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That leave be given to bring in a Bill to require the provision of speech and language therapy for young offenders; and for connected purposes.
In preparing todays Bill, I have been indebted to Juliet Lyon and Jenny Talbot of the Prison Reform Trust, and to Kamini Gadhok and Jane Mackenzie of the Royal College of Speech and Language Therapists. The problem is simply stated: more than 60 per cent. of the 11,000-plus young offenders in institutions today lack the communication skills to engage effectively and profitably with educational programmes, with courses in behaviour and anger management, and with initiatives designed to enhance their thinking skills.
The House will be aware, not least from the work of the educational charity I CAN, that it is estimated that the lifetime cost of the failure to treat communication disorders is of the magnitude of £26 billion. We are also commonly reminded that some 80 per cent. of young offenders reoffend: they go through the revolving door of the criminal justice system over and over again. We also know from a vast literature of published evidence of repute and academic expertise that a lack of education and the inability to communicate are risk factors in reoffending. People in the situation that I have just described are less likely to obtain a qualification, less likely to land a job and less likely to find a home; conversely, they are more likely to suffer emotional and behavioural problems, more likely to experience mental health challenges, and more likely to commit, or to go on to recommit, crime.
That is the situation with which this country is faced, and it prompts the obvious question: what can be done about it? I put it to the House that we could do a lot worse in dealing with this client group of people with severe communication disorders than to go for a significant, far-reaching and intensive programme of speech and language therapy.
As chief inspector of prisons, the then Sir David Ramsbothamnow Lord Ramsbothamvisited Polmont young offenders institution in Scotland. There, he had an intriguing and memorable conversation with the governor of the institution. Going round the prison estate, he was struck by the governors observation that if by some mischance he was obliged to get rid of all the institutions staff, and if it was within his discretion, the last person to be let out of the gates would be his speech and language therapist, because of the invaluable extra that that person provided for the institution and the young people incarcerated there.
Sir David subsequently became aware, as others will have done, of the work undertaken on commission for the Home Office by the Learning and Skills Research Centre as long ago as 2001-02. A study of a particular group of young offenders in an institution found that when that group were given help with their oral communication skills, they were 50 per cent. less likely to reoffend in the year after release than the group who were not so helped. The reoffending rate was cut from a typical rate of 44 per cent. to 21 per cent. Armed with the impressionistic material and the empirical evidence,
the chief inspector of prisons said to the Home Office, I think that this is significant. I have taken advice and I am told that the most distinguished speech therapist in England is Professor Karen Bryan. I would like to undertake a two-year trial at particular institutions, to see whether help could effectively and cost-effectively be provided.
It was agreed that the trial would go ahead, and it took place under the auspices of Professor Karen Bryan between 2003 and 2005. Speech therapists were appointed at Brinsford and Werrington young offenders institutions, both of which are in Staffordshire. Working to Professor Karen Bryan, their responsibility was to assess, to diagnose and to plan effective interventions to help those young people. The young offenders suffered from a miscellany of difficulties, but the significant point is that they suffered from difficulties of hearing, of listening, of understanding, of remembering, of relating to people and of expressing themselves in terms that were simultaneously comprehensible and legitimate.
At the end of the two-year study, which was privately financed courtesy of Lady Helen Hamlyn, Professor Bryan concluded that 100 per cent. of the young offenders studied would benefit from, orto put it more stronglywere palpably in need of speech and language therapy. The report went to the Government. What did Ministers say? They were full of plaudits. The response was laudatory. They were grateful for a striking, important and valuable piece of work. One could deduce from Ministers observations that the report would have a significant influence on future Government policy. Therefore, I am bound to inquire what, two years on and in the light of those public ministerial utterances, has happened. The answer is: absolutely nothing.
To add insult to injury, in December 2005 the Department for Education and Skills published a document entitled Reducing Re-offending Through Skills and Employment, which consisted of 47 pages, 20,000 words and no fewer than 58 footnotes, but made not one reference to speech and language therapy. In the House of Lords on 27 October, Baroness Scotland of Asthal said that there was no problem, because the service was already available. If people were identified as having a problem, they were referred. The unspoken message that we were entitled to take from those remarks was that if there was a problem, it was being handled and there was no reason to worry. That is cold comfort, and rings hollow to the people at the coal face who know that it simply is not the case. The impression was given that it was happening, but it is not; that people can get the help, when they cannot; and that the system will work, when it will not.
There is an institutional paralysis at the heart of the system, not noticed by the Under-Secretary of State for the Home Department, the hon. Member for Bradford, South (Mr. Sutcliffe) in dealing with the Offender Management Billand it is the fact that the Home Office, the Department of Health, the Department for Education and Skills, the Youth Justice Board, the Prison Service and childrens services are all involved. When everyone is responsible, no one is responsible. Nothing happens, nothing changes and nothing beneficial accrues.
The proposal in the Bill is simple. I suggest that we should cut the Gordian knot and place responsibility firmly in the hands of the Home Office. It provides that every young offenders institutionall 18 of those that cater for young men and the four that cater for young womenshould be required to employ a speech and language therapist. That person would screen, diagnose and provide. The cost, at £34,000 per therapist, is infinitesimally small compared with £30 million spent on the respect agenda, or the £80,000 per head cost of uselessly and unproductively incarcerating someone who, we can confidently predict, left untreated, unqualified, unreformed and unemployed, will come back into a young offenders institution all over again.
I understand the strength of public feeling that says that when people commit serious crimes they must be locked up and pay their dues. The deprivation of liberty must take place. But we have to give people hope. We have to do something to make a difference. My Bill is not a panacea, but it would improve lives, offer opportunities and do something to hold out the prospect that those young people who are on the wrong track can become productive, effective and worthwhile citizens. I am proud of my Bill, which enjoys cross-party support, and I commend it with enthusiasm to the House.
Bill ordered to be brought in by John Bercow, Mr. Kevin Barron, Mr. Richard Benyon, Angela Browning, Mr. Tom Clarke, Mr. Geoffrey Cox, Mrs. Joan Humble, Mr. Ian Liddell-Grainger, Bob Russell, Mr. Ben Wallace, Hywel Williams, Sir George Young and Mr. Geoffrey Cox.
Mr. John Bercow accordingly presented a Bill to require the provision of speech and language therapy for young offenders: and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 15 June, and to be printed [Bill 98].
Peter Bottomley (Worthing, West) (Con): On a point of order, Mr. Deputy Speaker. During the exchanges on the modernising medical careers statement, the Secretary of State said that she was going to get in touch with the chairmen of ITN and Channel 4 because of the time taken to get in contact with the Department. One of the rules of Parliament is to maintain an open society, with the media able to investigate and report. Has there been a change of policy that requires Secretaries of State to comment on the actions of the media, instead of the other way around?
Mr. Deputy Speaker (Sir Alan Haselhurst): I have listened to the hon. Gentlemans point of order, but he will know that it is not anything about which I can comment from the Chair. His observation is more of a continuation of the earlier exchanges.
The Chairman of Ways and Means (Sir Alan Haselhurst): It may be for the convenience of the Committee if I say that it will be in order to refer to schedule 18 in the course of the debate. I would then expect the amendments to the schedule to be taken in short order, and similarly the formal question on schedule 18 being the schedule to the Bill.
Clause 67 relates to changes to the relief available to individuals for their pension contributions that are used to fund personal term assurance policies, and it also introduces schedule 18 of the Bill. In summary, clause 67 and schedule 18 are a response to a process of consultation with industry, announced at the time of the pre-Budget report, on the application of tax relief to personal term assurance. Throughout that process, and indeed throughout the whole consultation period when developing the new pensions tax regime in the period up to A-day on 6 April 2006, the Government have consistently applied the PBRs principles for providing tax reliefnamely that such relief should support saving for an income in retirement.
to encourage people to save in a pension, the Government awards favourable tax treatment...which people must use to provide a secure income in retirement. Most of the savings built up in this way must be used to generate a taxable income in retirement.
The tax reforms that came into effect last April removed the complexity that had led over many years to different tax rules applying across numerous types of pension scheme. The long-term benefit is a streamlined regime that is easier to understand and cheaper to administer and which was at the time, as it is now, broadly welcomed by the pensions and savings industry.
As we announced at the time of the pre-Budget report, we became aware in the summer and autumn of last year that the rapid growth of pension term assurancea life insurance death benefit that in most cases was providing no income in retirementwas leading to rising costs and was clearly at odds with the principles we had set out. To deal with the problem, we announced in the pre-Budget report that we would work with the pensions industry to explore, in time for the Budget, how our principle that pensions should be tax-advantaged to provide an income in retirement could be applied to pension term assurance contracts. We announced that any changes we decided to make would not affect either personal arrangements entered into before 6 December 2006 or existing types of employer arrangements.
Following detailed discussions with industry representative bodies, such as the Association of British Insurers, it became clear that a meaningful link could not be provided between those policies and pension saving without making the products commercially unviable or leading to high compliance and tax costs to Her Majestys Revenue and Customs and the Treasury. That is why the Budget announced the changes before us today.
In making the changes, we have worked with the industry to protect the position of consumers who had taken out policies before the pre-Budget report announcement in 2006 and, as I will set out in more detail latereither in the debate on the amendments or in the wind-upwe have tabled amendments to the transitional arrangements in schedule 18 to ensure that they work in the best interests of the consumer. On that basis, given the amendments we shall propose to the schedule, I commend the clause to the Committee.
Mr. Mark Hoban (Fareham) (Con): As the Economic Secretary indicated, clause 67 abolishes pension term assurance, which was introduced in its current form in the Finance Act 2004 and was part of last years A-day reforms to introduce pensions simplification. This is the third major pensions U-turn since the 2004 Act; it follows hard on the heels of taking residential property out of self-invested personal pensions and the changes to alternatively secured pensions foreshadowed last summer.
I am concerned about the implications of the abolition of pension term insurance and I have four key questions. First, should not the attractions of pension term assurance have been apparent to the Treasury at the outset? Secondly, how has the Governments thinking evolved over the past few years? The Economic Secretary gave us a flavour of that, to show that it had remained constant, but I contend that the Treasurys thinking has changed since the 2004 Act. Thirdly, how did the industry respond to the Governments concerns? Finally, what are the consequences both for the pensions life insurance industry and for consumers?
First, however, I shall consider why pension term assurance was introduced in the Finance Act 2004. Members on both sides of the House are lucky. As part of our pension scheme we receive a death in service benefit. When we die our widow or widower will
receive a lump sum, on top of their pension. Our contribution to that benefit is tax-free. If I die as a Member of the House
Mr. Hoban: It is not something I am anticipating but if, unfortunately, I died while I was a Member my wife would receive a lump sum, which she could use to pay off our mortgage, thus freeing up income. Alternatively, she could invest the lump sum to provide an income.
A substitution effect arises from the death-in-service benefit. The lump sum can be invested either to generate an income or to pay off a mortgage to increase disposable income. The importance of that point will be apparent when I discuss the evolution of the Governments thought process a little later in my remarks.
I am very fortunate as a Member to have that benefit, but others are not so fortunate. People who are self-employed, for example, will not have the same benefit and will have to pay for it themselves. Prior to A-day, this type of cover could have been subject to tax relief as part of a pension policy. Now, however, as we shall see later, even that is not available to the self-employed. Anyone not covered by an employers scheme will have to bear the full cost of coversomething that we do not have to do. In fact, we are doubly lucky because in a sense the cost of the benefit is split between us and our employer. Someone who is self-employed will not only have to pay the full cost of a stand-alone policy, but will not receive any tax relief either. That raises real questions about the affordability of protection cover for many people on low or moderate incomes.
The change that the Government have introduced creates some ironies. We will recollect that yesterday we discussed the incentives for incorporation in respect of small traders. As Taxation recently noted, if the policy is paid for by the employer, it is acceptable. That leads to the ridiculous situation whereby someone operating through a personal service company can get tax relief, but a sole trader or partner cannot. Yesterday, the Government tried to reduce the incentive for incorporation, but this afternoon we are discussing changes that have encouraged it.
When pension term insurance was introduced, the perspective from the industry was that it would lead to the closure of the protection gap. People out there on low and moderate incomes feel, as I said earlier, that they cannot afford life cover to provide for their dependants in the event of their death. It is worth reflecting on a recent article in Money Marketing by Vanessa Owen of Liverpool Victoria. I am afraid that I am going to refer back to it regularly throughout my remarks, because it provides an insightful view of the development of opinion in the industry about the introduction and development of this product and its subsequent abolition. She said:
Everyone, including consumer bodies and the Government, understands that most people do not have enough life protection to cover sudden death of the main breadwinner or family carer. It is in all our interests to encourage more people to provide for their dependants and reduce dependency on the state. Despite all
the talk about the size of protection gaps, since Swiss Re published its data, the problem has got bigger, with everyone scratching our heads over how to solve it. Then came pension term assurance.
Ed Balls: I want to understand the principles guiding the hon. Gentlemans approach. In 1984, tax relief on life assurance products was abolished by the Government of the day. Is the hon. Gentleman suggesting that we should revisit that principle and that tax relief on life assurance and term assurance products should be reintroduced? Should we reverse the 1984 decision?
Mr. Hoban: It is interesting that the Minister raises that point, because the Government effectively reintroduced the relief in their A-day reforms for pension term assurance and they are now seeking to abolish it. What I aim to achieve this afternoon is to understand rather more about the Governments thinking on that matter, particularly why they felt it appropriate to introduce this tax relief in 2004, when they want to remove it 2007. That is the purpose of my remarks today.
What the introduction of pension term assurance enabled in the 2004 Finance Bill was the creation of a level playing field, so that the indirect tax relief that we receive through our contributions to pension schemes, which gives us death-in-service benefits, is also available to others who are in a less fortunate position than us. It is worth reflecting on the debate that took place on the 2004 Finance Bill. The right hon. Member for Bolton, West (Ruth Kelly), who was then Financial Secretary to the Treasury, said in the Standing Committee debate:
Simplification will introduce greater individual choice and flexibility.
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