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16 Dec 2002 : Column 555—continued

David Davis (Haltemprice and Howden): I thank the Deputy Prime Minister for his statement, and for giving me notice of it. I thank him particularly for making the Bain report available to the House well in advance. There is much to welcome in the report, and I join the right hon. Gentleman in congratulating the members of the review body. Subject, of course, to proper scrutiny in the House, we will do what we can to expedite the primary legislation that he mentioned.

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An 11 per cent. rise in firefighters' pay over two years, coupled with radical modernisation of their working practices, is the main proposal in the Bain report. Will the Deputy Prime Minister say in more detail how he and the employers intend to pay for such a wage increase? He talked of a small amount of transitional funding, but back in November the Prime Minister insisted that any pay rise of more than 4 per cent. must be self-financing. Is that still the case?

Paragraph 8.22.ii of the report says

It is notable that Bain uses the word Xpaybill", by which we must assume he means total pay-related costs. That implies that little or no savings will be made by November 2003. Is my understanding correct? If so, this indicates a transitional cost of more than #60 million.

The Deputy Prime Minister said last time that the primary source of funding for a pay deal was likely to be manpower reduction based on the retirement of some 20 per cent. of firefighters in the next few years. He said, I think, that that amounted to 10,000 jobs. Unless early retirement is involved—which would cost money rather than releasing it—it will take some time for the manpower reduction to happen.

Professor Bain seems to assume that the arrangement will be introduced after 2003. That means a gap between any pay settlement and the work pattern changes needed to fund it. I understand that the professor largely confirmed that on the radio today. Transitional funding is, as the Deputy Prime Minister has effectively admitted, crucial to concluding the negotiation. The Chancellor, who is present, has said that absolutely no money will be available for the deal; the Prime Minister has said Xnothing over 4 per cent."; the Deputy Prime Minister has been more conciliatory, saying XWe are quite prepared to make an exceptional case". Now, he is set to provide a small amount of transitional funding. After waiting three months for the report, will he tell us how much the amount will be?

The report makes it clear that the fire service must take a radically different approach to ensure that fewer people die as a result of fire. The Deputy Prime Minister properly talked about that at some length. We all know the importance of the job that firefighters undertake, and we congratulate them on doing it. However, the report states that the overall strategic approach concentrates on firefighting, not on fire prevention, and it argues that that strategy should be reversed to concentrate on prevention. Indeed, the report is subtitled, XReducing Risk, Saving Lives". In the light of that, will the Government, when assessing any changes in work practices in the settlement, try to achieve an improvement in cover, safety and service levels? Will they make public the improved safety levels that they seek?

Although it is difficult to make comparisons, other European countries with a similar climate and culture—the Netherlands, Germany, France, Switzerland and Austria—have much lower death rates than the United Kingdom. If we achieved the same rates as the Swiss or the Dutch, we would save about 300 lives a year. The report shows that New Zealand, which had the same level of fatalities as us four years ago, has halved the death rate from fires. Again, that is equivalent to 300 lives a year in the UK.

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Although hon. Members would understand the Deputy Prime Minister's discomfort in setting himself another five-year target, will he use the opportunity that the reorganisation of the fire service provides to commit the Government to saving 300 lives a year or an equivalent target?

The scope for cost savings in some fire brigades is much greater than in others, nevertheless, all brigades will have to meet the costs of the new pay structure. How will the Government equalise that disparity so that they do not penalise previously efficient fire brigades, especially those in rural areas with retained firefighters? Does the Deputy Prime Minister agree that the scope for savings in rural areas that use retained firefighters is relatively small, and that the price of Bain should not be the closure of fire stations in rural areas?

In his interim report, Bain said that clearer national leadership must complement negotiation. One of the recurrent problems that worsened the dispute was the failure of communication between the Deputy Prime Minister's Office and the employers. Will the Deputy Prime Minister ensure that his office takes direct control of the negotiations so that the Government may exercise a veto over the financing of any deal and the acceptability of changes in work practices?

The report clearly states that the Government rather than the Bain review must decide whether to restrict the right to strike for such an important public service. Has the Deputy Prime Minister held any talks about that? What is his opinion and that of Downing street on the matter?

We have heard much in the past couple of weeks about talks at ACAS. We understand that no new offer is currently on the table, and the Bain report was not published until today. No hon. Members want any more fire strikes. Will the Deputy Prime Minister spell out the progress of the negotiations at ACAS and his expectations for a deal in the near future?

I hope that the publication of the Bain report means that the continuing talks can be conducted expeditiously. I also hope that the Deputy Prime Minister can get a grip on matters, take personal control of the negotiations and not lose an hour in pursuing a financially responsible outcome to the dispute.

What is the timetable for the negotiations in the next few critical weeks? The Bain report will be effected, the dispute ended and true reforms that reduce risk and save lives achieved only if the Deputy Prime Minister takes a grip on matters.

The Deputy Prime Minister: I am grateful for the comments of support, such as they were, at the beginning of the contribution of the right hon. Member for Haltemprice and Howden (David Davis). As for taking a grip, I remind him that Lord Belstead was the Home Office Minister in 1980 who made the same sort of recommendations to the Home Office review as those of the Bain report. The Tory Government did not take much of a grip to implement their review. Fifteen years later, in 1995, the Audit Commission report made the same points and again the Government failed to act. I shall therefore take no lectures from a Tory Member of Parliament when, in 18 years, the Tory Administration failed to do anything about the matter.

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We are now trying to do what Sir George Bain is asking us to do, which is to make the commitment to implement, rather than making promises and doing nothing about them. I have already mentioned some important changes in regard to accepting the repeal of section 19 of the Fire Services Act 1947. Everybody knows that, for negotiations to take place, we have to make changes to some of the legislative requirements, and I have immediately given that commitment.

Many of the right hon. Gentleman's questions will be answered in our White Paper, but I shall address some of the points that he has raised. I have some sympathy with his point about the confusion over the figures, because I face some of that confusion myself. The problem here is that the financial year relating to the costs and savings that have been referred to runs from April to April, whereas the pay negotiations cover a period from November to November, part of which would therefore be in one financial year and part in another. I can send the right hon. Gentleman a more detailed statement of those figures, if he likes. The statement makes it clear, however, that the net cost savings mean that the proposed programme could fund itself over three years but not over two, in terms of the extra costs required, and in relation to the modernisation and the savings that can be made. That could be done in three years, but it is right to say that the recommended deal could not fund itself over a two-year period. There is no doubt about that, and I have made it clear to the employers.

It is not my intention to take over the negotiations. We are doing exactly what every other Government have done; they have pointed out what their public pay policy is. That policy applies to everyone in all the local authority sectors, as well as to all other public sector workers. In these circumstances, no extra payments over and above those that are catered for in the public pay policy—or indeed, the 4 per cent. that has been granted—will be paid without modernisation. The employers have to show me—I believe that they have already made a statement this morning—that they intend, in view of the Bain recommendations, to produce a robust business report, which will be given to us, detailing how they might achieve this. That is the best way of dealing with this issue. The employers can now take into account what Bain has said.

The ACAS discussions are welcome because, although one party has refused to co-operate on Bain, those discussions have brought the parties together to listen to the case and discuss its implications. If ACAS can provide us with an opportunity in which the parties are prepared to talk, I do not mind if the agenda for change is achieved under ACAS or Bain, so long as the same principles apply. As I said in my statement, I wish ACAS well in its endeavours to get people to agree to both the modernisation and the increase in pay that will be justified by the changes. Let me also make it clear that the moneys will not come from the reserves or from the Chancellor. I have been very clear that this is my responsibility; these are the moneys that I have within my Department, so anything that needs to be found will have to come from my budget and not from the Chancellor or from extra money from the reserves. That has always been clear, and I am glad to be able to confirm that.

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I have already said that it is not my job to get involved in negotiating deal upon deal. If Governments attempted to negotiate pay agreements in every sector, it would create a highly centralised arrangement. In the main, most Governments have liked to leave the negotiations on local services to local people, and that has been the general principle that we have adopted. The right hon. Gentleman's suggestion comes from an Opposition who are constantly talking about giving power down to the local areas, rather than centralising it. So be it. This dispute illustrates their constant conflict of judgment in such matters.

On the White Paper, mention has been made of comparisons with other firefighting facilities—in New Zealand, for example—and the right hon. Gentleman mentioned the Dutch and Swiss services. The inquiry has pointed out that there are differences, and that obviously has to be taken into account. The fire services that the right hon. Gentleman mentioned have shift systems. I want to make it clear that nothing in our proposals would abolish the shift system, or some of the other practices that have gone with it, in relation to second jobs, for example. Those conditions apply in most of the fire services throughout the world, but let me make it clear that we need some changes: changes are necessary and we intend to embark on them. The fire authorities in the different countries to which the right hon. Gentleman referred have modernised and changed. They accept overtime and also do some of the things that we have recommended. I do not think that it is too much to ask that the British firefighting service should face up to the same challenge, which we believe will provide a better service.

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