My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) and my hon. Friends the Members for Leeds North East (Mr Hamilton), for Ochil and South Perthshire (Gordon Banks), for Kilmarnock and Loudoun (Cathy Jamieson), for Bolton South East (Yasmin Qureshi), for Llanelli (Nia Griffith), for Derby North (Chris Williamson), for Edinburgh East (Sheila Gilmore) and for Foyle (Mark Durkan) all made strong speeches on behalf of their constituents. It
would be remiss of me not to take this opportunity to praise in particular the contribution of my hon. Friend the Member for Leeds North East in jointly chairing the all-party group on Equitable Life policyholders. My right hon. Friend the Member for Holborn and St Pancras made the telling point that his general election opponents-like, I suspect, the opponents of all Opposition Members-did not mention any caveats when they signed the Equitable Life pledge in the run-up to 6 May.
To be fair, we also heard passionate speeches on behalf of their constituents from the hon. Members for Argyll and Bute (Mr Reid), for Angus (Mr Weir), for Chatham and Aylesford (Tracey Crouch), for Eastbourne (Stephen Lloyd), for Gillingham and Rainham (Rehman Chishti), for South Down (Ms Ritchie), for Witham (Priti Patel), for Worcester (Mr Walker), for Strangford (Jim Shannon), for High Peak (Andrew Bingham), for Redditch (Karen Lumley), for Macclesfield (David Rutley), for Richmond Park (Zac Goldsmith), for South Basildon and East Thurrock (Stephen Metcalfe), for Portsmouth North (Penny Mordaunt), for Central Devon (Mel Stride), for Brigg and Goole (Andrew Percy), for Mid Norfolk (George Freeman), for Warrington South (David Mowat), for Waveney (Peter Aldous), for Wells (Tessa Munt), for Newton Abbot (Anne Marie Morris), for Wycombe (Steve Baker), for Weaver Vale (Graham Evans), for Carmarthen West and South Pembrokeshire (Simon Hart), for Halesowen and Rowley Regis (James Morris), for Nuneaton (Mr Jones), for Sittingbourne and Sheppey (Gordon Henderson), for Oxford West and Abingdon (Nicola Blackwood), for Dover (Charlie Elphicke), for Harrow East (Bob Blackman), who is my constituency neighbour, for York Outer (Julian Sturdy) and for South Northamptonshire (Andrea Leadsom).
It was striking how much concern was expressed by those on both sides of the House about the lack of clarity in the Government's position, with every Member noting the very big gap between the Chadwick approach and the ombudsman's approach-albeit, I accept, that some did so very directly, while others did so with some sound and fury directed at those on the Opposition Benches. Members also noted the very different impression that Equitable Life policyholders are getting about the stance of Government Front-Bench Members now and that which they adopted before the general election.
As my right hon. Friend the Member for East Ham (Stephen Timms) said, we welcome the Bill and we will not oppose it, but we will seek to amend it in Committee, and we will want to probe the Government's plans further. The Bill provides no detail on the criteria under which payments will be made, so we are no further forward in knowing what Equitable Life policyholders will get. No provision has been made for the independence of the compensation scheme to be established on a statutory basis. The Bill does nothing to ensure an independent appeal process for those who feel they have been unfairly treated-a point made by my hon. Friends the Members for Llanelli and for Ynys Môn (Albert Owen) and the hon. Member for Harrow East. There is also still no clear timetable governing when payments are to be made. The Bill makes no mention of the work of the independent commission. We will want to explore further in Committee how the commission is working.
I recognise that there are two serious tensions between the Treasury and the Department for Work and Pensions, but I was surprised to learn that the Financial Secretary
has not resolved whether means-tested benefits will be affected by any compensation that Equitable Life policyholders on such support receive. Equitable Life policyholders on such means-tested support will now be worried that they will be hit by coming benefit cuts and then hit again because of any compensation they might get. I hope that when the Economic Secretary replies she is able to offer some further clarity, and we will certainly want to explore this matter in Committee.
What was most striking about the Financial Secretary's opening speech was the absence of any effort to resolve the lack of clarity about whether he favours Sir John Chadwick's approach or the ombudsman's approach. The manifestos of the Conservatives and their Liberal Democrat partners, and also the coalition agreement document, appeared to be clear. The Conservative party said:
"We will implement the Ombudsman's recommendation"
So the ombudsman's recommendation was clearly mentioned there, and it was referenced yet again in the coalition agreement document, which committed both parties to "implement" the parliamentary "Ombudsman's recommendation". Even though the parliamentary ombudsman has been crystal clear in her profound disagreement with what Sir John Chadwick has recommended, the Minister notably did not clear up whether he agreed with her assessment of the Chadwick proposals as
"an unsafe and unsound basis on which to proceed."
We now have a clear assessment of the estimated scale of relative loss, yet clear hints have also been given that the total payout will be very much less than those estimates. EMAG, which was rightly praised by those on both sides of the House, for the skill and persistence with which it has campaigned on this issue, invited candidates to sign its pledge and
"support and vote for proper compensation".
"recommended by the Parliamentary Ombudsman."
As my right hon. Friend the Member for East Ham said, every Treasury Minister signed that pledge and every one of them would have known then that they were committing themselves to a far higher figure than the sums now being suggested as a result of Sir John Chadwick's conclusions.
In case there were any doubts, EMAG went out of its way, in the run-up to the election, to sweep away the possibility of confusion by making it very clear that it did not accept Sir John Chadwick's work and wanted candidates to champion the ombudsman's approach, which offered very different financial costs and scheme details from those that Sir John's work would produce. Like the Grand Old Duke of York, the parties opposite have marched the Equitable Life victims up the hill only, once the election was over, to march them promptly back down again. Their hopes and expectations so cunningly built up before the election have been crushed in an exercise that, by any definition, looks breathtakingly cynical.
Mr Thomas: I recognise the hon. Gentleman's difficulty. He signed the pledge-he confirmed that in his speech-but because of the actions of his Front-Bench team he is going to be embarrassed in front of his constituents. I suggest that he, along with some of his colleagues, needs to put urgent pressure on his Front-Bench team.
As my hon. Friend the Member for Central Ayrshire (Mr Donohoe) pointed out in his intervention, what has also been telling in this debate has been the Conservatives' unwillingness to take any real responsibility for the failure of regulation surrounding Equitable Life. The Penrose report made it clear that a significant part of the regulatory failure occurred before 1997. Indeed, proposals were put to Conservative Ministers before 1997 that would have updated life insurance regulation, both domestically and within Europe, yet those Ministers either did not think that they were a high priority or argued against reform. A light-touch, low-intervention culture existed in which regulators were poorly resourced or simply not up to the job, so it is hardly surprising that the ombudsman herself, in charting regulatory failure, should set out in July 2008 10 findings of fact relating to regulatory failure, five of which related to events prior to the start of the Labour Government in 1997.
As my right hon. Friend the Member for East Ham has noted, the Government of whom we were members issued a clear apology to Equitable Life policyholders, and I associate myself with those remarks. However, there has yet to be any apology for the mess that passed for financial services regulation under the Conservative party's last watch.
Andrew Percy: While we are in the spirit of apology, will the hon. Gentleman, from that Dispatch Box, apologise to my constituents for not providing them with a single penny of compensation before his Government got voted out in May?
Mr Thomas: I think that the hon. Gentleman should have been listening to my earlier remarks, but I recognise the difficulty that he has, along with that of many of his constituents. He marched his constituents up the hill, promising them great sums of money in compensation, and it is now becoming clear that his Front Benchers will not deliver on that commitment. The hon. Gentleman should start to put a bit of pressure on his colleagues. Perhaps he will join us in supporting the amendments we will seek to table to improve the Bill further.
Mr Thomas: I say gently to the hon. Gentleman that rather than looking back, we need to look forward. The hon. Gentleman, who serves as Chair of the Select Committee on the Treasury, will, I hope, work with his hon. Friend the Chair of the Select Committee on Public Administration to hold those on his Front Bench to account.
Even though Lord Penrose concluded that regulatory system failures were secondary to the society's own behaviour as a cause of its problems, the last Government, rightly in my view, recognised that many policyholders
had been disproportionately affected. The ombudsman suggested a scheme with a case-by-case review that considered 30 million investment decisions by 1.5 million people, but that would have taken an estimated 4,000 staff years to resolve. That is the scheme to which the Conservative party committed in its manifesto. Case-by-case comparison for policyholders was not something that we thought was practicable.
Sir John Chadwick has proposed a simpler arrangement. If Government Members are now accepting the fundamentals of Sir John's approach, they should at least be honest with the ombudsman and, crucially, with the hundreds of members of the Equitable Members Action Group and with this House. Is it not the truth that the parties on the Government Benches knowingly allowed members of EMAG to believe that they were opposed to Sir John Chadwick's work and that they wanted a far greater sum to be available for compensation? In reality, yet another manifesto commitment is being ignored and yet another group of electors is having to come to terms with the fact that, despite what they were led to believe that Government Members wanted, their Front Benchers now have no commitment to the original pledge and no intention of following it through.
The Economic Secretary to the Treasury (Justine Greening): In closing this important debate, I want to thank all Members who have participated. This has been a passionate debate, and I pay tribute in particular to the maiden speech of my hon. Friend the Member for Congleton (Fiona Bruce). I thought she did a fantastic job. She was right that she has some special shoes to fill, but we got a flavour from her tonight that showed that she will fill those shoes very ably. I congratulate her on that maiden speech.
There have been 43 speakers in today's debate, the overwhelming majority of whom sit on the Government Benches. Most Opposition Members realise that their Government thoroughly let down the members of Equitable Life, and we agree with that. We think that this saga has gone on for way too long. It has affected all our constituents, including my own.
We managed to get out of those on the Opposition Front Bench that-I think-they support the findings of the Chadwick report. If they disagree with that, perhaps they would like to intervene. It is quite important to make the point about how much they would have been willing to pay out as compensation to Equitable Life policyholders. We can take it from their silence that the Chadwick report was commissioned by the previous Government and is now accepted by Labour's Front Benchers in opposition. It shows that, in spite of the warm words, within two weeks of getting the Chadwick report they would have been quite happy to set up payments much lower than many members of EMAG were hoping for. It is fair to put that into context: that followed 13 years of zero payments from the previous Government.
We have decided to take a different approach, which has been guided by three core principles: fairness, swiftness and transparency. In fact, my hon. Friends the Members for Sittingbourne and Sheppey (Gordon Henderson), for Worcester (Mr Walker), for Wycombe (Steve Baker) and for Macclesfield (David Rutley), as well as the hon.
Member for Llanelli (Nia Griffith), all mentioned those principles, which we share. Indeed, my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) made a speech about the need for transparency, and we agree with that. That is why we have tried to make the process as transparent as possible-to make sure that all the interested parties know what is driving the process and so that they have the opportunity to contribute towards our thinking.
Since coming to office, the coalition Government have clearly shown that reaching a resolution for Equitable Life policyholders is a real priority. I assure hon. Members on both sides of the House who seem to be under the impression that there is some delay-those of us who have been in the House for a longer time have been working alongside our Equitable Life constituents who have suffered losses for many years now-that this delay is to make sure that there is no more delay. We are going through this process to ensure that the payments we are able to make are fair and transparent and so that there is some genuine compensation for the people who have suffered.
"implement the Parliamentary and Health Ombudsman's recommendation to make fair and transparent payments to Equitable Life policy holders",
and we have already taken the first steps towards honouring that pledge. We have established the Independent Commission on Equitable Life Payments, which is assessing the best way of allocating payments to policyholders. For those Members who asked how payments will be allocated, let me be clear: the independent commission will report in January on its assessment of the best and fairest way of allocating payments, including, as the hon. Member for Strangford (Jim Shannon) mentioned, to the relatives of people who are now deceased. It is one of the greatest tragedies of this whole saga that some people simply did not live to get their compensation payments, but this Government will make sure that their families nevertheless get redress.
In spite of what we have just heard from the Opposition spokesman, we are introducing a fundamental part of the process by which we can make compensation payments. The Equitable Life (Payments) Bill-that title would have been something of an oxymoron under the previous Government-was announced as part of the Queen's Speech and we can all welcome it as a key step along the path towards making the payments that have not been made for the past decade under the previous Government.
Several Members, including the hon. Member for Angus (Mr Weir), have talked about having a clear timetable, so let me be absolutely clear: we want to start making the first payments to policyholders by the middle of next year. Today is all about having the chance to take a further step towards reaching a resolution. Our passing the Bill will enable policyholders to receive payments irrespective of decisions about exactly how the future scheme will look or the value of payments made.
I remind hon. Members across the House that the setting up of an independent commission was a key point in the ombudsman's report. I think we all recognise that that independence is critical and we need to allow the independent commission to get on with its work, to consider the various representations, including the Chadwick report, and to decide how best we can ensure that
payments are fair. There are many different views about these difficult issues and, although those key issues are not the subject of the Bill, they are important when deciding how we should progress.
Members across the House have raised a number of important issues which I will try briefly to address in the time that is left. First, let me reiterate the timetable and the next steps. As I have said, the independent commission has started its work. My hon. Friend the Financial Secretary, who should be congratulated on the pace at which he has brought forward the various steps we are taking, will provide a response to Sir John Chadwick's report at the time of the spending review on 20 October. At that stage, it will also become clear how much it will be affordable to put into the scheme. The commission will then look at how it will all work and it has been asked to report at the end of January. Following that, we will set about putting its recommendations into action. As I have said, our ambition is to have made the first payments by the middle of 2011.
Justine Greening: I know that my hon. Friend the Financial Secretary has met representatives of EMAG over the past few days. EMAG will have the chance over the coming weeks to make representations to the commission about what it considers the fairest way to allocate payments. The independent commission must be independent of everybody and must be allowed to get on with its job. That is what we propose to let it do. We should not prejudge it. We should allow it to proceed with the work that has been set out. As I said, the approach recommended by the ombudsman in her report was that the setting up of the scheme should be looked at independently. We have decided to follow her recommendation. It is important that that should now happen.
Members asked about an appeals process. That is a fair question. We are still considering the details of how such a process might work. I am sure that the independent commission will also consider how that could become part of the process. The key requirement is that any appeals process is independent of the initial assessment of an individual's claim.
One of the other issues that has come up is why we have not put more detail about the scheme in the Bill. Although that it a fair question, it prejudges what the independent commission might propose. As I have said a number of times, we need to allow it to get on with its work so that it can propose the design of the scheme. It is wrong to prejudge that by baking into legislation steps that the commission may consider unnecessary.
Mr Weir: When the Minister was introducing the Bill, I asked him whether the details of the scheme would be debated on the Floor of the House. Those details are important. We all understand that this is an enabling Bill, but we must have the opportunity to examine the scheme in more detail.
Justine Greening: We will make sure that when the document from the independent commission is published and the final proposal emerges for how the scheme should work, Parliament will get the chance to hold the Government to account for it. We will consider the best way for that to happen. There is no doubt that today was a good opportunity for Members across the House to air their views on the key aspects of any scheme. I encourage them to continue doing that. One of the questions that we heard from those on the Government Benches was how Members could continue to be part of the process of reaching a resolution. I urge Members to continue to have their say and to represent their constituents in the way that many did so passionately today.
On the issue of delayed payments, aiming to make an interim payment and a more substantial payment at a later date would prolong the process unnecessarily. What we need to do now is reach a solution for the Equitable Life policyholders who have suffered, so that they know where they stand and get full redress according to what we are able to pay them. Spreading payments over many years would greatly increase complexity, not to mention administration costs. It might also leave most policyholders in limbo about how much they would receive in financial settlement.
Many Members are concerned about the delays that have already occurred. We want to minimise the time before which people know what their final settlement will be, not least because, as we have heard from across the House, many Equitable Life policyholders are dying while they wait for that to happen.
It was fair to make the point about tax and welfare, and we have included the relevant clause in the Bill precisely because we want to look at how we might handle the tax situation in relation to any future compensation payments to Equitable Life policyholders. We have included it precisely to give ourselves some flexibility. I have no doubt that Opposition Front Benchers will want to return to the matter and debate it in Committee, and we will be very happy to hear what further remarks they have to make. However, in order really to provide some reassurance, I must say that we have structured the Bill as we have because we do not want any legislative impediments to making the settlement that we want to make. With this Bill, we have tried to ensure that we have the powers that we may need, so that we do not suddenly reach the point at which an issue arises and find out that we have to return to the Chamber to secure further powers that further waste time. We have decided to get on with the matter.
A number of Members, including the hon. Member for Leeds North East (Mr Hamilton), who I cannot see in his seat, and my hon. Friend the Member for Halesowen and Rowley Regis (James Morris), talked about a moral obligation to make payments, and we agree that now is the time to take action. We very much hope that over the coming weeks we will secure cross-party support, and I am pleased that the Opposition will not divide the House tonight. That would have been a real mistake and a continuing tragedy for Equitable Life policyholders.
Inside Parliament and outside, the Government are committed to continuing their programme of extensive engagement on the issues that have been raised in today's debate, and on the issues that we know we will have to address if we are to reach a fair resolution.
As I wrap up this debate, I should like to highlight the work of the various action groups that have campaigned vigorously on behalf of policyholders, in particular the members of the Equitable Members Action Group and the Equitable Life Trapped Annuitants who have played their role in ensuring that some of the worst affected policyholders have had their voices heard. The Government have held meetings with representatives of both parties and are now carefully considering their views as part of the wider resolution process. We know that we need to get the matter right, and I want to stress that at this point no final decisions have been made about the size of the future scheme. We want to continue to gather the views of a wide range of parties before any plans are set in stone.
I know that Members from all parts of the House have a great deal of respect for the parliamentary ombudsman; we heard that in today's debate. My hon. Friend the Financial Secretary met her this week to discuss the issues, and her input has been vital. We recognise her concerns and share her desire to achieve a resolution that is fair for policyholders and for the taxpayer. The resolution must not only achieve justice for policyholders but, as the ombudsman herself pointed out,
"consider the potential impact on the public purse of any payment of compensation...and...the opportunity costs elsewhere through the diversion of resources."
There are many important conversations to be had about how the scheme will operate, and about the size of the payments that will be made to policyholders, but there is no doubt that policyholders have waited too long for a conclusion to the saga, so I for one do not want to see the process unnecessarily extended, and nor do the coalition Government. We take the maladministration of Equitable Life very seriously; we have highlighted in our programme for government that resolving the issue is a real priority; and we have taken a number of steps towards achieving a resolution. By passing the Bill, the House can now show how important it regards the issue, and that its Members recognise the need to act swiftly on the matter.
I fully sympathise with the plight of policyholders, who have waited for more than a decade for justice, but
justice will be achieved only by passing this important piece of legislation, so I commend the Bill to the House.
That the following provisions shall apply to the Equitable Life (Payments) Bill:
1. The Bill shall be committed to a Committee of the whole House.
Proceedings in Committee, on consideration and on Third Reading
2. Proceedings in Committee, any proceedings on consideration and proceedings on Third Reading shall be completed at one day's sitting.
3. Proceedings in Committee and any proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
4. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion one hour after the commencement of those proceedings or at the moment of interruption on that day, whichever is earlier.
5. Standing Order No. 83B (Programming committees) shall not apply to proceedings on the Bill in Committee and on consideration and Third Reading .-(Miss Chloe Smith.)
That, for the purposes of any Act resulting from the Equitable Life (Payments) Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred by the Treasury or a government department by virtue of the Act .-(Miss Chloe Smith.)
That Nick Harvey be discharged and Sir Paul Beresford and John Thurso be appointed as members of the House of Commons Commission under the House of Commons (Administration) Act 1978.
This is a routine motion to change the membership of the House of Commons Commission, which is a statutory body established by the House of Commons (Administration) Act 1978. It is, in effect, the governing body of the House of Commons. Its responsibilities are set out in its annual report, which I encourage all right hon. and hon. Members to read, as it is an invaluable source of information about the strategic management of the House.
As you know, Mr Speaker, the membership of the Commission includes two ex officio members-you and me-and one member nominated by the Leader of the Opposition who is, by convention, the shadow Leader of the House, whom I welcome to the debate this evening. The Commission also consists of three Back Benchers appointed by the House. They are currently the hon. Member for Middlesbrough (Sir Stuart Bell) and my hon. Friend the Member for North Devon (Nick Harvey). David Maclean, who served on the Commission from 2005 until the election, ceased to be a member automatically when he retired from the House at the election.
Taking up a ministerial position does not automatically lead a member of the Commission to vacate their office, so the motion discharges my hon. Friend the Member for North Devon, who is now Minister of State for the Armed Forces. I am sure that the whole House will join me in thanking the outgoing members of the Commission for their work on its behalf.
Both David Maclean and my hon. Friend served through the challenging recent events surrounding our expenses, but they also played their part in many more positive developments. The implementation of the Tebbit review, which involved a fundamental restructuring of the House of Commons service, has been one of the Commission's biggest achievements in recent years. But the Commission has also made significant achievements in other areas, such as promoting greater awareness of the House's environmental impact, establishing the House's equality scheme, developing a 25-year estate strategy, introducing new broadcasting arrangements and, this month, opening the new nursery.
If the motion is agreed, the outgoing members will be succeeded by my hon. Friend the Member for Mole Valley (Sir Paul Beresford) and my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), who chairs the Finance and Services Committee. Both have served their parties in government or opposition and both have wide-ranging experience of serving on Select Committees of the House, both as a member and as Chair.
I am sure that the House will have the greatest confidence in the wisdom and experience that both Members will bring to the deliberations of the House of Commons Commission and the Members Estimate
Committee, given that membership of one flows from the other. I look forward to working with both of them and I commend the motion to the House.
Ms Rosie Winterton (Doncaster Central) (Lab): I, too, pay tribute to the work of the hon. Member for North Devon (Nick Harvey) and the former right hon. Member for Penrith and The Border on the House of Commons Commission. Both served for five years on the Commission under two Speakers. The hon. Member for North Devon was not only a highly respected member of the Commission but was its spokesperson on the Floor of the House, a role that he fulfilled with great aplomb. We congratulate him on his appointment as Minister for the Armed Forces.
The former right hon. Member for Penrith and The Border was also an assiduous member of the Commission, bringing to bear his experience as a former Chief Whip. He retired from the House at the election but leaves behind his fine House of Commons reputation. He will be missed on the Commission.
I should like to thank the longest-serving member of the Commission, my hon. Friend the Member for Middlesbrough (Sir Stuart Bell), for his ongoing commitment and dedication. The Leader of the House clearly set out the achievements of the House of Commons Commission in recent years and I welcome the appointment of the hon. Members for Mole Valley (Sir Paul Beresford) and for Caithness, Sutherland and Easter Ross (John Thurso), who are to serve on the Commission. I am sure that the whole House will join me in wishing them well in the important role of ensuring the smooth running of the House.
Peter Bottomley (Worthing West) (Con): I join the right hon. Member for Doncaster Central (Ms Winterton) in paying tribute to-I have no idea whether he is right honourable, but if he is not he certainly should be-the Member for Middlesbrough (Sir Stuart Bell), and in thanking David Maclean for the service he has given. I say to my right hon. Friend the Leader of the House, and to you, Mr Speaker: thank you for the role you fulfil.
I do not know whether the Commission has much to do with the Independent Parliamentary Standards Authority, but IPSA deserves to have as much support as possible in getting right its role. I shall not talk now about its responsibilities, but I would say that IPSA was set up because the House and the Commission-
Mr Speaker: Order. The subject of IPSA has precisely nothing-repeat, nothing-to do with the terms of the motion. I therefore know that the hon. Gentleman will not seek to dilate on the matter but will confine himself to the specifics of the motion.
The point I was going to make is that the holder of your office, Mr Speaker, and the holders of other offices, failed to support Elizabeth Filkin when she was Parliamentary Commissioner for Standards.
Mr Speaker: Order. I am afraid that, although the hon. Gentleman has tried, the second go was no better than the first. The matter has absolutely nothing to do with the terms of the motion, on which I hope the hon. Gentleman will focus the remainder of his remarks.
Mr Speaker: Order. Let me help the hon. Gentleman. I made no such observation or suggestion whatsoever. The issue is not the sphere of competence of the Commission but the substance of the motion that Members are supposed to be debating.
Peter Bottomley: In welcoming the proposed appointment of my hon. Friend the Member for Mole Valley (Sir Paul Beresford) and the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), I express the wish that my confidence is not misplaced, as it sadly might have been in the past. If we expect the Commission to be able to defy, on occasion, the wishes of this House and support the work of those who work with the Commission and alongside it, we will be able to praise them not just in advance of their appointment but after their service as well.
I make this point without anticipating contradiction: had we done better in the past, those who take on the responsibility of being part of the Commission would have had, and will have, an easier job than they have had. In the days when I was defending the holder of a different office, most of the House asked why I was doing it. The reason was that the Speaker, the Leader of the House and others have responsibility for considering issues on their merits, and I expect that those appointed to the Commission will do the same.
The fact that there may have been failures in the past was not a big surprise, because some in high authority did not give the backing they should have done. I hope that if any member of the Commission finds that they are in a similar position in future, they will say, openly, "It may be a minority interest, but those who serve in this House have got to be prepared to be unpopular, to defy convention at times, and to remind those who serve this House that virtually every page in "Erskine May" is there because something has happened for the first time." If anyone rolls out the historic negative, saying, "You can't do this in a new way because nobody's done it that way before", they should read the pages of "Erskine May"-not just the present edition but those from the past as well.
I wish honourable service to those who have joined the Commission, and I praise those who have been part of it. Let us never again find that when MPs are
investigated, members of the Commission, whether in that position or in their other positions, fail to back those who ask for a higher standard of behaviour within this House. I say that, I think, without contradiction this time.
Mr Speaker: Now that the motion has been agreed and Mr Nick Harvey has been discharged, and in the light of the very welcome remarks of the Leader of the House and the shadow Leader of the House, I should like to record my heartfelt thanks to Nick Harvey for his five years' service on the Commission and the Members Estimate Committee, and especially for acting as Commission spokesman throughout that time, as well as for his work on the 2008 review of allowances. In addition, I should like warmly to thank the former Member for Penrith and the Border, David Maclean. He was appointed to the Commission on 1 November 2005, replacing Sir Patrick Cormack, and he served until the end of the last Parliament. We appreciate the work of Mr Harvey and of David Maclean.
That the draft Communications Act 2003 (Maximum Penalty for Persistent Misuse of Network or Service) Order 2010, which was laid before this House on 25 March 2010, in the previous Parliament, be approved. -(Angela Watkinson.)
That the draft Armed Forces Act (Continuation) Order 2010, which was laid before this House on 2 June, be approved. -(Angela Watkinson.)
That the draft Equality Act 2010 (Consequential Amendments, Saving and Supplementary Provisions) Order 2010, which was laid before this House on 14 July, be approved. -(Angela Watkinson.)
Alison McGovern (Wirral South) (Lab): Thank you, Mr Speaker, for giving me the opportunity to raise this issue of importance to my constituency in my first Adjournment debate. I should like to say a few words about young people's employment opportunities in Wirral. Specifically, I will highlight the success of the Wirral apprenticeship scheme, touch on some wider employment issues and finally consider the numbers involved and the problem that we face in the supply of employment opportunities.
I begin by highlighting the great success of the Wirral apprenticeship scheme. Wirral council, in partnership with Connexions and Jobcentre Plus, has done an excellent job of increasing the number of apprenticeships and, most importantly, helping young people to apply for them. It has used working neighbourhood funds to support local businesses in hiring 167 young people in everything from dairy farming to jewellery design. Nearly half those young people were not already in employment, education or training, or were at risk of drifting on to the dole, which none of us wants to see.
There were two elements to the scheme. First, the council committed funding for a member of staff for 18 months if a business would commit to employing them for two years. The second, and I believe more important, part of the scheme related to recruitment support and how the council went about finding the businesses to take part and the young people to be employed by them. I pay tribute to Viv Stafford, Mel Campbell and the team at Wirral council, who worked proactively with young people and employers so that businesses were supported all along the way and young people were able to gain confidence prior to their work interview. Their priority was young people at risk of becoming a burden on the state and businesses with little existing experience of apprenticeships or of hiring young people.
Overall, the scheme resulted in not only more apprenticeships and young people who were work-ready to take up the opportunities available, but in employers gaining the confidence to offer young people more work experience. Rather than just apprenticeships per se, employers also offered work placements. I feel that the programme ought to be replicated across the country. We have real expertise in Wirral, and we can help ensure that this generation of young people does not end up missing out on the chance of success. I ask the Minister whether he supports local government playing such a leading role, and what the Government can do to back up councils that want to take that approach. My lesson from Wirral is that a cross-partnership approach involving all the responsible agencies is needed, no matter which bit of the state they are involved in. I should like to know what he thinks about that approach.
To move on from the Wirral apprenticeship scheme, there are wider issues to consider in young people accessing employment. The future jobs fund, which ensured that young people had continuity on their CVs, is now gone, and young people without work experience
face a very tough labour market. My job is not to stand here and whinge on behalf of Merseyside-I will never do that. However, historic facts about our area mean that the employment picture there can be more fragile than elsewhere. It is therefore all the more important for us that Connexions, working with schools, can assist and advise young people on getting good-quality work experience placements, as well as training and mentoring. Young people need independent advice, but teachers do not always have the time to get up to speed with how the labour market has moved on. That independent advice is important.
Businesses, too, have a responsibility. They must show commitment to the next generation. When I became an MP, I went around and talked to lots of businesses in my community on how they felt about that. Thankfully, Wirral businesses told me that they absolutely want to make such a commitment. Invest Wirral has a fantastic business support team that is committed to connecting businesses with all the Government help that is available and with help from other sources. However, that depends on our local authority having the resources to provide that support. It is under great pressure given the budget cuts that are being handed down, as is all state funding.
As a side point, we should not let the media off the hook. Sometimes, there is great pressure on young people to succeed at A-levels and go straight on to a university degree, whether or not that is right for them. I would like the media more often to celebrate successful apprentices and young people who are in business. Academic success is important, but it should not be prioritised for media coverage every year at results time at the expense of all other forms of success among our young people. The more we celebrate the diversity of our young people, the more confident they will be, and we know how important self-esteem and confidence are when it comes to people achieving their hopes.
Will the Minister give me more information on what the Department for Work and Pensions and other Departments plan to do to support young people to gain work opportunities, including, but not only, apprenticeships? Will the Government support the recruitment process? I am sure he will give me a positive answer to this question: will he commit, with all Ministers, to talking up the achievements of our young people?
We know that, in part, this is a numbers game. We had a good opportunity to discuss the national apprenticeships scheme in Westminster Hall, when the fact that there are simply not enough apprenticeships out there for the people who want them was brought to light very clearly.
Esther McVey (Wirral West) (Con): The hon. Lady and I are on opposite sides of the House, but our constituencies are next to each other, and on this matter we stand side by side. We both talk very passionately about youth unemployment and apprenticeships, and she will no doubt know that I am taking on an apprentice. However, Labour's legacy is dire. Labour brought about the highest number of young people aged between 18 and 24 not earning or learning-the proportion is nearly 20%. Although I agree with her rhetoric, the evidence of what Labour did in reality is somewhat lacking. Will she join me in welcoming the new Government's allocation of £600 million for programmes to support unemployed young people and £150 million for 50,000 apprenticeships?
Alison McGovern: The hon. Lady raises a few questions, but she and I stand side by side in ensuring that there are enough opportunities for apprenticeships-I agree with her up to that point. I understand what she says, but I invite her to come with me to visit Age Concern Wirral, which uses the future jobs fund to employ young people to do very important work in caring for those with Alzheimer's. Those young people were getting continuity on their CVs, so that once the economy picked up, they would be work-ready and ready to look for opportunities. The Government's first act was to take that away, which is having a real impact. I agree with her in many ways, but I obviously cannot agree with her about the previous Government's record.
Julie Hilling (Bolton West) (Lab): I am grateful to my hon. Friend for initiating this debate, which is important to the future of our young people. Does she agree that we have just faced an enormous global recession that has put young people out of work and made life very difficult for them, and that one of the challenges that we face is finding enough employers to take on apprentices? We therefore badly need the Government to encourage employers to take on apprentices whenever possible.
Alison McGovern: I agree with my hon. Friend. It is, sadly, rare to be inspired by a local authority officer, but I was totally inspired by our team in Wirral, which has taken employers in the area on a journey. Employers with no history of working with young people or taking on apprentices have become so confident in the scheme that they are fully funding their apprentices. We need to spread that approach across the country, and I hope that the Minister will say more about how we could do that.
There are not enough work opportunities for young people whereby they can train on the job. The Government have said that they will increase the number of opportunities, but we need truly additional funding, not just a re-badging of existing training schemes. Unless there are more opportunities for young people-and business has a role to play in this as much as Government-we will see great frustration and, ultimately, more young people on the dole. That is my real concern. That would damage not only any attempt to reduce the budget deficit, but those young people for years to come. Labour markets demonstrate hysteresis-they have memory. If a place has suffered unemployment in the past it is more likely to continue to do so, and that lowers the skills and the confidence of the people. Merseyside has worked hard, and will continue to do so, to combat the worst effects of the 1980s, some of which we still feel, but not continuing the increase in apprenticeships and work opportunities for young people will set us back and we will feel the effects for many years to come. People in my constituency do not want austerity economics: they want investment in our young people.
I would be grateful if the Minister explained how the Government will increase the number of work opportunities in the UK and, specifically, how that will affect Wirral and the Merseyside travel-to-work area.
The Minister of State, Department for Work and Pensions (Chris Grayling):
I congratulate the hon. Member for Wirral South (Alison McGovern) on securing her first Adjournment debate on a subject that is a matter
of concern across the House. I share her concerns about Wirral and Merseyside. In the previous Parliament I was the shadow Minister with responsibility for building knowledge, understanding and ties between my party and the people, businesses and communities of Merseyside, and I also spent time in Wirral supporting my hon. Friend the Member for Wirral West (Esther McVey).
The hon. Lady mentioned the 1980s, but it is not what happened 30 years ago that defines the present moment. What defines the present moment is the failed inheritance from the previous Government. They had 13 years of unprecedented economic growth, and they spent billions of pounds on welfare programmes, but the number of people on out-of-work benefits-in Merseyside and elsewhere-remained stubbornly high. They failed to get people off benefits and into work. That failure matters now, when we are dealing with the cyclical impact of a recession, because we have to deal not only with those who have lost their jobs as a result of the recession and those who are entering the jobs market for the first time, but a huge block of people who have been on benefits for year after year. It makes the challenge that we face-of getting as many of our citizens into work as possible-much bigger than it should have been.
The hon. Lady is right to say that Wirral, and Merseyside as a whole, have suffered from the recession. In Wirral the Swiss food company Givaudan has closed, with the loss of 150 jobs, and jobs have been lost in other parts of Merseyside, leading to real pressures on the community, as in other parts of the country. We have to create an economic environment in which businesses can grow, develop and create sustainable jobs for the future, and I am confident about Merseyside in that respect.
If people spend a lot of time in Liverpool and around Merseyside, they quickly recognise what a wealth of enterprise, ideas and knowledge there is in and around the region that can be harnessed very effectively to create the opportunities of the future. There is a really dynamic spirit coming out of the universities in Liverpool. I have seen some great young businesses in the area, and I am confident that we can create the right environment there-an environment in which we charge less for employers who take on their first few employees; in which we cut the national insurance they pay; in which businesses pay less in corporation tax; in which we seek to reduce the burden of regulation; in which there are fewer health and safety regulations that cost small businesses; and in which we try to simplify the environment for businesses to work in.
In that kind of environment people will say, "Yes, I can do it. I can start a business. I can start to create jobs." That way we can start to deal with the big problem that the hon. Lady rightly pointed out with unemployed young people. Last year there were 5,500 unemployed 16 to 24-year-olds in the Wirral-an unemployment rate that has stayed stubbornly high-but that is not simply down to the current recession. The level of young people not in employment, education or training has remained stubbornly high throughout the past 13 years, and is higher now than it was in 1997. We really have to change that.
The hon. Lady referred to the future jobs fund. Many of the employment programmes we inherited from the previous Government were not effective. I understand the motivation for the future jobs fund, but we found it
to be a scheme that cost a substantial amount of money and generated temporary jobs in and around the public sector, but did not create the kind of long-term opportunities for young people that would give them skills to last a career. Frankly, we felt that we could do better. However, she is wrong to say that we simply came in and scrapped the future jobs fund. We did not. Future jobs fund jobs are still being created today. However, we have said that we will phase out the scheme and put in place a number of measures next year, including the introduction of our single Work programme, about which I will talk more in a moment.
My hon. Friend the Member for Wirral West is right about the Government's decision to deliver 50,000 extra apprenticeships. An apprenticeship is a much better way of giving somebody long-term skill opportunities than putting them into a temporary placement as the future jobs fund would.
Mrs Mary Glindon (North Tyneside) (Lab): The Secretary of State is talking about apprenticeships, which are fantastic for the young people who have the confidence and ability to engage with them. However, the future jobs fund helped some young people who were nowhere near ready to be apprentices and who needed that extra lift. Without that, a whole layer of young people will be put on the scrap heap. That is the difference. What he is talking about is fantastic, but he has to consider what the future jobs fund did to help young people whose situation did not allow them to take up an apprenticeship-people who were not apprenticeship-ready.
Chris Grayling: Let us be clear: the hon. Lady is absolutely right to say that we are dealing with very real issues for young people, and one certainly finds that in and around Merseyside. I have spent a lot of time with voluntary sector groups working with young people who have some pretty difficult circumstances in their lives. The reality is that many people from those difficult backgrounds emerge from school and struggle to enter the workplace, having not developed skills in school and having fallen behind for a variety of reasons. We have to get to grips with that.
That is one reason why this Administration are pressing ahead with the pupil premium. Hon. Members will know that often young people fall behind during early years development, at the age of one, two and three, and then get to school already behind their peers, never catch up and end up leaving school without basic levels of literacy and numeracy. That is one reason why we are putting the pupil premium into some of our most challenged schools-so that we can try to help some of those young people to catch up.
The hon. Member for North Tyneside (Mrs Glindon) is right to say that we have to do more preparatory work for young people to get into the work place, and that will be one of the key aims of the single Work programme. On the one hand, we are looking to build skills, which the apprenticeships programme is certainly designed to help achieve. However, the Work programme is the most important part of what we are trying to do. It will be introduced next year and will take over from existing programmes, some of which-such as pathways to work, which was highlighted by the Public Accounts Committee
this week- have not worked, and others of which, such as the future jobs fund, we judged were not delivering value for money, given the high cost and the nature of the employment provided.
I am keen to see the creation of an environment in which we have specialist organisations working with people of all ages-including young people, who have precisely the kind of challenges to which the hon. Lady referred-by helping them to move into the workplace, build up their confidence, develop an understanding of what they need to get into work, establish work placements for the first time, build up work experience and make the jump into the workplace. That is the nature of the single Work programme.
Alison McGovern: Can the Minister say specifically how that differs from the new deal for young people? It sounds like revisionism to me-as though no good was ever done before-whereas in fact the figures in Wirral show that we have half as many unemployed people now as we did in the previous recession, which is the proper comparison. It would therefore be helpful if the Minister could say how his programme will differ from the excellent new deal.
Chris Grayling: The big problem that we had with the new deals was that they were effectively programmes designed in Whitehall. The standard new deal format was 13 weeks in a classroom, with relatively little financial focus on outcomes or whether people got into work at the end. It was very much about the Government paying for placements. The placements happened, but as for the outcomes of the different new deals-yes, they got some people into work, but the number who stayed in work was disappointingly low. One of the big differences with the Work programme is that it will not simply be about getting people into work, but will be about sustaining them in employment.
In particular, where young people come from the kind of difficult background that the hon. Member for North Tyneside described, the programme will not be about just getting them through the first days of work; it will be about helping them to stay there and overcome some of the hurdles that they face in the workplace, including some of the cultural aspects of working life that they do not expect. Having mentors sitting alongside them in the workplace is an extremely important part of what we are seeking to do.
I am expecting to have specialist providers serving the Wirral and Merseyside whose job it will be to work with unemployed young people, as well as those of other ages, not only helping them to find those first opportunities to gain work experience, develop interview skills and understand how to put together a CV, but going out and working with employers, match-making young people with the opportunities that are out there. As the hon. Lady will know, there are quite a large number of vacancies out there, but often a jobseeker will not know how to go about finding those opportunities. The skills brought by professional providers working with people with the potential to get into work, so that we match them with the right opportunities, are fundamental.
We should set that against our plans for the skills system. We are currently consulting on how the further education and skills system can be developed to respond effectively to the skills gaps that we need to address. We
want to give training providers greater freedom to target provision to meet local needs, alongside giving colleges and other providers greater local autonomy to say, "This is what we need in our area," ensuring greater provision of apprenticeships and putting in place the Work programme, which will be both local and national. The programme will be a national scheme, but the responsibility for delivery in each area will be devolved to a provider in a local community who will be specifically mandated to work with organisations in the voluntary sector and organisations such as Wirral council.
Indeed, I very much want to see local authorities participating locally in the work that is done, working with the providers and sometimes doing the work themselves. What we will end up with is local partnerships collaborating to match individuals with employment opportunities and to overcome the hurdles that often exist between the two. Although we face tough and straitened times-I will be absolutely frank and say that, as an Administration, we will not be able to do all the things that we would like to do-we need to make that investment in skills development and deliver those apprenticeships.
Chris Grayling: I would be very happy to do that at some point. I am always happy to revisit Merseyside. There are some great people there, and it is a great community. Liverpool is a magnificent city. I know that my hon. Friend the Member for Wirral West and the hon. Member for Wirral South represent important constituencies that are also nice places to live in and to represent, and I would be delighted to come and see some of the work being done there at some point.
I share the aspiration of the hon. Member for Wirral South to ensure that as many young people as possible can find work, although there will undoubtedly be times when she and her colleagues disagree with me and my colleagues about the means that we are using to try to achieve that. We certainly face tough and challenging times financially, and that will make it more difficult to do all the things that we would like to do. At the end of the day, however, we all share that aspiration. I do not want to see large numbers of people whose lives are wasting away while they are stranded at home on benefits, doing nothing.
We need to make changes to the welfare state to improve the incentives to work. We also need to give people an extra push, particularly when they have been out of the workplace for a long time or have never worked. Such people can build up problems with their confidence, and they are often uncertain about how to get into the workplace and how to go about getting a job. We have to help them to overcome that. We all want the same thing. I want to see as many people as possible of all ages, but particularly young people, in work in thriving businesses in an enterprise culture that we have created, in which businesses are growing and developing, and emerging from our universities, and in which companies are coming into the UK to invest and create jobs. If we can create that dynamic business environment, provide investment in skills and deliver really effective back-to-work support for those who are struggling to get work, we shall be able to achieve the goals that the hon. Lady rightly sets for her constituents and for those of all right hon. and hon. Members across the House.