Borders franchise to the the hon. Lady says, and I am keen not only to specify Welsh Government. A joint agreement governs joint services that are provide the best value and best opportunity management of the existing franchise to 2018. In our for travellers, but to allow the privatised companies the evidence to part 2 of the Silk commission, the UK best advantage to ensure that they can look at new Government noted the strong case in favour of modifying services and new opportunities for new markets, using the devolution boundary in respect of the Wales and innovation within the franchise. Borders franchise. The Silk commission subsequently reported that further devolution of the rail network in Other elements of our strategy will also be of benefit Wales would be possible and desirable, although it to Wales. The Heathrow western access scheme will would require close cross-border co-operation. Our response reduce journey times between Cardiff and Heathrow to Silk made it clear that recommendations that did not airport by about 30 minutes from 2021. The UK require primary legislation could be implemented early Government have committed to the introduction of if we were satisfied that the case for change had been super-express trains on the Great Western main line by clearly made and there were support across Government 2018, which will reduce the journey time between Cardiff for its implementation. and London from about 2 hours to 1 hour and 42 minutes. Crossrail will then speed up access between Paddington We recently held a consultation on the second direct and central London from 2019, which will provide a award, and I recognise the concerns that have been fast, one-change journey from south Wales to the City expressed about the First Great Western franchise. That of London, the docklands and beyond. Welsh stations was why we carried out the public consultation, so that will also share in the £100 million of station improvement it could inform us of some of the concerns and issues so funds and the £100 million of Access for All funds from that they can be addressed when the award is made. 2014 to 2019. Overall, therefore, Wales stands to benefit directly and indirectly from almost £2 billion of investment A number of Members raised the issue of the high-speed in modernising the rail network. network. High Speed 2 will deliver significant benefits for Wales through the interchange at Old Oak Common Cross-border rail services between England and Wales and the improved journey times to London and the are provided by four franchised train operators. The north via Birmingham and Crewe. It will also allow for Department for Transport has a statutory obligation to greater commuter, freight and local services from the consult Welsh Government Ministers before issuing any capacity released on the existing networks. Intercity invitation to tender for a franchise agreement that includes express programme trains will also be coming to Wales cross-border services. As I said in response to a number from 2017— of questions, where a service is provided wholly within Wales, the Welsh Government must be a signatory to the franchise. Mrs Linda Riordan (in the Chair): Order. The Arriva Trains Wales franchise is not due to expire until October 2018. The Welsh Government specify To allow the next debate to begin, I ask Members and fund services within Wales and across the border, leaving the Chamber to do so quietly. 259WH 2 JULY 2014 Rural Paper Industry 260WH

Rural Paper Industry coniferous trees grown in sustainably managed and certified forests. On the whole, that makes good economic 11 am and environmental sense in the densely populated but under-forested UK. Mr Iain McKenzie (Inverclyde) (Lab): It is a pleasure Of the timber extracted in the UK, less than 5% is to serve under your chairmanship once again, Mrs used in paper and pulp production, compared with Riordan. I thank the Minister for coming along to give about 11% in other countries. That timber is lower-grade his thoughts on the Government’s position on securing conifer logs and forest thinnings. Higher-grade timber and enhancing our rural economy. is generally used by other industries, such as construction Creating business opportunities and increasing jobs and furniture making. rightly continues to be an important focus of this Clearly, the paper industry depends on trees and Parliament. There is no greater challenge than bringing needs new, thriving forests. It is very much in the jobs and business to all areas of the UK, be they rural industry’s interests for trees and forests to be used or urban. My constituency has both rural and urban sustainably and to remain available as a raw material for communities, and the more rural areas are growing. future generations and as a source of future employment. Although those communities can be sustained by people The industry employs thousands of people across the travelling to towns and cities for employment, for various UK and indirectly provides even more jobs in sectors reasons we still need to provide work for the rural such as publishing and packaging. That helps to generate population. wealth, and it creates jobs in predominantly rural areas, With that in mind, I recently visited a new business where it can be the only source of revenue for local venture in my constituency called West Coast Woodfuels. populations. The business, which was set up in the hills behind the In many ways, the pulp and paper industry is a village of Inverkip, uses sustainable forestry management business model of sustainability, and 2013 was relatively to produce and supply wood chip for biomass energy. successful for it—more so than recent years. Increased However, the sustainable forest maintained for that consumer spending helped the packaging sector and purpose relies on servicing a limited number of biomass other sectors. Looking to the recent past, we see that customers. The plan was always to establish a green peak employment directly in the paper industry was industry, acknowledging that the UK’s forest and timber reached in 1959, when it employed 100,000 people. By industries are virtually carbon neutral. 1960, UK paper consumption exceeded 4 million tonnes Forestry management maintains vital investment in per annum for the first time. However, by 1981, imports rural economies and plays an important role in the of paper and board exceeded UK production for the construction, renewable energy, paper and tourism sectors. first time. Since then, this employment has declined, Historically, forests were planted, maintained and harvested along with the number of mills. However, tonnages have to provide wood and building materials, as well as tools continued to increase. By 2012, there were 53 mills in and timber for industry. Britain saw a serious decline in the UK, producing an estimated 4.4 million tonnes of its forested land in the 19th century, when deforestation paper and board. occurred at an alarming rate to meet agricultural and Paper mills use recycled paper to produce 70% of the industrial demands. The 19th century also saw wood fibre for paper making in the UK. However, paper can pulp from trees gradually replace other sources of fibre be recycled only a set number of times—I am told the used for paper making, such as straw, grasses and rags. maximum is about seven. After that, the paper loses its Our history shows that the recovery from world war two fibre and is no longer useful for making good quality did much to focus minds on the need to rebuild industries paper, so forestry still underpins the industry. and the economy. As a result, forests were intensively harvested primarily for timber production. Virgin pulp comes from northern England, Scotland and abroad, and 5% of harvested UK timber is used in Guy Opperman (Hexham) (Con): I congratulate the paper making. As I said, UK timber can also be used in hon. Gentleman on securing this important debate. I biomass energy production, making biomass an ever- speak as the representative of the constituency with the growing additional competitor of the paper industry largest forest in the United Kingdom—Kielder. Egger, for new wood, and suggesting that more forests are in my constituency, has a cross-border interest in Barony, needed. Forests are a renewable, sustainable resource. which is in Ayr, and in Hexham. As a supplier of wood They are carbon neutral, and they also create pleasant chip, it is very dependent on the businesses the hon. environments for leisure activities. In the UK, there is Gentleman is talking about. Does he agree that this and consensus that improved forest management would increase future Governments must consider the commercial forests rural employment. of the future so that we have an ongoing forestry What, then, of the impact of recycling as we steadily ecosystem? improve our performance on our recycling targets up and down the country? Since the 1950s, UK paper Mr McKenzie: The hon. Gentleman is absolutely makers have steadily increased their use of recovered spot on: forestry must be managed for the future, to paper, and nearly 70% of the fibres used to make paper provide not only raw materials but jobs and industry in in the UK now comes from paper that has been collected the areas I am talking about. and recycled. As I said, however, there is a limit to the The trend towards deforestation has now been arrested, number of times paper can be recycled. There is also an but even though the UK has favourable growing conditions, ever-growing and fiercely competitive market for recycled only 12% of its land is forested, compared with 28% in paper, so new pulp needs to be sourced. France and 32% in Germany. Since the 1950s, increasing It is not only the paper industry that requires access quantities of paper have been made from recycled sources, to new pulp. The UK packaging manufacturing industry but the rest comes mainly from virgin wood fibre from also requires it. It has annual sales of £11 billion and 261WH Rural Paper Industry2 JULY 2014 Rural Paper Industry 262WH

[Mr McKenzie] Mr McKenzie: I thank the hon. Gentleman for bringing in the Scottish question, which I think will come into employs 85,000 people, and represents 3% of the UK’s just about every debate from now until September. Yes, manufacturing work force. It is a powerful addition to clearly, as he pointed out, in the context of the industry, those demanding access to new sources. independence would create another problem for the I have visited a packaging firm in my constituency. population of Scotland. McLaren Packaging, which produces packaging for A need has been identified for more forests in the more than 100 whisky products, has invested in cardboard UK, and it would seem that a clear start could be made tube manufacturing with great success. In fact, most of by creating more forests in the rural north of Britain. the whiskies that are on display in shops or exported Related manufacturing industries could then be attracted will feature distinctive packaging from McLaren Packaging to forested rural areas, bringing even more jobs and in Port Glasgow. business to areas of the UK where we can tap into a The cardboard packaging industry’s main product sustainable natural resource. The Confederation of Paper segment, however, is corrugated cardboard boxes, with Industries, which has 68 member companies employing additional cartons and cases. Such products are made 25,000 people directly, tells us that there is a need for of three layers of cardboard sheeting, with a corrugated access to new sources of paper, to sustain demand and sheet in the middle, making the box more durable than enable the industry to grow. Also, the paper industry is standard containers. Cardboard boxes have a wide variety said to support a further 100,000 jobs indirectly. The of applications and are used to package many products turnover of CPI member companies is reported to be in across a range of sectors. Its customers include the region of £6.5 billion. Competition for recycled manufacturers, wholesalers, storage owners and retailers. paper and the limits on the number of times paper can In general, demand for cardboard boxes correlates with be recycled mean that new sources are increasingly in demand for consumer goods as greater manufacturing demand. Great quantities of paper are never recycled—we output triggers a greater need for packaging. need think only of the volume of paper being flushed In my part of the UK, forestry is sometimes described away each day that will never be recycled. as the secret industry. About 40,000 jobs would disappear Will new technologies ever truly replace paper? That from the area if there were no forests or forest industries. idea is used as a counter-argument—against increasing Every week, some 4,000 lorry loads of harvested wood the number of sources of new paper and pulp fibre. We are transported to mills for conversion into timber for strive for the paperless office, but we are miles away house building, quality paper and many other essential from achieving it. Merely looking around Parliament products. After felling, more trees are planted and the provides evidence of that. Paper and card will always be cycle continues. That makes forestry truly sustainable. It necessary for packaging. Paper is more environmentally promotes economic activity in rural areas in ways that undisruptive than plastic. Even paper for print and protect and conserve the natural environment and wildlife. writing is unlikely to die out, despite e-books. Some Forests also support a network of interdependent businesses, 80% of social network users—diehard committed including those of forest owners and managers who onliners—say they still require paper. Demand for paper produce wood while creating wildlife habitats and providing and paper products can only increase. Even the mighty recreation facilities. There are forest nurseries, where iPad requires packaging. young trees are grown. In addition, contractors harvest Rural and semi-rural areas can only benefit from the wood, and hauliers transport it, and there are sustainable management of their forests and attracting businesses that process wood, such as the paper industry. a paper industry with access to new material and an The development of wood-processing industries really energy source. That would hopefully mean an increase took off in the 1980s. That was when the forests created in jobs, business and population for rural areas. Let’s during the middle part of the 20th century began producing try to see the wood from the trees. significant volumes of softwood. However, careful management of the forests can also produce the energy for manufacturing of paper through energy biomass. 11.15 am Thus there is a natural resource that can not only be The Minister of State, Department for Business, Innovation transformed into a product but can fuel the manufacturing and Skills (Michael Fallon): I congratulate the hon. process to create the product. More than half the energy Member for Inverclyde (Mr McKenzie) on securing a used in the EU paper industry now comes from biomass, debate on this important matter. As he said, the paper and the UK paper industry is using biomass with increasing industry is an important one and always has been. The frequency. That means that more forests will be needed hon. Gentleman gave historical figures, and he might to provide adequate supplies for both energy biomass like to know that I was brought up in a paper mill and other industries, such as paper. Creating a rural village. Bullionfield paper mill in the village of Invergowrie paper industry next to a forest would seem as natural supplied high-quality paper for more than 100 years, and logical as it was in the past to match up a mill with a including, as I recall, paper for the Tokyo Olympics stream for hydro power. programmes. The European pulp and paper industry is in many ways a business model of sustainability, and it is largely The Government recognise the challenges facing all rural. the energy-intensive sectors, including paper, and I welcome the industry’s positive recognition of Government support Guy Opperman: The industry experts to whom I have in its June 2014 review. That review commended the spoken on both sides of the border are opposed to steps being taken by the Government to ease the direct Scottish independence and the impact that that would and indirect costs that climate change policy places on have on the businesses we are concerned about. Does the industry. Improving economic conditions have fed the hon. Gentleman agree? through, as the hon. Gentleman said, to a more successful 263WH Rural Paper Industry2 JULY 2014 Rural Paper Industry 264WH year for most paper sectors. The data show that measures I turn to the creation of sustainable forestry that can to help the paper industry have resulted in real growth feed back into the industry. Forestry is a devolved in the sector. I want to comment specifically on what we matter, so any specific concerns the hon. Gentleman has are doing to help the paper industry with its energy relating to Scotland should be raised with the Scottish costs and respond to what the hon. Gentleman said Government and Scottish Parliament. Throughout the about the importance of job creation in rural areas. If United Kingdom, we are working to promote the future there is time, perhaps I will give a little more detail on success of our woodlands by ensuring their sustainability. what we are doing to promote sustainable forestry. In January 2013, we set out our vision in a forestry and The Government are increasingly concerned about woodlands policy statement, which included our priorities the effects of high energy prices on the competitiveness for future policy implementation, focusing on protecting, of our energy-intensive industries, including paper. That improving and expanding public and private woodland, is why we now make compensation payments for the and recognising the multiple benefits that woodlands indirect costs of the EU emissions trading system. We provide to the economy, to society and to the environment. intend to make the first payments for the indirect costs Alongside that, we recognise that a strong timber industry of the carbon price floor this summer. Further measures helps to deliver the core objectives of protecting, improving were announced in the Budget: a cap of £18 per megawatt- and expanding woodland, and contributes to the growing hour on the carbon price support mechanism, which strength of the rural economy. will benefit all sectors of the economy; and compensation for the costs of the renewables obligation and small-scale Guy Opperman: We all agree that we need more feed-in tariffs from 2016. That is the most significant forestry to cope with existing businesses and the enhanced policy cost affecting the price of electricity.The Chancellor and expanding subsidised biomass businesses. Post-world also announced the continuation of the ETS and CPF war one, we planted Kielder in my constituency specifically compensation schemes until the end of 2020. to accommodate the need for large forestry infrastructure. We have paid some £32 million in ETS compensation I am worried that the Government do not have the big to 53 companies so far, across the UK, including £5 million project ideas for large forestry planting going forward. to eight companies in Scotland, operating 17 sites between Will the Minister expand on that? It is very much what them. The paper industry shared £8 million between businesses that I speak to, including forestry businesses, 28 companies, including three in Scotland: Ahlstrom are looking for a steer on. Chirnside in the borders, UPM-Kymmene near Kilmarnock, and Tullis Russell paper makers, near Michael Fallon: My hon. Friend is right, and I will Glenrothes. Those companies have been benefiting from address the steps that the Government are taking. the support that we are making available. I am pleased The forestry industry makes a significant contribution. that paper, as an energy-intensive industry, is eligible for It provided some £230 million gross value added in the compensation across the whole spectrum of measures. latest year for which figures are available, an increase of The industry recognises that those Government support 52% over the two or three preceding years. We are measures will save it up to £170 million over the coming committed to invigorating the woodland economy, bringing years. neglected woodland back into management and helping The hon. Gentleman said some important things to create jobs and growth. We support and are encouraged about the role of the paper industry in helping to by the new sector-led “Grown in Britain” initiative, stimulate jobs in rural areas. That is a priority for the which is creating increased market demand for British Government. We have introduced a range of policies wood products. Although it was launched only in October and initiatives to promote growth in rural areas by 2013, it already has the support of 200 organisations, helping to deliver new infrastructure, particularly ranging from forestry suppliers, processors and product broadband; by raising skill levels; and by supporting manufacturers to big-name high street retailers and UK small and medium-sized enterprises. We are also trying construction firms. specifically to support the rural economy by investing in rural tourism and supporting micro-enterprises. We “Grown in Britain” is driving a change in forestry have five pilot rural growth networks—not in Scotland that could see the management and new planting of but in Cumbria, in the north-east of England, and in woodland become more economically viable. Strengthening the south of England—aimed at tackling specific barriers and expanding our forestry supply chains is not only to growth in rural areas such as a shortage of work creating new market opportunities but, crucially, creating premises, slow internet connectivity and fragmented an incentive for increased private investment in woodlands. business networks. Those pilots are expected to create We are working with “Grown in Britain” to pioneer up to 3,000 jobs and support up to 700 new businesses. ways of making it easier for businesses to direct their We want to share the lessons we learn from them with corporate responsibility investments into projects that local authorities and local enterprise partnerships. improve the ecosystem services delivered by woodlands Tourism is an important driver of the rural economy. and result in more tree planting. We must ensure that we are doing more to take advantage We are also making good progress in expanding the of the predicted growth in the tourism sector as a whole woodland cover across England. It is now as high as it to ensure that the rural part of the tourism sector does has been since the 14th century. We want it to increase not lose out. We are making funding grants available to by planting the right trees in the right places for the tourism businesses to boost the rural economy through right reasons. We also want more of our woodlands to the rural economy growth review and rural broadband. be managed sustainably to maximise their public benefits. We are also providing support for a high-quality tourism We estimate that if we work together with the sector, we visitor economy through a £25 million package of support, could help to achieve 12% woodland cover by 2060, including £6 million for partnership projects funded by provided that private investment in woodland creation the rural development programme. increases in line with our expectation. 265WH Rural Paper Industry2 JULY 2014 Rural Paper Industry 266WH

[Michael Fallon] together with the sector could bring two thirds of woodlands into active management in the next five years, We continue to do our bit in supporting woodland with the potential to reach some 80% if markets develop. creation. The total area covered by the woodland creation Good progress is being made, and already the area of grant in the year to March 2014 was 2,691 hectares, woodland under active management has increased from which is more than the seven-year rural development 52% three years ago to 55% in March this year. The key programme target of an average of 2,200 hectares a to bringing more woodland into such management is year. In this financial year, some £30 million of rural economic viability, and a range of measures are promoting development programme funding is being invested, sustainable woodland management, underpinned by the £24 million of it on management of the existing resource UKFS. and £6 million for planting about 4 million trees on We are actively supporting the sector-led “Grown in 2,000 hectares of new woodland. Britain” initiative in its efforts to increase demand for Our woodland carbon code also provides a mechanism and supply of British wood and wood products. Although further to enhance private sector investor confidence in still in its early stages, the initiative is beginning to make woodland creation projects for carbon benefits. More a difference. For example, to date some 19 major UK than 142 projects have sought certification to the code, contractor group companies with a collective turnover representing more than 14,000 hectares of new woodland of more than £24 billion have pledged to look into ways being planted that will sequester more than 5 million of procuring more British timber for their construction tonnes of carbon dioxide during its lifetime. That is a projects. Their buying power will help to stimulate huge increase from the position a year ago and reflects demand for British wood products, which should lead the growing interest in domestic carbon emissions projects to more woodland management and economically and the success of the woodland carbon code. sustainable woodlands, and in turn to more private On improving woodland management, more than investment in woodlands, which we all want to see. 50% of England’s woodlands are now managed under I am grateful to the hon. Member for Inverclyde for the UK forestry standard, which sets good practice raising these important topics. The paper industry is guidelines for sustainable forest management. The UKFS important to us, and we recognise the challenges it faces is a world-class forestry standard administered by the and the high cost of the energy that it necessarily uses. I Forestry Commission, and is the foundation for good have outlined the measures we have taken to alleviate forestry practice throughout the United Kingdom. It is those costs. I have also explained how we see rural therefore fundamental to the delivery of sustainable development as a major part of our economic recovery forest management. It provides a valuable toolkit for and our pilot work to improve the success rate of small helping woodland owners to manage their woodlands businesses in rural areas. Finally, I have explained what productively and sustainably. Its application can lead the Government are doing to increase investment in not only to increased timber yields but to better flood private woodland and to drive up the proportion of risk management, the safeguarding of clean water supplies woodland that is under active, sustainable management and the conservation and enhancement of biodiversity. to increase the supply of timber to our own industries. Our ambition is to increase the proportion of existing woodland under the UKFS. In our forestry and woodlands 11.29 am policy statement, we estimated that working effectively Sitting suspended. 267WH 2 JULY 2014 Disabled Students Allowance 268WH

Disabled Students Allowance In 2012-13, the payments helped 54,000 students up and down the country, doing so at a slightly lower cost than was necessary in 2011-12. [MR JIM HOOD in the Chair] Mr Mark Williams (Ceredigion) (LD): I congratulate 2.30 pm my hon. Friend on securing the debate. He talks about Mr Jim Hood (in the Chair): Before I call Dr Julian “the country”, but has he considered the implications of Huppert, I inform hon. Members that I already have the policy for students studying in Wales and in Scotland, 12 speakers on my list, plus the two Front Benchers, and where there is great concern about the Government’s I will be calling the Front Benchers at 20 minutes to 4. proposals? Although the review is England-only, it has After Dr Huppert has made his speech, I will then work dire implications for Wales and Scotland. out a time limit and advise hon. Members of it. I hope that interventions, if they are taken, will be brief, and I Dr Huppert: My hon. Friend is absolutely right. I may have to remind Members of that if they try to have mostly been focusing on the effects in England, make speeches in their interventions. and mostly on the effects in my constituency, but he is right that there are concerns about what might happen Dr Julian Huppert (Cambridge) (LD): It is a pleasure in Wales and Scotland. Of course, students study across to serve under your chairmanship, Mr Hood. I will do the borders. my best to abbreviate my speech in deference to the The support helps students with all sorts of equipment, large number of Members who have shown up. It is such as computer software, but also with non-medical good to see everybody who has come here. We are helpers, note-takers and all sorts of travel costs. It helps united by a belief that everybody, regardless of who people to reach their potential, and it works. Figures they are, should be able to aspire to go to university. from the Equality Challenge Unit report the year before Regardless of disability, whether it is physical or mental, last showed that disabled students who get the support visible or invisible, there should not be a barrier as a are more likely to achieve a first or upper second-class result of it. There have been improvements on widening degree than students who do not get that sort of help. participation. At the university of Cambridge, where I used to be and which I now have the pleasure to Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op): represent, in 2007, only 4% of students were disabled. Does the hon. Gentleman share my concern that although That has gone up to 10% now, and it is a trend that we an equality analysis of the proposals has not yet been see across the country. Universities have worked very carried out, the Minister, in a letter I have just received, hard to try to get disabled applicants to apply, to states that it is the detail of the implementation of the support them and to get rid of barriers. As a former proposals that is yet to be decided? director of studies and supervisor, I have seen some of that work and engaged in some of it to try to support Dr Huppert: The hon. Lady raises an absolutely students. reasonable concern, and I will, again, take that point We have to ensure that the progress continues, because out of my speech. there are challenges. In general, life costs more for We should be able to help people, and there are so people who are disabled, and the same applies to student many advantages to university; as well as the human life. The disabled students allowance is a lifeline for benefits, the economic benefits are clear. It boosts the many students with disabilities. That is why I sought the national economy, and it boosts personal earnings by debate and why I am pleased to have secured it, after something in the order of £100,000 over a lifetime. having seen the Minister’s proposals and heard the As the Minister said in a speech to the Higher Education concerns that many people have expressed to me. Funding Council for England last year: “Going to university increases the chances that you will vote Caroline Lucas (Brighton, Pavilion) (Green): I and appears to make you more tolerant. It improves your life congratulate the hon. Gentleman on securing this important expectancy. You are less likely to be depressed, less likely to be debate. Does he share my alarm that that National obese and more likely to be healthy. These are benefits for Union of Students has said that as many as 55% of individuals and for society.” students with disabilities have seriously considered giving He went on to say that up their courses, many of them precisely because of “I said it would be a tragedy if anybody were put off from financial concerns? applying for university” because of costs. That is what this modernisation could Dr Huppert:I do indeed share that concern—I will do; it could act against those excellent words from the now take that point out of my speech—and the key Minister. point is that that number is significantly higher than it is for non-disabled students. I have been working with the National Union of Students, Anglia Ruskin university Kate Green (Stretford and Urmston) (Lab): Will the students’ union and Cambridge university students’ hon. Gentleman give way? union on that. I want to draw Members’ attention to early-day motion 48, which was tabled by the right hon. Dr Huppert: I will make some more progress. Member for Sheffield, Brightside and Hillsborough Although the Minister will, I am sure, make it clear (Mr Blunkett). It is a pleasure to work with him on that the changes are not due to come in for another that—I am one of the co-sponsors—and we have now 18 months, and that current students will be protected reached 99 signatures to that motion. I hope we can get for 2015-16, they are already having an effect. Paddy over 100 today, because it shows that the issue matters Turner, from the National Association of Disability to Members across parties. Practitioners, said that his staff are already seeing 269WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 270WH

[Dr Huppert] should extend to higher education. We were assured that in light of the particular grants that are available, prospective students who are rethinking 2015 entry we need not worry. Does he agree that it may be applications because they are concerned about the changes. necessary to reconsider extending the duty to higher Open days are already under way. Many students are education, to cover students between 19 and 25 years visiting universities to find out what will happen, and of age? universities simply do not know what to say. The changes could mean that people are put off, or that they struggle Dr Huppert: I agree completely. My hon. Friend when they get to university. makes an essential point. He is a dedicated campaigner on autism issues—and I will now remove page 12 of my Jack Dromey (Birmingham, Erdington) (Lab): Will speech. the hon. Gentleman give way? What sort of support will there be? I have some sympathy for the Minister’s comments about the provision Dr Huppert: I would like to make some more progress, of basic computers. The world has changed since I was if I may. an undergraduate. Most people have a computer now, I have spoken to many people about the issue. I pay but a lot of the software that is needed simply will not tribute to the three unions—from Cambridge university, run on a basic computer. What happens if people need the National Union of Students, and particularly the software that is not compatible with the perfectly reasonable union from Anglia Ruskin—that organised a fantastic computer that they have? What about technical support— event with a large number of people who have been how would that work? What about support for scanners supported by DSA. They spoke very movingly about if optical character recognition is needed? What about the experiences that they have had. I was intending to training? There are many, many questions. say a bit more about individual cases, but in the interests of time I will not. However, I was struck by how many Several hon. Members rose— of the cases involved mental health issues rather than just the physical health issues that people so often think Dr Huppert: I will take an intervention from the hon. about. There were people with dyslexia who had not Member for Birmingham, Erdington (Jack Dromey), had the support that they needed. It was only quite late then I will continue. on that they discovered the help that was available. They would never have been supported otherwise; they would have never have been able to do what they wanted Jack Dromey: I congratulate the hon. Gentleman on to do. securing the debate. He is absolutely right about the importance of access for disabled people. Does he agree At Anglia Ruskin university, 1,800 students are eligible with the comments of the Muscular Dystrophy Campaign for DSA, so there are 1,800 stories of people being that young women such as Keisha Walker in my helped. There are similar numbers at the university of constituency—she is from a modest background, and Cambridge. It has made a huge difference, but that is at no one in her family had ever gone to university before— risk, because universities are being expected to provide simply could not have gone to university, stayed at the support themselves. Where will they get the extra university and become a success, as she is determined money? There is to be no additional funding—indeed, to do, without the help of DSA? the right hon. Member for Sheffield, Brightside and Hillsborough has had that confirmed through a written question. Dr Huppert: I agree completely.The Muscular Dystrophy Campaign’s trailblazers case studies have been incredibly Mr Ben Bradshaw (Exeter) (Lab): How far does the powerful. I hope that the Minister has had a chance to hon. Gentleman think that the reasons for this decision look at them. I will not go through them in any detail, in go back to the Government’s mismanagement of the the interests of time, but there are many of them. student loan book and student finance as a whole? Duncan Hames (Chippenham) (LD) Will my hon. Dr Huppert: That is a somewhat broader question. Friend give way? There have been issues with the student loan book dating back some 15 years, as I am sure the right hon. Lucy Powell (Manchester Central) (Lab/Co-op) Will Gentleman will know. Rather than arguing about that the hon. Gentleman give way? broader debate—he will know that I am staunchly against the fee system that his Government set up, Dr Huppert: I will take these two interventions and which is being expanded—we should fix the problem in then try to finish my speech. I will take the hon. Lady’s question. I am always happy to discuss those issues with intervention first. him, as he well knows. We have heard concerns from the National Autistic Lucy Powell: The hon. Gentleman has been very Society about what support will be available for people generous with his time. I agree entirely with his point who are on the autistic spectrum. How will they be able about computer facilities. I met my constituent Suzannah to hold universities to account? last week. She suffers from autism and described to me exactly what the hon. Gentleman is saying, but she also Mr Robert Buckland (South Swindon) (Con): I commend said that the desire for students to use banks of computers my hon. Friend for securing the debate. In the course of is not appropriate for those with autism and other proceedings on the Children and Families Act 2014, problems, who find public areas too distracting and too there was much discussion about whether the duty in it difficult to work in. 271WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 272WH

Dr Huppert: The hon. Lady is absolutely right. We existence of the extra money for teaching. We should be need to tailor the support to the individual. What is keeping DSA—he is right about that, and we will talk suitable for people on the autistic spectrum can vary further—and universities should apply the equality duty, substantially, which is why they need assessment and but there will still be pressures on them and there will the help that is right for them. For some people, a bank still be changes. I look forward to his detailed answers of computers will be perfectly fine; for others, it will to the concerns. not be. Mr Barry Sheerman (Huddersfield) (Lab/Co-op) Will Duncan Hames: I thank my hon. Friend for giving the hon. Gentleman give way on the Minister’s point? way and for securing this important debate. My constituent, a member of the British Assistive Technology Association, Yasmin Qureshi (Bolton South East) (Lab) Will the points out that whoever is providing the support, whether hon. Gentleman give way? it is the Government or higher education institutions, it is vital that students have the support that they need to Dr Huppert: No. I would like to make more progress. use the technology—hardware and software—as effectively Universities themselves are not content with what the as possible, to get the maximum benefit from it. Minister has been saying. I spoke to the head of the disability resource centre at the university of Cambridge, Dr Huppert: My hon. Friend is absolutely right. As it John Harding, who highlighted the fact that the real happens, my mother is registered blind and relies on concern for higher education institutions, including assistive software. It takes a huge amount of support Cambridge and all the Russell Group institutions, is the for her to be able to use it, and I often have to provide significant lack of clarity in the announcement and the that support. My hon. Friend is absolutely right to raise complete lack of prior consultation. The Minister would the point about the need for that. have been better able to make his case had there been I will make further progress, because I understand formal consultation and discussions. How will “complex” that many hon. Members want to speak. The NUS has be defined? What is “the most specialist support”? highlighted a number of specific concerns about how There are many concerns about how this will work for the system will work, and I would be interested in the people. Minister’s specific response. There is a risk that the reforms could deter institutions from actively recruiting Yasmin Qureshi: Will the hon. Gentleman give way? disabled students, because if the institutions are responsible for paying the extra costs, there will be an incentive not Dr Huppert: I will give way if there is time towards to take people who will be a bit more expensive. Although the end, but I know that many hon. Members want to universities have a duty to provide reasonable adjustments speak. for their students, there is no clear definition of what “reasonable adjustments” mean and no funding available Mental health problems are more common among to provide them. students than the general population, and we must take action on that. Some 3,500 people applied for support The NUS makes another point, which is about the last year citing mental health issues. It can help people routes of redress for disabled students when there is a to develop realistic study patterns and with organising problem. There is only a finite amount of time available their time and setting goals—things that are easy for to fix that. Who would provide advocacy—would it be some, but much harder for others. Students can require the disability support office? It could cause huge internal support from specialist autism mentors. It is unclear tensions if one part of the university is having to fight what band those would fall into and whether people another. would still be able to get support. The Minister for Universities and Science (Mr David There are many concerns about how the new system Willetts): I am grateful to the hon. Gentleman for giving will work. We know that people are likely to drop out if way; he is rattling through a lot of important points the cuts occur while they are at university. Randstad, an very quickly. organisation that works with many institutions, surveyed students and found that more than one third would not It is important to recognise that universities are of have attended university without DSA and that about course under an equality duty. The House has voted the same number would be more likely to drop out under successive Governments to introduce that duty, without it. and at no point has there been the suggestion that extra funding has to be given to a public or private body to Kate Green: Will the hon. Gentleman give way? enable it to discharge its equality duty. Fortunately, the resources available to universities for teaching are increasing from £7.9 billion at the beginning of this Parliament to Yasmin Qureshi: Will the hon. Gentleman give way? £9.9 billion at the end of this Parliament. That is a result of the changes that the hon. Gentleman “steadfastly Dr Huppert: I will try to finish. opposed”, to use his words. They are among the few We have many problems, and the Open university is major national institutions that are seeing increases in concerned. It has about 20,000 disabled students. Where cash, and they have a clear equality duty. Along with will it get the funding to support them? The university the retention of DSA, does he not accept that we of Cambridge has short, intense terms, which changes should expect them to discharge that duty? the nature of the help that is needed. DSA is tailored at the moment. I am sure that some universities will provide Dr Huppert: The Minister makes a valid point about good support, but I fear that others will not. the total cash being spent on teaching. As he knows, my problem is with the method of payment rather than the Mr Willetts: Will the hon. Gentleman give way? 273WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 274WH

Dr Huppert: I will always allow the Minister to intervene. addition to the standard package of support and does not have to be repaid. We should not seek to duplicate Mr Willetts: There is no picking or choosing. Universities or replace the system. Either the Government meant it have an equality duty. They have more funding for or they did not. teaching, and they also have more funding in relation to access agreements—more than £700 million. Under the Kate Green: My right hon. Friend will be interested hon. Gentleman’s approach, that funding might not to know that it is not only in the context of the Children exist. Does he accept that, in my letter to the Office for and Families Act that the Government said one thing Fair Access on how universities discharge their access before and are saying another now. In relation to the obligations, I specifically identified disabled students as independent living fund, Ministers in the Department one group to whom they had to reach out in access for Work and Pensions are citing DSA as an alternative agreements, for which extra funding is available? source of support.

Dr Huppert: I do not have the Minister’s letter to Mr Blunkett: And if we want another contradiction hand, but I do not doubt the facts of what he says. in relation to Government policy, I have to say to the However, there is a concern among higher education Minister, who has always been extremely helpful and institutions, among students and among Members of respectful to me, that it is not acceptable to use the this House—about 100 of them—that the system will argument that the universities have a lot of money and not work and will result in a less even playing field and therefore can afford to replace DSA under the Equality less of the support that people need. I therefore urge the Act 2010. If that were the case, the Department for Minister to rethink it some parts of it. Work and Pensions—God forbid it should hear this I have asked many questions—I realise that I have and do it—would remove the access to work requirements, rushed through a number of them—that the Minister on the grounds that quite a lot of individuals who will have heard before in letters from me and from other receive the support could go to a potential or actual right hon. and hon. Members and seen in comments employer and say, “You have a lot of money swilling from the National Union of Students and all sorts of about with your shareholders. Why don’t you use some other organisations. I hope that he will consider them of that to fulfil the equalities requirements on you?” and rethink the cuts, the way they are being made and That would include public services. Please, please do the pace of them. I hope that he will then return with not get the idea that universities have got money so it alternative proposals that achieve what we surely all can be diverted from somewhere else and benevolently want to see, which is that support is available and we do given to support students who have a right not to some not leave people out as we are trying to develop them sort of benevolent charity, but to be supported properly. through the university system. Stephen Lloyd (Eastbourne) (LD): For profoundly Several hon. Members rose— deaf students, DSA pays for note-takers. Without a note-taker, how on earth would a profoundly deaf student Mr Jim Hood (in the Chair): Order. As I said earlier, be able to take notes during their lectures when they are there are 12 hon. Members on the list of speakers, and I at university? would like to get through everyone, so I will begin with a four-minute limit on speeches. I may have to cut that Mr Blunkett: Absolutely, and that would entail employing down if there are too many interventions. someone, not simply diverting a bit of resource. My support systems, back in ’69 to ’72, were funded by the 2.46 pm local authority; at the time, the local authority had a duty to support students under the grant system. Even Mr David Blunkett (Sheffield, Brightside and though the local authority was helpful, however, I had Hillsborough) (Lab): I congratulate the hon. Member to organise reading circles of volunteer students to for Cambridge (Dr Huppert) on obtaining the debate assist me. That was a mutual arrangement and it was and on rushing through his speech, which I will also obviously socially responsible, but it should not have have to do. The sadness about this move is that it is been necessary. Under the proposals, we will find ourselves clearly driven by the desire of the Department for going back to a bygone era where people have to plead Business, Innovation and Skills to cut £117 million from for help rather than receiving it directly. its budget. That is a tragedy for those who will be affected and a failure of Ministers, who I like, to have Mr Willetts: Will the right hon. Gentleman give way? fought the battle with the Treasury on this matter. Let us be clear: the pre-consultation was non-existent. Mr Blunkett: I just want to make this point, because I The review was not undertaken with or on behalf of think others want to speak. I emphasise what the hon. those affected, those who support those affected or Member for Cambridge has already said. When it comes those who will have to pay out. It was not, in my view, to taking a student in, the access provisions of universities honest, because the Government, during the passage of and other higher education intuitions will always contain the Children and Families Act 2014, which has been a subliminal question: can this student manage? That referred to already, gave reassurances that there was no question was asked of me all those years ago. If the need to extend the Act’s requirements precisely because answer is, “Yes, if I have the support systems necessary: of DSA. Baroness Northover wrote to the Royal National the equipment, the extra readers and other provision Institute for Blind People and said that disabled students that other people will not need”; if the university thinks, in the higher education sector are already successfully “Is it worth it?”; and if the department thinks, “What supported by institutions and directly by the Government imposition will this cause? Will resources be diverted through DSA. DSA is not means-tested, is awarded in from somewhere else? Will this responsibility be devolved 275WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 276WH to this department?”, there is a chance that that student I also stress my concerns about augmentative and will not be offered a place. If that were to be the case, I assistive communications software. I urge the Minister say to the Minister: be it on your conscience. Go back to consult with the Communication Matters forum, to the Treasury and say that the money in its existing which is the specialist in that regard. It is a fallacy to budget should be retained. The rights and opportunities think that much of that technology can be used even on of individual students should be retained, and the the most complex laptops, let alone on iPads. As technology, Government should be ashamed of themselves if that particularly AAC technology, advances ever faster, the does not happen. computing technology required advances equally. Finally, in the 30 seconds that remain, I draw the 2.52 pm Minister’s attention to the document “Fulfilling Potential: making it happen”, published by the Department for Paul Maynard (Blackpool North and Cleveleys) (Con): Work and Pensions. Great strides have been made in For the avoidance of any doubt, I will not take any increasing disabled students’ participation in higher interventions to ensure that as many people speak as education, but one key indicator measured in “Fulfilling possible. I am pleased to speak in the debate, because I Potential” is the number of students who abandon their am one of the few MPs who benefited from DSA, as a course after one year. If that number goes up as a result student in 1994. I had some problems and I had to use of the changes, that will be a serious concern and we a computer for part of my course. I thought I would get will need to look again at what we are doing. I urge the a laptop, but when I went to my assessment, I was given Minister to have regard to “Fulfilling Potential”. I will a half-screen word processor. I say that not to underpin write to him with everything else that I wanted to say. the point that we do not need laptops any more, but to agree with the Minister that we should not gold-plate 2.56 pm the provision. The fund is limited, and we cannot write a blank cheque for it. Mr Andrew Smith (Oxford East) (Lab): It is a pleasure to follow the hon. Member for Blackpool North and I accept that, after 25 years, we have to look again at Cleveleys (Paul Maynard). His powerful arguments and disability living allowance in particular, and I accept testimony, like those of my right hon. Friend the Member that public bodies have to adhere to their duties under for Sheffield, Brightside and Hillsborough (Mr Blunkett), the Equality Act 2010. However, I have concerns about underline the argument made by the hon. Gentleman the detail of the proposals. The Minister is thoughtful, who represents the other place, the hon. Member for good and decent, and I urge him to listen carefully to Cambridge (Dr Huppert). I agreed with everything he what we have to say before he places his regulations said in his opening speech. before the House. I was particularly keen to take part in the debate I will try not to repeat myself too much. The report because in our area we are lucky to have not only two from the Muscular Dystrophy Campaign’s trailblazers great universities but ACE centre south—ACE stands team, a key member of my all-party group on young for aids to communication and education—which has disabled people, has been mentioned. That report stresses achieved great things working with students with severe that DSA was the area of the university experience that communication disabilities and giving them a voice. worked best. What concerns me most is the language Twenty years ago, many of them would have been of written communications from the Minister. It may locked in a world without communication and unable seem obvious, for example, to translate the language of to go to school, let alone university. Now, however, disability from the 2010 Act into DSA, but there are some of the young people whom the centre has helped real concerns that that leaves, for example, dyslexia, have got PhDs. Quite rightly, there was cross-party dyspraxia and dyscalculia outside the remit of DSA. support to save the ACE centre when it had financial Will the Minister guarantee that no disability that was difficulties in 2012. We need a big cross-party effort to previously covered by DSA will be left out under the stave off the cuts to DSA. It is heartening to see so new regime? many Members present and to hear the arguments from I am also worried about the laxity of some of the both sides of the Chamber. language, which has caused real concern among those The cuts risk rolling back what has been achieved with the most complex disabilities. If, for example, and blocking access to education for many disabled someone requires a non-medical helper to stay with students from poorer backgrounds, in particular, including them overnight, the language is not clear enough to give those who have dyslexia and other specific learning that person confidence that they will be covered under difficulties. DSA. That is causing a lot of anxiety. More widely—the hon. Member for Eastbourne (Stephen Yasmin Qureshi: Bolton university in my constituency Lloyd) has mentioned note-takers—I am greatly worried is not rich and has 900 students who receive DSA. by the idea that a course can be delivered in such a way Imagine the impact of the proposals on those students as to allow the student to benefit from it without having and the university, which has not got the resources to to participate in the same way as the other students. I look after them if they do not have enough money. want students to be able to attend lectures, participate fully and enjoy full integration in student life. If one Mr Smith: My hon. Friend makes a very good point. goal of DSA is to enable them to complete the course at As has been said, there is a real danger that the proposals the lowest possible cost, it will reduce the university will provide universities and other institutions with a experience almost to the level of a correspondence perverse disincentive, with the best will in the world, to course. I am sure that that is not the Minister’s intention accommodate all the students that they would like, whatever, but that is where the language appears to be especially those who have the most severe disabilities. leading us. Like other hon. Members, I have been contacted by 277WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 278WH

[Mr Andrew Smith] Thirdly, what will happen to students who begin a course in 2014 when the new provisions come into effect many students, academic support staff and lecturers in 2015-16? Will they be able to maintain any support who are appalled, as I am, by the proposed cuts. I that they have been receiving ahead of the changes right recently had the pleasure of speaking to the disability through to the completion of their studies after 2015-16? officers of the two university student unions in my Finally, what assessment has the Minister made of constituency. They brought powerful testimony of how the effect that the changes may have not only on disabled students at both Oxford’s universities have benefited students’ access to university but on their choice of from DSA and are well on their way to building fulfilling university? We already know that access is a key criterion careers. Their determination to help ensure that young for disabled students when they select a university, and people with disabilities have the same opportunities in these changes could further constrain choice by further future is inspiring. One of them told me: restricting the courses that disabled students can consider “I pretty much failed the first year of my law degree due to my if universities that offer their desired courses are not disability and not being fit to study. I couldn’t afford to buy any of supportive with access and in facilitating their studies. the accessibility items I needed. DSA gave me a lifeline. With the Has the Minister paid any attention to the question of specialist equipment including a specialist mouse bar, laptop, choice and the need to maximise access to not just any dictaphone, extra-large screen, specialist software, printing and book allowance and various other provisions, I was able to retake university but the university and course that would be everything the following year and actually cope with the work right for the student? That should be disabled students’ load. Without DSA I wouldn’t be where I am now.” driving criterion, not whether or not they get disabled Even under the current system, it is not easy to get student support. support. One student in my constituency is having to get an unnecessary diagnosis of dyslexia because his 3.3 pm diagnosis undertaken the previous year in the sixth Sarah Champion (Rotherham) (Lab): It is a pleasure form was not accepted by the DSA authorities. Since to serve under your chairmanship, Mr Hood. I thank there is no clinical need for a new diagnosis, he is having the hon. Member for Cambridge (Dr Huppert) for to apply to the university hardship fund to pay for it securing such an important and timely debate. privately. I begin by addressing the reality of what it means to For all its difficulties, DSA provides an essential be a disabled student. Despite living in what we assume lifeline for people with disabilities who without it would is an open and inclusive society, disabled young people have to give up on their education and ambitions, or often face problems that do not make the headlines, and would not have been able to apply in the first place. they start from a young age. We already know, for Cutting it will make many disabled students’ lives much instance, that 27% of young disabled people aged 16 to more difficult, but, worst of all, it will result in a 19 are not in any form of education, employment or country where people with disabilities begin to think training. By contrast, the same is true of only 9% of that they cannot even aspire to higher education and their non-disabled peers. must limit their ambitions. It will do incalculable damage A Disability Rights Commission study found that to equality. I urge that the proposed cuts be abandoned. 45% of disabled people said they had experienced problems at school as a consequence of their impairment. Further 3pm to that, 26% of disabled people have reported negative Kate Green (Stretford and Urmston) (Lab): I congratulate experiences in mainstream education, in part because of the hon. Member for Cambridge (Dr Huppert) on poor facilities and the negative attitudes of other people. securing such an important debate. Since so many others In turn, it is hardly surprising that disabled adults are wish to speak, I shall make only four points. I endorse only half as likely to have formal qualifications as their the comments made by colleagues from all parties. non-disabled counterparts. All these issues arise prior First, I want to repeat the point about how vague the to university. To redress these compound barriers, it specifications are for access to support. That is true for becomes even more important that we make it as easy computers but also for accommodation. Will the Minister as possible for disabled students to make the transition comment on the guidance in the Student Loans Company to higher education. handbook in relation to the non-medical help manual? Last year, the Muscular Dystrophy Campaign found Are there any plans to revise the guidance on what that 40% of university inter-campus transport was makes someone eligible for the help outlined in bands 3 inaccessible to disabled students. In addition, 30% of and 4? university social and leisure facilities were not accessible Secondly, students need access to good quality advice, to disabled students. I find it surprising and saddening and not just in relation to the disabled students allowance. to hear that the Government plan to introduce changes When this debate was announced and I posted on to funding for disabled students that cut out all but the Twitter to say that it would be taking place, I was most severely disabled people. It strikes me as unfair for contacted by someone who told me that they had been a number of reasons. There cannot be a sliding scale of told that they could not access DSA unless they were on equality: you are either equal, or you are not. Everyone employment and support allowance or in receipt of should be treated equally and allowed access to the personal independence payments. That is clearly incorrect, support and modifications that will enable them to but it suggests that someone in the university advice flourish. service is misinformed about eligibility and the welfare Cutting funding to disabled students with what the benefits system. What support is going to be given to Government deem to be lesser support needs will mean university advice and welfare services to ensure that that although some students are given support to access they are properly equipped to support students who university on a level playing field, others will be denied might have an entitlement? access to equality of education. 279WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 280WH

Mrs Ellman: Does my hon. Friend share my concern The National Union of Students has reported that that the Government have stated that they want to 59% of disabled respondents to their “Pound in Your replace existing Government support to disabled students Pocket” survey are worried about not having enough with support from local authorities? This is at a time money to meet the basic living expenses of university, when local authorities are under the hammer, particularly while 55% are considering leaving their course. Putting those in poorer areas such as Liverpool. another barrier in their way is certainly not going to help. Such financial challenges only add to the multitude Sarah Champion: I completely agree with my hon. of barriers already faced by disabled students. They are Friend. It seems that local authorities and the voluntary more likely to drop out than their non-disabled counterparts and charitable sector are meant to fill all the gaps and less likely to be able to access postgraduate degrees. created by this Government. Disabled students also face reduced choice when deciding It is unfair and unreasonable to think that any person which university to attend. Many students take the should be barred from furthering their education because opportunity to travel away from home, but for disabled of a disability. The Rotherham Disability Network has students that might not be an option. Students with told me the same thing. Its chair said that the major special care needs may require support from parents or impact of the funding cuts on disabled students in assistants, and their choices are dictated by accessibility. Rotherham is that the potential hardship caused by Receiving the disabled students allowance massively paying for modifications will mean that many families improves disabled students’ experience and success will have to decide whether they can afford to send their while in higher education. Research has shown that son or daughter to university at all. Many such students students receiving DSA are more likely to achieve the are from disadvantaged backgrounds, with the odds very highest degree classifications than those who do stacked against them in economic and disability terms. not. The decision to remove DSA funding for standard Unfortunately, the funding cuts will be make or break specification computers, software and associated when it comes to deciding whether to go to university. instruments compromises disabled students’ ability to Surely that is not fair. get ahead and make the very best of their time in Around 40,000 disabled people graduate each year, university. but levels of disabled students dropping out of university are high. I worry that that figure will become higher Mr Sheerman: Does my hon. Friend agree that the under these changes, resulting in a drop in the number fundamental difference between us and the Minister is of disabled graduates. Disabled students have enough that he does not understand that the direct payment barriers to face in getting to university in the first place; was the emancipation of disabled people, allowing them we should not be cutting the vital support they need to to see going to university as a right? access university learning and services while they are there. That exemplifies why the amount of money given Andy McDonald: Absolutely. My hon. Friend makes to students should be needs-based, rather than based on a powerful point. That principle has been enshrined, arbitrary caps associated with the Government. and we should treasure it. Ultimately, there must be genuine equality between It is not good enough to suggest that everyone owns a disabled and non-disabled students, and if funding to laptop or that computers are now ubiquitous among disabled students creates a high bill, it is a price we must students. They are not cheap, and it simply cannot be pay for equality. More than that, it is a price we must assumed that everyone from an area like mine has one. pay for the economic viability of the country. I would For those from a well-heeled background, where these much prefer a short-term financial intervention to enable things are easily provided, that is fair enough, but it is disabled students to fulfil their potential and get a good not the case for families from other backgrounds. job to their being stuck in a world of part-time, low-pay The changes to DSA also fail to recognise the needs work for the rest of their life. of the up to 98% of disabled students who require The Government must find some other way to fund specific software to help them with their studies. The this critical support. They certainly should not be Government have suggested that cheaper tablet and penalising disabled students, so I urge them to reverse notebook devices might be suitable for disabled students, their decision. but such machines are simply not equipped with the power or memory to support specialised software alongside 3.7 pm standard office and internet programs, as the hon. Member for Blackpool North and Cleveleys (Paul Maynard) so Andy McDonald (Middlesbrough) (Lab): It is a great eloquently explained. pleasure to serve under your chairmanship, Mr Hood, My second major concern is about moving responsibility and I thank the hon. Member for Cambridge (Dr Huppert) for providing non-medical support from the Government for securing the debate. to individual institutions. The reforms assume that I start by saying to the Minister that it is reprehensible disability is evenly distributed, but that is not the case. that we are here talking about a backwards step for There are smaller institutions where disabled students disabled people’s access to education. I thought we were make up a higher percentage of the total number. How supposed to be in the business of making life better for will those institutions cope with the changes? Some people, not worse. It simply cannot be right for the higher education institutions might be deterred from Minister to abdicate his responsibility to universities actively recruiting disabled students, simply because of and say, “You get on with it. It is your duty to provide the cost if they attend. Indeed, Teesside university in my access to education and observe the principles of the constituency has warned that it might cost up to half a Equality Act.” Surely to goodness that responsibility million pounds to replace any funding elements that are rests with Government as well. withdrawn. 281WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 282WH

[Andy McDonald] undertake their work, but supported them with social situations—obviously, part of university is the opportunity Universities currently have a duty to provide reasonable to operate in a new environment. They say: adjustments for their students, but they are largely “Without my mentor my experience at university would have undefined and open to interpretation. I am greatly been very different and I fear I would have been overwhelmed concerned that if institutions are unable adequately to with academic issues.” provide for disabled students, there will be limited means They say they would not have had the opportunity to to raise the issue. Confusion and uncertainty will experience university in the same way as a non-disabled undoubtedly affect the level of applications from disabled student might. people and the subsequent willingness of disabled people The Equality Challenge Unit showed us that disabled to seek the support they need to progress and attain students who receive DSA do better than those who do qualifications. not, and we should look at extending it, rather than Many disabled students in Middlesbrough would suffer reducing it. When the Minister made his statement to as a result of the changes, and I recently met the NUS the House, he talked about modernising the system, the welfare officer at Teesside, who provided some key equality impact assessment and limiting the public funding examples. A student in computing and digital forensics available and making sure it was targeted at those most suffering from—I hope I pronounce this correctly—visual in need. That raises a number of questions, which he stress/Irlen syndrome required ClaroRead software and really must answer. How is the review being carried out modified glasses to enable her to read without undue and who will be properly consulted? When will the hindrance, but she would not have been able to purchase equality impact assessment be published and to what those essential tools without DSA. We can all cite many extent will its conclusions require changes to his proposals? such examples, and they will be repeated all over the There is real concern about the funding for disabled country, but I will bring my comments to a close. These student support and about potentially targeting it on individuals are not seeking to cheat the system or to get those in most need. What happens to those who have something for nothing; they simply want their right to minor or moderate needs, but for whom DSA is nevertheless succeed in education. The punitive changes to DSA will important? As one of my hon. Friends said, there is also undoubtedly limit the ability of disabled students to the impact on institutions, especially smaller ones and fulfil their ambitions and their potential. It is simply those with a disproportionate number of disabled students. incomprehensible that legislators in a wealthy, modern country are looking to withdraw support from those I am particularly concerned to raise one other issue. who require it simply to get an education. The university of Nottingham has told me that Student Finance England has jumped the gun, is assuming that DSA will be cut and has started implementing reforms— 3.12 pm before we have even had a proper debate in the House. Will the Minister confirm that any changes will be Lilian Greenwood (Nottingham South) (Lab): I properly consulted on and debated before they are congratulate the hon. Member for Cambridge (Dr Huppert) implemented? Will he ensure that Student Finance England on securing this important debate, and it is good to see is made aware of the fact that its actions are unacceptable it so well supported. When the Universities Minister and have caused unnecessary panic and distress, as the announced the Government’s proposed changes to DSA university of Nottingham told me? on 7 April, they came as a real shock to universities and students alike, and gave rise to a great many questions. DSA is vital, and any revisions must be undertaken only with care and after proper consideration and debate. All of us here know the difference DSA can make to The Minister must listen and respond. disabled students and to their ability to benefit from the opportunities offered by higher education. In that regard, a couple of students in my constituency have written to 3.16 pm me. One says that they have just completed their BA in Nic Dakin (Scunthorpe) (Lab): I congratulate the sociology, for which they have been awarded a first-class hon. Member for Cambridge (Dr Huppert) on securing degree, and that they are going on to do a master’s the debate. It is clear from the comments made how degree next year. They add that strong feeling is on the issue—not only in the House, “quite honestly I could not have achieved this without support but outside. from disabled students allowance.” I would like to quote my constituent, June Jacobs, Having a hearing and visual impairment, they feel that who recently wrote to me: there are real challenges in studying for a degree and “The allowance made a big difference to me and it saddens me that DSA has been absolutely essential. In this student’s to think that the next generation of students would not have case, DSA provided funding for note-taking support in access to funds that could make the difference between succeeding lectures; library browsing support; reader support, whereby in their studies or not.” a support worker could read aloud sections of written With the word “succeeding”, she puts her finger on the text; practical support with finding buildings on campus; issue before us. Succeeding is about aspiration and assistance with paying for books, paper and printer ink; about enrolling on the course of our choice, remaining and assistive technology, including a laptop, a printer on it and achieving—it is about all that, and DSA has a and magnification capacity. It is clear that all those track record of helping people to succeed. things are necessary for someone to achieve such great From my experience as a principal of a sixth-form results. college, I know that the message DSA gave young I had a further letter from a mathematics undergraduate people was about building aspiration and belief. It at the university of Nottingham. They say they received allowed them to believe in themselves and to believe a DSA-funded mentor, who not only helped them to that they would go forward. It also showed leadership 283WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 284WH by the Government on this crucial issue. That leadership the model for the sort of person we want to progress in helps to break down barriers and create access. As a universities: a woman and a scientist. She clearly said to result, DSA was, and is, transformative in people’s lives. me that her delight at going to Cambridge By going down the proposed route extremely hastily, “is overshadowed by the fear of not receiving the same help that the Government risk giving the wrong message. Indeed, I have done through my undergraduate degree.” as my hon. Friend the Member for Nottingham South The Minister has said that universities should meet the (Lilian Greenwood) said, that message is already out cost of supporting students such as Kat, but will making there and causing damage, which will create more damage disabled students more expensive for universities improve tomorrow. The proposals will constrain people’s aspirations access to higher education? Of course not. Universities and choices, which is really negative. will fulfil their equality obligations, which the Minister The Minister is a good Minister, and I hope he is talked about earlier, but that will happen at a cost if listening, reflecting on the debate and trying to find there is no funding. The universities that are the most ways, as my right hon. Friend the Member for Sheffield, inclusive will face the greatest costs. Brightside and Hillsborough (Mr Blunkett) said, to The Minister said in a communication of 25 June take the battle back to the Treasury. We will be with him that in that battle, because he needs to win it. As things are, “it is not the case that students with ‘mild’ dyslexia”— the pain will far outweigh the gain, and that, in political terms, is the test. such as Kat— We risk making a very bad decision very hastily. This “will no longer receive DSA funding.” process is happening too quickly for us to have proper An assessment of Kat’s needs would determine who consultation and to involve all those who need to be pays. I ask him for clarity: which needs will the Government involved if we are to get this right and ensure that, if we help to meet, and which will it be left to universities to go down a different route, the implementation of any meet? Will he think again about this foolish short-term proposals will protect the future. policy and take the case to the Treasury?

3.19 am 3.23 pm Paul Blomfield (Sheffield Central) (Lab): I join the congratulations to the hon. Member for Cambridge Mrs Emma Lewell-Buck (South Shields) (Lab): It is a (Dr Huppert) on initiating the debate, which is important pleasure to serve under your chairmanship, Mr Hood. to me. I am delighted to represent more students than I thank the hon. Member for Cambridge (Dr Huppert) any other Member of the House—36,000 of them. for obtaining the debate. Both Sheffield’s universities are in my constituency and Many people already know that I have mild dyslexia I have met students from both to talk about their and dyspraxia. I know that without the support that concerns, and mine, about the DSA proposals. came from my university I would never have qualified In a letter to Members of 3 June, to brief us in as a social worker, and that is why the proposals concern anticipation of the NUS lobby on the Friday of that me. From 2016, a person in my position may be denied week, the Minister described the changes as “measures the opportunities that allowed me to succeed academically. to modernise” DSA. I would have thought better of him According to the Minister, the Government propose than that, because it is the sort of Orwellian doublespeak to ensure that the limited public funding available for that makes people cynical about politics. This is not DSA is targeted in the best way, to achieve value for about modernisation, as he knows. It is about balancing money, while ensuring that those who are most in need the Department’s books on the back of disabled students, get the help they require. However, I am not convinced just as the Treasury sought to do with other vulnerable and the Government have not provided enough evidence groups, with the attack on the student opportunity to show that support for those with moderate needs will allocation earlier this year. He fought his corner then, be maintained. There is still a threat that they will be and I hope he will do so in the present case. locked out of higher education. That is a further blow In the letter, the Minister identified what he described to disabled students who are already suffering as a as unsustainable growth in spending on DSA, with an result of the Government’s trebling of tuition fees. A increase over this Parliament of £37 million. That is a report by the National Union of Students found that tiny proportion of his budget and just 6% of the 55% of disabled students have considered leaving their £620 million growth in grants and loans to students in courses, compared with 35% of non-disabled students. I private colleges, partly as policy design and partly as a cannot imagine how the changes will encourage students failure by his Department to maintain adequate controls to remain on their courses, or future students to enter over that budget line. The wrong people are paying for higher education. the consequences of those mistakes. The priorities are Universities have a duty not to discriminate against wrong, and those with disabilities are being punished students with disabilities under the Equality Act 2010, for the black hole in the Minister’s budget. passed by the previous Labour Government. It is of Disabled students’ No. 1 priority in choosing a university course right to expect higher education institutions to is the access and support that they will have; that is carry out those duties as my university did. However, more important to them than the choice of courses. the Government have been unable to explain how They are more likely to drop out than non-disabled institutions are supposed to meet the duty under the students. We can all throw statistics around, but I want reformed scheme. Their share of responsibility will to share a story about a university of Sheffield student greatly increase, but we do not know where they will union officer, Kat Chapman. She is dyslexic and recently find the resources to carry out that responsibility. We do finished her degree, with a high 2:1. She is delighted to not even know the effect that the proposals will have on be embarking on a master’s degree at Cambridge. She is the total DSA spend. It is worrying that the Government 285WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 286WH

[Mrs Emma Lewell-Buck] I am sure that hon. Members have already looked through the background notes for the debate, which have rushed ahead without either conducting a full clearly explain who needs help: they include people with analysis of the impact or holding a public consultation, autism, people with sight or hearing issues and people to ask institutions whether they will be able to cope with with learning difficulties, of whom there are almost plugging the gaps left by DSA. 22,000, as well as about 3,400 people with mental health Even more worryingly, by giving institutions more issues, nearly 3,600 people with multiple disabilities and responsibility for delivering specialist support, the 540 people with wheelchair mobility. Clearly, complex Government will create a situation in which the most health and physical needs must be addressed. People’s inclusive universities will be hit hardest. That could, as concern about the proposal is therefore understandable. the National Association of Disability Practitioners According to the Equality Challenge Unit, 71% of pointed out, have perverse consequences: those universities disabled graduates gained employment in 2012, compared might not be able to afford to be so inclusive, or they with 42% of disabled non-graduates. Already a high might be forced to make cuts in other areas. number of disabled students consider leaving university Disabled people already face disadvantages in higher because of high costs, and surely the figures are testament education. They are less likely to enrol and to study full to the importance of providing disabled students with time, and more likely to drop out before finishing their DSA, which enables them to pursue some of the ambition course. If that is the situation now, we can expect it to that we in this Chamber want to encourage. get worse once the Government’s DSA cuts take effect. If the change to DSA is pursued, there will be direct Disabled people thinking about entering higher education implications for people whom I and other hon. Members today will have no idea what support to expect, or what represent. We have heard about the cutting of DSA for the effect on their finances will be. dyslexic students, and the Minister has referred to those I feel lucky to have been supported with my dyslexia with complex needs or exceptional circumstances receiving and dyspraxia. My condition is relatively mild, but the DSA. I should like to know, for the life of me, exactly help that I received made a difference and helped to get what that means, because I do not see that coming down me where I am today. I am concerned that people with to the people whose grants will be taken away from them. mild conditions will be written off under the Government’s The one issue that has perhaps not been hinted at is proposals and will never get the opportunities that the bill for DSA. In 2011-12, the bill was £124 million I have been lucky enough to have. for 53,000 undergraduates. The latest figures from the Student Loans Company, however, show that spending 3.26 pm on DSA had reduced by almost £5 million in 2012-13, despite the number of claimants rising by almost 2,000. Jim Shannon (Strangford) (DUP): I congratulate the More seems to be being delivered with less money, so hon. Member for Cambridge (Dr Huppert) on obtaining will the Minister say how his figures work out, given the the debate. reduction of almost £5 million and the almost 2,000 I want first to say clearly that I am concerned about extra students? Why are we considering further cuts the cuts and the dramatic effect that they will have on given some of the cuts that are happening already? In the people who need the DSA the most. The hon. 2013, of the whole United Kingdom, Northern Ireland Member for Scunthorpe (Nic Dakin) talked about belief, was hit hardest by the benefit cuts, with £750 million hope, opportunity and ambition, and all those things taken out of the economy. The case for the DSA proposal will be hurt by the slashing of the grants. is not proven and is not acceptable. I strongly object to Early-day motion 48 notes the NUS research finding what is taking place. that 3.30 pm “55 per cent of disabled students have already seriously considered leaving their course compared to 35 per cent of non-disabled Mr Barry Sheerman (Huddersfield) (Lab/Co-op): respondents”, Mr Hood, it is very kind of you to call me to speak with 54 per cent citing financial difficulties. Clearly, briefly, even though I failed to tell you that I wanted to there is an issue. The reason I, a Northern Ireland speak. I am conscious of that. Member, am speaking in the debate, is that the change As the MP for Huddersfield, I represent Huddersfield will affect students from Northern Ireland who go university, which was the university of the year this across to universities on the mainland. The hon. Member year. The university has an amazing student body— for Ceredigion (Mr Williams) talked about Wales and including Coco Toma, the communications officer, and Scotland, and there will be an effect for people from others—that constantly talks to me about how the Northern Ireland as well. The change will affect us all. proposals will affect disabled students. The empowerment I know from some of my constituents that the DSA and emancipation of students provided by this direct helps with buying special equipment required for studying, gift from the Government is wonderful. People know non-medical helpers such as note-takers or readers, about DSA; they anticipate it; and it changes lives. I extra travel costs that disabled students may have and have talked to disabled students who say that, if they others costs for things such as tapes and Braille paper. had the new system that the Minister will introduce, Non-medical help such as that provided by note-takers they would not have thought about going to university. is critical to disabled students. Some require their help I know that the Minister will be embarrassed, but he throughout the semester; others need their assistance and I get on very well. I think that he will change his whenever they must go into hospital, which for some is mind. If he does not, this will be a big political issue at a fact of life. Surely, the House recognises the importance the general election. I hope that an incoming Labour of such helpers, particularly those who help when a Government will make it clear that we will change the student is in hospital. proposal, because it is wrong. 287WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 288WH

I have great respect for the hon. Member for Cambridge has a fantastic opportunity to engage in our world-class (Dr Huppert), but disabled students are particularly universities, particularly my wonderful, award-winning double-whammied because the tremendous increase in Huddersfield university. student debt hits them more than anyone else. Disabled students have not forgotten the pledge or that the Liberal Democrats led us up the garden path. We all 3.35 pm thought that they would never be in a coalition. Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): It is a great pleasure to serve under your chairmanship, Dr Huppert: Will the hon. Gentleman give way? Mr Hood. I add my congratulations to the hon. Member for Cambridge (Dr Huppert) on securing this debate. Mr Sheerman: No. The hon. Gentleman did not give way to me, so I will not give way to him. The fact of the I have a simple argument to put to the Minister: the matter is that some people in Cambridge tell me that, proposals are flawed, they need to be dropped and they whatever he does, they will not forget the pledge. He need to be dropped now. I agree with my hon. Friend might work hard for the disabled students allowance, the Member for Huddersfield (Mr Sheerman) that the but they will not forget the breaking of that pledge. Minister is a good Minister and a good man. He has been put in a difficult position, and I hope that in Dr Huppert: Will the hon. Gentleman give way? today’s excellent debate he sees a consensus that stretches across the House. We are here with him to help him win Mr Sheerman: No, I will not give way. The hon. the argument and to put the proposals where they need Gentleman will get his come-uppance at the next election, to be, which is in the bin. and so will any Government who introduce this dreadful We have heard powerful arguments this afternoon scheme. about the success of DSA, how the proposed changes are slipshod and why it was wrong to develop these 3.33 pm proposals not in the open but in secret. We have heard Jason McCartney (Colne Valley) (Con): Thank you powerful arguments about why DSA is so successful. for squeezing me in, Mr Hood. It is a pleasure to serve We do not give disabled students enough help to change under your chairmanship, and it is a pleasure to follow their lives by going to university, and we have to hold on my near neighbour, the hon. Member for Huddersfield to that basic fact in this debate. I congratulate the (Mr Sheerman). Like him, I have engaged closely with National Union of Students on its work to expose how the students union of my local university, the award-winning important DSA is to thousands of students. Some 60% Huddersfield university. I thank Josh, the president of of disabled students are terribly worried about the cost the Huddersfield students union, and Daniel, the democracy of living, which is a much higher proportion than for and campaigns officer, for coming down to brief me. I most students. More than half of disabled students voted against the rise in tuition fees in December 2010 have thought about dropping out of their course, which because I was concerned that students from low-income is a much higher proportion than for most students. backgrounds would be put off applying to university. That is why DSA is so important to students across I did not go to university. the country. Today’s debate has been particularly powerful. My Dr Huppert: Like my hon. Friend, I voted against the hon. Friend the Member for South Shields (Mrs Lewell- rise in tuition fees. I am the first Member of Parliament Buck) told her own story, but we have also heard stories for Cambridge to vote against a fee rise. When there was from my hon. Friends the Members for Birmingham, a Labour MP, she voted for a fee rise having promised Erdington (Jack Dromey), for Middlesbrough (Andy to oppose it. McDonald), for Scunthorpe (Nic Dakin) and for Jason McCartney: That is worth putting on the record. Rotherham (Sarah Champion) and from my right hon. I am concerned about the proposed changes—they Friend the Member for Oxford East (Mr Smith) about are just proposed at this stage—because Josh and Daniel people they represent who have serious worries. The explained to me the implications, the worries about the National Union of Students has collected similar stories, cost of modifying laptops, and the importance of scribes such as the story of Lucia, who said that university and note takers. They talked about their first hand “wasn’t easy.” She knows that experience of students they study with who have dyspraxia “without the validation and…support from DSA I wouldn’t have and dyslexia. That is why I am here representing them kept going… I certainly wouldn’t have been able to get my first class honours degree, and I would have been lucky to finish.” today. They have questions about the complexity of different learning difficulties and how they would be There are stories such as Suzanna’s. She said: categorised. There is also the cost of modifications to “I get DSA for dyslexia. I expect I am one of those David accommodation. Huddersfield university is investing Willetts would class as having ‘mild difficulties’. My study…advisor hundreds of thousands of pounds in new accommodation, is a godsend.” and there would be concerns about that, too. They told She now wants to finish neuroscience and cure Parkinson’s me that more than 700 students at Huddersfield university disease. She said: currently receive DSA, so it is close to people’s hearts in “Without DSA I would probably still be a waitress. A bad my part of the world. waitress at that.” I look forward to hearing from the Front Benchers, There are stories like Charlotte’s. She said that when particularly the Minister, whether we will look again at she was making her university choices the availability of the proposed changes. I encourage the Minister to DSA was key to her getting into university and changing engage with local students unions, to involve them in her life. In the background briefing for this debate we the process and to work hard so that every student, no have heard argument after argument for protecting, matter what their economic background or disability, preserving and enhancing DSA. 289WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 290WH

[Mr Liam Byrne] with supporting disabled students at university, which is why he is not proposing the abolition of DSA. The fact The Campaign for Science and Engineering makes that DSA is to continue is an acceptance of the principle the interesting point that if we care about the supply that extra central Government support is needed. line of science, technology, engineering and maths skills We are not being told what the real objectives of the in our economy, we should care about the future of reform will look like. By how much does the Minister DSA: seek to cut the bill? How big will the cost shunt be? “One of the most worrying developments for STEM is the removal They are not the sort of questions we should be debating of…‘higher specification and/or higher cost computers…because here this afternoon. We should have been debating them of the way in which a course is delivered’”. long ago—in January, February or March—before the CASE continues: ministerial statement appeared. Opposition Members “DSA funding will… only be provided for ‘the most specialist are worried, as I am sure the hon. Member for Cambridge non-medical help (NMH) support.’ The definition of… ‘specialist’ is too, that organisations such as the National Deaf is not clear.” Children’s Society felt they were not given a real chance Many hon. Members have made that point today. The to put their points of view in meetings that were simply proposal would damage the chances of people on STEM cut short. That is not a standard of consultation that we courses in particular, which is why the changes are such are prepared to see, because the issue is simply too bad news. In this House we are always happy to hear the important. case for reform. When pressed by hon. Members at oral If there is a need for modernisation, let us hear it. questions the other day, the Minister said that no student The Minister is a good man and a good Minister. He would be worse off. That is a very big promise. Let us be should be up front with us about how much he is honest: most of us here would like to believe him, but seeking to save. He should be debating with us what when my right hon. Friend the Member for Sheffield, extra safeguards need to be put in place to protect the Brightside and Hillsborough (Mr Blunkett) tabled a rights and opportunities for disabled students in the parliamentary question to the Minister on 26 June years to come. The need is urgent. Lord Addington has about the extent to which DSA would be supported in told the other place that guidance for April is being future, answer came there none. The question was dodged, drawn up. All of us wanted to be part of any changes and that is why so many of us in this House have such that needed to be introduced. That is what we got when serious concerns. the DWP proposed to change the DLA and introduce The Minister will no doubt want to remind us that the personal independence payment. It is the approach the bill for DSA has gone up. That is true, but in the that we saw when the DWP wanted to introduce universal past year for which figures are available it has gone credit. Those were big and important changes, and down by £5 million, while the number of disabled Opposition Front Benchers were invited to the Department students who are supported has gone up, so each of to discuss them. We may have disagreed with the them is actually getting much less. That is why we are conclusions, but at least we had the chance to flag up a so worried about a kind of carte blanche shunt of few warnings, make a few suggestions and ensure that responsibilities to universities. the debate was had in public, not in secret. We have heard very clearly today the warnings from I think the Minister is a good man who will want to experienced people in this House about what happens think again about the proposals. The debate should not when responsibility is shunted over. The hon. Member have been today; it should have been in the early part for Blackpool North and Cleveleys (Paul Maynard) put of the year before the proposals were drawn up. If the case powerfully. There is too much ambiguity in an modernisation is needed, let us hear the arguments. If Act as high level as the Equality Act, important though there are savings to be had, let us hear the targets, but that is. We should be honest about what is going on. we will not stand by while disabled students are given a This is a cost shunt to universities—let us call it what it bunch of proposals and told to like it or lump it. is—but it is a cost shunt without any safeguards to go Disabled students demand and deserve much better with it, and that is why so many of us are worried. I than that. think the Minister will acknowledge that that is one heck of a gamble with the futures of disabled students 3.45 pm in our country. It is certainly not a gamble that we want The Minister for Universities and Science (Mr David to see. Willetts): It is a pleasure to respond to this important My hon. Friend the Member for Stretford and Urmston debate, and I congratulate the hon. Member for Cambridge (Kate Green) made an important point when she underlined (Dr Huppert) on securing it. how the risk of a postcode lottery in the way disabled I want to make it absolutely clear that we are not students are supported will mean that people’s choices abolishing DSA. Some Members who intervened have will be damaged. They will not be able to pursue the assumed it would disappear. It is a substantial item of choices that they want. As my hon. Friend the Member spending now running at about £125 million, but we for Sheffield Central (Paul Blomfield) pointed out, it envisage that there will continue to be significant DSA will be the most inclusive universities that are most in future. Several Members, particularly the hon. Member damaged by the proposal. The worst-case scenario, we for Sheffield Central (Paul Blomfield), did not like my are told, is grim indeed. statement that we were modernising it, but let me explain I was concerned, as I know the Minister was, when I briefly what modernisation means and why we are read the briefing from people who are expert in supporting engaging with it. disabled students, which stated that the worst-case scenario The system of DSA has not changed significantly could see 60% to 70% of DSA eliminated. That is an since it was introduced in 1974. Since then, there have enormous bill. The Minister accepts there is a problem been widespread technological changes, some of which 291WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 292WH have improved disabled people’s ability to access education beginning with my hon. Friend the Member for Cambridge through advances in IT, but some things that were but not only him, specifically asked, “How will universities previously available by special arrangement are now pay, given that you are expecting them to discharge widespread. For example, many people have laptops or these institutional obligations?” There are two genuine other forms of access to IT. So there have been advances points to be made in response, although more could be in technology, which have spread across the country. made. Let me tackle head-on another significant change First, with regard to the equalities duties that the that has happened: the spread of equality duties under House has introduced under successive Governments, the Disability Discrimination Act 1995 and the Equality by and large we do not say, “We therefore need an extra Act 2010. The right hon. Member for Sheffield, Brightside stream of funding for the NHS”, any more than we say and Hillsborough (Mr Blunkett) was emphatic on that that there should be extra public support for Marks & point. I have enormous respect for him and his work, Spencer. Hon. Members should remember that, legally, but it is reasonable for us to say what is the right universities are independent institutions outside the balance of responsibility between institutions’ legal public sector. The general view across the House, when obligations under the Acts and individual payments to we have imposed equality duties, has been that that is students via the DSA. There may well be types of just part of the proper functioning of an institution. provision that are better and more efficiently delivered Secondly, it is fortunate that our universities are in a on an institutional basis via the universities’ obligation healthy financial position. I will not stray from the than via individual student support. point, as happened in the argument a few minutes ago Perhaps as a lay person I can give a simple practical between the hon. Member for Huddersfield (Mr Sheerman) example. If a university has a library where people with and my hon. Friend the Member for Cambridge, but the disabilities find it hard to access material, it is a legitimate sums going to universities for teaching—the combination question to ask whether the DSA should provide for of the grant income and the fee income that they their costs to access the library or whether the library receive—is rising substantially as a result of the controversial should be organised in such a way that every time changes that we introduced, going from £7.9 billion someone comes in— total income in 2011-12 to £9.9 billion in 2015-16. To be frank with hon. Members who voted against 3.47 pm the £9,000 fee—I suspect that the majority of those in Sitting suspended for a Division in the House. this Chamber did so—it is inconceivable that universities would have enjoyed a £2 billion increase in teaching 4.2 pm income in the life of this Parliament under any other On resuming— model of financing universities, especially one that depended on public expenditure through grant. There is a genuine Mr Jim Hood (in the Chair): Before I call the Minister, increase in their financial resource. Several hon. Members I remind right hon. and hon. Members that 15 minutes expressed concern that our proposal comes at a bad extra—the time taken for the Division—will be added time, when universities have not got any money, but in to this debate. The debate that was supposed to start at fact they have had an increase in their cash resource. 4 pm will start 15 minutes later. Mr Byrne: I am grateful to the Minister for giving Mr Willetts: I am not sure that this extra time will be way with characteristic generosity. Can he help hon. as good as that in the Belgium versus United States Members? He has made an eloquent argument for the match, but I will do my best. I welcome hon. Members need to rebalance responsibilities between central who have come for the next debate and apologise to Government and independent universities, saying that them. we need to do so because it is a long time since we have I was starting to wind up the debate, explaining why considered the matter. By how much is he seeking to it is legitimate to carry out the review and why the term reduce the DSA budget over the next financial year and “modernisation” is legitimate. One argument in that the one after? He must know, because he has a list of regard was about technical change. I was also saying specific measures. that there is a genuine issue about obligations under the Equality Act, whereby universities have a duty to make Mr Willetts: I was going to get to that point in a reasonable adjustments for students who are disabled. moment. We are still consulting—it is a genuine We have to get the balance right between the institutional consultation—so I cannot give the House a specific obligation on the university and personal financial support figure, because that will depend on a host of things, for the individual student. I was giving an example of including exactly how the proposals are implemented how a library should function, saying that the obligation and wider effects. However, it is a budget that has grown could be discharged by a library properly training its rapidly. Incidentally, the right hon. Gentleman said that staff to help people with a range of disabilities. That that growth had stopped. There is always a difference may be a more effective way of delivering support between the provisional figures and the final outcome for disabled people than individual disabled students figures. My personal expectation is that the final outcome turning up at the library with a personal assistant to figures for the latest year should be higher than those help them. It is legitimate to try to get the individual for the previous year. It is not fair to compare final versus institution balance reviewed in the light of the outcome figures with provisional figures. We will see. equalities duties. The budget has increased from about £88 million when The right hon. Member for Sheffield, Brightside and we came to office to about £125 million now, so it is Hillsborough did not like the fact that I referred to the legitimate to look at it. However, we do not have a funding available for universities, but several hon. Members, specific allocated figure. 293WH Disabled Students Allowance2 JULY 2014 Disabled Students Allowance 294WH

Mr Sheerman: Will the Minister give way? work with institutions and stakeholders to ensure that changes are introduced effectively, but I understand Mark Durkan (Foyle) (SDLP): Will the Minister give that some institutions are concerned that they will be way? disproportionately affected due to their high numbers of disabled students. Several Members have made that Mr Willetts: I will give way briefly to the hon. Member point, which will be considered before guidance is issued for Huddersfield, but I have a lot of specific points to to the sector in the autumn. The guidance will help make, so after doing so I shall make progress. institutions understand better the role that DSA will play, enabling them to consider the support they will Mr Sheerman: The Minister knows what I am going need to provide. We will also provide regular updates to say. He is looking through rose-tinted glasses at the for the HE sector over the coming months. future of finance in higher education, but it is not all as rosy as that. A vice-chancellor recently said to me, “The Student information and guidance, which will include real worry that I have is that the whole HE system is information on DSA changes as well as on the wider based on a mountain of student debt.” That is our student support package, will be available in September worry. It is not as rosy a picture as the Minister has in the normal way. Once we conclude our consultation painted. meetings, we will be in a position to issue draft guidance in early autumn on what DSA will cover. That guidance Mr Willetts: That is a separate issue. The graduate will benefit higher education institutions and assessment repayment system is a fair, sustainable and viable way of centres in particular. Stakeholders will have the chance financing our universities, and it would be a mistake to to review it and ensure that it is sufficiently clear and try to reverse that. understandable before it goes live. I undertake to lay the relevant regulations at that time, which will allow Members I turn to some of the specific issues that have been to see the regulations and the draft guidance in parallel. raised. Let me say clearly to right hon. and hon. Members Before adopting either, the Government will continue that we will fund non-medical help that would not be a to have due regard to the impact of the changes on the reasonable adjustment for higher education institutions aims set out in the Equality Act 2010. We will publish to make. We will define the obligations of the institutions, our analysis on that at the same time. and on top of that there will be support for non-medical help, which in certain situations will include support for A point was raised about existing students and DSA students with specific learning difficulties, as well as students beginning university in 2014-15. They will other groups. Hon. Members mentioned IT, and we will remain on the current arrangements in 2015-16. I have make a contribution to the costs of higher-cost and already announced that the maximum available DSA higher-specification computers in certain circumstances amounts will not be changing. We are not adopting a if they are required purely because of the student’s blunt approach to the provision of non-medical help. disability. We will pay the extra costs that arise from We realise that non-medical help will be the responsibility those computers being required by students with a of higher education institutions, but we recognise that disability, rather than have a general payment for laptops in certain areas, perhaps as a result of the impact or when they are now widespread across society. We will severity of a disability, DSA has an additional role to also cover additional costs of specialist accommodation play once reasonable adjustment has been made. In the in exceptional circumstances. case of complex needs, we will assess the severity of the impact on the education of the student. It will not be a Mr Andrew Smith: Have the Minister and the simple physical assessment of their disability; it will be Government looked into the implications more widely, an assessment of how the disability challenges they face beyond higher education, of the Government making affect their ability to benefit from higher education. such a definition of what is a reasonable adjustment by That is the assessment that has to be made. We will universities? Is there not a real risk that others will cite focus on the educational impact and the severity of that definition and say that anything that goes beyond it their educational needs. I would also like to—[Interruption.] is not a reasonable adjustment for them, thereby denying disabled people in other areas too? Mr Jim Hood (in the Chair): Order. When the Chairman can hear conversations at the back of the room, someone Mr Willetts: That will be the last intervention that I is out of order. I urge Members to pay attention to the take, because time is tight. Minister’s contribution. We are consulting, and we will produce guidance that will help make the crucial distinction between what Mr Willetts: Thank you, Mr Hood. I was trying to go institutions can legitimately be expected to do and almost too fast, because there is so much material to where individual funding is required. cover. I was trying to clarify the issue of specific learning We are talking about education, and I want to come difficulties and dyslexia, which has arisen in the debate. back to that, because several Members raised the topic. My announcement used the term “complex needs”, and It is a distinct responsibility. We are consulting, and we I wish to make it clear that DSA will support those for will continue to meet a whole range of groups representing whom the impact on their higher education needs is disabled people. We have already discussed the policy most severe. That is the approach we propose to take. changes with, for example, the National Union of Students, We are in consultation on technology with groups Universities UK and the Office for Fair Access, and such as the British Assistive Technology Association. I there will be many further such meetings in the future. assure Members that the Government are committed to Institutions will be expected to have reasonable supporting disabled students in accessing higher education. adjustments in place by September 2015. We believe Students are right to expect support from their higher that the time scales provide sufficient time for us to education institution, and DSA has been available to 295WH Disabled Students Allowance 2 JULY 2014 296WH complement that support for nearly 25 years. That is Flooding (Somerset) not changing. What is changing is the balance between the two types of support, and that balance should be struck in the light of the Equality Act 2010. I conclude 4.15 pm by assuring Members that over the summer, the Mr David Heath (Somerton and Frome) (LD): I am Government and officials will continue to develop thinking, extremely pleased to have secured the debate, which will engage on policy issues and consolidate our work. We consider the aftermath of flooding in Somerset. I am will, of course, continue to consult and keep the House delighted to be supported on this occasion by my hon. informed as our proposals develop. Friends the Members for Wells (Tessa Munt) and for Taunton Deane (Mr Browne) and the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger). We have been acting effectively as a team on the issue, and long may that continue. I cannot honestly say that I have not had the opportunity to speak at length about flooding in Somerset on previous occasions. By my count, this is the 16th occasion this year when I have spoken on the subject. It has been a recurrent theme over my 18 years in Parliament, and sometimes I feel that I have spoken about little else. Looking back in Hansard the other day, I found that in March 2009, in a debate that I had introduced on the subject, I said: “I am convinced that if we had proper dredging of some of our rivers and proper clearing of debris and strengthening of banks on some of the smaller tributary streams, it would make a substantial difference to the way in which we deal with these matters.”—[Official Report, 12 March 2009; Vol. 489, c. 553.] I was right on that occasion, as were many, many local people, who had been saying the same things year in, year out for a long time. I had the opportunity to say some of those same things to the Minister’s predecessor, the hon. Member for Newbury (Richard Benyon), when he came down to see me in Langport in April 2012. No one can honestly say that the flooding in Somerset this winter caught them by surprise; we knew it was going to happen. The good news is that, despite the reports about the conditions underfoot at Glastonbury festival last weekend, Somerset is now predominately dry. The floods have gone. We need to keep repeating that, because there are still people who ring up businesses in my constituency—I am sure it happens in my colleagues’ constituencies, too—saying, “Is Somerset open for business? Are you still under water?” No, we are not under water. Come and have a jolly good holiday in Somerset. It is a much better place to go than places that are further away. [Interruption.] No, I do not mean the Minister’s constituency. Somerset is a thoroughly good place to have a holiday. Before I proceed to a catch-up on where we are, I repeat, as I have on many occasions, my thanks to everyone who was concerned during the flooding crisis with dealing with the conditions on the ground. People worked tirelessly, whether they were officers of the Environment Agency, the police, the fire brigade, council officers or volunteers. There were so many that it would be invidious to mention people by name, but they know how much their work was appreciated. I also thank those who helped in other ways, such as providing cattle fodder from the far ends of the country or providing cash to the appeals organised by the Somerset Community Foundation and others. We are deeply appreciative of that, as we are of the attention we were afforded for a few brief weeks by the Government. The Prime Minister, the Deputy Prime Minister, the Secretary of State for Environment, Food and Rural Affairs, the Minister and many other members of the 297WH Flooding (Somerset)2 JULY 2014 Flooding (Somerset) 298WH

[Mr David Heath] paid, but I am satisfied that genuine dredging is taking place along the identified stretch. After a slow beginning, Government came down to see for themselves what the it is starting to catch up, and I think six crews are now at issues were. Were we lucky that we happened to have a work. What a pity it is that we do not have the equipment few weeks before the Thames valley flooding to make that was given away or sold for peanuts many years ago. our point? Yes, I suspect we were, but nevertheless, we Nevertheless, the relevant area has been reconstituted did, and we appreciate the attention we were given. and we have the hard-standings that enable the dredging machines to do their work. Will the Minister update us Mr Jeremy Browne (Taunton Deane) (LD): Will my as to when he expects the initial tranche of dredging to hon. Friend expand on the point he just touched on? We be completed? all feel a genuine sense of gratitude that leading members Increasing the capacity of watercourses will not satisfy of the Government—the Prime Minister, the Deputy local people, however. We accept the argument that Prime Minister and others—took such a close interest increasing capacity is the most effective use of early in the situation in Somerset, but surely the task now is funds, but I am conscious of the fact that the upper to ensure that that interest is not passing and that the reaches of the Parrett were also severely flooded. Around legacy of the attention afforded to our county is that we Langport, Muchelney and Martock, there are bottlenecks see over a period of years, not months, exactly the that need addressing. Are we able to increase capacity changes that were promised during those visits. That under the bridge at Great Bow wharf at Langport? will ensure that the risk of floods is alleviated in the There are also plans to widen and deepen the Sowy future. diversion stream to provide extra capacity, which is a Mr Heath: My hon. Friend is absolutely right, and sensible idea that I would like to see happen, but it that was why I called for today’s debate, which is perhaps needs to be properly planned. We need to consider the unseasonable. Now is the time not only when work potential consequences for other communities and reassure must happen in Somerset, which it is, but when decisions them that they will not be adversely affected by the must be taken that will affect the situation for years to Sowy being used to a greater extent. That issue would come. That is what I want the Minister to respond to. be particularly apparent at Beer Wall, which is where my constituency adjoins that of Bridgwater and West I will briefly touch on the background, because we Somerset, and Aller Drove, which saw unprecedented cannot escape the fact that elements of the Somerset flooding. Aller does not normally flood, but this time it flooding were avoidable. We expect flooding on the did. I think that there was a miscalculation and that levels; it is a normal state of affairs. This occasion, someone made a mistake in lowering the level of the however, was unprecedented due not only to the extreme river wall. Those calculations have to be right. As we weather conditions, but to now widely acknowledged use the Sowy, we must be sure that adverse effects are policy mistakes. I have drawn attention to two glaring not happening elsewhere. errors many times over the years, but they now have a common subscription. First, the landscape is artificial Mr Ian Liddell-Grainger (Bridgwater and West Somerset) and does not maintain itself. Every drop of water that (Con): My hon. Friend is making some good points needs to be pumped away from the fields and the about the Sowy. The Minister is aware that part of the communities in the area must be pumped uphill into Sowy development must include the barrage or the rivers that are higher than the surrounding landscape. sluice—whatever we want to call it—below Bridgwater, People forget that and talk nonsense about natural which would complement what my hon. Friend is drainage and flood plains when such drainage will discussing. Will the Minister also consider ensuring that never happen. The land is effectively reclaimed. It is the scheme goes into the autumn statement? We need land from the great mere of Somerset. Unless the water money for the Sowy and for the barrage, but it can come is pumped, drainage will not happen. only from central Government. Does my hon. Friend Secondly, an environmental heresy was allowed to think that that may be a way forward? develop for far too long at senior levels in the Environment Agency. It was assumed that the environmental benefit Mr Heath: I most certainly do agree, because that of the area was in the watercourses rather than in the was going to be the principal point— land in between, which meant that what are essentially canals were being artificially preserved at the expense of Mr Liddell-Grainger: I am so sorry. the quite invaluable flora and fauna. I hope that that is now a thing of the past. Mr Heath: We are at one on the issue. This is the big What is on the list of things to be done and how have ask. This is what we need from the Minister. I know that we been managing? There have obviously been immediate he will not answer today, because he is not in a position acts of recovery and restitution. I understand that farm to do so, but this is the most important demand. funding is considerably undersubscribed, but the Minister Purely local schemes to alleviate flooding are also might be able to provide an up-to-date assessment of needed. Thorney is a tiny village—a hamlet—that is whether the funding has reached the farmers who need now rather curiously described as two different places it. I also wish to add one caveat: we have not to date for the purposes of flooding, because it floods separately seen huge damage to orchards, but it is possible that it at two ends, so we now have Thorney north and south, will appear later on. If we need to come back to the or greater and lesser—I am not quite sure how to Department, I hope the Minister will be sympathetic if describe the two ends of the village. A bund of some orchards have lost tree stock. kind—a way to stop the water coming in—would be Dredging is now happening. There has been a lot of effective, however. That is a relatively low-cost solution local cynicism as to whether it has been done sufficiently and one that is being considered. I want an assurance quickly and properly, and whether lip service has been that it actually will be built to protect the people of Thorney. 299WH Flooding (Somerset)2 JULY 2014 Flooding (Somerset) 300WH

Similarly, we need to look at Muchelney Ham, a area? My concern is with the Axe and Brue rivers; there small part of Muchelney that was subjected to flooding. is a need for dredging on the Brue, but my most important We also need to examine the highways situation, where concern is the Axe, which drains out into the northern the county council will be taking the lead. part of my patch and over towards Weston-super-Mare. I think we all agree that it is extraordinary in this day Bleadon sluice was closed by the Environment Agency, and age to have a village such as Muchelney completely which put a red notice on it in 2009. There has been a cut off for week after week. We must establish at least bundle going on—no one will take responsibility. I was one way to get in and out. Feasibility studies are being told earlier this year that the sluice was going to be fixed carried out as to whether it should be the Drayton road at some point during the year, but we are a long way or whether there is a better alternative, but something through it and nothing has happened. Will the Minister must be done to ensure that people can get in and out of address that, since we are on the subject of sluices? the village. Mr Heath: My hon. Friend is absolutely right. We Mr Browne: I am hugely sympathetic to the residents cannot divorce the issues of the Parrett and Tone from of Muchelney, but while my hon. Friend is on the topic those of the Axe and Brue. That is why the next ask is of highways, will he also discuss what could be done to equally important: setting up the Somerset rivers authority, improve the resilience of the A361? It is a major trunk to absorb the interests of the existing internal drainage road that links Taunton, the county town of Somerset, boards and to create real capacity to manage our complex to the main body of the county, including Street and water systems appropriately and with the benefit of Glastonbury, but its resilience is inadequate. There seem local knowledge. That will not happen unless we have a to be two tasks: keep the flood water down and try to revenue stream to support it, which in turn will not ensure that the road is open for longer stretches of time happen unless the Department for Communities and during floods. Local Government realises that Somerset is an exception and does not fit its rules. The Department will have to Mr Heath: I am grateful to my hon. Friend, because give way to establish what is already the case in some the next thing written on my piece of paper is “A361”. I parts of the east of England—a separate levy to fund do not like the idea of Taunton being cut off from the maintenance we know to be necessary. Again, that is civilisation and we need to do something about the an ask to which the answer must not be no, because A361, but the question is, what? I am not convinced otherwise we will not have done our job. that simply raising the level of the road along its entire Will the Minister also update us about how the length is the most sensible use of funds, but we need to common agricultural policy reforms as implemented in do something in combination with the sluice, which I England—the pillar two payments, in particular—will will come back to in a moment. We need to mobilise be used to encourage water retention, the sort of sustainable whatever funding is available—whether from Network use of land that will reduce the amount of water entering Rail, which otherwise needs to do something about its the lower reaches of the levels at the right time. That is a track across the levels, or the roads agencies—and use it key component, whether it involves reforestation or in the wisest way to ensure that the road is not closed simple changes in land use, to enable us to hold more again and that we all have easy access to the pub at water at higher levels, releasing it slowly when it can Burrowbridge, which served as such a useful headquarters get away. for the media during the flooding. We need a balance between the environment and the Are we going to see the replacement of the necessary community, including the agricultural community. The pumping facilities? Some have already been done, but environment of the levels is precious. I will not have it we brought in those massive pumps during the crisis said that the environmental benefits of the levels do not and they were an extremely good thing. We need to matter, because the levels are irreplaceable—if we allow ensure that they are available when we need them, and them to drown, they die. Therefore, it is in our interests without having to ask, as we need a boat to be available as environmentalists, as well as representatives of our when necessary. Such facilities need to be built. community, to ensure that the balance is created. As I That brings me to the two big ticket items. One is the have said often, flooding 3-feet deep for three weeks is Parrett sluice, which I agree entirely with, having looked fine. That is what we expect in Somerset; it is the levels into the matter. As the hon. Member for Bridgwater way. Flooding 10-feet deep for 10 weeks is unacceptable; and West Somerset knows, I was initially sceptical as to that is when people are in difficulties, businesses and whether the sluice would include improvement for my communities die, and vegetation dies as well. area—it clearly would for his—but I am now convinced I hope that the Minister will give as many answers as that it would. Preventing the influx of water from the he can. We will excuse things not having been completed Bristol channel at high tide, thereby ensuring that we by next winter, provided that we have clear intent that can drain away water from the upper reaches of the they are under way. After all the promises that we have levels, is crucial. We need the Chancellor of the Exchequer been given and all the efforts made, however, we will not to announce the funding in the autumn statement—no excuse things simply being said only for nothing to doubt about it, we need it there in black and white. happen. We will have flooding again this winter—that is When we have that, we will be satisfied that the Government a fact—but if it is as bad as it was last winter and we are keeping their promises to the people of Somerset. can turn around and say, “The Government have failed to do all those things that they said they were going to Tessa Munt (Wells) (LD): While we are on the subject do,” then, frankly, the Government will have to answer of sluices, will the Minister address the problem of not only to the people in this Chamber, but to an awful Bleadon sluice, bearing in mind that we have all talked lot of people in Somerset, who will be very angry about how any approach has to be for the whole catchment indeed. 301WH Flooding (Somerset)2 JULY 2014 Flooding (Somerset) 302WH

4.35 pm Tessa Munt: Will the Minister give way? TheParliamentaryUnder-Secretaryof StateforEnvironment, Food and Rural Affairs (Dan Rogerson): It is a pleasure Dan Rogerson: I will give way briefly, but I do not to serve under your chairmanship, Mr Hood, and to have much time. have the opportunity to respond to the debate. Tessa Munt: It is a brief point. Will the Minister I hope to satisfy my hon. Friend the Member for make absolutely certain that DEFRA officials stay engaged Somerton and Frome (Mr Heath) with my response, as with the process, because an internal drainage board far as I can on the day. As he said, he has raised the cannot do things on its own? It is crucial that DEFRA issues consistently, since long before my time with this officials carry on working with the boards. portfolio. More recently, we have had a number of opportunities for debate inside and outside Parliament. He has been entirely consistent, as have my other hon. Dan Rogerson: DEFRA officials and indeed Ministers Friends present today, and they have worked together will remain involved. The Secretary of State was in the as a team, along with our right hon. Friend the Member area again recently to look at progress. He has been for Yeovil (Mr Laws), who has also raised the issues appointed flood envoy for Somerset and Wiltshire by with me. the Prime Minister, as I have for Cornwall. We maintain an interest in the delivery of the plan which, as my hon. I have only a short time to respond, so I will not set Friend says, is crucial. Money has been made available out everything to do with the extreme weather that we from the Department for Transport, DEFRA and the experienced, although it is important to mention that Department for Communities and Local Government. the effects in Somerset were replicated in other parts of For example, an additional £12.3 million from the the country. Yesterday I was debating with right hon. Department for Transport has been made available to and hon. Members from the Humber estuary. My hon. the county council to help roads recovery. Friends here today will be delighted to know that those Members were only requesting £880 million for the I want to pick up on some of the issues in the action schemes identified in that area. We are not short of plan and the progress that has been made against that positive ideas to deal with flooding around the country! plan. An important element is resilience, which is perhaps slightly more intangible than dredging and hard defences The specific issues affecting Somerset are not so but is important. The Somerset civil contingencies much to do with the large numbers of properties partnership is providing a dedicated programme of flooded—as my hon. Friend the Member for Somerton targeted support to help people, farms, businesses and and Frome said, in other areas a much larger number neighbourhoods to recover, including by accessing the flooded—as with the volume of the water and its duration, support and advice that we have made available. They producing the longer term economic impacts on the are working hard on plans to increase resilience in the communities affected. There was in excess of 65 million future. As my hon. Friend the Member for Somerton cubic metres of floodwater,covering an area of 65 sq km. and Frome said, flooding will happen again, so we must Exceptionally, that floodwater stayed on the levels for ensure that communities have what they need at their more than 12 weeks. disposal. That is particularly so for people who have The Environment Agency did an excellent job in moved to the area and may not have been through this carrying out the single largest pumping operation ever before, unlike the old hands who have and know about undertaken in Somerset. As my hon. Friend said, the resilience and how to support one another. emergency services, the volunteers and all the other groups from local communities and from across the Implementation of the action plan has started with country who offered assistance did a magnificent job the dredging of the Rivers Parrett and Tone. It started in some very difficult conditions. In addition to the when the banks were stable and safe enough to support 40 permanent pumps, the Environment Agency mobilised the weight of the heavy equipment, when local access a further 24 temporary units, increasing the ability to permission had been sought and preparations made for pump by more than 150%, although there is an interaction receiving the excavated silt. The dredging is progressing between the tidal nature of the catchments and the well and is on target to be completed by the autumn. ability to get the water out into the sea, which my hon. The plan is to dredge 8 km of river; so far 1.7 km has Friend considered when talking about the sluice. I want been completed and the number of gangs has increased to make it clear that there are no plans to reduce the from two to six. number of Environment Agency front-line flood and Work is in hand to find alternative ways of getting coastal risk management posts. That issue has been water to flow from the Parrett catchment area by increasing raised in the past. the capacity of the River Sowy and the King’s Sedgemoor On my first visit to the Somerset levels with my hon. drain so that water can be pumped more easily and be Friend during the episodes of winter flooding there, the diverted to Dunball where extra pumps are working. clear ask from the community was for dredging of the The footings have been made permanent so we can call rivers. I came back to the Department determined that on them if necessary. That will lower the levels in the we should re-examine the case for doing so. The Secretary River Parrett sufficiently to enable the pumping stations of State for Environment, Food and Rural Affairs to be operated, helping to lower water levels on the followed up with a visit and asked all the local organisations moors around Langport, and to a lesser extent around to meet and to put an action plan together, with support West Sedgemoor, Curry moor and North moor. from officials in the Environment Agency and the DEFRA. The Environment Agency is currently scoping this That happened in remarkably speedy six weeks. I chaired work and hopes to appoint a consultant by the end of the first meeting and returned later to hear about some this month who will work with communities and of the progress. We now have the action plan, whose professional partners to agree aims and to include them delivery is crucial for the future of the levels. in the development of the options. By the autumn, the 303WH Flooding (Somerset)2 JULY 2014 Flooding (Somerset) 304WH agency expects to have assessed a range of options to compromises and urgency. The options under review see what is feasible. Partnership funding will be needed include organisational structures, legislative requirements to build the scheme. Further key action is the construction and funding models, all issues that will need to be of a barrier or sluice to deal with the impact of a rise in discussed by local and national Government to ensure a sea level and to protect Bridgwater from flooding, and sustainable model in the future. Proposals being considered to look at future development. include an appropriate catchment-wide funding mechanism On Friday 6 June, the Environment Agency, with to generate additional funds. These proposals will be Sedgemoor district council, organised a technical meeting discussed at the next leaders group meeting on 7 July. to discuss various options for the type of barrier that When proposals have been agreed, next steps will include could be used. The meeting was attended by 60 people consultation and engagement on them. In addition, who received presentations from experts from across work is under way to consider raising the road to the country who have been involved in the design of Muchelney and building a ring-bank flood protection other flood defence barriers. The long-term vision for scheme for Thorney. My hon. Friend was keen to make Bridgwater was also discussed. A group will review the case for that. these options and compile a report by September. That We have made provision through funding such as the report will contribute to an informed decision on the farming recovery fund, and 167 applications were received preferred option. from Somerset by the 27 June deadline. That represents The Environment Agency estimates that it will be 44% of all the claims. It was available to other areas of three to five years before construction starts and that it the country that experienced winter flooding from early will take two years to complete notwithstanding discussions December 2013 to April 2014. The total value of claims on funding, to which my hon. Friend is keen to draw from Somerset is over £1.5 million of the money that attention. If we have a plan by September, that will was made available. Repair and renew grant is also allow serious consideration of the funding options. available, and householders and businesses may claim up to £5,000 to establish flood resilience measures on Under the action plan, a new Somerset rivers board is their property. Of the 283 properties that were flooded being set up. It will have greater control of and responsibility in Somerset, 219 were in the area covered by Sedgemoor for work to maintain water and flood risk management district council. Other councils have also taken that in the area. This work is being co-ordinated by Somerset option. county council, working closely with district councils, In the few seconds remaining, I should say that I the Environment Agency, Natural England and the greatly appreciate the leadership that has been shown in internal drainage boards, which do such crucial work communities. This has helped to bridge the gap between not just in the Parrett and Tone catchment areas but the local and national agencies. We will continue to focus Axe and Brue areas. on delivering the action plan. There are challenges The Somerset rivers board was discussed at an interim ahead, but if we work together we can overcome them leaders implementation group meeting on 20 June. It so that that resilient community has a better time in was a positive meeting that acknowledged the need for future. 305WH 2 JULY 2014 VAT on e-books 306WH

VAT on e-books online retailers—the consequences of the changes to be introduced in January, just six months from now, will reverse much of the good that the introduction of 4.45 pm e-books has achieved in recent years. Mr Tom Harris (Glasgow South) (Lab): Through Unlike printed books, which rightly attract a zero you, Mr Hood, I thank Mr Speaker for giving me the rate of VAT, e-books have the full rate of VAT added to opportunity to raise this matter. I raised the subject their price. That is simply wrong, and I have thought so under a Labour Government in the last Parliament, for several years. It is clearly unfair to recategorise a before the 2010 election. Sadly, many of my concerns book as an electronic service, which is the justification have not receded. I welcome the Minister to her place. for adding VAT, simply because it is downloaded rather It is not necessary to go into a long exposition about than picked off a shelf. A book is a book is a book. The the importance of books or reading. We can take for full UK rate of VAT is charged on any e-book sold in granted the Minister’s agreement that encouragement the UK, but that does not affect readers who buy a to read books is a good thing, and that any Government, book from the Kindle store, because the VAT rate is whatever their political colour, want to promote the that applying in Luxembourg, where Amazon is based. reading and enjoyment of books. From 1 January 2015, however, VAT will apply wherever I declare an interest at the outset in that I am an avid the purchaser lives. For example, Donna Tartt’s “The reader and, in the past four years, have become an avid Goldfinch”—which I would highly recommend to the reader of e-books downloaded to my Kindle or my Minister, although a drawback of e-books is that it is iPad—my personal iPad mini, which I bought myself, much harder for people to lend others their copy—which not my publicly-funded iPad. I say that for the record I purchased from Amazon a couple of weeks ago for lest the tiresome usual suspects see an opportunity to £3.49, included a nominal VAT rate of about 3%. If we berate me for misuse of public funds. add an additional 20% to that cost, which is what I would have had to pay had I waited until next year to My experience seems to be fairly familiar to other buy it, that will undoubtedly have the effect of discouraging e-book readers. Purchasing an e-reader prompts the many readers—not all, but many—from buying it. reader to buy more books than he or she did before. An additional benefit of e-readers is that I can now purchase The decision to buy a book is price sensitive. Ofcom books and store them unread on my Kindle instead of research shows that the willingness to pay for a single buying physical books and leaving them unread and book download declines steadily as the proposed price gathering dust on my shelf. of a book download increases. The average price that respondents were willing to pay was £3.74. About 42% Amazon states that UK users of the Kindle buy up to of people were willing to buy an e-book at £5. Once four times as many books as they did before they VAT at 20% was added, bringing the cost up to £6, the bought their Kindle. For those of us feeling the dreadful proportion of consumers willing to buy it fell dramatically physical onslaught of the years, e-readers make print to 28%. more accessible with adjustable font size and colour, and so encourage reading. According to the Publishers Association, digital sales across all publishing increased in 2013 by 305% and E-books offer greater consumer choice. I was delighted digital revenues are now £509 million—or 15%—out of to discover that books by my favourite science fiction an overall book market of £3.4 billion. In fiction, writer—the late, great Bob Shaw—which were out of e-books account for a third of all sales—that is £200 million print, are available again online to download. The renewed —and for 7% of non-fiction sales. availability of previously out-of-print books from a huge range of authors has provided a much-needed But the association adds: revenue stream for publishers and authors, as well as “These figures are likely to continue to increase, but at a slower offering readers greater choice. rate of growth than in the earlier years of e-reading take-up, as the market matures... A further check on the growth of ebooks E-books are a British success story and have helped will come from the fact that they currently attract VAT (in the UK to drive the recovery of the UK publishing industry at the full rate of 20%). This is compared with the application of since the financial crisis of 2008. Consumers in the UK the zero rate of VAT on physical books—a long-standing feature are already the biggest e-commerce spenders in the of the UK’s tax regime—and is a reflection of the belief that the world, and have been fastest in the EU to embrace tax should not act as a disincentive to reading and learning. e-books, partly because of the huge choice of English However, this important feature of the fiscal regime is absent for digital publications on which the full rate of VAT of 20% is language books, partly because of competition and applied. Research suggests that consumers are discouraged from choice in e-book readers, and in large part because of buying ebooks by the VAT rate.” the price competitiveness of e-books. That has brought The association continues: big new opportunities to readers, writers and publishers. “The European Commission Directorate-General for Taxation Rapid year-on-year growth saw e-book sales in 2013 is conducting a full study of the whole of the VAT regime, and has account for 21% of the value of the UK’s total book identified ebooks as a particular focus of attention. market, up from 8% in 2011. The Publishers Association “We currently await a Communication from the Commission reported that 29%, or about £1.5 billion, of UK publishing outlining its findings and recommendations—however, publication revenues in 2013 was derived from digital products. of this seems to be suffering from repeated delays. We believe that Amazon.co.uk’s Kindle e-books already outsell print the UK Government should urge the European Commission to books. publish its findings following its study; and that the Commission should resolve to allow Member States to investigate applying That is all good news, but the Minister will be aware lower rates of VAT on e-publications (books and academic journals). that a change is coming that will have damaging The UK should itself then undertake a similarly detailed study to consequences for all concerned, except the Treasury. analyse the impact of reducing the VAT rate on e-publications, For everyone else—authors, readers, publishers and with a view to reducing to the zero rate.” 307WH VAT on e-books2 JULY 2014 VAT on e-books 308WH

E-books are a hugely important part of the UK A German Government spokesman said: publishing industry, which is itself a hugely important “Due to rapidly advancing digitisation”— part of our creative industries, and in a week when the I do not know what the German for “digitisation” is, by Government are pledging to help and support our the way, but I would be quite interested to find out— creative industries, this debate has come at an appropriate “we insist on a rapid implementation of the agreed points. We time. want to make sure that print and electronic media and audio The UK is the largest e-book market in Europe, but media are treated equally for tax.” the Society of Authors is concerned that publishers’ Well, hooray for the Germans. practices and the Government’s policies are creating barriers to growth and hindering development of the In the House, we are only too aware of the need to publishing industry. It told me this week: nurture the next generation. As parents, we understand the importance of encouraging our children to read. “The largest barrier to growth for most authors is the difficulty of obtaining a proper return for their professional work. Authors’ My own children often borrow my Kindle to take to incomes continue to be squeezed: fewer books are published and bed, although they have not yet mastered the art of sold; advances and royalties have fallen while more unpaid work charging the damn thing after they have used it—that is expected of authors in marketing and publicising their work, may be further down the line. So, for a new generation including appearances and use of social media. who view CDs as a quaint old-fashioned way to buy “Print books attract a zero rate of VAT, but their electronic music; who watch TV shows when it suits them, not equivalents attract a rate of 20 per cent in the UK. Other EU when it suits the broadcasters; who download their countries, such as France and Luxembourg, have unilaterally video games, rather than queuing outside the shop; reduced the rate of VAT on ebooks. This means the UK will now and who have a far greater number of distractions be at a competitive disadvantage, as ebooks sold in the UK will be more expensive than those sold elsewhere. The result is often to than any previous generation to prevent them from drive down prices leading to a smaller net sum going to authors. sitting down with a book, but who will, when choosing Most of the major players in the ebook market are based abroad. to read a book anyway, be more likely to buy it electronically, “Given the rapid pace of development in the ebook market, are we really saying that increasing the cost of that there is an urgent need for removing VAT on ebooks to avoid the product by up to 20% can really be reconciled with an UK slipping behind European competitors.” ambition to encourage the young to read literature? There are those in the industry who welcome the Do the Government still accept that we should promote change from charging VAT in the country where the reading and literacy and do all in our power to widen e-book is sold to charging the consumer where he lives. reading and literacy? I know, of course, that the genuine As someone who has spoken in the Commons against answer from the Minister will be yes, but should we not Amazon and others for not living up to their moral therefore widen our support for print books to their obligations to pay tax, it is a change that I understand. digital equivalent? Are the Government willing to engage However, this is not about Amazon or Kobo or any of with the European Commission to hasten the completion the other e-book sellers avoiding tax. VAT on e-books is of its impact study assessment of options to reform EU not paid by the seller; it is paid by us, the consumers. If VAT rules, including those affecting VAT on e-books? the change goes ahead in January, while the Treasury Should the Government not be standing up to Europe sticks to its position of insisting that an e-book is not a and following the examples of France, Germany and book at all but the equivalent of a video game and is Luxembourg by insisting on a substantially lower rate therefore subject to 20% VAT, the industry—the whole of VAT on e-books? This is one area where I would like industry, not just those specifically involved in producing to see a race to the bottom. I want the Government and selling e-books—will suffer, and suffer significantly. parties and my own party competing in the next few The Government argues that their legal advice months leading up to the general election to see who “indicates there is no scope to change the VAT treatment of the can offer the lowest rate of VAT on e-books, because sale of digital book… products under EU law.”—[Official Report, consumers, readers and authors, not politicians, would 14 May 2014; Vol. 580, c. 682W.] emerge the winners. I simply cannot accept that, because Luxembourg and Lastly, and importantly, one activity I use my taxpayer- France have already challenged it. They cut their rates funded iPad for is reading newspapers, and I am a for e-books to 3% and 5.5% respectively in 2012. There subscriber to the digital edition of The Times.Iam is no reason why the UK cannot follow suit. I certainly delighted that, as revenue from journalism is increasingly do not believe that Ministers in this Government, of all scarce, newspapers have found a route to survive in the Governments, are reluctant to pick a fight with the EU 21st century through digital subscriptions, but their Commission. route to survival is similarly under threat. This country Other European Governments have taken on the EU removed taxation from newsprint more than 300 years on this issue. Germany, Poland and Italy are all calling ago—removing what was seen, rightly, as a tax on free for reductions in the rate of VAT on e-books. Will the speech. Now, however, the Treasury is stealthily reimposing UK add its voice to that call? Even assuming that the it by requiring the 20% VAT levy for the proportion of Government stand by their legal advice, which has been every newspaper subscription that is digital. It was not published and publicised, will they add at least their this Government who introduced that, but the previous voice to the calls on the European Commission for change? Government. This Government have merely continued Incidentally, the German coalition Government’s it, and it is wrong. executive board decided in April to cut VAT on audio As a former local newspaper journalist, I want a books to 7% from 19%. The German Ministry of Culture successful future for our local, as well as our national, is also pushing at the EU level for the same 7% VAT rate press. When quality journalism by properly trained and to apply to e-books, in line with the rate for print books professional staff is competing with numerous free sources, in Germany, so the decision, if made, would make as well as so-called citizen journalists—well meaning e-books and print books equal as far as VAT is concerned. amateurs with dubious qualification to write about 309WH VAT on e-books2 JULY 2014 VAT on e-books 310WH

[Mr Tom Harris] economy. E-services are a growing part of our economy, and we expect them to generate significant tax revenues their chosen field of interest—imposing an unnecessary going forward. 20% charge on newspapers is a serious blow to freedom On the specific issue of VAT, I should briefly explain of expression. That argument was first deployed, that, as the hon. Gentleman pointed out himself, it is successfully, 300 years ago. It is no less relevant today. governed by EU law, and that reliefs from VAT are The Minister and her colleagues have an opportunity to strictly limited under EU law. As hon. Members may be on the side of fairness, literacy, opportunity and know, when the UK joined the European Community culture. The question is whether her Treasury colleagues in 1973, we successfully negotiated to keep our existing will allow her to grasp that opportunity. zero rate on items such as children’s clothing, most foods and physical books, newspapers and journals. Most 5pm other member states do not benefit from that derogation. The Economic Secretary to the Treasury (Andrea Leadsom): It is a pleasure to speak under your chairmanship, Mr Harris: I apologise for interrupting, but when the Mr Hood. I congratulate the hon. Member for Glasgow derogation was granted on our accession to the EU in South (Mr Harris) on securing a debate on this very 1973, there was no reference to physical books, because important subject. I am aware that he has asked a e-books did not exist at the time. There was a concession number of questions on the issue recently. As he will be on books, and as that derogation stands, it could be aware from the answers that he has received, I am filling extended to e-books, as e-books come under the definition in for my hon. Friend the Exchequer Secretary to the of being a book. Treasury in Westminster Hall, as he is in the main Chamber leading on the Finance Bill. In his absence, I Andrea Leadsom: Yes, I accept the hon. Gentleman’s will do my best to answer some of the hon. Gentleman’s point, and I will come on to it if he will bear with me. questions. EU VAT law allows member states to implement Of course, no one needs to be an expert on tax to reduced rates of VAT of no less than 5% for certain recognise the importance of books. The hon. Gentleman goods and services, listed in annexe III of the VAT is absolutely right—publishing is an industry in which directive, at the discretion of member states. One of the United Kingdom can boast to have always been, those reliefs relates to the supply of books on all physical and to remain, one of the world’s leaders, be it because means of support, newspapers and periodicals, other of Charles Dickens, Jane Austen or Agatha Christie. I than material wholly or predominantly devoted to understand that Barbara Cartland is one of our most advertising. Although that may sound like it includes lucrative book exports, but I am not personally so e-books, article 98(2) of the VAT directive specifically familiar with her novels. excludes electronically supplied services from the reduced rates in annexe III. That means that the UK charges the Mr Harris: I suppose that at this point we should standard rate of VAT, 20%, on e-books and the zero acknowledge that one of the Minister’s colleagues, the rate of VAT on physical books. hon. Member for Mid Bedfordshire (Nadine Dorries), As hon. Members will be aware, the UK’s e-books is consistently in the top six on the Amazon bestsellers market is a growing one. Therefore, it is not clear that it list for e-books. is in need of a stimulus in the form of a reduced VAT rate. Between 2011 and 2012, e-book sales in the UK Andrea Leadsom: I am sure that my hon. Friend will increased from £138 million to £261 million, so at a time be delighted to have been name-checked. Her sales when the Government are working to tackle the economy’s will no doubt rise dramatically as a result of that problems head-on and deliver a recovery that works for helpful intervention. all, it is not clear that we should offer fiscal support for The Government also recognise the crucial role such a rapidly expanding industry. that reading can play in increasing literacy among our younger generations, which is important to their future Fiona Mactaggart (Slough) (Lab): How many e-books success. I remember that my two sons were five and are currently subject to UK rates of VAT and how three when the first Harry Potter books by J. K. Rowling many are subject to, for example, Luxembourg rates? came out. We used to snuggle up together, and none of us wanted them to go to bed, because we just wanted to Andrea Leadsom: The hon. Lady will forgive me—I do get on to the next bit. There is no doubt about the not have those specific breakdowns to hand, but I will contribution of some of the great British children’s and happily write to her on that point. I apologise for that. adults’ literature. I include C. S. Lewis and some of the other great children’s authors among those who have Mr Harris: I am grateful to the Minister for giving helped to support and sustain literature and pleasure way again. She has shown great patience, and I appreciate in reading among young people and adults. Our it. What she has just said, though, rather misses the new national curriculum, which comes into force this point of my debate. No one is asking the Government September, is clear that all pupils must be encouraged to offer subsidies or favours to the e-book industry. to read widely, both for pleasure and for information. What I am asking is that an impending charge that We absolutely recognise the important role that books consumers in this country are not currently paying not have always played in this country and will continue be levied. She is right to say that the industry is doing to play. well and growing. The problem is that people who buy On the issue of tax, I begin by reassuring the hon. books currently and pay 3% or 5% VAT will from Gentleman that the Government recognise the importance 1 January pay 20%. We are not asking for any kind of of the e-services market in the UK and that Ministers subsidy from the Government; we are asking for the are taking a number of actions to support the digital current situation to continue. 311WH VAT on e-books2 JULY 2014 VAT on e-books 312WH

Andrea Leadsom: Again, I understand entirely the issues in the wider electronic services market, because point of the hon. Gentleman’s debate. The issue is problems of definition could lead to a widening of the specifically that e-books are not counted as zero-rateable relief through legal challenge and industry changes. books from the point of view of the EU directive, so That would put at risk serious amounts of revenue in this is not an optional VAT charge. The EU directive the UK market, which is worth more than £2.5 billion. requires us to treat e-books in that way, because they I turn to the VAT changes that will be introduced in are treated as an electronic service. As the hon. Gentleman 2015. Currently, supplies of services, including electronically said at the start of his remarks, people can change the delivered services such as e-books, are taxed in the font; they can download e-books; they can switch from member states where the supplier is based at the VAT page to page without having to move pieces of paper, rate of that member state. Member states with lower and so on. Therefore, they are deemed to be an electronic VAT rates therefore have a competitive advantage, which service and not the same as a physical book. The point encourages suppliers to locate there and sell to EU that I am making is that our charging VAT on them is consumers, including the UK, at lower VAT rates. From not optional. 1 January, therefore, there will be a place of supply Let me come on to the case of France and Luxembourg, change, which will mean that e-books and other e-services about which the hon. Gentleman spoke, and in particular will be taxed in the member state where the customer the difficult issue of books on Amazon. I am sure that, belongs at the VAT rate of that member state. That is although he would support not paying VAT on e-books, designed to make competition fairer and to remove he recognises that there has been an issue with big distortions. companies locating themselves in other places to take Legal advice obtained by the Government indicates advantage of beneficial tax regimes that no doubt help that there is no scope to change the VAT treatment of their sales. As he pointed out, since 2011, France and the sale of digital books and similar products under EU Luxembourg have levied reduced rates of VAT—7% law. The Commission’s position is clear on the VAT rate and 3% respectively—to bring them in line with their of e-books: e-services attract a standard rate of VAT, VAT rates on physical books. That is creating competitive because they are electronically supplied services. The distortions in relation to economic operators in other UK’s rate is in line with EU law, and there is currently member states, and there has been pressure from the no intention to reduce the rate of VAT for e-books. industry for the UK to reduce its VAT rate on e-books. The European Commission has begun European Court I am sorry to disappoint the hon. Gentleman by my of Justice infraction proceedings against France and reply, but I hope that he will be pleased to know that Luxembourg, and it has formally instructed them to Ministers are focused on actions outside the VAT system apply their standard VAT rates to supplies of e-books. to support the digital economy. In that area, we are If the UK were to reduce the rate of VAT on e-books, it making great efforts to encourage the digital economy. is extremely likely that we, too, would be infracted. I For example, in June 2013 the Government launched an would be interested to know whether the hon. Gentleman information economy strategy, which includes positioning thinks that we should seek to avoid infraction proceedings the UK strongly in the field of e-commerce by, among from the European Court of Justice or embrace them. other things, improving digital skills across the population We could be, unusually, on opposite sides of the argument and creating the infrastructure to support innovation on that point. and growth. Although I am sure that the hon. Gentleman is Mr Harris: I seem to remember being complimentary disappointed by my answer on VAT and e-books, I hope to the Minister when she spoke powerfully in favour of that he and other hon. Members are reassured that the votes for prisoners in a debate on which we took the Government support the sector and will continue to do opposite points of view, and I believe that we are going so and that we are confident that the electronic services to do the same again. I am more than relaxed about the market will continue to grow and generate significant UK being the target of court action by whichever tax revenues. European institution is relevant. I was relaxed about the idea when it came to votes for prisoners—we have to Mr Harris: As there are a couple of minutes left, I keep our position on that—and I see no difference, wonder whether I could be cheeky and get in with frankly, in this case. If the move would be good for the another couple of points. UK industry, we should stand up for that industry against interference by the EU. Mr Jim Hood (in the Chair): Order. The hon. Gentleman was able to intervene, but the Minister has sat down and Andrea Leadsom: I absolutely respect the hon. the hon. Gentleman cannot make another speech. Gentleman’s position. Were we unilaterally to decide to Question put and agreed to. change the VAT rate, we would, no doubt, be subject to ECJ infraction proceedings. The other real issue is that a reduction in the rate of 5.13 pm VAT on e-books would be likely to create border-line Sitting adjourned.

57WS Written Statements2 JULY 2014 Written Statements 58WS

In response to this call for evidence, we want stakeholders Written Statements to advise us on how to ensure that all parts of the sector are ready to deliver against this new ambition. Wednesday 2 July 2014 We are also introducing high-quality new “core maths” qualifications—aimed at the 40% of young people who BUSINESS, INNOVATION AND SKILLS achieveaCorbetter at GCSE but do not take A-level maths. They will give some 200,000 students a year the opportunity to study maths in post-16 education, starting Maths and English (Post-16 Education) in 179 schools and colleges this autumn, before being rolled out nationally in 2015. The Minister for Skills and Enterprise (Matthew The majority of students who do not achieve A* to C Hancock): I am today setting out the Government’s GCSE English or maths at 16 go on to further education. plans for strengthening English and maths in post-16 As part of our plans to support these changes, we are education, increasing uptake of reformed GCSEs in publishing the FE work force strategy. This will set out these subjects. the steps we are taking to improve the quantity and quality of teachers to support the delivery of maths and A total of 40% of pupils do not get GCSE grades A* English; to increase business engagement in FE; to to C in English and maths by age 16. Worse still, 90% of improve the quality of leadership and governance; and those who do not reach this basic standard by 16 do not to enhance the use and effectiveness of technology to achieve it by age 19. From August 2014 students who support teaching and learning. have not achieved a good pass in English and/or maths GCSE by age 16 must continue to work towards achieving We are announcing details of a new “golden hello” these qualifications or an approved interim qualification scheme for maths teachers recruited after April 2014, as as a “stepping stone” towards GCSE as a condition of part of a £30 million package to raise the quality of student places being funded. teaching in maths and English in FE. This includes bursaries to attract more graduate teachers and programmes Reformed GCSEs in English and maths will be available to enhance the skills of existing maths and English for first teaching in schools from September 2015 with teachers so they can teach GCSE. The Education and the first examinations being sat in summer 2017. These Training Foundation will play a lead role in implementing new GCSEs will both be more stretching at the top, and this strategy. This extra support for FE sits alongside more practical than existing GCSEs. incentives we have already announced to recruit high-quality These new GCSEs will then be introduced into post-16 maths teachers into schools, alongside significant investment education in phases between 2015 and 2020. in maths training and support for existing teachers. With effect from August 2015, we will amend the From the beginning of academic year 2015-16, providers funding condition, so full-time students aged 16 to 19 who teach English and maths GCSE to adults aged 19 with prior attainment of grade D in English and/or and over outside apprenticeships will receive a higher maths will take GCSE, rather than any other qualification rate of funding through the adult skills budget. In line in these subjects. with the policy outlined above, the Government will We will further revise the funding conditions relating cease to fund level 2 qualifications and credit framework to the teaching of the new GCSEs in English and maths (QCF) English and maths qualifications from the same to students aged 16 to 19 enrolling for full-time courses point, so that adults studying at level 2 will either take from August 2017. The final requirements will be set functional skills or GCSE. nearer the time, informed by the outcomes of Ofqual’s These changes build on wider reforms under this consultation on grading standards for the reformed Government to put academic and vocational education GCSEs. on an equal footing. We are reforming apprenticeships For many, reaching GCSE standard requires progressive to put employers in the driving seat and make stepping stones, for example through functional skills apprenticeships more rigorous and responsive to the qualifications, and a curriculum that suits their needs. needs of business. Our new technical awards are as We will ensure that such stepping stones are available to rigorous and demanding as the new reformed GCSEs support students en route to GCSE and that these are and will give 14 to 16-year-olds real-life skills in practical fit for purpose. subjects. TechLevels for those aged 16 to 19 must be GCSE is also a valuable qualification for adults and signed off by employers. Technical awards and TechLevels the reformed GCSEs will assess many of the skills that comprise a clear set of high-quality options for students employers tell the Government they need. wishing to follow a vocational route, and so help ensure Our ambition is that, by 2020, adults aged 19 and all young people better get the chance to achieve their over and apprentices of all ages studying English and potential. maths will be working towards achievement of the reformed GCSEs, taking stepping-stone qualifications TREASURY if necessary. Functional skills will continue to be part of apprenticeship completion requirements but we will work with apprenticeship providers to enable them to Double Taxation Agreement (Tajikistan) offer GCSEs to their apprentices. We will launch a call for evidence, so that we can The Exchequer Secretary to the Treasury (Mr David draw in advice from a wide range of stakeholders on Gauke): A double taxation agreement and protocol how to reach this goal for young people, adults and in with Tajikistan was signed on 1 July 2014. The text of apprenticeships, and how far the new GCSEs meet the the agreement and protocol has been deposited in functional skill requirements of all adults and apprentices. the Libraries of both Houses and made available on 59WS Written Statements2 JULY 2014 Written Statements 60WS

HM Revenue and Customs’ website. The text will be Nagorno-Karabakh we have funded a series of projects scheduled to a draft Order in Council and laid before designed to strengthen the likelihood of a peaceful the House of Commons in due course. resolution of the conflict by working with civil society in Armenia, Azerbaijan and Nagorno-Karabakh. We strongly support the work of the OSCE Minsk FOREIGN AND COMMONWEALTH OFFICE group to find a peaceful and lasting resolution to the Nagorno-Karabakh conflict. It is for this reason that the UK continues to adhere to the embargo on deliveries Arms Embargo (Azerbaijan and Armenia) of military list equipment to forces engaged in combat in the Nagorno-Karabakh area in accordance with the precursor to the OSCE, the conference on Security and The Minister for Europe (Mr David Lidington): The Co-operation in Europe’s declaration of 1992. UK regularly reviews export policy to embargoed destinations in the light of our international obligations and the situation on the ground, to ensure that JUSTICE implementation continues to be legally robust, diligent and consistent with the terms of the sanctions in place. Local Government Pension Scheme Following a thorough review of their procedures for processing export and trade licence applications to Armenia and Azerbaijan, the Government will continue to apply The Parliamentary Under-Secretary of State for Justice the Organisation for Security and Co-operation in Europe (Jeremy Wright): Tameside metropolitan borough council, (OSCE) embargo to the supply of military list equipment the operator of the Greater Manchester pension fund, to military, police and security forces and related has asked that we provide a guarantee that the Department governmental entities, where this equipment could be will meet employer or employee pension contributions used in the Nagorno-Karabakh region, or on the land for employees that were former probation trust employees border between Azerbaijan and Armenia. For the supply who have been transferred or are recruited to community of military list equipment which does not have the rehabilitation companies while in ownership of the technical capacity to be used or modified for use in the Secretary of State. The guarantee will be limited to Nagorno-Karabakh region or on the land border between where a community rehabilitation company becomes Armenia and Azerbaijan, the Government will consider insolvent. I can inform the House today that we will licence applications in line with the consolidated EU provide such a guarantee in respect of each community and national export licensing criteria. Supplies of military rehabilitation company and a parliamentary minute, list equipment to other end-users; such as, humanitarian, which sets out the detail of the guarantee, has been laid peacekeeping, research or media organisations, will not in both Houses. be considered subject to the embargo, unless there is a The provision of the guarantee ensures continued clear risk of diversion to the armed forces, police or pension provision in the local government pension scheme security forces of either state. for staff following the sale of shares in community All export and trade licence applications for Armenia rehabilitation companies as part of a public procurement and Azerbaijan as elsewhere will be assessed on a exercise. case-by-case basis against the Consolidated EU and The provision of the guarantee is considered to be National Arms Export Licensing Criteria and we will value for money for the taxpayer as it will avoid community not issue a licence where to do so would be inconsistent rehabilitation companies having to obtain appropriate with the criteria. security in relation to their pension obligations which The south Caucasus is an area of strategic importance would have been funded by the Secretary of State. to the UK. In partnership with Armenia and Azerbaijan Further, in some cases the inability to obtain the appropriate the UK continues to work for peace, security and mutual security may have prevented some companies from understanding in the region. In the 2012-13 financial participating in the tender process. year, the UK funded £1.245 million worth of projects to I have placed copies of the associated documents in promote peace between Azerbaijan and Armenia. On the Libraries of both Houses. 5P Petitions2 JULY 2014 Petitions 6P

if requested, provide technical assistance and training Petitions to the Indian plant health authorities. Fera has sent a draft training programme to the IHC and is awaiting Wednesday 2 July 2014 confirmation of acceptance as well as details of participants. The ban followed a long series of exchanges between the European Commission and the Indian authorities OBSERVATIONS because of frequent findings of harmful pests in these products over several years. An increase in interceptions ENVIRONMENT, FOOD AND RURAL AFFAIRS of harmful pests on produce from India prompted the Commission to ask its audit team, the Food and Veterinary EU Ban on Import of Indian Alphonso Mangoes Office (FVO), to investigate. In 2010 and 2013, these The Petition of residents of Leicester East, audits revealed major shortcomings in India’s phytosanitary export certification system. Despite assurances and action Declares that the EU ban on the importation of taken by India, the number of interceptions did not Alphonso mangoes from India is unjust, that petitioners reduce; in 2013 there were more EU interceptions of are anxious about the hugely detrimental impact that harmful organisms from India than any other third this ban will have on the livelihoods of millions of country. Whilst the ban is an emergency action rather people in, and on the economies of, both the UK and than a long-planned measure, it comes after the signals India, and further declares that there has been a significant sent by the negative audit reports in 2010 and 2013 gave lack of consultation with both the Parliament and the notice to India to address the major shortcomings affected people. identified. The Petitioners therefore request that the House of Plant pests and diseases such as those intercepted Commons urges the Department for the Environment, from India in recent years can cause serious damage. Food and Rural Affairs do everything possible to reverse The UK’s glasshouse crops—an industry worth over this ban, to develop an action plan on how best to £300 million per annum—are at risk from such pests, progress in this matter and to better communicate with which were found in over 200 consignments of fruits the people affected. and vegetables from India imported into the EU in And the Petitioners remain, etc.—[Presented by Keith 2013. Protecting plant health is one of Defra’s highest Vaz, Official Report, 7 May 2014; Vol. 580, c. 245.] priorities and addressing the threat of plant pests and [P001348] diseases and the damage they cause to the UK’s economy Observations from the Secretary of State for Environment, and environment is a key objective. Food and Rural Affairs: The FVO has arranged a further audit of India’s The Government thank the petitioners for raising export systems in September 2014. If this concludes this issue in the House of Commons. that the necessary measures have been put in place to The temporary ban on the importation of five plant meet EU requirements, the UK will argue for the ban to products, including mangoes, from India was introduced be lifted before the current end-date of December 2015. on 26 April. This will be reviewed in December 2015. This would require a proposal from the European However, an earlier review of the ban is possible but Commission and the agreement of member states. this can only be achieved if the Indian Government can The Government hope that imports will resume as satisfy itself and the European Commission that exporters quickly as possible and will continue to work with the are meeting the EU’s import requirements. Although European Commission and other Member States to the imports in question are not significant (e.g. the facilitate this, subject to India’s exporters and Government mangoes account for c 8.5% of mango imports into the showing that the necessary standards are being achieved. UK), the Government recognise that they are of economic and cultural significance to the Asian community in the UK. Defra is therefore liaising with the Indian High WORK AND PENSIONS Commission on what support the UK can offer to India UK Hunger and the use of Food Banks to help it ensure compliance with the EU requirements. The Petition of residents of the UK, Defra has taken extensive actions on this issue. Before Declares that there is an online Petition requesting the ban was introduced on 26 April, when it was first that Parliament has a debate on UK hunger and the rise mentioned as an option Defra took immediate steps to in food bank use, which has received over 130,000 discuss the issue with the main trade association, the signatures. Fresh Produce Consortium (FPC). Since the ban, Defra’s The Petitioners therefore request that the House of Secretary of State has had discussions with the Indian Commons urges the Government to hold a debate on High Commissioner and officials have also met with the UK hunger and the rise in food bank use as soon as National Asian Business Association (NABA). In May, possible. Lord de Mauley, Defra’s Minister with responsibility for plant health, chaired a roundtable meeting which And the Petitioners remain, etc.—[Presented by Rachel included the NABA and FPC, and representatives from Reeves, Official Report, 9 December 2013; Vol. 572, the Indian High Commission (IHC). A follow up meeting c. 1P.] has been arranged for July. [P001310] At the roundtable meeting, Lord de Mauley reaffirmed Observations from the Secretary of State for Work and the Secretary of State’s commitment to facilitating Pensions: communication between the Indian Government and A Parliamentary debate on food banks and food hunger the European Commission. He also offered that Defra’s was held after the date of this petition on Wednesday Food and Environment Research Agency (Fera) could, 18 December 2013. 7P Petitions2 JULY 2014 Petitions 8P

The benefits system supports millions of people who According to the Survey the proportion of income are on low incomes or unemployed and provides further spent on food by the lowest 20% of households, by support such as hardship payments, short term benefit income, has remained relatively static over the last advances and budgeting loans. While it is not the 10 years and was 16.6% in 2012. Government’s role to control the price of food, the impact of food price inflation is a real concern for this We also work internationally to promote transparent, Government. open global markets and a competitive domestic market Defra monitors food prices and their impact on that helps producers and retailers offer the best prices to household expenditure through the Family Food Survey. consumers. 615W Written Answers2 JULY 2014 Written Answers 616W Written Answers to Mr Alistair Carmichael: No.

Questions CULTURE, MEDIA AND SPORT

Wednesday 2 July 2014 Cemeteries

Mr Amess: To ask the Secretary of State for Culture, Media and Sport what recent representations he has SCOTLAND received on the establishment of a national cemetery; and if he will make a statement. [202027] Postal Services: Competition Mr Vaizey: None. DCMS has no responsibility for 8. Mr Weir: To ask the Secretary of State for Scotland cemeteries. what assessment he has made of the effect on postal services in Scotland of competition between providers. Golf: Tourism [904535] Mark Menzies: To ask the Secretary of State for Mr Alistair Carmichael: Ofcom, as the UK’s independent Culture, Media and Sport what steps he is taking to regulator for postal services, has a duty to monitor any promote golfing holidays in the (a) North West and impacts of market competition on the provision of the (b) UK. [202446] universal service in Scotland. Ofcom has the power to intervene if the service is deemed to be at risk. Mrs Grant: Golfing holidays in both the North West and the rest of the UK are promoted by VisitEngland Passport Applications and VisitBritain. Liverpool is using £62,500 from VisitEngland’s Growing Tourism Locally programme, 9. Gregg McClymont: To ask the Secretary of State funded through the Regional Growth fund, to promote for Scotland if he will take steps to provide compensation ’England’s Golf Coast’ in the golfing press, using the for people in Scotland who have lost out financially as a staging of the Open Championship at Royal Liverpool to encourage visits to the region. VisitBritain’s consumer result of delayed passport applications. [904536] website highlights golf courses across the whole of the David Mundell: Her Majesty’s Passport Office is dealing UK including the Golf Coast, which also features in with the highest demand for passports in 12 years and their Sport is GREAT pillar guide. In advance of the the overwhelming majority of people continue to receive Ryder Cup in Gleneagles, VisitBritain has organised their new passports within three or four weeks. But we familiarisation trips taking American and European recognise that a number of people are having to wait journalists to the course. Previous experience tells us too long. that hosting the Ryder Cup is worth tens of millions of pounds to the UK and to the local economy. On 12 June, the Secretary of State for the Home Department, my right hon. Friend the Member for Lotteries Maidenhead (Mrs May), announced a series of additional measures to ensure people and families receive their Tracey Crouch: To ask the Secretary of State for passports in good time for their summer holidays. Culture, Media and Sport whether his Department’s The Government apologise to anybody who has been proposed constitution on society lotteries, which was unable to travel because of a delay in processing their first announced in December 2012, will consider ways passport application and we recognise people’s to help the sector maximise returns to good causes. understandable concerns. Her Majesty’s Passport Office [202398] staff are doing everything possible to put things right. Mrs Grant: Decisions on what elements will be considered 12. Sandra Osborne: To ask the Secretary of State for in the consultation on society lotteries have yet to be Scotland if he will take steps to provide compensation taken. We have commissioned advice from the Gambling for people in Scotland who have lost out financially as Commission which will inform us of the scope and a result of delayed passport applications. [904539] content of the consultation.

David Mundell: I refer the hon. Member to the answer Tracey Crouch: To ask the Secretary of State for I gave earlier to the hon. Member for Cumbernauld, Culture, Media and Sport what information his Department Kilsyth and Kirkintilloch East (Gregg McClymont). holds on how much society lotteries have generated for good causes in each of the last six years. [202399] General Election Franchise Mrs Grant: Information about how much society 10. Mr Hollobone: To ask the Secretary of State for lotteries generate for good causes is collected by the Scotland if he will bring forward legislative proposals Gambling Commission. The most up to date information to provide that, in the event of a vote for Scottish can be found in the Gambling Commission’s industry independence in the forthcoming referendum, residents statistics, which are at: of Scotland will not be entitled to vote in the 2015 UK http://www.gamblingcommission.gov.uk/ general election. [904537] gambling_data__analysis/statistics/industry_statistics-1.aspx 617W Written Answers2 JULY 2014 Written Answers 618W

Press to charities and faith groups, and can be used for works involving war memorials. The scheme will be available until 31 March 2015. Bill Wiggin: To ask the Secretary of State for Culture, Media and Sport pursuant to the answer of 24 June Spend (£) 2014, Official Report, column 125W, on the Press, when he expects a date for meeting victims of press abuse and 2013-14 529,000 their representatives to be finalised. [202966] 2012-13 269,000 2011-12 334,000 Mr Vaizey: DCMS, in line with Government procedure, publishes details of Ministers’ meetings with external The Government has announced this week that it will organisations, on a quarterly basis. When published, give the War Memorials Trust up to £3 million over the details can be found at: First World War centenary period to boost the funds https://www.gov.uk/government/ available to local communities for the repair and publications?departments%5B%5D=department-for-culture- conservation of war memorials. English Heritage, Imperial media-sport&publication_type=transparency-data War Museums and Civic Voice will together be given £1.5 million over the same period to deliver better War Memorials protection through Listing, a greater pool of specialist skills, a national register of war memorials, and a network of trained volunteers. Mr Amess: To ask the Secretary of State for Culture, Media and Sport what funding his Department has allocated to the maintenance of war memorials in each of the next three years; what steps it takes to ensure that war memorials are maintained to a high standard; NORTHERN IRELAND and if he will make a statement. [202184] Business Mr Vaizey: The DCMS-run Memorial Grant Scheme has a budget of £543,000 for this financial year. Grants Mr Ivan Lewis: To ask the Secretary of State for are available to charities and faith groups, and can be Northern Ireland when she last met the (a) CEO and used to repair and maintain war memorials. The (b) chair of the British Business Bank to discuss how Government has today announced that it will give the that organisation can more effectively support Northern War Memorials Trust up to £3 million over the first Ireland businesses; and if she will make a statement. world war centenary period to boost the funds available [202614] to local communities for the repair and conservation of war memorials. English Heritage, Imperial War Museums Mrs Villiers: I regularly hold discussions with and Civic Voice will together be given £1.5 million over representatives of the British Business Bank in my role the same period to deliver better protection through as chair of the Joint Ministerial Task Force on banking Listing, a greater pool of specialist skills, a national and access to finance. register of war memorials and a network of trained The taskforce has discussed how Northern Ireland volunteers. business benefits from the British Business Bank schemes and will continue to explore how these measures can be Mr Amess: To ask the Secretary of State for Culture, delivered in the most effective way in Northern Ireland. Media and Sport what information his Department holds on the (a) number and (b) location of Corporation Tax memorials to commemorate the war dead in the (i) first world war and (ii) second world war; and if he will make a statement. [202192] Mr Ivan Lewis: To ask the Secretary of State for Northern Ireland when she last discussed the potential devolution of corporation tax to Northern Ireland Mr Vaizey: DCMS holds no records on the number with the Chancellor of the Exchequer. [202255] or location of memorials to commemorate the war dead. Information about war memorials throughout the UK is held by both the Imperial War Museum and Mrs Villiers: I regularly hold discussions with Treasury the War Memorials Trust. The Imperial War Museum Ministers, including the Chancellor of the Exchequer, is working with its partners to make this information my right hon. Friend the Member for Tatton (Mr Osborne), more easily accessible to the public. on a wide range of economic issues including the potential devolution of corporation tax powers to Northern Ireland. Mr Amess: To ask the Secretary of State for Culture, As set out in “Building a Prosperous and United Media and Sport what steps his Department has (a) Community”, the Government will make a final decision taken in each of the last three years and (b) plans to on the devolution of corporation tax powers no later take in the next two years to ensure that war memorials than the autumn statement 2014. are properly maintained and kept in a good state of repair; and if he will make a statement. [202338] Northern Ireland Government

Mrs Grant: DCMS has spent the following amounts Ms Ritchie: To ask the Secretary of State for Northern maintaining national memorials in each of the last Ireland what role she will play in the forthcoming talks three years. The Memorials Grant Scheme is available between party leaders in Northern Ireland. [202689] 619W Written Answers2 JULY 2014 Written Answers 620W

Mrs Villiers: I welcome the intensification of the Mr Hurd: The information requested falls within the party leaders’ talks. The Government will continue to responsibility of the UK Statistics Authority. I have support the parties in their efforts wherever possible. It asked the authority to reply. is essential that early progress is made with every effort Letter from Glen Watson, dated June 2014: to secure an agreement as quickly as possible. As Director General for the Office for National Statistics (ONS), I have been asked to reply to your Parliamentary Question Northern Ireland Human Rights Commission asking for the level of crime in (a) Harrogate and Knaresborough constituency, (b) North Yorkshire, and (c) Yorkshire and the Naomi Long: To ask the Secretary of State for Northern Humber in each of the last five years (202647). Ireland if she will commission an independent assessment Police recorded crime figures are provided for the last five of the effect of changes to funding levels of the Northern calendar years for the Harrogate local authority area, the North Yorkshire police force area, and for Yorkshire and Humber. Ireland Human Rights Commission and its compliance Crime data are not available at parliamentary constituency level, with the Paris Principles. [202284] so data for the Harrogate local authority area is provided. These figures exclude fraud which is no longer recorded by local forces Mrs Villiers: I refer the hon. Member to the answer I but reported centrally by Action Fraud. gave to her question of 26 June 2014, Official Report, column 260W. My officials will study the Commission’s 2009 2010 2011 2012 2013 impact statement closely and work with it to ensure it is Harrogate 7,093 6,746 7,095 5,789 5,867 able to continue to meet its statutory and international LA obligations. North 43,903 40,625 39,345 35,241 34,472 Yorkshire Terrorism PFA Yorkshire 443,707 404,564 400,160 359,501 350,419 Ian Paisley: To ask the Secretary of State for and the Humber Northern Ireland how many people are in prisons in Note: Northern Ireland for terrorist-related offences; what Please note that to allow consistency across years, fraud offences the age profile is of those prisoners; what assessment have been excluded. she has made of that age profile; and if she will make a These data have been published by the ONS and have been statement. [202557] extracted from the ‘Recorded crime data at local authority level from 2002/03’, and ‘Recorded crime data at police force area level Mrs Villiers: This is a devolved matter within the from 2002/03’ files, available here: remit of the Northern Ireland Department of Justice http://ons.gov.uk/ons/publications/re-reference- for Northern Ireland. tables.html?edition=tcm%3A77-287894 The Crime Survey for England and Wales provides the most reliable measure of crime experienced by the population resident in households, as it has used a consistent methodology over time and is unaffected by changes in police recording practices or CABINET OFFICE public reporting. However, the sample is not large enough to give robust estimates at the sub-national level. Analysis by ONS Civil Service showed that estimates of comparable crimes from the survey were 47% higher than in the comparable count of police recorded crime. Philip Davies: To ask the Minister for the Cabinet Following an assessment of ONS crime statistics carried out Office (1) how many grades there are in the Civil Service; by the UK Statistics Authority, data on police recorded crime [202819] were found not to meet the required standards and have been (2) if he will take steps to reduce the number of de-designated as National Statistics. Police recorded crime remains badged as official statistics, and is the preferred source of subnational grades in the Civil Service. [202923] crime statistics. Mr Maude: Arrangements for setting grades below the senior civil service (SCS) are delegated to Departments Electronic Government and not held centrally. For the SCS, grading arrangements are determined centrally by the Cabinet Office. There Mark Menzies: To ask the Minister for the Cabinet are four main grades in the SCS. Office what digital-by-default Government services will To deliver a flatter structure in the civil service, be available by next year; and what support he plans to Departments are, as set out in the Civil Service Reform make available to older people and those who are not Plan, reviewing their structures as part of ongoing yet online. [202448] change programmes and departmental improvement plans. Mr Hurd: By March 2015, 25 major Government services will be redesigned and rebuilt as digital-by-default Crime: Yorkshire and the Humber making them simpler, clearer and faster to use. Full details are listed on: Andrew Jones: To ask the Minister for the Cabinet www.gov.uk/transformation Office what assessment his Department has made of This Government’s approach is digital-by-default but trends in the level of crime in (a) Harrogate and not compulsion. We want to help get more people Knaresborough constituency, (b) North Yorkshire and online, through our Digital Inclusion programme, but (c) Yorkshire and the Humber in each of the last five for those who cannot or will not we will always provide years. [202647] assistance, whenever they need it. 621W Written Answers2 JULY 2014 Written Answers 622W

Employment: Discrimination Civil Service Resourcing do not use Pearson VUE and Pearson Professional Centres. Mr Denham: To ask the Minister for the Cabinet Office (1) which organisations funded by his Department Private Sector: Pay restrict employment to members of particular faiths; [202939] Gregg McClymont: To ask the Minister for the Cabinet (2) what his Department’s policy is on funding Office how many private sector employees aged over 21 organisations that restrict their employment to members and under the state pension age have gross earnings of particular faiths. [202940] between £111 and £192 per week in each constituent part and region of the UK. [202586] Mr Maude: All organisations funded by the Cabinet Office have to adhere to relevant employment legislation Mr Hurd: The information requested falls within the including the Equal Opportunities Act and Sex responsibility of the UK Statistics Authority. I have Discrimination Act. asked the authority to reply. Letter from Glen Watson, dated July 2014: Jobseeker’s Allowance As Director General for the Office for National Statistics, I have been asked to reply to your recent Parliamentary Question asking the Minister for the Cabinet Office, how many private Stephen Timms: To ask the Minister for the Cabinet sector employees aged over 21 and under the state pension age Office how many people currently claiming jobseeker’s have gross earnings between £111 and £192 per week in each allowance are aged (a) 16, (b) 17, (c) 18, (d) 19, (e) constituent part and region of the UK. (202586) 20, (f) 21, (g) 22, (h) 23, (i) 24 and (j) 25 years. The Annual Survey of Hours and Earnings (ASHE), carried [202617] out in April each year, is the most comprehensive source of earnings information in the United Kingdom. It is possible to use Mr Hurd: The information requested falls within the ASHE to estimate the proportion of employees meeting these responsibility of the UK Statistics Authority. I have criteria, although these figures are not currently available. We asked the authority to reply. expect to be able to provide them on 8 July 2014. I will write to you when this information is available. Letter from Glen Watson, dated June 2014: As Director General for the Office for National Statistics (ONS), I have been asked to reply to your recent Parliamentary Question asking the Secretary of State for Work and Pensions ENERGY AND CLIMATE CHANGE how many people currently claiming jobseeker’s allowance are aged (a) 16, (b) 17, (c) 18, (d) 19, (e) 20, (f) 21, (g) 22, (h) 23, (i) 24 and (j) 25 years. (202617) Aviation: Fuels The Office for National Statistics (ONS) compiles the number of claimants of Jobseeker’s Allowance (JSA) from the JobcentrePlus John Robertson: To ask the Secretary of State for Administrative system. Unfortunately some of the requested age Energy and Climate Change (1) what estimate he has categories are not available individually. made of the duration in days that airports in the south As an alternative, Table 1 shows the number of people claiming east of England would be able to run at full aviation Jobseeker’s Allowance for those aged (a) under 17 years, (b) 17 fuel demand capacity in the event of an emergency on years, (c) 18 years, (d) 19 years, (e) 20 to 24 years and (f) 25 to 29 the scale of the Buncefield explosion in 2005; [202806] years. (2) what estimate he has made of the duration in National and local area estimates for many labour market statistics, including employment, unemployment and claimant days that the South East of England fuel demand count are available on the NOMIS website at: could run at full capacity based on current stock levels www.nomisweb.co.uk of (a) refined petrol and (b) diesel products in the event of an emergency on the scale of the Buncefield Table 1: Number of people claiming jobseeker’s allowance by age explosion in 2005. [202805] May 2014—Level 11

Aged under 17 years 195 Michael Fallon: UK supplies of aviation fuels are Aged 17 years 1,130 resilient to most hazards and additional protections Aged 18 years 25,685 have been put in place since the incident at Buncefield in Aged 19 years 39,165 2005. Any impact upon supplies would depend entirely on the nature of any incident. Aged 20 to 24 years 193,875 Aged 25 to 29 years 160,250 Climate Change 1 Data rounded to the nearest 5. Source: Jobcentre Plus Administrative System Mr Gregory Campbell: To ask the Secretary of State for Energy and Climate Change when he expects the Pearson VUE Intergovernmental Panel on Climate Change to publish its Fifth Assessment Report. [202659] Mr Jim Cunningham: To ask the Minister for the Cabinet Office which Government departments use (a) Gregory Barker: The Fifth Assessment Report by the Pearson VUE and (b) Pearson Professional Centres Intergovernmental Panel on Climate Change (IPCC) for delivering tests; and if he will provide details of comprises contributions from three Working Groups each such use. [202965] and a Synthesis Report. The Working Group (WG) reports on the science (WGI), impacts, adaptation and Mr Maude: This information is not held centrally. vulnerability (WGII) and mitigation of climate change 623W Written Answers2 JULY 2014 Written Answers 624W

(WGIII) were published in September 2013, March John Robertson: To ask the Secretary of State for 2014 and April 2014, respectively. Copies of these reports Energy and Climate Change what steps his Department are available at: has taken to ensure equality of access to the UKOP, https://www.ipcc.ch/report/ar5/. GPSS and MLP UK pipeline systems. [202802] The Synthesis Report is due to be completed and published at the end of the 40th session of the IPCC, Michael Fallon: Both the UKOP and MLP pipeline 27-31 October 2014, in Copenhagen. This will complete systems, are privately owned and operated and commercial the publication of the entire Fifth Assessment Report. decisions on access are taken by the companies concerned. The Pipelines Act 1962 contains provisions for owners/ operators to offer third party access and for any spare Energy: Prices capacity to be made available to anyone who wishes to apply for it. Dan Byles: To ask the Secretary of State for Energy The GPSS is a Government owned pipeline operated and Climate Change with reference to the answer of by the Oil and Pipelines Agency (OPA), a public corporation 14 May 2014, Official Report, column 595W, on sponsored by the Ministry of Defence. The OPA lets electricity, what assessment he has made of whether the commercial contracts on a similar basis to operators of ability of auctions to drive value for money is private pipelines provided these are consistent with dependent on market plurality and competition; and if Defence requirements. Access to the GPSS may require he will make it a formal objective of his Department to the agreement of private companies which control ingress ensure that independent generators are able to compete points, egress points or other pipelines connected to the in Contracts for Difference auctions on an equal network. footing. [202195] Following the recent cross-government review of the role of both the UK refining and import sectors in UK, Michael Fallon: The secondary legislation for the and in recognition of pipeline access being cited as an Electricity Market Reform programme contains provisions issue by some stakeholders, the new independently chaired to move straight to allocation rounds, with competitive Midstream Oil Government and Industry Task Force auctions setting the price where the demand for CfDs will take forward further work on this issue. exceeds the available budget. DECC analysis shows that the pipeline of projects is Renewable Energy: Heating strong and can deliver a competitive outcome, whilst the administrative strike price sets a cap to protect Graham Stringer: To ask the Secretary of State for consumers. Energy and Climate Change if he will provide information More generally, the auction has been designed to on the performance of those heat pumps which have encourage participation, and we are introducing the been installed in domestic premises on a trial basis. offtaker of last resort (OLR) to support independent [202960] renewable generators by providing them with a guaranteed route to market and improving their ability to raise Gregory Barker: In January this year, we published a project finance. preliminary report on the renewable heat premium payment DECC officials have worked closely with developers (RHPP) heat pump metering programme. This is available and other stakeholders on these proposals, and the at: approach to implementing the OLR is currently being https://www.gov.uk/government/uploads/system/uploads/ consulted on. attachment_data/file/276612/ Preliminary_Report_on_the_RHPP_metering_programme_ 2014-01-31.pdf. Oil This report, presents data from more than 400 heat pumps installed in domestic properties on a trial basis. John Robertson: To ask the Secretary of State for Energy and Climate Change what mechanisms his Trade Unions Department has put in place to monitor the amount of available capacity in the UKOP, GPSS and MLP UK Mr Nicholas Brown: To ask the Secretary of State for pipeline systems. [202801] Energy and Climate Change for what reasons he decided against change following his review into his Michael Fallon: Both the UKOP and MLP pipeline Department’s check-off system for employees’ trade systems are privately owned and operated. Currently union subscriptions. [202858] there are no statutory provisions that require private pipeline owners and operators to make available commercial Gregory Barker: The Secretary of State for Energy information on spare capacity. and Climate Change, the right hon. Member for Kingston The GPSS is a Government owned pipeline and and Surbiton (Mr Davey), did not share the views of DECC is able to obtain information regarding available the Minister for the Cabinet Office and Paymaster capacity on request. General, my right hon. Friend the Member for Horsham Following the recent cross- government review of the (Mr Maude), on this issue. role of both the UK refining and import sectors in UK, He also noted advice from the Department that the and in recognition of pipe-line access being cited as an Department is charged a fixed cost for payroll services issue by some stakeholders, the new independently chaired based on the number of employees, so there would be Midstream Oil Government and Industry Task Force no immediate cost saving to the taxpayer in removing will take forward further work on this issue. the check-off agreement. 625W Written Answers2 JULY 2014 Written Answers 626W

FOREIGN AND COMMONWEALTH OFFICE St Lucia

Bahrain Priti Patel: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will take steps to Katy Clark: To ask the Secretary of State for Foreign ensure that the Gloria Greenwood murder and trial of and Commonwealth Affairs if he will make representations the suspects is discussed during any future visit to the to the government of Bahrain about the death of Abdulaziz UK by government ministers from St Lucia. [202947] al-Abbar. [202558] Mark Simmonds: Consular officials remain in regular Hugh Robertson: We are saddened to hear about the contact with the St Lucian authorities about the death of Abdulaziz Al-Abbar. We encourage the authorities investigation into Mrs Greenwood’s death. We will continue to carry out a timely and thorough independent to use all appropriate opportunities to press upon them investigation. the importance we place on bringing this case to trial, including ministerial visits to the UK and to St Lucia. Indonesia Consular officials are keeping Mrs Greenwood’s family updated and continue to provide full consular assistance. Mr Nicholas Brown: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent Tajikistan representations he has made to the Government of Indonesia on human rights in West Papua. [202599] Anas Sarwar: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will raise respect for Mr Swire: In January 2014, the Secretary of State for human rights, the rule of law and the case of Mr Foreign and Commonwealth Affairs, my right hon. Alexander Sodiqov with Tajik Foreign Minister Sirojidin Friend the Member for Richmond (Yorks) (Mr Hague), Aslov during his upcoming visit to the UK. [202904] raised the situation in Papua and West Papua with the Indonesian Foreign Minister, Marty Natalegewa who Mr Lidington: We discuss the importance of respect made clear the determination of the Indonesian for human rights and adherence to the rule of law with Government to improve the human rights situation the Government of Tajikistan at both official and ministerial there. level whenever opportunity allows. Most recently, in June 2014, our ambassador to Jakarta We remain deeply concerned by the continuing detention raised Papua with Indonesia’s Co-ordinating Minister in Tajikistan of Alexander Sodiqov, an academic researcher for Legal, Political and Security Affairs, who reconfirmed working for the University of Exeter. Senior Minister of his Government’s intention to increase autonomy for State Baroness Warsi discussed a number of issues, the region. Our embassy staff also visit the provinces including human rights, the rule of law and the case of regularly, discussing our concerns with Government Mr Sodiqov, when she met Foreign Minister Aslov on officials, civil society leaders and human rights defenders. 1July. We remain concerned about reports of violence and Tony Blair human rights abuses, including limitations on free speech and limitations on access to the region by international Mr Andrew Turner: To ask the Secretary of State for non-governmental organisations, foreign journalists and Foreign and Commonwealth Affairs by what process diplomats. Tony Blair was appointed to the post of Middle East Saudi Arabia peace envoy; and who approved that appointment. [202942] Katy Clark: To ask the Secretary of State for Foreign and Commonwealth Affairs whether the UK Embassy Hugh Robertson: Tony Blair was appointed by the in Saudi Arabia provides support and protection to Quartet (US, EU, UN and Russia) as the representative human rights activists in that country. [202665] of the Middle East Quartet in June 2007. The Quartet principals (Russian Foreign Minister Sergei Lavrov, US Hugh Robertson: Our policy on human rights defenders Secretary of State Condoleezza Rice, UN Secretary-General is guided by the UN Declaration on Human Rights Ban Ki-moon, High Representative for European Foreign Defenders (1998) and the EU Guidelines. Embassy and Security Policy Javier Solana) approved his officials have regular contact with human rights defenders. appointment. It is, however, often the view of the defenders that involvement with foreign representatives and organisations can make their task of pressing for reform more difficult. TRANSPORT Nevertheless, we work to align our priorities with theirs and continue to press for reform. First TransPennine Express and Northern Rail

Katy Clark: To ask the Secretary of State for Foreign Alex Cunningham: To ask the Secretary of State for and Commonwealth Affairs if he will raise the case of Transport what estimate he has made of the potential Fowzan al-Harbi with the Saudi Arabian government. increase in passenger numbers on (a) the TransPennine [202746] Express and (b) Northern Rail lines during the life of the next franchises starting in February 2016. [202293] Hugh Robertson: We are aware of the case of Fowzan al-Harbi. We maintain a regular dialogue with the Stephen Hammond: Between 2002 and 2012 rail Saudi authorities on a range of human rights issues, demand in the north of England grew by a total of including of human rights defenders. 66% and demand is expected to continue to grow. The 627W Written Answers2 JULY 2014 Written Answers 628W

Department for Transport is currently preparing its Stephen Hammond: Belfast Maritime Rescue Coordination own forecasts of passenger demand for the next Centre (MRCC) was staffed below risk assessed levels franchises to inform the specification. during: (a) April 2014—40 occasions out of 60 shifts Alex Cunningham: To ask the Secretary of State for (b) May 2014—22 occasions out of 62 shifts Transport what role (a) his Department and (b) local authorities will have in (i) specifying and (ii) managing Where there are specific issues at a MRCC Her the new franchises for rail passenger services on the (A) Majesty’s Coastguard is using the current long established TransPennine Express and (B) Northern Rail lines. pairing arrangements between MRCCs. This enables [202323] each MRCC to be connected to at least one other MRCC which is available to provide mutual support. Stephen Hammond: The specification for each franchise Rescue Services: Stornoway is being developed collaboratively by the Department for Transport’s Rail Executive and Rail North. Rail North are representing all the local transport authorities Katy Clark: To ask the Secretary of State for Transport in the north of England. This is line with the partnership how many times the Maritime Rescue Co-ordination agreement confirmed between the Secretary of State for Centre at Stornoway was staffed at below risk-assessed Transport, my right hon. Friend the Member for Derbyshire levels in (a) April 2014 and (b) May 2014. [202597] Dales (Mr McLoughlin), and leaders of the local transport authorities in the north of England in January 2014. An Stephen Hammond: Stornoway Maritime Rescue integrated partnership structure between Rail Executive Coordination Centre (MRCC) was staffed below risk and Rail North is being developed with a view to assessed levels during: managing the franchise once it has been let. (a) April 2014—12 occasions out of 60 shifts (b) May 2014—14 occasions out of 62 shifts Alex Cunningham: To ask the Secretary of State for Where there are specific issues at a MRCC Her Transport whether the franchise specifications for rail Majesty’s Coastguard is using the current long established passenger services on the (a) TransPennine and (b) pairing arrangements between MRCCs. This enables Northern lines contained in his Department’s consultation each MRCC to be connected to at least one other document published on 9 June 2014 will increase the MRCC which is available to provide mutual support. rolling stock fleet on each line. [202435] West Coast Railway Line Stephen Hammond: The specifications for both the Northern and TransPennine Express franchises have not yet been decided. A public consultation exercise is Mark Menzies: To ask the Secretary of State for being conducted, which will inform these specifications. Transport what discussions he has had with Virgin The consultation can be found at: Trains on ensuring that its proposed train service from Blackpool to Euston will stop at Kirkham Station. https://www.gov.uk/government/consultations/future-of- northern-and-transpennine-express-rail-franchises [202374] We do not, however, intend to specify rolling stock Stephen Hammond: On 19 June 2014 the Secretary of requirements in these specifications; it will be for the State announced that Virgin had been awarded a new bidders to propose the appropriate rolling stock for Direct Award franchise. This commenced on 22 June their bids. 2014, and will run until the new planned commencement of the next competed franchise in April 2017. Maritime and Coastguard Agency Virgin and Network Rail will now submit an application to the Office of Rail Regulation for new services between Katy Clark: To ask the Secretary of State for Transport Blackpool North and London Euston, which will include what assessment he has made of the performance of the stops at Kirkham and Wesham and Poulton le Fylde Maritime and Coastguard Agency during the search for stations. The new services are planned to commence in the Water Rail between 20 and 22 May 2014. [202922] December 2014. Stephen Hammond: The Maritime and Coastguard Agency’s (MCA) performance in relation to the incident involving the Water Rail between 20 and 22 May 2014 ENVIRONMENT, FOOD AND RURAL AFFAIRS was thorough and professional, and in line with established international protocols. Bees The operational activity of coastguards on duty at the Aberdeen Maritime and Rescue Co-ordination Mr Gregory Campbell: To ask the Secretary of State Centre (MRCC) were supervised by an experienced for Environment, Food and Rural Affairs whether he search mission co-ordinator. has had discussions with his counterparts in the devolved Administrations on the proposed National Rescue Services: Belfast Pollinator Strategy to reverse the decline in the bee population in the UK. [202661] Katy Clark: To ask the Secretary of State for Transport how many times the Maritime Rescue Co-ordination Dan Rogerson: DEFRA officials have been in regular Centre at Belfast was staffed at below risk-assessed contact with the devolved Administrations as we prepare levels in (a) April 2014 and (b) May 2014. [202596] the National Pollinator Strategy. We have shared lessons 629W Written Answers2 JULY 2014 Written Answers 630W learned and how to work co-operatively to achieve considered that the dog was not a threat to public common goals. As we move to implementation of the safety. The Government is in the process of making strategy’s actions, this co-operation will continue. changes to the relevant regulations to enable this power to be available to the police. Dangerous Dogs Dredging

Mr Crausby: To ask the Secretary of State for John Robertson: To ask the Secretary of State for Environment, Food and Rural Affairs what progress he Environment, Food and Rural Affairs how many has made on provision for the kennelling and seizure of marine dredging applications have been dealt with by suspected dangerous dogs; and what changes he the Marine Management Organisation using the online expects to make to the regulations on dangerous dogs. marine licensing system since 2009. [202809] [202747] George Eustice: The online marine licensing system George Eustice: On 6 February 2013 the Government came into force on 6 April 2011 following the formation announced, as part of its package of measures to tackle of the Marine Management Organisation (MMO) in irresponsible ownership of dogs, that it would provide 2010. To date the MMO have dealt with the following powers for the police to allow suspected prohibited type numbers of marine aggregate and non-aggregate dredging dogs to be kept with the owners in cases where they applications:

2009-10 2010-11 2011-12 2012-13 2013-14

Aggregate dredging 25 x short term 14 x 15 year marine marine licences; licences; 0 1x15yeardredging 0 7 x 15 year marine 1 x aggregate trial permission licences dredging 0103215

Non-aggregate dredging (a) gas and (b) electricity in each month since June There was a transitional period from 6 April 2011 to 2010; and what the cost of such consumption has been 5 April 2014 for non-aggregate dredging. This activity in each such month. [202704] mainly included navigational dredging which become licensable from 6 April 2014. Dan Rogerson: The cost and consumption of electricity Disposal dredged material at sea and gas purchased by Core DEFRA, for the period Figure June 2010 to May 2014, is set out in the tables. These data are taken from monthly energy invoices for this 2009-10 0 period. 2010-11 0 Core DEFRA has rationalised its estate during the 2011-12 39 period covered by this report and has consolidated into 2012-13 42 fewer buildings. This is reflected in the downward trend 2013-14 38 in cost and consumption. Note: Figures represent MMO licensing up to April 2014. All energy covered by this report was procured through Crown Commercial Services (CCS) Energy Frameworks. Energy Notes: The data provided in this report may not be consistent with data Tom Greatrex: To ask the Secretary of State for published elsewhere because it includes consumption and costs Environment, Food and Rural Affairs what estimate he which are normally allocated to third party occupants of DEFRA’s has made of his Department’s consumption in kWh of Buildings.

DEFRA Electricity Consumption 2010 to 2014 June July August September October November

2010-11 Electricity Consumption (kWh) 562.154 579.196 533,876 534,580 540,560 571,644 Electricity Cost (£) 51,185 52,665 48,950 49,038 51,621 51,592

2011-12 Electricity Consumption (kWh) 374,614 364,075 417,440 389,990 396,394 399,602 Electricity Cost (£) 38,368 37,009 43,738 39,242 45,085 46,233

2012-13 Electricity Consumption (kWh) 371,117 396,691 379,973 362,798 397,176 375.117 Electricity Cost (£) 41,762 44.420 42,410 40,332 42,927 41,107 631W Written Answers2 JULY 2014 Written Answers 632W

DEFRA Electricity Consumption 2010 to 2014 June July August September October November

2013-14 Electricity Consumption (kWh) 366,049 396.691 363,186 356,532 367,484 355.698 Electricity Cost (£) 44,440 44,420 43,755 36,012 38,070 43,683

December January February March April May

2010-11 Electricity Consumption (kWh) 532,863 542,176 490,766 503,287 331,467 365,087 Electricity Cost (£) 50,800 55,296 47,993 49,142 34,701 37,372

2011-12 Electricity Consumption (kWh) 386,825 402,591 387,405 394,080 498,094 401,874 Electricity Cost (£) 43,781 45.513 43,064 38,704 37,510 45,450

2012-13 Electricity Consumption (kWh) 375,162 408,029 376,753 388,382 368,431 371,196 Electricity Cost (£) 40,343 44,642 41,216 41,602 45,590 45,190

2013-14 Electricity Consumption (kWh) 351,397 368,977 343,836 368,107 351,290 369,207 Electricity Cost (£) 42,712 45.630 42,716 44,029 46,165 47,715

DEFRA Gas Consumption 2010 to 2014 June July August September October November

2010-11 Gas Consumption (kWh) 399,128 464,580 353,706 466,370 432.283 642477 Gas Cost (£) 13,616 15,239 12,731 14,971 14.615 19,087

2011-12 Gas Consumption (kWh) 89,035 116.433 77,012 133,048 264,282 346,157 Gas Cost (£) 4,218 4,846 4,060 5,563 10,970 13,207

2012-13 Gas Consumption (kWh) 83,299 73. lift 92,580 60,792 239,861 237,313 Gas Cost (£) 5,120 4,620 5,596 6,962 12,064 12,255

2013-14 Gas Consumption (kWh) 92,341 134,913 42,057 251,658 183,864 499,138 Gas Cost (£) 4.573 5,881 3,113 7,818 7,961 17,960

December January February March April May

2010-11 Gas Consumption (kWh) 938,383 783,009 616,016 ¦ 768,205 14 857 106,818 Gas Cost (£) 27,086 23,001 18.493 23,282 5,025 5.103

2011-12 Gas Consumption (kWh) 466,376 591,299 483,026 584,149 327,666 197,233 Gas Cost (£) 16 691 19,385 15,634 14.642 11034 10,681

2012-13 Gas Consumption (kWh) S70 516 327.: 17 42:545 410.775 263.816 263,729 Gas Cost (£) 24,134 21,396 23,132 24.150 15.323 9,920

2013-14 Gas Consumption (kWh) 409,595 456,987 429,920 377.971 235.014 194,273 Gas Cost (£) 15.296 16.852 15,651 14,156 9,668 8,237 633W Written Answers2 JULY 2014 Written Answers 634W

Organic Farming: Yorkshire and Humberside Electronic Warfare

Hugh Bayley: To ask the Secretary of State for Sir Nicholas Soames: To ask the Secretary of State Environment, Food and Rural Affairs how much land for Business, Innovation and Skills if he will place in in Yorkshire was given over to organic farming in each the Library copies of the K-Matrix UK Security year since 2008-09. [202850] Sectors reports for each year from 2008 to 2013. [201948] George Eustice: The following table shows the areas of “in conversion” and fully organic land in the Yorkshire Michael Fallon: The K-Matrix reports requested will and the Humber region from 2008 to 2013, which is the be placed in the Libraries of the House. The report for most recent year that these data are available. Data are 2013 is not yet available. not available just for Yorkshire. Energy Area of organic land in Yorkshire and the Humber region1 Thousand hectares Tom Greatrex: To ask the Secretary of State for 2008 2009 2010 2011 2012 2013 Business, Innovation and Skills what estimate he has In-conversion 431111made of his Department’s consumption in kWh of (a) land gas and (b) electricity in each month since June 2010; Fully organic 11 12 14 13 10 10 and what the cost of such consumption has been in land each such month. [202700] Total organic 15 15 15 13 10 11 land Jo Swinson: This information is currently being collated 1 Data are collected during the annual inspections of organic and I will arrange for this data to be deposited in the operators. Due to the nature of annual inspections, the data are Libraries of the House as soon as possible. collected at varying times throughout the year. Therefore, the data presented here does not give an exact snapshot of organic farming at any specific time of year. It should be treated with a degree of Enterprise Zones: Coleraine caution. Note: Please note that totals may not necessarily agree with the sum of Mr Ivan Lewis: To ask the Secretary of State for their components due to rounding. Business, Innovation and Skills what plans UK Trade Source: & Investment has to promote the new Enterprise Zone Organic Certification Bodies in the UK in Coleraine as a location for potential international investors. [201734]

Michael Fallon: UK Trade and Investment (UKTI) follows the ‘UK First’ principle when promoting inward BUSINESS, INNOVATION AND SKILLS investment. This means that we seek to promote the UK as the country of choice and propose the most suitable locations based on the inward investor’s particular Construction: Training needs which are matched to the strengths of individual areas. Mr Stewart Jackson: To ask the Secretary of State Invest Northern Ireland promotes Northern Ireland for Business, Innovation and Skills what steps he is and UKTI works together with them on potential taking to improve skill levels in the construction opportunities and to highlight benefits of areas such as industry. [202372] Enterprise Zones.

Michael Fallon: Under the auspices of the Construction Environment Protection: Scotland Leadership Council, the house building industry is developing an action plan to address three immediate priorities: improving the image of house building; attracting Anas Sarwar: To ask the Secretary of State for back experienced workers who left during the recession; Business, Innovation and Skills in how many green and attracting other workers with relevant skills. infrastructure projects the Green Investment Bank has invested in Scotland. [202943] More widely, the Government is making a number of reforms to the skills system to improve skills supply; Michael Fallon: The Green Investment Bank (GIB) putting employers in the driving seat and making providers has helped finance energy efficiency improvements at more responsive to their needs. two distilleries in Scotland and expects to finance similar The Government is also currently undertaking a triennial projects at further distilleries soon. GIB has also financed review of the way the Construction Industry Training introduction of energy efficient lighting at NCP car Board operates and challenging it on the service it parks across the UK, including a number located in delivers to the sector. Scotland, and GIB is in advanced discussions with In addition, the Government believes that a more Glasgow city council to finance replacement of 10,000 robust and more visible Government construction old street lights in Glasgow with energy efficient LED procurement pipeline is key to improving investment lights, with the longer term aim of replacing up to decisions in construction. We are working to enhance 50,000 lights across the city. Full details about projects the pipeline to give construction businesses the supported by GIB may be found on the bank’s website confidence to upskill staff, to recruit, and to commit to at: apprenticeships. www.greeninvestmentbank.com 635W Written Answers2 JULY 2014 Written Answers 636W

Medicine: Scotland in (a) each of the last five years and (b) 2014-15; and what his estimate is of funding in (i) 2015-16 and (ii) Anas Sarwar: To ask the Secretary of State for any future years for which budgets are available. Business, Innovation and Skills what assessment he has [202334] made of the potential effect on funding for medical research of Scottish independence. [202905] Matthew Hancock: I refer the right hon. Member to the answer given on 11 July 2011, Official Report, Mr Willetts: The Secretary of State for Business, column 195W, by the Minister for Universities and Innovation and Skills, the right hon. Member for Science, my right hon. Friend the Member for Havant Twickenham (Vince Cable), has made no assessment of (Mr Willetts). the effect of funding for medical research in a separate Further education (FE) colleges and training Scotland. organisations receive a post-19 funding allocation each The “Scotland Analysis: Science and Research” report academic year at the programme level (for example published in November 2013 examined the current UK budgets for adult skills, adult safeguarded learning and/or framework for funding, infrastructure, co-ordination offender learning and skills). and collaboration. It demonstrated that Scottish research As funding is not allocated at the learning aim level, has thrived within this system, for example, regularly the amount of money spent on TUC learning aims is receiving a higher percentage of Research Council funding not reported centrally by the Skills Funding Agency. when compared to UK population share. The same holds true for research charities. In 2011, From the 2011/12 academic year a single adult skills Scotland received 13% of all investment made by members budget was introduced. This will provide FE colleges of the Association of Medical Research Charities. and training organisations with the flexibility to offer the range and balance of programmes, from basic skills The evidence shows that being part of the UK to higher-level skills, in the mode of delivery that will complements and strengthens Scotland’s world-class best meet the needs of learners, employers and communities research base. (classroom, workshop, online and in the workplace). The UK Government’s position is clear: if Scotland left the UK, the current framework for research could not continue. The best way for research to continue to flourish in Scotland is together as part of the UK. TREASURY Science: Research Mapeley Anas Sarwar: To ask the Secretary of State for Business, Innovation and Skills what his policy is on Charlie Elphicke: To ask the Chancellor of the Exchequer increasing the research budget for science to 0.7 per pursuant to the answer of 19 June 2014, Official Report, cent of gross domestic product. [202944] column 675W, on Mapeley, how many years the Private Finance Initiative contract between HM Revenue and Mr Willetts: The Government recognises that science Customs and Mapeley Steps Contractor Limited has and research is vital in driving economic growth. Our left to run. [202953] ambition is to make the UK the best place in the world to do science and research. Mr Gauke: As explained in the answer I gave on In 2012, Government expenditure on science and 1 July 2014, Official Report, column 581W, a copy of research through the Research Councils and the Higher the contract, which runs until April 2021, can be viewed Education funding bodies was £4.9 billion, equal to on the National Archive website at: 0.3% of GDP. In the same year, total public spending http://webarchive.nationalarchives.gov.uk/+/http:// on science was 0.6% of GDP. Total UK spending on www.hmrc.gov.uk/freedom/steps-contract.htm Research and Development was 1.7% of GDP. In the recent spending review, Government made a Personal Savings long-term commitment to investment in science and research infrastructure: increasing capital investment in Mr Gregory Campbell: To ask the Chancellor of the real terms to £1.1 billion in 2015-16 and growing this in Exchequer if he will meet representatives of financial line with inflation each year to 2020-21. We also continued institutions to discuss how those institutions can assist to protect the science resource ring fence in cash terms customers to get the best return on their savings. for financial year 2015-16. On the basis of existing [202658] commitments, the Government’s investment in science through the Research Councils and Higher Education Andrea Leadsom: Treasury Ministers have discussions 1 funding bodies will be £5.9 billion in 2015-16, an with a wide variety of organisations in the public and increase in cash terms of 20% since 2012. private sectors. Details of ministerial and permanent 1 Cash terms including additional spending announced in AS13 secretary meetings with external organisations on and Budget 14. departmental business are published on a quarterly Trade Union Officials basis and are available at: www.gov.uk/government/collections/hmt-ministers-meetings- Mr Byrne: To ask the Secretary of State for Business, hospitality-gifts-and-overseas-travel Innovation and Skills how much his Department has It is important that customers can make the most of spent on funding for trade union representatives their savings. This is why at Budget 2014 we announced studying Trade Union Congress (TUC) learning aims a radical package of measures to support savers—reducing 637W Written Answers2 JULY 2014 Written Answers 638W taxes for the lowest income savers, reforming the ISA 1. Ensuring reported performance better reflects the amount regime to give savers greater flexibility as to where and of revenue that HMRC can expect to receive how they save their money, and creating a product to 2. Recognising the revenue effects of work against criminals help retired savers see a better return. 3. Refining our methodology to reflect our latest understanding of the effects of our interventions on customers’ behaviour in the Reserve Forces: Taxation future. Further information on HMRC’s compliance Julian Sturdy: To ask the Chancellor of the methodology will be set out in its Annual Report, which Exchequer what estimate he has made of the number of will be published in due course. reserve servicemen who have been allocated the wrong tax code by HM Revenue and Customs as a result of Welfare Tax Credits: York their additional income accruing from military duties. [202559] Hugh Bayley: To ask the Chancellor of the Exchequer how many families in (a) York Central constituency Mr Gauke: The information requested is available and (b) York Unitary Authority area received child and only at a disproportionate cost. working tax credits in 2009 and in each year since. HM Revenue and Customs (HMRC) has processes in [202934] place to ensure that reservist service personnel called up for military service receive the full benefit of their Nicky Morgan: The finalised annual award child and personal income tax allowances while they are on active working tax credits statistics for 2012-13 are available duty. here: https://www.gov.uk/government/publications/personal-tax- Tax Avoidance: British Virgin Islands credits-finalised-award-statistics-geographical-statistics-2012- to-2013 Mr Sanders: To ask the Chancellor of the Exchequer The finalised annual award child and working tax what recent discussions he has held with his counterpart credits statistics for 2011-12 are available here: in the British Virgin Islands on tax evasion and avoidance https://www.gov.uk/government/publications/personal-tax- in that country; and if he will make a statement. credits-finalised-award-statistics-geographical-statistics [202498] For the years 2009-10 to 2010-11, please refer to the archived publication webpage: Mr Gauke: The Treasury engages in regular discussions http://webarchive.nationalarchives.gov.uk/20121106034103/ with the British Virgin Islands on tax issues, including http://www.hmrc.gov.uk/stats/personal-tax-credits/final- avoidance and evasion. award-geog.htm Following the commitments made at the G8 the Table 2 of these publications provide a breakdown of British Virgin Islands, along with all of the UK’s Overseas figures by local authority, including York. Territories with financial centres and the Crown Table 3 of these publications provide a breakdown of Dependencies have taken significant steps forward on figures by parliamentary constituency, including York tax transparency putting them at the forefront of this Central. agenda globally.

Tax Collection WORK AND PENSIONS Mr Sanders: To ask Mr Chancellor of the Exchequer what changes have been made to the methodology for Employment and Support Allowance assessing compliance yield for tax collection in the last 10 years. [201672] Mark Hendrick: To ask the Secretary of State for Mr Gauke: It is important that HMRC’s methodology Work and Pensions how much revenue has been raised for assessing the effects of its compliance activities by his Department from employment and support reflect the full range of impacts of its activities on allowance claimants telephoning 0843 515 8650 in (a) customer compliance. Both to provide accountability 2013 and (b) 2014 to date. [202484] for its overall performance and to manage its business and the performance of its compliance teams on a Mike Penning: DWP does not operate any telephone day-to-day basis. HMRC periodically refines its lines starting 0843, and therefore receives no revenue methodology for compliance yield to reflect the latest from 0843 515 8650. evidence. This is consistent with recommendations from Similarly, DWP is unable to provide any information the NAO and PAC. on the number of employment and support allowance Changes at the start of this Government were claimants who call 0843 515 8650. implemented to better assess the total impact of HMRC’s work. Some reduced the revenue HMRC could score, Mark Hendrick: To ask the Secretary of State for while others recognised that HMRC were achieving a Work and Pensions how many employment and greater impact on future taxpayer behaviour than they support allowance claimants telephoned 0843 515 8650 had previously assumed. in the first quarter of 2014; what the average cost of Key changes to scoring rules at the start of the 2010 such calls has been to claimants; and what the average Spending Review period were: length of each such call has been. [202503] 639W Written Answers2 JULY 2014 Written Answers 640W

Mike Penning: DWP does not operate any telephone Energy lines starting 0843, and therefore receives no revenue from 0843 515 8650. Tom Greatrex: To ask the Secretary of State for Similarly, DWP is unable to provide any information Work and Pensions what estimate he has made of his on the number of employment and support allowance Department’s consumption in kWh of (a) gas and (b) claimants who call 0843 515 8650. electricity in each month since June 2010; and what the cost of such consumption has been in each such month. [202711] Employment and Support Allowance: Preston Mike Penning: The actual consumption and cost for gas and electricity, as requested, has been provided on Mark Hendrick: To ask the Secretary of State for an annex and will be available in the Library. Work and Pensions how many claims for employment and support allowance submitted by people in Preston Housing Benefit in 2013 have yet to be determined. [202489] Chris Bryant: To ask the Secretary of State for Work Mike Penning: We have interpreted the question to be and Pensions how many councils in (a) England, (b) for the number of employment and support allowance Wales and (c) Scotland funded discretionary housing (ESA) and incapacity benefits reassessments (IBR), work payments beyond the funds allocated to them by his capability assessments (WCA) which are still to be Department in (i) 2013-14 and (ii) 2014-15. [202667] decided in 2013, for Preston local authority and this information is shown in the following table: Steve Webb: In 2013-14, (a) 85 (out of 326) English authorities, (b) 15 (out of 27) Welsh authorities and ESA WCA assessments still in progress in Preston local authority (c) 27 (out of 32) Scottish authorities spent more than January 2013 to September 2013 the contribution provided by DWP towards discretionary No. housing payments. New claims—initial assessments 200 Figures for 2014-15 will not be available until after New claims—repeat assessments 100 30 April 2015—the deadline for local authority DHP Incapacity benefit re-assessments — returns for the year in question. Note: Figures are rounded to the nearest 100. “—” denotes nil or fewer than Independent Living Fund 50. Source: Data in the tables above is derived from administrative data held by Kate Green: To ask the Secretary of State for Work the DWP and assessment data provided by Atos Healthcare. and Pensions what information his Department is gathering from local authorities on the number of Employment Schemes: Young People disabled people who are currently supported to live in their own homes who will move into residential care as a result of changes to the Independent Living Fund; Stephen Timms: To ask the Secretary of State for and what support his Department is providing to those Work and Pensions what budget was set for the Youth people affected. [202310] Contract in (a) 2012-13, (b) 2013-14 and (c) 2014-15. [202908] Mike Penning: The potential implications of closing the Independent Living Fund are set out clearly in the Equality Analysis published on 6 March alongside the Esther McVey: Following the Youth Contract launch written Ministerial Statement announcing the closure. in 2012-13, the Department has set the following budgets: Kate Green: To ask the Secretary of State for Work £ million and Pensions how his Department plans to monitor the effect of changes in the Independent Living Fund on 2012-13 260 individual recipients; and if he will make a statement. 2013-14 196.3 [202311] 2014-15 183.8 Mike Penning: As stated in the Equality Analysis published on 6 March, the Department will be developing Stephen Timms: To ask the Secretary of State for plans for evaluating the impact of the closure on former Work and Pensions how much was spent on the Youth users of the Independent Living Fund. Contract in (a) 2012-13 and (b) 2013-14. [202909] Kate Green: To ask the Secretary of State for Work and Pensions what assessment he has made of the Esther McVey: The spend on Youth Contract since it effect on disabled people in work of the closure of the was launched in April 2012 is as follows: Independent Living Fund. [202326]

£ million Mike Penning: The potential implications of closing 2012-13 85.8 the Independent Living Fund are set out clearly in the 2013-14 210.3 Equality Analysis that was published on 6 March alongside the written ministerial statement announcing the closure. 641W Written Answers2 JULY 2014 Written Answers 642W

Kate Green: To ask the Secretary of State for Work Personal Independence Payment: Preston and Pensions what information his Department holds on the employment status of Independent Living Fund Mark Hendrick: To ask the Secretary of State for recipients; and if he will make a statement. [202327] Work and Pensions how many claims for personal independence payments submitted by people in Preston Mike Penning: The Independent Living Fund does in 2013 have yet to be determined. [202491] not collect or record data on the employment status of its users when assessing their care and support packages. Mike Penning: Figures on the number of personal independence payment (PIP) claims outstanding are Kate Green: To ask the Secretary of State for Work not available. and Pensions what steps his Department has taken to However a breakdown of the statistics published on 5 address the current geographical imbalance in June 2014 show that during April to December 2013, Independent Living Fund (ILF) use by local 820 PIP new claims were registered and 250 decisions authorities in the allocation of transitional funding as were made for individuals living in Preston local authority.1 the ILF comes to an end. [202800] 1 Source: Mike Penning: The funding that will be transferred to PIP Computer System claimant records local authorities and to the devolved Administrations There are several reasons why a new claim could be when the Independent Living Fund closes will be distributed registered and awaiting a decision. For example, the in a way that reflects the patterns of expenditure at that claimant is waiting to receive or has not yet returned time. their PIP 2 How your disability affects you form, the claimant is awaiting their assessment appointment date, Pension Credit: York the DWP have not yet made a decision on the claim, or the claimant has told DWP that they wish to withdraw their claim. Hugh Bayley: To ask the Secretary of State for Work and Pensions (1) how many people in (a) York Central Universal Credit constituency and (b) York Unitary Authority area received pension credit in the last year for which data is available; [202932] Ian Austin: To ask the Secretary of State for Work (2) how many people in (a) the city of York local and Pensions when and where his Department plans to authority area and (b) York Central constituency were next introduce universal credit. [202325] in receipt of (i) the basic state pension and (ii) pension credit in 2008-09 and in each year since; and what the Esther McVey: Universal credit is now available in average weekly value of pension credit received was in 19 live sites across England, Scotland and Wales, and is each case during those periods. [202926] continuing to roll out across the north-west of England. See link to the Press Notice published on 20 June 2014: Steve Webb: Statistics for state pension and pension https://www.gov.uk/government/news/north-west-universal- credit are available from 100% data and are published credit-expansion on the Department’s website at: In total 90 Jobcentres, or one in eight Jobcentres in http://tabulation-tool.dwp.gov.uk/100pc/pc/tabtool_pc.html Britain, will offer the service once the north-west expansion has been completed. and http://tabulation-tool.dwp.gov.uk/100pc/sp/tabtool_sp.html Mr Sanders: To ask the Secretary of State for Work Guidance for users is available at: and Pensions if he will place in the Library a copy of https://www.gov.uk/government/publications/dwp-tabulation- the risk register for the universal credit programme. tool-guidance [202496]

Personal Independence Payment Esther McVey: In line with standard practice, as the universal credit risk register includes details of a sensitive nature, the Department will not be putting the risk Heidi Alexander: To ask the Secretary of State for register into the public domain. Work and Pensions what steps are being taken to better identify those personal independence payment claimants who could be assessed solely on the basis of Stephen Timms: To ask the Secretary of State for evidence without the need for face-to-face assessments. Work and Pensions how many universal credit claimants have been sanctioned in each month since [202753] October 2013. [202907] Mike Penning: We are working with our providers to Esther McVey: The information requested is not currently ensure that all PIP claims received are reviewed and available. where sufficient evidence is available at that initial review we may make a decision on the claim without the need The Department published its strategy for releasing for a face-to-face consultation. Where a face-to-face official statistics on universal credit (UC) in September consultation is needed or further evidence must be 2013 which can be found at: gathered, the assessment provider will undertake that https://www.gov.uk/government/collections/universal-credit- activity. statistics 643W Written Answers2 JULY 2014 Written Answers 644W

Stephen Timms: To ask the Secretary of State for HSE routinely applies the VPF, with adjustment, in Work and Pensions how many universal credit claimants an annual report of the costs of work-related injuries have become ineligible for the benefit as a consequence and ill health. The most recent report, Costs to Britain of increased income since October 2013. [202945] of workplace fatalities and self-reported injuries and ill health, 2010/11, is published on the HSE website Esther McVey: The information requested is not currently http://www.hse.gov.uk/statistics/pdf/cost-to-britain.pdf available. An accompanying methodology report describing HSE’s The Department published its strategy for releasing current approach to valuing the impacts of work-related official statistics on universal credit (UC) in September injuries and ill health is also available on the HSE 2013 which can be found at: website: https://www.gov.uk/government/collections/universal-credit- Work Capability Assessment statistics Ian Austin: To ask the Secretary of State for Work Stephen Timms: To ask the Secretary of State for and Pensions what steps his Department is taking to Work and Pensions whether his Department is reduce the backlog of work capability assessments. currently pursuing plans for jam jar bank accounts [202333] under the universal credit programme; and if he will make a statement. [202948] Mike Penning: We are working closely with Atos to deliver the best possible service for claimants and ensure Esther McVey: We are looking at a wide range of the number of cases outstanding with them continues support options and considering the best outcomes for to fall. universal credit claimants which provide value for the We announced last summer that we were looking to taxpayer. bring in further provision to support the delivery of the We are continuing to have discussions with providers work capability assessment. In the meantime, we have of financial products and other stakeholders and we been working closely with Atos to improve their will make an announcement once those discussions performance and have put in place changes to better have concluded. manage the flow of work between the Department, all designed to reduce waiting times for claimants. These Valuation of Life and Health Interdepartmental Group measures are taking effect and the backlog of cases has fallen over the past few months. Mr O’Brien: To ask the Secretary of State for Work and Pensions if he will place in the Library a copy of the Health and Safety Executive’s submission to the EDUCATION Inter-Departmental Group for the Valuation of Life and Health review and evidence submitted to the series Public Expenditure of interviews with his Department’s staff conducted by researchers from the University of Leeds in 2008. Mr Watson: To ask the Secretary of State for Education [202417] on how many occasions ministerial authorisation has been granted for expenditure which exceeded his Mike Penning: The submission will be placed in the Department’s internal efficiency control thresholds for Library shortly. (a) advertising, marketing and communications, (b) consultancy and (c) external recruitment; and what the (i) purpose and (ii) value of any such agreed expenditure Mr O’Brien: To ask the Secretary of State for Work has been in the last 12 months. [202359] and Pensions what the explicit monetary value per quality-adjusted life was in the context of Workplace Elizabeth Truss: The Department for Education has accidents and regulation, as quoted as part of the its own internal efficiency controls thresholds and complies Health and Safety Executive’s submission to Inter- with the Cabinet Office controls. departmental Group for the Valuation of Life and Health review in 2008. [202432] 1. Advertising, Marketing and Communications expenditure above the Departmental threshold of £100,000 is submitted to Efficiency and Reform Group at Cabinet Mike Penning: In response to a review of departmental Office for final clearance. valuation practices conducted for the Interdepartmental Group for the Valuation of Life and Health in 2008, 2. Consultancy expenditure above £20,000 (and is a HSE submitted a summary of a regulatory impact new contract expected to exceed nine months, an existing assessment (RIA) of the Control of Noise at Work contract to be extended beyond nine months or is Regulations 2005. In this appraisal, HSE applied a expenditure for procurement related consultancy) is value of £42,000 per quality adjusted life year (2005 submitted to Cabinet Office for final clearance. prices), derived from the Department for Transport’s 3. Cabinet Office is not directly involved in recruitment Value of a Prevented Fatality (VPF) (£1.4 million in approvals. 2005), to assess the health benefits of reduced noise The approved expenditure requests which have exceeded exposure at work. This value was derived specifically for Departmental thresholds are published on a quarterly the appraisal of the Noise at Work regulations. The full basis on the Department’s website: RIA is published on the HSE website: https://www.gov.uk/government/publications/approved- http://www.hse.gov.uk/noise/noise.pdf exemptions-to-the-efficiency-controls 645W Written Answers2 JULY 2014 Written Answers 646W

Schools: Maternity Pay Crime scene to crime Crime scene to scene matches1 subject matches

Mark Hendrick: To ask the Secretary of State for 2013-14 1,410 24,953 Education what guidance he has given education 1 Data source: authorities, free schools and academies on maternity NDNAD management information. If one crime scene matches to pay for staff transferring schools during pregnancy. several subject profiles, only one match is counted. Only new matches [202492] are counted—if a crime scene has produced a match in a previous year, then matches again in 2012-13, it is not counted. Where several crime scene profiles are obtained from one crime, resulting in several Mr Laws: Maternity pay arrangements for most teachers matches, it is counted as one crime with a match. These figures are for transferring schools are set out in ‘Conditions of Service matches from routine searching of profiles. Offence types are recorded for School Teachers in England and Wales’ and wider by forensic staff processing the DNA sample and do not correspond employment legislation. Similar arrangements are to police recorded crime codes. determined by the ‘National Agreement on Pay and Domestic Violence Conditions of Service’ for school support staff employed by local authorities. Academies and free schools are not Dan Jarvis: To ask the Secretary of State for the bound by these arrangements but are free to adopt Home Department what assessment she has made of them for their staff if they choose to do so. the effectiveness of the TecSOS system for high risk victims of domestic abuse; and what plans she has to rollout the programme to other areas of the country. [200933] HOME DEPARTMENT Norman Baker: The report by Her Majesty’s Inspectorate DNA: Databases of Constabulary (HMIC) on the police response to domestic abuse, published in March 2014, clearly set out the importance of using new technology to help Philip Davies: To ask the Secretary of State for the protect victims of domestic abuse. Whilst it is an operational Home Department what estimate she has made of the matter for chief constables on procuring technology, we number of DNA profiles on the DNA database which are aware that the TecSOS system is used by 16 police had been previously removed. [201979] forces across England and Wales. Through the National Oversight Group, set-up and Karen Bradley: No record is kept of profiles which chaired by the Home Secretary to drive delivery against have been removed from the national DNA database. It the HMIC recommendations, the Government is ensuring is not, therefore, possible to ascertain whether the profile that best practice on the use of new technology, like has been reloaded. TecSOS, is identified and shared so that the policing of domestic abuse is robust. Philip Davies: To ask the Secretary of State for the As part of its commitment to support high risk Home Department how many DNA profiles of current victims of domestic abuse, the Government part-funds prisoners have not been added to the DNA database. 144 Independent Domestic Violence Advisors and 54 [201981] Multi-Agency Risk Assessment Conference co-ordinator posts. This funding amounts to £3.4 million per year. Karen Bradley: The information requested is not held. Energy Philip Davies: To ask the Secretary of State for the Home Department how many successful matches there Tom Greatrex: To ask the Secretary of State for the have been between DNA profiles taken from crime Home Department what estimate she has made of her scenes and those stored on the national DNA database Department’s consumption in kWh of (a) gas and (b) electricity in each month since June 2010; and what the in each of the last two years. [201982] cost of such consumption has been in each such month. [202707] Karen Bradley: The requested data is shown in the following table. Karen Bradley: Electricity and gas cost and consumption data for each month since June 2010, for those buildings Crime scene to crime Crime scene to (excluding sponsored ALBs) where the Department is scene matches1 subject matches directly invoiced for energy, is provided in the following 2012-13 1,247 24,894 table. Data for financial year 2014-15 is not yet available.

Monthly electricity and gas cost and consumption data since June 2010 to date

2010 2011 2012 2013 2014

January Gas kWh — 1,862,985 1,886,579 2,446,044 2,161,027

£ — 53,019 72,170 88,224 77,188

Elec kWh — 4,502,519 4,132,372 3,933,006 3,809,931

£ — 448,896 407,677 406,473 447,262 647W Written Answers2 JULY 2014 Written Answers 648W

Monthly electricity and gas cost and consumption data since June 2010 to date 2010 2011 2012 2013 2014

February Gas kWh — 2,004,444 2,672,946 2,412,556 1,956,215 £ — 59,183 99,266 106,906 68,806 Elec kWh — 4,206,913 4,063,684 3,655,461 3,456,015 £ — 411,163 385,456 386,001 404,495

March Gas kWh — 442,141 1,448,182 2,539,303 1,720,441 £ — 98,712 58,506 92,095 61,275 Elec kWh — 4,544,779 4,323,043 3,870,338 3,577,708 £ — 411,442 402,293 415,873 413,262

April Gas kWh — 569,897 1,231,576 1,489,393 — £ — 27,112 52,821 51,201 — Elec kWh — 4,335,114 3,826,278 3,757,760 — £ — 438,003 415,828 439,266 —

May Gas kWh — 938,280 967,011 834,039 — £ — 38,980 79,897 32,565 — Elec kWh — 4,306,364 4,244,849 3,750,300 — £ — 439,858 454,402 438,121 —

June Gas kWh 311,118 822,044 659,160 488,519 — £ 13,945 35,325 31,091 23,043 — Elec kWh 5,278,782 4,377,736 4,106,200 3,841,666 — £ 422,494 479,630 434,936 446,712 —

July Gas kWh 308,117 305,171 696,281 318,348 — £ 30,821 28,853 43,465 16,657 — Elec kWh 5,545,133 4,581,490 4,450,078 4,520,539 — £ 472,730 459,876 479,946 521,657 —

August Gas kWh 411,714 380,853 418,754 279,305 — £ 17,971 22,437 18,935 12,258 — Elec kWh 5,094,744 4,574,442 4,560,612 4,300,566 — £ 436,809 453,845 481,571 495,638 —

September Gas kWh 503,295 450,457 599,067 393,035 — £ 21,105 25,267 25,208 16,810 — Elec kWh 4,883,891 4,341,778 3,930,782 3,883,045 — £ 427,102 425,084 426,692 447,864 —

October Gas kWh 923,079 800,558 1,126,662 1,008,343 — £ 28,623 36,315 43,855 37,417 — Elec kWh 4,843,055 4,252,840 4,085,297 3,995,271 — £ 438,204 430,531 418,188 465,962 —

November Gas kWh 1,749,439 1,330,511 1,525,794 1,982,680 — £ 49,178 53,846 57,032 69,984 — Elec kWh 4,706,972 4,317,892 3,880,980 3,745,355 — £ 432,945 450,434 400,807 437,260 —

December Gas kWh 2,996,545 1,911,221 2,059,677 1,960,387 — £ 79,999 72,767 75,407 69,189 — 649W Written Answers2 JULY 2014 Written Answers 650W

Monthly electricity and gas cost and consumption data since June 2010 to date 2010 2011 2012 2013 2014

Elec kWh 4,718,749 4,089,519 3,814,350 3,750,061 — £ 422,899 397,159 386,689 430,847 — Note: Monthly figures are affected by seasonal variations and credit notes issued when converting estimated to actual meter readings.

HM Passport Office Country of origin Count Mr Hanson: To ask the Secretary of State for the Congo 1 Home Department from which other Departments Uganda 1 temporary additional staff at the Passport Office have Grand total 30 been deployed; and what training costs have arisen from such redeployment. [200810] Care and support for victims, once they receive a positive Conclusive Grounds decision is being considered James Brokenshire: To date, all but one of the additional as part of the review of the National Referral Mechanism staff have been redeployed from within HM Passport and as part of the re-tender of the Government’s victim Office and the wider Home Office. support service. Discussions are continuing with other Government Departments about whether deployment of any more Graham Evans: To ask the Secretary of State for the of their staff would be necessary. Home Department with reference to the answer of The training that has arisen from this deployment has 25 April 2014, Official Report, column 717W, on been delivered using internal resources and this has not human trafficking, what information her Department incurred any additional costs other than the time of holds on the current safety of victims who received those involved and certain travel and subsistence costs. Conclusive Grounds decisions and returned home in (a) January, (b) February and (c) March 2014; and if Human Trafficking she will make a statement. [202511]

Graham Evans: To ask the Secretary of State for the Karen Bradley: The Government does not hold Home Department with reference to the answer of information on the whereabouts of victims once they 25 April 2014, Official Report, column 717W, on have left the victim support service. human trafficking, what tailored support is given to Care and support for victims, once they receive a victims who have received a Conclusive Grounds positive Conclusive Grounds decision is being considered decision to safely return home; to which countries such as part of the review of the National Referral Mechanism victims returned in January to March 2014; and if she and as part of the retender of the Government’s victim will make a statement. [202510] support service. Karen Bradley: Currently, there is no specific return and reintegration package for those who have received a Graham Evans: To ask the Secretary of State for the positive Conclusive Grounds decision and wish to return Home Department with reference to the answer of home. The Assisted Voluntary Returns package is available 25 April 2014, Official Report, column 717W,on human to nationals of non-EEA countries. Where possible and trafficking, what tailored support is given to victims appropriate to do so, the Government will work with who have received Conclusive Grounds decisions to host countries’ Government agencies to ensure that the integrate into the UK; where such victims came from in victim receives adequate support. January to March 2014; which organisations provide Information pertaining to the countries to which her Department with information on the progress of victims returned via the AVR programme is not collated the victim integration process; and what information centrally and would require a detailed examination of her Department holds on how victims have integrated case files in order to extract such data. into the UK. [202515] Between January and March 2014, The Salvation Army recorded that 30 individuals, in their care, returned Karen Bradley: Currently, there is no specific integration to their country of origin. These were: package for those who have received a positive Conclusive Grounds decision and wish to stay in the UK. The Country of origin Count Salvation Army, which delivers the Government’s support service for adult victims of human trafficking, provides China 1 support to those victims leaving its service by facilitating Czech Republic 2 access to mainstream benefits, housing and local services Hungary 3 as well as pastoral support such as assistance with Latvia 3 completing application forms. Lithuania 4 Poland 1 Care and support for victims, once they receive a Romania 9 positive Conclusive Grounds decision is being considered Slovakia 4 as part of the review of the National Referral Mechanism and as part of the re-tender of the Government’s victim Sri Lanka 1 support service. 651W Written Answers2 JULY 2014 Written Answers 652W

Graham Evans: To ask the Secretary of State for the 2013 Home Department if she will ensure that the regulations governing the new contract for the specialist support Breakdown of calls received Number of calls providers allow bids to provide ongoing care and support Traffickers arrested 2 once victims exit the shelter service, at the end of the Victims rescued 2 45 days period irrespective of whether they have received a Conclusive Grounds decision. [202652] For 2013, 52 calls were made to the helpline. A confirmed breakdown of calls is as follows: Karen Bradley: Once they receive a positive Reasonable Grounds decision, potential victims of trafficking are Number of calls entitled to a minimum of 45 days’ care and support which can continue up to the point they receive a 2014 129 positive Conclusive Grounds decision, whichever is the 2013 52 later. Article 12 of the European Convention on Action 2012 41 against Trafficking in Human Beings requires the UK 2011 234 to provide a minimum of 30 days’ support for victims of 1 To 19 June human trafficking. The current UK Government policy 2 From June to December goes further than the European Convention on Action against Trafficking obligations by providing a minimum of 45 days support once a Reasonable Grounds decision Offences against Children: Internet is made. Care and support for victims, once they receive a Mr Watson: To ask the Secretary of State for the positive Conclusive Grounds decision, is being considered Home Department what information her Department as part of the ongoing review of the National Referral holds on how many UK-based registered users of the Mechanism and as part of the retender of the Government’s paedophile file sharing network website boylover.net care contract for adult victims of human trafficking. have been identified by international authorities in (a) the US and (b) Holland; what proportion of those was Mr Frank Field: To ask the Secretary of State for the passed to UK authorities for investigation; what steps Home Department further to the answer of 25 June her Department is taking to trace those registered 2014, Official Report, column 210W,on human trafficking, users; and if she will make a statement. [201056] how many calls in each of the years from 2011 to 2014 came from (a) victims, (b) other police forces, (c) the Norman Baker: I refer the hon. Member to the reply UK border force, (d) other professionals and (e) the given on 19 June 2014, Official Report, columns 666-667W. public; and how many (i) traffickers were arrested and Following two linked international investigations into (ii) victims rescued as a result of information provided the boylover.net website, information was provided to by those calls. [202902] the Child Exploitation and Online Protection Centre (CEOP) by US authorities and Europol that related to Karen Bradley: This information is recorded by the UK-based registered users. CEOP was, at that time, an Trafficking and Kidnap Unit at the Metropolitan Police affiliate of the Serious Organised Crime Agency. We do Service. The breakdown of data requested is only available not maintain a record of the number of UK-registered from 2013 onwards. This is detailed in the following users of the website identified by United States or tables: Dutch authorities, nor of what proportion of those users were passed to CEOP. However, as a consequence 2014 (up to 30 June 2014) of the information provided and through CEOP’s own Breakdown of calls received: Number of calls investigations, 240 intelligence packages were prepared (a) victims 0 and subsequently disseminated to police forces across (b) other police forces 8 the UK. Further information regarding charges, convictions (c) UK Border Force 1 and open investigations is handled at a local level by the relevant police force and is not recorded nationally. (d) other professionals 8 (e) members of public 15 Total 32 Pay

Traffickers arrested 0 Victims rescued 0 Mr Nicholas Brown: To ask the Secretary of State for the Home Department which organisations collect 2013 subscriptions through the employers’ payroll service in Breakdown of calls received Number of calls her Department and its agencies. [203107]

(a) victims 0 Karen Bradley: The Ministry of Justice Payroll Services (b) other police forces 5 make deductions from salary on behalf of the Home (c) UK Border Force 1 Office and its agencies staff for the 42 organisations (d) other professionals 11 listed in the following table. (e) members of public 35 Total 52 This does not include salary sacrifice schemes offered internally, by the Home Office. The cross indicates those that had deductions collected in May 2014. 653W Written Answers2 JULY 2014 Written Answers 654W

Name Paycode Main HO DBS HMPO Name Paycode Main HO DBS HMPO

Affinity Select 558X——Westfield Hlth 639 X — X INS S Sch Aig Europe 505X—— UK Prisoner Escapes Benenden 518XXX Health BHCA Health 617 X — X Philip Davies: To ask the Secretary of State for the Shield Home Department what estimate she has made of the Birmingham 504XXXcost to the public purse of police hunts for all prisoners Hosp who have absconded or escaped from prisons in each of Bupa Cash 580X——the last five years. [202787] Plan CandEClub 502X—— Wales Damian Green: This information is not held centrally. Charity For 508XXX CS Registration of Births, Deaths, Marriages and Civil CS Club 510 X — X Partnerships CS Med Aid 514X—— Ass Dr Huppert: To ask the Secretary of State for the CS Sports 520XXX Council Home Department if she will bring forward legislative CUST Fund 503 X — — changes to ensure deaths are registered within five to 10 days of the death occurring without it being CUST Fund 515X—— Ins necessary for the cause of death to be established. Engage 631X—— [201851] Mutual Ass Family 603XXXKaren Bradley: Registrars of deaths are reliant on Friendly being informed by a doctor or coroner that a death has First Div Ass 536 X — — occurred. The certification processes currently require a Forester 582XXXcause of death to be given. Any changes would require Health PSY doctors and coroners to change the way they certify GMB 542 X — — deaths in advance of the death registration. Neither the Gwent Hosp 544 — — X Department of Health, for doctors, nor the Ministry of Health Scheme 566X——Justice, for coroners, have any plans to change the death Hull certification process to certify fact of death in advance Healthsure 574 X — X of cause of death. Group The Department of Health is planning to consult on HO Bootle SP 559 X X — Soc proposals to introduce medical examiners in England HO Golf 633 X X — and Wales who will scrutinise the cause of death stated Society by an attending doctor on a Medical Certificate for Hosp Sat 562 X — X Cause of Death (MCCD). The draft Death Certification Fund Regulations propose that a prospective informant must Hosp Sav Ass 565X——provide a confirmed MCCD to the registrar within five Sin days of a medical examiner’s confirmation of the stated Hosp Sav Assn 564 X — X cause of death. Immigration 568 X — X Union Standford Hill Prison IPMS Prospect 570 X — — Leeds and Dist 572 X X X Medicash 578 X X X Philip Davies: To ask the Secretary of State for the NPS Med 586XXXHome Department what estimate she has made of the Cash Plan cost to the public purse of the police hunt for Michael PCS 592 X X X Wheatley who absconded from HM Prison Standford Peterborough 588 X — X Hill on 3 May 2014. [202784] PO SP PSLA Ass 604 X — — Damian Green: This information is not held centrally. Simply Health 576 X — — SOV Pers Acc 611 X — X UK Border Agency Plan SOVER 609X—— Health Care Sadiq Khan: To ask the Secretary of State for the Sunlife 614 X — X Home Department how many contract or temporary (Friends Life) employees were employed in (a) the Case Resolution TGWU 615 X — — Directorate and (b) the Case Assurance and Audit Unison 579 X — — Unit in each year of those bodies’ existence; and what Welsh Hosp 635 X — — proportion of the overall staff of such bodies were contract or temporary employees. [202285] 655W Written Answers2 JULY 2014 Written Answers 656W

Karen Bradley: The Case Resolution Directorate (CRD) the proportion of full-time hours they work, so that employed a total of 350 temporary staff during the staff working half the time of an equivalent full-time summer 2011. It is not possible to provide a breakdown colleague would count as 0.5 FTE. of how many contract/ temporary employees were employed for each year that CRD was in existence. Verne Prison The Case Assurance and Audit Unit (CAAU) employed 98 full-time equivalent (FTE) staff in 2011, 134 FTE Mr Hanson: To ask the Secretary of State for the staff in 2012 and 224 FTE staff in 2013. It is not Home Department pursuant to the answer to the hon. possible to break this down by how many were contract/ Member for Brent Central of 16 June 2014, Official temporary employees or employed full-time. FTE means Report, column 445W, on HMP Verne, in which prison that part-time employees are counted by the proportion establishment for how long each person detained has of full-time hours they work, so that staff working half been held. [200665] the time of an equivalent full-time colleague would count as 0.5 FTE. Karen Bradley: It is not possible to provide detail of how long those held in prison establishments have been Sadiq Khan: To ask the Secretary of State for the detained without the examination of individual records Home Department how many full-time employees were at disproportionate cost. employed in (a) the case resolution directorate and (b) the case assurance and audit unit in each year of those bodies’ existence. [202286]

Karen Bradley: The case resolution directorate (CRD) HEALTH employed a total of 1,300 caseworkers in 40 regional teams during its existence. It is not possible to provide a Abortion breakdown by each year that CRD was in existence. The case assurance and audit unit (CAAU) employed Mr Amess: To ask the Secretary of State for Health 98 full-time equivalent (FTE) staff in 2011, 134 FTE which 10 primary care areas in England had the (a) staff in 2012 and 224 FTE staff in 2013. FTE means highest and (b) lowest abortion rates per 1,000 women that part-time employees are counted by the proportion aged between 15 and 44 years in 2013. [202525] of full-time hours they work, so that staff working half the time of an equivalent full-time colleague would Jane Ellison: The following tables show the information count as 0.5 FTE. requested. Sadiq Khan: To ask the Secretary of State for the Table 1: Clinical commissioning groups (CCGs) with the 10 highest abortion rates, 2013 Home Department what the cost was of renaming (a) Rate per 1,000 resident women the Case Resolution Directorate in 2011 and (b) the CCG name aged 15-44 ASR1, 2 Case Assurance and Audit Unit in 2013. [202287] NHS Barking and Dagenham 31.4 Karen Bradley: It is not possible to answer the question, NHS Croydon 26.9 as information is not held in the appropriate format and NHS Greenwich 26.6 to extract the data would incur disproportionate cost. NHS Lewisham 26.6 NHS Waltham Forest 25.8 UK Visas and Immigration NHS Southwark 25.0 NHS Brent 25.0 Sadiq Khan: To ask the Secretary of State for the NHS Hounslow 24.6 Home Department how many contract or temporary NHS Lambeth 24.0 employees are employed in the older live cases unit; and NHS Redbridge 23.8 what proportion of the overall staff count are contract 1 Rates for CCGs are based on mid-2013 population estimates. 2 Aged standardised rates are calculated using the 2013 European or temporary employees. [202313] Standard Population (ESP). Karen Bradley: There were 208 full-time equivalent Table 2: CCGs with the 10 lowest abortion rates, 2013 (FTE) temporary agency workers employed on OLCU Rate per 1,000 resident women CCG name aged 15-44 ASR1, 2 casework at the end of Q1 2014, this was equal to 62.7% of the overall staff at the time. FTE means that part-time NHS Hardwick 9.2 employees are counted by the proportion of full-time NHS Vale of York 9.7 hours they work, so that staff working half the time NHS North Durham 9.9 of an equivalent full-time colleague would count as NHS South Norfolk 10.1 0.5 FTE. NHS North Derbyshire 10.1 NHS North Norfolk 10.2 Sadiq Khan: To ask the Secretary of State for the NHS West Suffolk 10.5 Home Department how many full-time staff are NHS Rushcliffe 10.5 employed in the older live cases unit. [202314] NHS South Lincolnshire 10.7 NHS Bath and North East 10.8 Karen Bradley: There were 332 full-time equivalent Somerset (FTE) staff employed by OLCU at the end of Q1 2014. 1 Rates for CCGs are based on mid-2013 population estimates. FTE means that part-time employees are counted by 2 Aged Standardised Rates are calculated using the 2013 ESP. 657W Written Answers2 JULY 2014 Written Answers 658W

Mr Amess: To ask the Secretary of State for Health Autism (1) what research his Department has (a) undertaken and (b) evaluated since May 2010 on the number of Grahame M. Morris: To ask the Secretary of State women who died following complications from a legal for Health how many adults with autism in England abortion; when his Department last undertook an receive support having previously been identified by a evidence review of the number of women who died local authority as being at risk of abuse or neglect. following complications from a legal abortion that [202594] drew on (i) UK and (ii) international research; and if he will make a statement; [202526] Norman Lamb: This information is not kept centrally. (2) how many women are known to have died within one month of operations for termination of pregnancy Breast Cancer notified under the Abortion Regulations 1991 in each year since 1984; what cause of death was recorded on the death certificate in each case; and if he will make a Anas Sarwar: To ask the Secretary of State for statement. [202527] Health what steps the Government is taking to reduce the number of avoidable deaths from breast cancer. Jane Ellison: The most comprehensive information [202906] about a death following an abortion is published in the Confidential Enquiry into Maternal Deaths (CEMD) Jane Ellison: The Cancer Outcomes Strategy set out (previously known as the Confidential Enquiry into our ambition to save an additional 5,000 lives per year Maternal and Child Health). by 2014-15 and is backed with more than £750 million, including more than £450 million to achieve early diagnosis Maternal deaths associated with termination of pregnancy; United by improving public awareness of the symptoms of Kingdom 1985-2008 cancer and improving access to key diagnostic tests. Public Health England, working with the Department Number of deaths from 1 and NHS England, ran a national Be Clear on Cancer Triennium termination of pregnancy campaign on breast cancer in women over 70. The 2006-08 20 campaign aimed to improve awareness of the signs and 2003-05 1 symptoms of breast cancer and urge people with relevant 2000-02 5 signs and symptoms to visit their general practitioner 1997-99 2 promptly. 1994-96 1 Screening is an important way to detect cancer early 1991-93 5 and the national health service Breast Screening Programme 1988-90 3 (BSP) invites women aged 50 to 70 every three years. We 1985-87 1 want to expand the NHS BSP so that more women can 1 Data is collected for each three year period. make the important choice to take part, so the programme 2 The report also reviews the deaths of two women who died from is currently being extended to women aged 47-49 and sepsis following termination of pregnancy and one death associated 71-73 as part of a major research trial. Results on the with cocaine misuse interacting with anaesthesia. impact of the extension on breast cancer mortality will Cause of death recorded on death certificates for be known in the early 2020s. women who died following an abortion is not reviewed by the Department. The Maternal, Newborn and Infant Cancer Clinical Outcome Review Programme which now oversees CEMD is funded by the Department and other Nic Dakin: To ask the Secretary of State for Health organisations. CEMD take account of all relevant United (1) what plans (a) his Department and (b) NHS Kingdom and international research in their work. Data England have to capture the experiences of cancer for 2009-12 is due to be published in December this year patients outside hospital settings; [202946] and annual updates will be produced in the future. (2) what plans NHS England has to conduct the National Cancer Patient Experience survey in 2015. Alcoholic Drinks: Labelling [202903] Jane Ellison: NHS England now has responsibility Mr Virendra Sharma: To ask the Secretary of State for the Cancer Patient Experience Survey (CPES) and for Health if he will make it his policy to support advises that it plans to continue the survey in 2015. calorific labelling on alcoholic drinks. [202378] Although the sample for the CPES is drawn from those who have had treatment for cancer within a Jane Ellison: Energy labelling of alcoholic drinks is hospital, the questionnaire also asks many questions regulated by the European Union. The EU Food about the patient’s experience outside of hospital too. Information for Consumers Regulation allows voluntary For example, the initial process around diagnosis, energy labelling for alcoholic drinks pending a European interactions with a cancer nurse specialist (which may Commission report on nutrition labelling and ingredient be outside of a hospital setting), home care and support, listing on alcoholic drinks, which we expect later this community nurses and care from their general practitioner. year. The Government supports mandatory energy From this, it is possible to learn what the experience of declarations, and we will continue to press for this to be cancer patients has been both inside and outside of a included in any new legislative proposals. hospital setting. 659W Written Answers2 JULY 2014 Written Answers 660W

Care Act 2014 Norman Lamb: Improving dementia care is a priority for the Government, and the Prime Minister. On the 28 Grahame M. Morris: To ask the Secretary of State February, my Rt. hon. Friend the Secretary of State for for Health when he expects the Care Act 2014 part 1 Health announced his ambition for improving dementia care and support for people with dementia, their family regulations to be laid before the House. [202566] and carers. Norman Lamb: Subject to the parliamentary timetable, NHS England has identified around £90 million annually we intend to lay the final regulations in October 2014 that is available nationally to the National Health Service and publish the statutory guidance at the same time. We to support timely diagnosis of dementia and to ensure are committed to setting out the detail of secondary that by 2015, two-thirds of people with dementia have a legislation and statutory guidance six months in advance diagnosis and receive appropriate support following of when most of part 1 of the Care Act comes into diagnosis. force (April 2015), in order to give local authorities and The Department has committed to double funding their partners as much time as possible to plan for for research for dementia by 2015. implementation. The Department has also provided major funding to improve dementia care for the following: Care Homes: Disability Dementia Friends programme, £2.4 million funded by Cabinet Office and the Department; Dr Huppert: To ask the Secretary of State for Health Commissioning for Quality and Innovation (CQUIN) £54 what recent discussions his Department has had with million in April 2012 and £108 million in April 2013; providers of residential care for people with physical Dementia Friendly Environments Capital Fund £50 million, impairments and learning difficulties on proposals for October 2012; home closure. [202794] Dementia Awareness Campaign £3.2 million, September 2012; Dementia Workforce Development Fund for Social Care Staff Norman Lamb: The Department has not had any (administered by Skills for Care) £2.4 million July 2012. In addition to this we have funded further Workforce Projects to recent discussions with providers of residential care for the value of £1,640,000 since 2012-13 (£540,000 in 2012-13, people with physical impairments and learning difficulties £700,000 in 2013-14 and £400,000 planned for 2014-15); on proposals for home closure. Breakthrough Innovation Challenge Prize £1 million announced, The new Care Act, which will come into force in June 2012; and 2015, will give local authorities a core duty to promote Social Services support to Memory Services £10 million, September their local market, with a particular focus on ensuring 2011. diversity, quality and sustainability which, importantly, will mean there should be sufficient high quality services Mr Ivan Lewis: To ask the Secretary of State for Health available to meet the needs of individuals in their local whether Ministers from the devolved Administrations area. were invited to attend the Global Dementia Legacy The Department has worked with stakeholders, including Event in London in June 2014. [202562] provider organisations, to develop draft statutory guidance to support the implementation of the Care Act. The Norman Lamb: Senior officials from each of the guidance will describe how local authorities must meet devolved Administrations are members of the Dementia these new duties, including encouraging sustainability Steering Group (International) and were involved and through appropriate fee levels. The draft guidance was aware of plans for the UK Global Dementia Legacy published as part of a 10-week public consultation on event. They were also invited to attend the event. Ministers the full package of regulations and guidance under part were not invited, senior officials were sent a formal 1 of the Care Act on 6 June. invitation. The Government believes that people who wish and The Scottish Government hosted an international who are able to live in their communities, rather than in dementia event on 9 and 10 June, and officials from the an institutional care setting, should be given the support Department attended. they need to do so. Ministers from across the United Kingdom signed up to the Blackfriars Consensus to prevent and delay dementia, Dr Huppert: To ask the Secretary of State for Health which was announced at the UK Global Dementia how many places in residential care homes were Legacy event. available for people with (a) physical impairments and (b) learning difficulties or complex needs in each of Mr Ivan Lewis: To ask the Secretary of State for the last four years. [202795] Health what discussions his Department has had with its counterparts in Northern Ireland ahead of the Norman Lamb: Information provided by the Care Global Dementia Legacy event in London on 19 June Quality Commission, covering the four financial years 2014. [202563] to 31 March 2014, has been placed in the Library. Norman Lamb: Senior officials from each of the devolved Administrations are members of the Dementia Dementia Steering Group (International) and were involved and aware of plans for the UK Global Dementia Legacy Mark Menzies: To ask the Secretary of State for event. They were also invited to attend the event. Ministers Health if he will make available additional funding to were not invited, senior officials were sent a formal improve care for people with dementia. [202449] invitation. 661W Written Answers2 JULY 2014 Written Answers 662W

There were no discussions between the Secretary of Mental Health Services: Ethnic Groups State for Health, the right hon. Member for South West Surrey (Mr Hunt), and his ministerial counterparts. Ms Abbott: To ask the Secretary of State for Health Senior officials in the devolved Administrations were (1) if he will assess the effectiveness of the implementation involved in discussions via their participation in the of the conclusions of Delivering race equality in mental Dementia Steering Group (International). health care: An action plan for reform inside and outside Ministers from across the United Kingdom signed up services published in 2005; what his Department’s strategy to the Blackfriars Consensus to prevent and delay dementia, is for reducing inequalities in Black and minority ethnic which was announced at the UK Global Legacy event. patients’ access to, experience of, and outcomes from mental health services; and if he will make a statement; General Practitioners [202552] (2) what proportion of beds in (a) residential mental Mike Weatherley: To ask the Secretary of State for health facilities and (b) psychiatric wards in NHS Health what meetings he has had with patient groups hospitals in England are occupied by black and to discuss the difficulties patients face in booking minority ethnic people. [202500] appointments with their GP. [202308] Norman Lamb: The Delivering Race Equality in mental Dr Poulter: The Department’s Ministers regularly health care programme, a five-year Department of Health meet with Members of Parliament to discuss issues programme launched in January 2005, was developed relating to general practice affecting their constituents. to address inequalities in patient admission, detention They have not had any meetings with patient groups to and experience of services. discuss the difficulties patients face in booking appointments. The 2010 document ‘Race Equality Action Plan: A five-year review’ looks back at the work of the Delivering Health Services Race Equality in mental health care programme and describes some of the key challenges, successes and learning. A copy of ‘Race Equality Action Plan’ has Nic Dakin: To ask the Secretary of State for Health if been placed in the Library. he will promote the roll-out of the values and behaviours of the six Cs beyond nursing, midwifery Our mental health Strategy, ‘No Health Without and care staff. [202941] Mental Health’ states that the ‘Race Equality Action Plan’ provides a strong base from which commissioners Dr Poulter: We recognise that the 6Cs—Care, and service providers can make improvements. These Compassion, Competence, Communication, Courage will rely on: and Commitment—the values and behaviours of the local collection and monitoring of information on ethnicity ‘Compassion in Practice, Nursing, Midwifery and Care and culture; Staff, Our Vision and Strategy’, published in December better use of these data to inform commissioning and provision 21012, to deliver high quality companionate care and to in health and social care; achieve excellent health and well-being outcomes, are a focus on outcomes that work for individuals and communities; contributing to improved patient and staff experience monitoring and evaluating effectiveness of service delivery, and safety. especially around equality needs; and Many trusts have signed up and rewritten their establishing mechanisms that allow local user groups to engage organisational strategy around the 6Cs and other health with providers and commissioners, and that empower and professionals have adopted the 6Cs into their practice support them so that they can engage effectively. across the national health service and social care. Additionally, our new mental health action plan, During the past 12, the number of Care Makers—who ‘Closing the Gap’ sets out our priorities for essential act as ambassadors for the 6Cs—has continued to change in mental health: 25 areas where people can flourish and there are currently more than 1,200 throughout expect to see and experience the fastest changes. The England. Care Makers have expanded beyond nursing, fourth priority is that we will tackle inequalities around midwifery and care family, to include other professions access to mental health services. We know that people such as allied health professionals, doctors, chaplains from black and minority ethnic (BME) communities and commissioners. have to date been less likely to use psychological therapies. To ensure that this significant cultural change is Which is why we are working with the Race Equality developed across all NHS and social care professions, Foundation and other stakeholders to try and understand NHS England is hosting an event (on 4 July), for senior why this is the case and to understand inequalities leaders from the NHS and social care, clinical and around access to other services. NHS England are also non-clinical, in conjunction with the Clinical Leaders working with BME community leaders to encourage Network. Attendees include patient advocates, more people to use psychological therapies. representatives from partners including the Hospital The Ministerial Working Group on Equality in Mental Caterers Association and clinical colleagues who have Health has been established to support the Mental actively engaged with the 6Cs and are eager to promote Health Equality work-stream of the Mental Health their spread and uptake among other disciplines. Strategy programme. The group will report to the Mental The event aims to act as a springboard for individuals Health Strategy Ministerial Advisory Group. This will and organisations that are interested in listening to and help to ensure that equality issues directly inform strategy sharing learning and good practice to engage their implementation and enable the Government to fulfil workforces to embed the values of the 6Cs across all their duties under the Equality Act 2010 and the Human professions and levels in health care practice. Rights Act. 663W Written Answers2 JULY 2014 Written Answers 664W

Information on the number of open hospital spells, be necessary to support the qualified work force supply; the number of occupied beds on a single day as a proxy however, the NHS now has many more health care for beds available, broken down by ethnicity is provided professionals, and is much closer to self-sufficiency—in in the following table. line with World Health Organization recommendations. Number of people in adult mental health in-patient services at the end of March 2014 Obesity: Alcoholic Drinks Proportion of people Mr Virendra Sharma: To ask the Secretary of State People with an with an open for Health what assessment his Department has made open hospital of potential links between alcohol and obesity. [202375] Broad Ethnicity hospital spell Ethnicity group spell (percentage) Jane Ellison: The Government’s ‘Healthy Lives, Healthy People: A call to action on obesity in England’, October Total — 23,246 100 2011, states that alcoholic drinks can be high in calories British White 16,435 70.7 and contribute to the energy imbalance that can lead to Irish White 272 1.2 being overweight and obesity. A copy of the document Any Other White White 987 4.2 has already been placed in the Library. Background White and Black Mixed 262 1.1 Caribbean Out-patients: Attendance White and Black Mixed 69 0.3 African Mike Weatherley: To ask the Secretary of State for White and Asian Mixed 84 0.4 Health (1) what measures are currently in place to Any Other Mixed Mixed 179 0.8 record the number of missed GP appointments; [202307] Background (2) what estimate he has made of the annual cost to Indian Asian or Asian 336 1.4 the NHS of missed appointments; [202304] British Pakistani Asian or Asian 385 1.7 (3) how many GP appointments were missed in (a) British 2009, (b) 2010, (c) 2011, (d) 2012 and (e) 2013; Bangladeshi Asian or Asian 174 0.7 [202305] British (4) what steps his Department is taking to reduce the Any Other Asian Asian or Asian 318 1.4 number of missed GP appointments; and if he will Background British make a statement. [202306] Caribbean Black or Black 865 3.7 British Dr Poulter: Information is not collected centrally on African Black or Black 645 2.8 British the number of missed general practitioner (GP) Any Other Black Black or Black 614 2.6 appointments. This is a matter for local organisations. Background British However, NHS England estimates that each year around Chinese Other Ethnic 60 0.3 12 million GP appointments are missed, at a cost to the Groups system of £162 million. Any Other Ethnic Other Ethnic 386 1.7 In order to reduce the number of missed GP Group Groups appointments, the Prime Minister’s Challenge Fund is Not Stated Not Stated 569 2.4 supporting pilots to ensure appointments are as convenient Invalid Data Invalid Data 23 0.1 as possible for the patient. The pilots will offer millions Supplied Supplied more patients evening and weekend GP appointments, Unspecified Unspecified 92 0.4 as well as introducing initiatives, such as email and Not Known Not Known 491 2.1 Skype consultations. Source: M12 2013/14 MHMDS, Health and Social Care Information Centre Prostate Cancer NHS: Recruitment Nadine Dorries: To ask the Secretary of State for Mark Hendrick: To ask the Secretary of State for Health how much the Government has spent on Health which NHS health trusts have (a) recruited and prostate cancer research in each of the last five years (b) advertised for staff outside the UK since 1 January for which figures are available. [202567] 2013. [202480] Dr Poulter: The following figures provide an annualised Dr Poulter: The Department does not hold information estimate of Government funding for prostate cancer on national health service trusts that have recruited or research, provided by the National Cancer Research advertised for staff outside the United Kingdom since 1 Institute Cancer Research Database 2009 to 2013. January 2013. It is the responsibility of local NHS organisations to Prostate cancer (£) plan and deliver a work force appropriate to the needs 2009 7,895,544 of their local population, based on clinical need and sound evidence. 2010 7,158,048 2011 7,095,581 The nature of the NHS labour market means that 2012 9,484,685 supply shortages in specific specialisms and geographies 2013 8,276,039 do exist. It is likely that some overseas recruitment will 665W Written Answers2 JULY 2014 Written Answers 666W

These figures include only direct spend on prostate Mr Stewart Jackson: To ask the Secretary of State cancer research, or spend which directly supports prostate for Health what steps his Department is taking to cancer research; it does not include fundamental research reduce premature mortality from respiratory disease in that could have implications for prostate cancer in the Peterborough constituency. [202522] longer term. Jane Ellison: The “NHS Outcomes Framework 2014/15” Respiratory System sets out the Department’s priority areas for the national health service. It includes reducing deaths from respiratory Mr Stewart Jackson: To ask the Secretary of State disease as a key indicator and highlights the need to for Health if he will take steps so that Public Health reduce unplanned hospital admissions due to asthma. England introduces a case-finding spirometry test The Mandate for NHS England, set by the Government, component as part of the NHS Health Check for requires NHS England to improve outcomes, including people aged between 40 and 74. [202535] the prevention of premature deaths from respiratory disease and to support people with long-term conditions. Jane Ellison: Public Health England (PHE) is responsible for advising the Department on potential content changes Clinical commissioning groups (CCGs) plan, develop to the NHS Health Check programme. The agency has and improve local NHS services for their population, established an Expert Scientific and Clinical Advisory taking into account local priorities. We are advised by Panel to oversee this process. The panel includes NHS England that reducing premature mortality from representation from the National Screening Committee, respiratory disease is included in one of Cambridgeshire National Institute for Health and Care Excellence and and Peterborough CCG’s key priorities—reducing coronary wider experts. heart disease. Activity is concentrated in the more deprived areas of Cambridgeshire, including Peterborough. It is not feasible to make frequent changes to the programme. PHE reviews new content proposals every 12 months and will consider spirometry when it next Chronic Obstructive Pulmonary Disease begins this process in the winter of 2014. Mr Stewart Jackson: To ask the Secretary of State Respiratory System: Diseases for Health (1) for what reasons his Department’s Outcomes Strategy for Chronic Obstructive Pulmonary Mr Stewart Jackson: To ask the Secretary of State Diseases and Asthma in England, published in 2011, for Health how much funding will be designated for does not include an implementation programme basic and applied research into respiratory disease in timetable; and if he will make a statement; [202555] 2014-15; and if he will make a statement. [202521] (2) if he will make it his policy to continue to fund a regular national audit of chronic obstructive Dr Poulter: The Department’s National Institute for pulmonary disease; and if he will make a statement. Health Research (NIHR) funds a range of applied [202523] clinical research, but does not fund fundamental laboratory-based research, which is funded by other Jane Ellison: NHS England intends to continue to organisations including the Medical Research Council fund the chronic obstructive pulmonary disease (COPD) (MRC) and medical research charities. audit as part of the NCAPOP (National Clinical Audit The usual practice of the NIHR and of the MRC is and Patient Outcomes Programme). not to ring-fence funds for expenditure on particular The COPD and asthma outcomes strategy was published topics: research proposals in all areas compete for the by the Department around the time of the national funding available. health service transition to the current structures. It was The Department’s NIHR welcomes funding applications designed to help NHS commissioners understand the for research into any aspect of human health, including key evidence based and cost effective interventions which respiratory disease. These applications are subject to would improve the quality of care for patients with peer review and judged in open competition, with awards COPD. As such, it was not intended to be supported by being made on the basis of the importance of the topic an implementation plan. to patients and the national health service, value for In May 2012, the Department published the NHS money and scientific quality. In all disease areas, the Companion Document to the Outcomes Strategy, setting amount of NIHR funding depends on the volume and out how the NHS can implement changes at a local quality of scientific activity. level. Spend on research funded directly by the Department’s NIHR from 2010-11 to 2012-13 in respiratory disease is Social Services: Disability shown as follows. The complete information on NIHR spend in 2013-14 is not currently available. These figures do not take account of NIHR expenditure on research Dr Huppert: To ask the Secretary of State for Health infrastructure and systems where spend cannot be attributed what assessment his Department has made of the availability to health categories. of a range of housing and care options for people with physical disabilities and learning difficulties. [202793] £ Health Norman Lamb: The Department has not made any category 2010-11 2011-12 2012-13 assessment about the availability range of housing and Respiratory 18,192,188 20,234,850 24,692,314 care options for people with physical and learning disabilities. 667W Written Answers2 JULY 2014 Written Answers 668W

A key aim of this Government is to put people with Number of learning disability services users receiving services provided disabilities, including learning disabilities, and the families or commissioned by a Council with Social Services Responsibilities who care for them, in the driving seat with greater (CSSR) choice and control and able to contribute to and influence 2009-10 2010-11 2011-12 2012-13 decisions which affect their lives, including over where Durham 1,895 1,933 1,972 1,990 and with whom they live. Hartlepool 326 335 334 335 The Care Act puts into law a series of reforms to care Stockton- 507 505 515 560 and support, making it a modern system which is built on-Tees around people’s individual needs and goals, and which County 3,041 3,096 3,151 3,220 puts them in control of their own care and support. The Durham Act will help to improve care and support for everyone total who uses care and support services, by placing personal North East 8,627 8,737 8,953 8,764 budgets onto a statutory footing as part of the care and England support plan. These reforms will allow people to exercise total real choice and control over the care and support they receive, and are supported by new duties around market England 141,761 142,455 144,130 144,831 shaping and information and advice, to ensure that total people fully understand the care system and have a wide range of high quality services available in their local Universal Credit area to choose from. Housing plays a critical role in helping adults with Chris Bryant: To ask the Secretary of State for Health physical and learning disabilities to live as independently if he will estimate the cost to the public purse of as possible. The Department is providing £315 million extending entitlement to Healthy Start vouchers and over five years for the Care and Support Specialised vitamins to all claimants of universal credit once universal Housing fund. The fund is administered by the Homes credit has been fully rolled out. [202673] and Communities Agency and, within London, by the Greater London Authority. The main aim of the fund is Dr Poulter: We plan to provide access to Healthy to support and accelerate the development of the specialised Start for pregnant women, new mothers, and children housing market for older people and disabled adults, under four in the lowest earning families receiving universal which includes housing for adults who are physically credit. Our intention is to ensure that a broadly similar disabled and those with learning difficulties. number, and range, of universal credit families will qualify as currently do so through income based benefits Social Services: Learning Disability and tax credits. The current annual delivery cost of Healthy Start Grahame M. Morris: To ask the Secretary of State throughout the United Kingdom (vouchers, vitamins for Health how many adults with (a) autism and (b) and administration) is approximately £100 million. We learning disabilities accessed care and support under estimate that if eligibility were extended to pregnant the Fair Access to Care Standards eligibility criteria in women, new mothers, and children under four in all (i) Easington constituency, (ii) County Durham, (iii) families claiming universal credit it would increase the North East England and (iv) the UK in each year since total spent annually to around £290 million. 2010. [202595] Valuation of Life and Health Interdepartmental Group Norman Lamb: The Health and Social Care Information Centre (HSCIC) does not collect any data on the number of adults with autism accessing care and support under Mr O’Brien: To ask the Secretary of State for Health the Fair Access to Care Services eligibility criteria nor (1) what monetary thresholds were applied to the cost- does it collect any data on the number of adults with per-quality adjusted life year quoted in the evidence learning disabilities accessing care and support in the submitted as part of the Health Protection Agency’s Fair Access to Care Services eligibility criteria. work with the Inter-departmental Group for the Valuation of Life and Health review in 2008; [202431] The revised guidance “Prioritising need in the context of Putting People First: A whole system government (2) what the explicit monetary value per quality- approach to eligibility for social care” which came into adjusted life was in the context of ’Evaluation of new effect in April 2010, replaces the Fair Access to Care pharmaceutical products or medical devices’, as quoted Services guidance issued by the Department in 2003. A as part of the National Institute for Health and Care copy of the revised guidance has already been placed in Excellence’s submission to Inter-departmental Group the Library. for the Valuation of Life and Health review in 2008; [202426] HSCIC has been able to provide the number of clients with learning disabilities receiving services each (3) if he will place in the Library a copy of his year since 2010 as follows: Department’s submission to the Inter-Departmental Group for the Valuation of Life and Health review and Number of learning disability services users receiving services provided all evidence submitted to the series of interviews with or commissioned by a Council with Social Services Responsibilities (CSSR) his Department’s staff conducted by researchers from 2009-10 2010-11 2011-12 2012-13 the University of Leeds in 2008; [202414] (4) if he will place in the Library a copy of the North Darlington 313 323 330 335 East Health Protection Agency’s submission to the Inter- Departmental Group for the Valuation of Life and 669W Written Answers2 JULY 2014 Written Answers 670W

Health review and all evidence submitted to the series Mr Vara: As of 22 April 2014, the County court no of interviews with his Department’s staff conducted by longer has the jurisdiction to consider divorce or civil researchers from the University of Leeds in 2008; partnership dissolution applications. These are now [202418] considered by the Family Court. (5) if he will place in the Library a copy of the Food Hearings in divorce and civil partnership dissolution Standards Agency’s submission to the Inter-Departmental cases are rare, but from April 2015 if a hearing is Group for the Valuation of Life and Health review and required then it can be accommodated at any Family all evidence submitted to the series of interviews with Court venue with the appropriate judicial expertise. his Department’s staff conducted by researchers from Community Rehabilitation Companies the University of Leeds in 2008; [202419] (6) if he will place in the Library a copy of the John Mann: To ask the Secretary of State for Justice National Institute for Health and Care Excellence’s what representation he has received from magistrates submission to the Inter-Departmental Group for the and the judiciary since 1 June 2014 on service delivery; Valuation of Life and Health review and all evidence and if he will seek feedback as part of Test Gate 4 on submitted to the series of interviews with his whether the sale of Community Rehabilitation Department’s staff conducted by researchers from the Companies contracts is having a detrimental impact on University of Leeds in 2008; [202420] sentencing and court processes. [202528] (7) what the explicit monetary value per quality- adjusted life was in the context of Interventions and Jeremy Wright: On 1 June, as part of our ongoing Regulations, as quoted as part of his Department’s Transforming Rehabilitation Programme of reform, the submission to the Inter-Departmental Group for the new National Probation Service (NPS) and Community Valuation of Life and Health review in 2008; [202424] Rehabilitation Companies (CRCs) formally commenced (8) what the explicit monetary value per quality- operation. My officials have been in regular contact adjusted life was in the context of Advice on Nuclear with the judiciary and magistracy throughout the transition power, centre for infections and modelling, as quoted process, but we have had no specific representations as part of his Department’s submission to the from them concerning service delivery. Inter-Departmental Group from the Valuation of Life We have made it clear throughout this process that we and Health review in 2008; [202425] will manage the reforms in a controlled way and we will (9) what monetary thresholds were applied to the not proceed to share sale until thorough testing is cost-per-quality adjusted life year quoted in the complete and we are satisfied that it is safe to do so. evidence submitted as part of his Department’s work with the Inter-departmental Group for the Valuation of Sadiq Khan: To ask the Secretary of State for Justice Life and Health review in 2008; [202429] (1) if he will publish the list of preferred bidders for the (10) what monetary thresholds were applied to the Tier 1 Community Rehabilitation Company contracts; cost-per-quality adjusted life year quoted in the [202763] evidence submitted as part of the Food Standards (2) when the preferred bidders under the Transforming Agency’s work with the Inter-departmental Group for Rehabilitation process will be announced; when winning the Valuation of Life and Health review in 2008. bidders will be announced; and when winning bidders [202430] will take over the running of the Tier 1 Community Rehabilitation Company contracts. [202768] Dr Poulter: I refer my right hon. Friend to the answer given on 26 June 2014, Official Report, column 283W. Jeremy Wright: Bids to run the 21 Community Rehabilitation Companies are expected by the end of Whyndyke Farm June, with contract winners being announced by the end of 2014. We will announce the list of preferred Mark Hendrick: To ask the Secretary of State for bidders when the evaluation has been concluded. We Health what amount has been spent on building the are committed to the roll out of payment by results by psychiatric facility at Whyndyke Farm to date; and 2015. when that facility will become fully operational. [202504] Courts: Children Jane Ellison: This is a matter for the national health service locally. Mr Gregory Campbell: To ask the Secretary of State for Justice what assessment he has made of the We have written to Derek Brown, Chair of the Lancashire implications for his policies of the NSPCC’s Order In Care NHS Foundation Trust informing him of the hon. Court campaign seeking change changes to the way the Member’s inquiry. He will reply shortly and a copy of criminal justice system treats children. [202662] the letter will be placed in the Library. Damian Green: The Ministry of Justice is committed to protecting and supporting child witnesses to help JUSTICE give their best evidence. In doing so, we have equipped the majority of Crown courts and magistrates courts Civil Partnerships Dissolution with facilities to enable vulnerable witnesses to give evidence by secure video link from an alternative location Dr Thérèse Coffey: To ask the Secretary of State for to the trial court. We are exploring ways to increase the Justice if he will make it his policy that civil partnerships use of video links, including in cases involving vulnerable can be dissolved at any county court. [202469] and intimidated victims and witnesses. 671W Written Answers2 JULY 2014 Written Answers 672W

We are also working with other criminal justice agencies Epsom and Ewell (Chris Grayling) and the Secretary of to improve the uptake of Registered Intermediaries for State for the Home Department, the right hon. Member child and other vulnerable witnesses. I am grateful to for Maidenhead (Mrs May), on the introduction of s77 the NSPCC, whose campaign will assist in raising awareness. of the Criminal Justice Act 2008 (CJIA). The Ministry Specialist training for judges is the responsibility of of Justice will liaise with all interested Government the judiciary and the Judicial College. Departments before deciding whether to consult on introducing section 77 (CJIA) and commencing the Courts: Video Conferencing enhanced public interest defence under section 78 (CJIA). Driving Offences: Insurance Dan Jarvis: To ask the Secretary of State for Justice how many remote sites for giving evidence in court are open in each region of England and Wales. [202355] Mr Ward: To ask the Secretary of State for Justice if he will take steps to increase the penalties for uninsured Mr Vara: We must do everything we can to support drivers. [202610] vulnerable witnesses and help them give their best possible evidence to bring offenders to justice. That’s why we are Jeremy Wright: Sentencing in individual cases is entirely trialing pre recorded cross-examination to allow young a matter for our independent courts and they must and vulnerable witnesses to give evidence away from follow sentencing guidelines issued by the independent what can be an aggressive court room atmosphere. This Sentencing Council. is on top of a range of measures to help reduce the The Government announced on 12 May this year anxiety of attending court, including giving evidence that it intends to carry out a review of the offences and behind a screen. We will continue to explore ways we maximum penalties available for a range of driving can use remote links and new technology to help witnesses offences. This will include offences involving uninsured give evidence from outside the court building. drivers. The following table sets out the number of courthouses in each of the seven HMCTS Regions in England and Employment Tribunals Service Wales. These facilities enable any victim or witness to appear by video link from a different court location to Ian Murray: To ask the Secretary of State for Justice that of the trial court; it is also possible for third party (1) whether his Department’s employment tribunal users to access the court system through a secure bridge. statistics are independently assessed for accuracy; [202164] Number of courthouses enabled (2) for what reasons the quarterly employment HMCTS Region for remote video link. tribunal statistics published by his Department on Wales 22 12 June 2014 were removed without notification and London 32 replaced the same day with a second set of statistics; South East 52 and if he will make a statement. [202165] South West 35 Midlands 40 Mr Vara: The Ministry of Justice publishes quarterly official statistics on the tribunals which come under it, North West 31 including employment tribunals. These are produced by North East 37 statisticians within the Ministry of Justice using information Total 249 collated by HM Courts and Tribunals Service, and are covered by the Code of Practice for Official Statistics. Criminal Injuries Compensation: Preston The statistics published on 12 June were updated shortly after the initial publication. This was because Mark Hendrick: To ask the Secretary of State for we identified that the breakdown of employment tribunal Justice how many claims for compensation have been jurisdiction claims was incorrect in a table published as submitted by residents of Preston constituency to the an annex to the main publication. Criminal Injuries Compensation Authority that have not yet been resolved. [202482] The revision had no impact on the main findings set out in the statistical publication, that HMCTS tribunals Damian Green: CICA does not hold information that recorded 84,700 receipts in the period January to March would allow it to extract figures based on parliamentary 2014. This is 67% lower than the same period of 2013, constituencies. and the lowest receipts since this statistical series began in 2008-09. Data Protection In line with gov.uk policy, we alerted users to this revision by posting a message on the main webpage for Mr Steve Reed: To ask the Secretary of State for the the publication and have put in place procedures to Justice what discussions she has had with the Lord ensure future publications will not be affected. Chancellor on the introduction of section 77 of the Criminal Justice and Immigration Act 2008 in relation Freedom of Information to data protection offences; and if she will make a statement. [202612] Paul Flynn: To ask the Secretary of State for Justice if he will make it his policy to regularly provide details Simon Hughes: I am not aware that any discussions on private sector bodies who collaborate with public have taken place between the Lord Chancellor and sector bodies on projects which are subject to the Secretary of State for Justice, the right hon. Member for Freedom of Information Act 2000. [202371] 673W Written Answers2 JULY 2014 Written Answers 674W

Simon Hughes: The Government already provides The Public Guardian has power to investigate cases details of private sector bodies who work under contract where concerns are raised about the actions of a person with the Government. Since January 2011, as part of acting under a power of attorney, and to apply to the the Government’s transparency programme, details of Court to revoke the power of attorney where necessary contracts above the value of £10,000 are published on to prevent abuse. The Public Guardian will refer cases Contracts Finder; to health and care authorities, who can act under statutory https://www.gov.uk/contracts-finder safeguarding powers to protect an individual who may be at risk, and to the police if he suspects a criminal Mediation offence has been committed. We are currently considering whether the Public Mr Bradshaw: To ask the Secretary of State for Guardian needs additional powers to strengthen his Justice what estimate he has made of the number of role in safeguarding elderly and vulnerable people, including cases in which compulsory mediation and information the power to continue an investigation after a power of meetings would have been appropriate in 2013-14; and attorney or court order has been revoked or disclaimed. what funding is being made available in 2014-15 to This would require changes to primary legislation. provide that service. [202292] Data on prosecutions for fraud, or for ill-treatment and neglect under the Mental Capacity Act 2005, do Simon Hughes: We do not have the data to allow us to not specify whether the allegation relates to a person assess how many family court applications filed in acting under a power of attorney. The Government’s 2013-14 might have been appropriate for a Mediation response to the House of Lords Select Committee’s Information and Assessment Meeting (MIAM) in report on the Mental Capacity Act includes a commitment comparison with the number of MIAMs actually attended. to review the use of the criminal offence under s44 of In 2013/14 13,354 couples attended a publicly funded the Act. MIAM (that is, where at least one of the parties was legally aided). Implementation of the Children and Families Act Prisoners 2014 on 22 April 2014 means that attendance at a MIAM is now compulsory for the potential applicant. Chris Ruane: To ask the Secretary of State for Justice Public funding (legal aid) remains in scope for family (1) how many hours per week prisoners in HM Prison mediation for those who qualify on means and merits, Whitemoor spent (a) in cells and (b) working in each and the budget for legal aid for mediation is uncapped. In of the last three years; and what proportion of such 2013/14, the LAA spent £9m on mediation. If one party prisoners were classed as unemployed on the latest date is funded the other will be covered for the MIAM as for which figures are available; [202691] well. Legal help with mediation is also available for the funded party and includes help from a lawyer with (2) how many hours per week prisoners in HM applying to the court for a consent order based on the Prison Winchester spent (a) in cells and (b) working agreement reached in mediation. in each of the last three years; and what proportion of such prisoners were classed as unemployed on the latest date for which figures are available; [202692] Powers of Attorney (3) how many hours per week prisoners in HM Nadine Dorries: To ask the Secretary of State for Prison Wolds spent (a) in cells and (b) working in Justice (1) if his Department will strengthen levels of each of the last three years; and what proportion of protection of elderly and vulnerable people by allowing such prisoners were classed as unemployed on the latest the Office of the Public Guardian to investigate abuses date for which figures are available; [202693] of power of attorney in cases where these powers have (4) how many hours per week prisoners in HM been revoked; [202570] Prison Wood Hill spent (a) in cells and (b) working in (2) what steps he will take to introduce safeguards to each of the last three years; and what proportion of power of attorney to better protect elderly and such prisoners were classed as unemployed on the latest vulnerable people from abuses of that power; [202571] date for which figures are available; [202694] (3) how many successful prosecutions for abuse of (5) how many hours per week prisoners in HM power of attorney were brought forward in each of the Prison Wormwood Scrubs spent (a) in cells and (b) last five years for which figures are available; and if he working in each of the last three years; and what will make a statement; [202572] proportion of such prisoners were classed as (4) what steps he is taking to increase levels of unemployed on the latest date for which figures are protection for elderly and vulnerable people who fall available. [202695] victim to abuse of power of attorney; [202573] (5) if his Department will take steps to expand the Jeremy Wright: Up until the end of 2011-12, information investigatory powers of the Office of the Public was collected on the average hours per weekday that Guardian to better protect elderly and vulnerable prisoners were unlocked. By subtracting the average people in cases in which power of attorney is abused; hours unlocked from the 24 hours in a day, it is possible and if he will make a statement. [202574] to estimate hours spent locked in cell. Figures for each prison establishment for the three years from 2009-10 to Simon Hughes: The Government is committed to 2011-12 have been placed in the Library of the House. protecting elderly and vulnerable people, and to ensuring It should be noted that time in cell includes hours that anyone responsible for abuse is dealt with appropriately. when prisoners are asleep. Time unlocked includes time 675W Written Answers2 JULY 2014 Written Answers 676W where a prisoner is either out of their cell or where the (3) how much was spent on car driving lessons and cell door is unlocked allowing them to move freely in tests for prisoners in 2013. [202938] and out of the cell. Time unlocked was discontinued as a performance Jeremy Wright: My officials are currently working to indicator for prisons at the end of 2011-12 because it provide the information requested but it has not proved was not used in the day-to-day management of prisons possible to produce it in the time allowed. I will write to and NOMS had concerns over the burden on the front-line you in due course. of collecting the data. Indicators introduced into prison Witnesses SLAs in respect of rehabilitation, resettlement and work in prisons provide a better demonstration of efforts to prepare prisoners for release and reduce reoffending. Dan Jarvis: To ask the Secretary of State for Justice what estimate he has made of the number of active Figures have been drawn from administrative IT systems, registered intermediaries that would be required to which, as with any large scale recording system, are allow all vulnerable witnesses to have access to such subject to possible errors with data entry and processing. support in court. [202209] Figures for time in cell for the year 2012-13 and 2013-14 could be obtained only at disproportionate cost. Damian Green: We must do everything we can to Work in prisons is a key priority to ensure prisoners support vulnerable witnesses and help them give their are engaged purposefully while they are in custody. It best possible evidence to bring offenders to justice. The also gives them the opportunity to learn skills and a Ministry of Justice is actively looking at ways to increase work ethic which can increase their chances of finding the provision and uptake of special measures, in particular employment on release, a key element to reducing the use of registered intermediaries to help vulnerable reoffending. witnesses give their best evidence in court. Since 2009, The number of prisoners working in industrial activity 98% of requests for a registered intermediary have been across public sector prisons increased from around matched by the Witness Intermediary Service. 8,600 in 2010-11 (the first year for which figures are available) to around 9,700 in 2012-13. This delivered an increase in the total hours worked in industrial activities from 10.6 million hours to 13.1 million hours. Private DEFENCE sector prisons have also been supporting this agenda AWE and have reported that they delivered over 1.5 million prisoner working hours in commercial and industrial Caroline Lucas: To ask the Secretary of State for workshops in 2012-13 which provided work for over Defence for what reasons a review of the scope of 1,200 prisoners. In addition, there are substantial number Project Pegasus is being undertaken at the Atomic of prisoners who work to keep prisons running on tasks Weapons Establishment; and what changes he expects such as cooking, serving meals, maintenance and cleaning. to be made to the scope of the project as a result of the Figures for public sector prisons are published in the review. [200410] NOMS Annual Report Management Information Addendum, available at: Mr Dunne: Pegasus is the replacement highly https://www.gov.uk/government/uploads/system/uploads/ enriched uranium component manufacturing and attachment_data/file/225225/mi-addendum.pdf storage facility, and forms part of the Government’s The establishment-level breakdown of weekly hours programme of investment in the Atomic Weapons worked is not available centrally for 2011-12 and 2012-13 Establishment sites. and could be obtained only at disproportionate cost. In accordance with normal industry best practice, Information on the proportion of prisoners classed the project is under regular review to ensure that the as unemployed is not available centrally and could be facility will meet the Ministry of Defence’s obtained only at disproportionate cost. requirements while also achieving the optimum balance Our reforms to the incentives and earned privileges of performance, cost and schedule. No changes to the national policy framework came into effect in adult approved scope of the project have been made. prisons on 1 November 2013. Prisoners will be expected to engage in purposeful activity, as well as demonstrate Caroline Lucas: To ask the Secretary of State for a commitment towards their rehabilitation, reduce their Defence with reference to the answer of 22 November risk of reoffending, behave well and help others if they 2011, Official Report, column 272W, on AWE, what his are to earn privileges. most recent estimate is of the (a) anticipated out-turn cost and (b) projected in-service date of each of Prisoners: Driving Instruction the new build projects in the Atomic Weapons Establishment Site Development Context Plan. [200428] Stephen Doughty: To ask the Secretary of State for Justice (1) what the (a) security category and (b) Mr Dunne: The following tables show the current sentence type was of each prisoner recorded as taking new build projects, with approved costs and in-service car driving lessons and tests in 2013; [202937] dates, at the Atomic Weapons Establishment. (2) how many prisoners recorded as taking car Projected in-service dates are shown in bandings to driving lessons or tests in 2013 (a) absconded and (b) avoid prejudice to national security and defence. No attempted to abscond during such lessons or tests; costs are attributed to projects detailed in table 2 as [202936] these have yet to be approved. 677W Written Answers2 JULY 2014 Written Answers 678W

Table 1: Current new build projects that have been through the Ministry of Defence approval process Projected Ongoing projects Function in-service period Approved cost (£million)

Conventional Manufacturing—Phoenix Manufacturing/production 2014-15 57 Hydrodynamics trials—Technology Testing/research 2014-15 40 Development Centre High Explosives fabrication—Circinus Manufacturing/Production 2014-15 231 Warhead assembly/disassembly—Mensa Manufacturing/production 2016-20 734 Uranium components—Pegasus Manufacturing/production 2016-20 634

Table 2: Projects currently planned for but which have yet to go through the formal Ministry of Defence approvals process Ongoing projects Function Projected in-service period

Salts Processing—Octans Testing/research 2020-25 Initiator system manufacture—Taurus Manufacturing/production 2020-25 Large Scale formulations—Scorpius Manufacturing/production 2025-30 Small Scale formulations—Cepheus Manufacturing/production 2025-30 New Plutonium (Pu) Facility—not yet named Manufacturing/production 2025-30 New depleted Uranium Facility Manufacturing/production 2025-30 Assembly for Trials—Columba Testing/research 2025-30 High Explosive Climatic Trials Testing/research 2025-30 Non-Metallics and materials R&D—Libra Testing/research 2025-30 Chemical processing—Astra Manufacturing/production 2025-30

Joint Strike Fighter Aircraft Children Children UNIT Personnel Spouses (0-4) (5-16) Sir Nicholas Soames: To ask the Secretary of State for Defence what the cost is of each Lightning II his 2CSBn 263 108 53 91 REME Department has ordered to date. [201930] 110 Pro 138 38 30 35 Mr Dunne: The Lightning II aircraft are being Coy procured incrementally. To date the UK has ordered Total 805 287 201 277 four F-35 B aircraft, three of which have been delivered. The approved cost for the production of the Dependents data is subject to change due to inflow four aircraft, including initial spares provision, risk, and outflow of personnel to and from the units and has concurrency, necessary programme and support been estimated for planning purposes. arrangements, long lead items and our contribution to Fife Education Authority has visited the units in the composite share ratio for the next batch of aircraft Germany and are in regular contact with officials is £999 million, as detailed in the National Audit Office regarding the number of children relocating to RAF Major Projects Report 2013. Leuchars.

RAF Leuchars Sir Menzies Campbell: To ask the Secretary of State for Defence what items of infrastructure have been (a) Sir Menzies Campbell: To ask the Secretary of State commissioned for installation and (b) installed at RAF for Defence when the (a) Royal Scots Dragoon Leuchars in preparation for the arrival of Army units Guards, (b) 2 Close Support Battalion REME and (c) and associated personnel; and how much each such 110 Provost Company RMP are scheduled to move to item (i) is estimated to and (ii) has cost. [202101] Leuchars; how many military personnel make up each unit; and how many (i) spouses and (ii) school-age Mr Francois: It is expected that over £5 million of children are attached to each unit. [202097] investment will be made at RAF Leuchars to prepare for the arrival of Army units. This work is in the final Mr Francois: The Royal Scots Dragoon Guards stages of planning, we hope to begin the work soon. (Royal Scots DG) and 2 Close Support Battalion Royal Electrical and Mechanical Engineers (2 CS Bn REME) Reserve Forces are due to relocate to RAF Leuchars during the summer of 2015, whilst 110 Provost Company (110 Pro Coy), Royal Military Police, will arrive in tranches from Tom Blenkinsop: To ask the Secretary of State for late 2015 to 2018. Defence how many people in (a) Scotland, (b) Wales, The number of personnel, spouses and school aged (c) Northern Ireland and (d) each English region have children are as follows: joined the (i) Army Reserves, (ii) Royal Naval Reserves and (iii) Royal Air Force Reserves in each year since [201291] Children Children 2010. UNIT Personnel Spouses (0-4) (5-16) Anna Soubry: This information is not held in the Royal 404 141 118 151 format requested. Statistical data on recruitment to the Scots DG Reserve Forces can be found in the Defence Statistics Quarterly Personnel Report at: 679W Written Answers2 JULY 2014 Written Answers 680W

https://www.gov.uk/government/publications/uk-armed- World War II: Anniversaries forces-quarterly-personnel-report-2014 Mr Amess: To ask the Secretary of State for Defence Unmanned Air Vehicles (1) how much funding has been allocated for commemorations of the 70th anniversary of the end of Fabian Hamilton: To ask the Secretary of State for the Second World War; and if he will make a statement; Defence what information his Department holds on the [202185] use of drones originating at (a) USAF Croughton, (b) (2) if he will provide funding to refurbish war graves RAF Marham, (c) NSA Menwith Hill and (d) RAF and war memorials (a) in the UK and (b) overseas as Waddington; and if he will make a statement. [202451] part of the commemoration of the 70th anniversary of the ending of the Second World War; and if he will Mr Francois: The UK’s Reaper Remotely Piloted Air make a statement; [202025] Systems (RPAS) are remotely operated from RAF (3) with which countries his Department has (a) Waddington. The US does not operate RPAS from held discussions and (b) plans to hold discussions on the UK. (i) joint events and (ii) a UK presence at overseas events to commemorate the 70th anniversary of the War Graves ending of the Second World War; when any such discussions (A) took place and (B) are due to take Mr Amess: To ask the Secretary of State for Defence place; and if he will make a statement; [202026] (1) how many graves are maintained by the Commonwealth (4) how many officials in his Department are engaged War Graves Commission, by (a) cemetery and (b) (a) full-time and (b) part-time in preparations to country; [202190] commemorate the 70th anniversary of the end of the (2) which cemeteries are maintained by the Second World War; and if he will make a statement; Commonwealth War Graves Commission, by country; [202178] and if he will make a statement. [202191] (5) if he will make it his policy to apply a motif on all his Department’s commemorative items and events Anna Soubry: The Commonwealth War Graves associated with the 70th anniversary of the end of the Commission ensures that the 1.7 million people who Second World War; and if he will make a statement. died in the two world wars will never be forgotten. The [202179] Commission cares for cemeteries and memorials at Anna Soubry: Following the very successful 23,000 locations, in 153 countries. It is therefore not commemorations to mark the 70th anniversary of possible to list every cemetery in this answer. Detailed D-Day we will now be focusing in more detail across and searchable information on the numbers of graves Government on how the 70th anniversary of the end of at each location in every relevant country is available the second world war in 2015 might be marked in an on the Commission’s website: appropriate manner. I expect an announcement to be www.cwgc.org made later in the year.

ORAL ANSWERS

Wednesday 2 July 2014

Col. No. Col. No. PRIME MINISTER ...... 881 SCOTLAND—continued Engagements...... 881 Independence Referendum...... 876 International Inward Investment...... 873 SCOTLAND...... 873 Living Wage ...... 875 Energy (Independence) ...... 879 Regional Air Connectivity Fund...... 878 Housing Benefit ...... 881 Transition Costs (Independence)...... 880 WRITTEN STATEMENTS

Wednesday 2 July 2014

Col. No. Col. No. BUSINESS, INNOVATION AND SKILLS ...... 57WS JUSTICE...... 60WS Maths and English (Post-16 Education)...... 57WS Local Government Pension Scheme...... 60WS

FOREIGN AND COMMONWEALTH OFFICE..... 59WS TREASURY ...... 58WS Arms Embargo (Azerbaijan and Armenia) ...... 59WS Double Taxation Agreement (Tajikistan)...... 58WS PETITIONS

Wednesday 2 July 2014

Col. No. Col. No. ENVIRONMENT, FOOD AND RURAL WORK AND PENSIONS ...... 6P AFFAIRS...... 5P UK Hunger and the use of Food Banks...... 6P EU Ban on Import of Indian Alphonso Mangoes ...... 5P WRITTEN ANSWERS

Wednesday 2 July 2014

Col. No. Col. No. BUSINESS, INNOVATION AND SKILLS ...... 633W DEFENCE—continued Construction: Training...... 633W RAF Leuchars...... 677W Electronic Warfare ...... 634W Reserve Forces ...... 678W Energy...... 634W Unmanned Air Vehicles...... 679W Enterprise Zones: Coleraine...... 634W War Graves ...... 679W Environment Protection: Scotland ...... 634W World War II: Anniversaries...... 680W Medicine: Scotland ...... 635W Science: Research ...... 635W EDUCATION...... 644W Trade Union Officials...... 635W Public Expenditure...... 644W Schools: Maternity Pay ...... 645W CABINET OFFICE...... 619W Civil Service...... 619W ENERGY AND CLIMATE CHANGE ...... 622W Crime: Yorkshire and the Humber ...... 619W Aviation: Fuels...... 622W Electronic Government ...... 620W Climate Change ...... 622W Employment: Discrimination...... 621W Energy: Prices ...... 623W Jobseeker’s Allowance...... 621W Oil...... 623W Pearson VUE ...... 621W Renewable Energy: Heating ...... 624W Private Sector: Pay ...... 622W Trade Unions ...... 624W

CULTURE, MEDIA AND SPORT...... 616W ENVIRONMENT, FOOD AND RURAL Cemeteries ...... 616W AFFAIRS...... 628W Golf: Tourism ...... 616W Bees...... 628W Lotteries...... 616W Dangerous Dogs ...... 629W Press...... 617W Dredging...... 630W War Memorials ...... 617W Energy...... 629W Organic Farming: Yorkshire and Humberside...... 633W DEFENCE...... 676W AWE ...... 676W FOREIGN AND COMMONWEALTH OFFICE..... 625W Joint Strike Fighter Aircraft ...... 677W Bahrain ...... 625W Col. No. Col. No. FOREIGN AND COMMONWEALTH OFFICE— JUSTICE—continued continued Courts: Video Conferencing...... 671W Indonesia ...... 625W Criminal Injuries Compensation: Preston ...... 671W Saudi Arabia...... 625W Data Protection...... 671W St Lucia...... 626W Driving Offences: Insurance...... 672W Tajikistan ...... 626W Employment Tribunals Service...... 672W Tony Blair ...... 626W Freedom of Information ...... 672W Mediation ...... 673W HEALTH...... 656W Powers of Attorney...... 673W Abortion ...... 656W Prisoners ...... 674W Alcoholic Drinks: Labelling ...... 657W Prisoners: Driving Instruction...... 675W Autism ...... 658W Witnesses ...... 676W Breast Cancer...... 658W Cancer ...... 658W NORTHERN IRELAND ...... 618W Care Act 2014 ...... 659W Business ...... 618W Care Homes: Disability...... 659W Corporation Tax ...... 618W Chronic Obstructive Pulmonary Disease...... 666W Northern Ireland Government...... 618W Dementia ...... 659W Northern Ireland Human Rights Commission...... 619W General Practitioners ...... 661W Terrorism ...... 619W Health Services ...... 661W Mental Health Services: Ethnic Groups ...... 662W SCOTLAND...... 615W NHS: Recruitment ...... 663W General Election Franchise...... 615W Obesity: Alcoholic Drinks...... 664W Passport Applications ...... 615W Out-patients: Attendance...... 664W Postal Services: Competition ...... 615W Prostate Cancer...... 664W Respiratory System ...... 665W TRANSPORT ...... 626W Respiratory System: Diseases...... 665W First TransPennine Express and Northern Rail..... 626W Social Services: Disability ...... 666W Maritime and Coastguard Agency ...... 627W Social Services: Learning Disability ...... 667W Rescue Services: Belfast ...... 627W Universal Credit...... 668W Rescue Services: Stornoway ...... 628W Valuation of Life and Health Interdepartmental West Coast Railway Line...... 628W Group ...... 668W Whyndyke Farm...... 669W TREASURY ...... 636W Mapeley ...... 636W HOME DEPARTMENT...... 645W Personal Savings ...... 636W DNA: Databases...... 645W Reserve Forces: Taxation...... 637W Domestic Violence ...... 646W Tax Avoidance: British Virgin Islands ...... 637W Energy...... 646W Tax Collection...... 637W HM Passport Office ...... 649W Welfare Tax Credits: York...... 638W Human Trafficking ...... 649W Offences against Children: Internet...... 652W WORK AND PENSIONS ...... 638W Pay...... 652W Employment and Support Allowance ...... 638W Prisoner Escapes ...... 654W Employment and Support Allowance: Preston...... 639W Registration of Births, Deaths, Marriages and Employment Schemes: Young People...... 639W Civil Partnerships...... 654W Energy...... 640W Standford Hill Prison...... 654W Housing Benefit ...... 640W UK Border Agency ...... 654W Independent Living Fund ...... 640W UK Visas and Immigration...... 655W Pension Credit: York...... 641W Verne Prison...... 656W Personal Independence Payment...... 641W Personal Independence Payment: Preston ...... 642W JUSTICE...... 669W Universal Credit...... 642W Civil Partnerships Dissolution ...... 669W Valuation of Life and Health Interdepartmental Community Rehabilitation Companies ...... 670W Group ...... 643W Courts: Children ...... 670W Work Capability Assessment...... 644W Members who wish to have the Daily Report of the Debates forwarded to them should give notice at the Vote Office. No proofs of the Daily Reports can be supplied. Corrections which Members suggest for the Bound Volume should be clearly marked in the Daily Report, but not telephoned, and the copy containing the Corrections must be received at the Editor’s Room, House of Commons,

not later than Wednesday 9 July 2014

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CONTENTS

Wednesday 2 July 2014

Oral Answers to Questions [Col. 873] [see index inside back page] Secretary of State for Scotland Prime Minister

Bills Presented [Col. 895]

Finance Bill [Col. 901] As amended, further considered; read the Third time and passed

Legal Aid and Advice [Col. 1046] Motion—(Mark Lancaster); Division deferred till Wednesday 9 July

Petitions [Col. 1046]

Nigeria (Abducted Girls) [Col. 1048] Debate on motion for Adjournment

Westminster Hall Cross-border Rail Services in Wales [Col. 235WH] Rural Paper Industry [Col. 259WH] Disabled Students Allowance [Col. 267WH] Flooding (Somerset) [Col. 296WH] VAT on e-books [Col. 305WH] Debates on motion for Adjournment

Written Statements [Col. 57WS]

Petitions [Col. 5P] Observations

Written Answers to Questions [Col. 615W] [see index inside back page]