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Sir George Young:
The whole House would have been dismayed by the 10 incidents, to which the health ombudsman referred in her recent report, showing neglect of elderly people. It would be wrong to generalise, because high-quality care is provided in much of the NHS, but the instances of poor discharge policy, poor
end-of-life policy and poor nutrition policy were deeply worrying. I hope that some of the reforms in the Health and Social Care Bill will improve the position, not least through the creation of local healthwatch organisations to give patients more power to ensure that there is feedback, that complaints are heard and that local services are held properly to account.
Steve Rotheram (Liverpool, Walton) (Lab): Will the Leader of the House grant an urgent debate on Liverpool's local government settlement from central Government, given the misleading statistics about funding levels used-inadvertently I am sure-by both the Prime Minister and the Minister for Housing in recent weeks?
Sir George Young: We have debated the local government settlement within the last fortnight, and that would have been the opportunity for the hon. Gentleman to raise the grievance to which he refers. I am afraid he will have to wait another year before that opportunity comes round again.
Kris Hopkins (Keighley) (Con): The Leader of the House will be aware of a Channel 4 programme that went out last Monday evening, showing several children from my constituency being kicked and beaten in a mosque. Will he ask the relevant Secretary of State to make a statement on how we can protect children who attend mosques and madrassahs, and how we can support members of the community who are afraid to complain to the police about what has happened?
Sir George Young: I understand the concern arising from the "Dispatches" programme, which included such comments as that men should be trusted only if they had substantial tufts of hair on their face. It would be appropriate for my hon. Friend to refer to the police any allegations of abuse or harm to children. All school inspections are carried out by trained and qualified inspectors, and he might like to raise the incidents in his constituency with the appropriate inspectors.
Paul Flynn (Newport West) (Lab): Can we debate the extraordinary and anachronistic Advisory Committee on Business Appointments? It is made up of five lords and two knights, almost all of whom have business appointments themselves. It cannot be a watchdog because it never follows up its recommendations. Is it not about time we reformed this establishment pussy-cat that just looks after the establishment?
Sir George Young: I understand that the hon. Gentleman is referring to the body that gives advice to ex-Ministers as to whether it is appropriate for them to take on employment. It is important that that job is done. I have no particular view on why it cannot be done appropriately by five lords or two knights; the important thing is to have the right people to do the job. It may be that the right people to do that job have the adornments to their names that the hon. Gentleman has just mentioned.
Bob Blackman (Harrow East) (Con):
As a coalition Government, we are committed to making sure that money is spent in the national health service on the front line. Two weeks ago I mentioned two trusts that were consulting about merging; I now understand that that will take three years and cost £1.5 million. Now I
highlight what is going on with the Care Quality Commission and dentists throughout the country, who are required to print and display 75 individual policies in their surgeries, totally unnecessarily.
Sir George Young: Dentists in my own constituency are complaining about the approach of the Care Quality Commission. If my hon. Friend would like to approach the Backbench Business Committee, it might feel it appropriate to arrange a debate. I shall raise the issue of the mergers of NHS trusts in my hon. Friend's constituency with my right hon. Friend the Secretary of State for Health.
Diana Johnson (Kingston upon Hull North) (Lab): Given the doubts expressed today by health experts about the Government's minimum alcohol pricing policy, may we have a debate on what the policy will actually mean, and whether it is anything other than a fig leaf for big commercial interests?
Sir George Young: We have not announced the details of that policy, but this is the first time that a Government will have a policy on minimum alcohol pricing, linked to the related policy for a special tax on high-strength drinks. The Budget may be the appropriate time for a debate on those issues.
Andrew Bridgen (North West Leicestershire) (Con): Can we have a debate about spending so that we can contrast the coalition Government's policies and plans for the economy with those of the shadow Chancellor, who asserts that we should be spending a lot more money that we do not have? The policy of spend, spend, spend is what got us into this mess in the first place.
Sir George Young: My hon. Friend is right. The spending reductions that we are planning for next year, of some £16 billion, are only £2 billion more than the figure pencilled in by the outgoing Chancellor of the Exchequer.
Geraint Davies (Swansea West) (Lab/Co-op): There is growing concern about the future of Remploy factories, which provide supported jobs for people with disabilities. Will the Leader of the House consider an urgent debate on ensuring that all public bodies include Remploy in their procurement policies for office furniture and other products, to support workers with disabilities and provide a level playing field for trade?
Sir George Young:
I understand the hon. Gentleman's concern. The matter was raised at business questions last week, and I wrote to one of his hon. Friends about Remploy. I should like to send him the same letter. The
Government have maintained support of some £555 million to Remploy to help it through the five-year modernisation programme, but I should like to write to the hon. Gentleman about the particular issue that he raised concerning public sector procurement.
Mr Andrew Turner (Isle of Wight) (Con): Tomorrow is Go Orange day on the Isle of Wight-a celebration of three independent lifeboats and the fundraising efforts to keep them afloat. Each service costs more than £25,000 a year. Will the Leader of the House join me in thanking the brave men and women who man the service, and in sending them good wishes for the success of Go Orange day?
Sir George Young: I welcome my hon. Friend's initiative at business questions in giving the service the publicity to which it is entitled. The whole House will endorse the good wishes that he has just mentioned.
Julie Hilling (Bolton West) (Lab): This week Oxfordshire joined the growing list of local authorities that are closing their youth services completely. In view of the gravity of the situation, and as there is a statutory duty to provide youth work, may we have an urgent debate in the Chamber on the issue?
Sir George Young: Again, I say to the hon. Lady that there was an opportunity to debate the situation two weeks ago when we discussed the revenue support grant. Those decisions have now been taken. I will draw her concern to the attention of my right hon. Friend the Secretary of State for Communities and Local Government and ask him to write to her.
Chris White (Warwick and Leamington) (Con): In my constituency the video games industry is a major employer, but recently there have been reports about potential job losses. That is a particularly worrying development given the importance of the creative industries to our economic recovery. Will the Leader of the House provide Government time for a debate on how we can best support our creative industries, such as video games, to boost exports and create new jobs?
Sir George Young: My hon. Friend is right; we need a stake in the digital and creative industries, and we have many market leaders in this country. I cannot promise a debate, but I will draw his remarks to the attention of both the Chancellor of the Exchequer as he prepares his Budget, and my right hon. Friend the Secretary of State for Business, Innovation and Skills.
The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman): I would first like to say that I take full responsibility for the situation that brings me to the House today. Let me make it clear that we have always placed the highest priority on preserving access and protecting our forests, but the forestry clauses in the Public Bodies Bill, published well before we launched the consultation, gave the wrong impression as to the Government's intentions. That is why I am today announcing three steps that will allow for more measured and rational debate about the future direction of forestry policy.
First, I have taken a decision to end the consultation on the future of the public forest estate, and I take full responsibility for that. I am doing so because it is clear from the early responses to the consultation that the public, and many hon. Members, are not happy with the proposals that we set out. Secondly, the Government will support the removal of the forestry clauses from the Public Bodies Bill, which is in Committee in the other place.
Thirdly, I would like to announce to the House that I am establishing an independent panel to consider forestry policy in England. It will report to me with its findings in the autumn. The panel will advise me on the future direction of forestry and woodland policy in England, and on the role of the Forestry Commission and the public forest estate. The panel will include representatives of key environmental and access organisations, alongside representatives of the forestry industry. I will shortly publish its membership and terms of reference.
If there is one clear message from this experience, it is that people cherish their forests and woodlands and the benefits that they bring. My first priority throughout this period of debate has been securing a sustainable future for our woodlands and forests. On many occasions in the House last autumn, Ministers gave assurances that our aim in all of this has been to do more to maintain and enhance the public benefits delivered by forestry-from recreational access to wildlife protection, and from tackling climate change to sustaining a wide range of small businesses. That is why my ambition to provide a better future for our forests is undiminished.
We have already heard positive suggestions about how we can do that for heritage forests and all other woodlands. We have spoken to the Royal Society for the Protection of Birds, the National Trust, the Woodland Trust, the wildlife trusts, the Ramblers Association and other groups. The Forestry Commission has itself acknowledged that change is needed, and will be fully engaged in the process, as I know that it has many ideas to contribute. We have also been listening to hon. Members on both sides of the House, many of whom have set up their own initiatives and local groups. We want to support them in that.
Finally, I am sorry, we got this one wrong-but we have listened to people's concerns. I thank colleagues for their support through what has been a very difficult issue. I now want to move forward in step with the public. I hope that the measures that I have announced
today, signalling a fresh approach, demonstrate my intention to do the right thing for our forests and our woodlands.
Mary Creagh (Wakefield) (Lab): I welcome the Secretary of State's full and frank apology to the House and to the nation for getting this so very wrong. I am sure that the past 48 hours have not been easy for her.
Last night the Government announced that they would withdraw the forestry clauses from the Public Bodies Bill, which is now in the other place, and scrap the consultation on the sell-off of England's forests. Again, MPs heard about a major Government U-turn on the television, rather than hearing it here first. [Hon. Members: "No!"] It came through on BBC News and Sky at 10.20. Can the Secretary of State tell the House when she was informed of the decision that she is now announcing, as her statement is mysteriously absent from the Order Paper today? Only yesterday the Prime Minister told the House that the consultation on the forests, set to run until April, would continue. When was the decision made, and who made it?
Today the air is filled with the sound of chickens coming home to roost. The Secretary of State has discovered that her first priority-delivering the 30% cut that she inflicted on her Department-has a hefty political price attached. Half a million people have marched, mountain-biked and petitioned against her sale of the century. They objected to the once-in-a-lifetime offer to buy something that they already collectively own. Under the cloak of reducing the deficit, she came up with a policy that her own Department admitted would cost more than it delivered in benefits, and which would have fragmented the environmental stewardship of England's forests. I congratulate all hon. Members who defied their party Whips a couple of weeks ago to vote against the sell-off, and I remind those who did not that the public may well extract a hefty price from them at the next election.
Today is not a victory for politics as usual: it is a victory for Liz Searle of the Friends of Chopwell Wood, whom I met in Gateshead two weeks ago, for the Save Cannock Chase campaigners, and for the Friends of Dalby Forest, members of which I met in York last weekend. It is a victory for the Save Our Woods campaign, for Alan Robertson from the Hands Off Our Forest campaign in the Forest of Dean, and for thousands of others. I hope that Government Members are listening to those names and will contact those campaigners. They signed the Save Our Forests petition and the Save England's Forests petition, and supported the silent majority in speaking up and telling the Government, "This land is our land".
Last Friday the Secretary of State announced that her sale of 15% of England's forest permitted under the law as it stands would be put on hold until the consultation ended. The consultation ended last night-we assume by Prime Ministerial decree. Will the sale of those 40,000 hectares, or 100,000 acres-10 times more than the Labour Government sold during their entire 13 years, and we then reinvested the money-now go ahead, or will that sale await the outcome of the panel's deliberations? How many consultation responses has she received, and will the panel consider those responses?
I am delighted that the Secretary of State has finally spoken to the environmental charities and listened to
them on the matter. How will the freshly dreamed-up independent panel on the forests be selected? Why are representatives of the forestry industry-the lone voice in favour of her proposals-included in the panel, and why will it meet in secret? Should it not tour the country listening to what people want from their forests and showing a little humility on the subject? Can she reassure the public that foresters themselves, the custodians of forests, will be represented on the panel? How will the campaigners and the members of the public who have spoken up on the issue be represented? What is the status of DEFRA's forestry regulation-or should I say deregulation-taskforce, which was quietly announced by her colleague in January? Surely we should not have two separate advisory panels, running in tandem, on the future of the forests? Can she tell the House how the Forestry Commission can possibly deliver better access and more biodiversity when it is set to lose a quarter of its staff in the next three months?
This U-turn highlights a wider problem about how this Government work. We have the Prime Minister, a self-styled non-executive chairman, now setting up a unit to monitor Ministers, but he is barking up the wrong tree. It is not individual Departments he should be putting into special measures, but the whole Government, who are out of touch with what people care about, whether that is the opportunity to walk in the forests or to ensure that babies get milk and books, or that our children have the chance to go to university.
I congratulate the Environment Secretary on one thing: she is probably the only Cabinet Minister in living memory to unite the Socialist Workers party and the National Trust in opposition to her plans. Will she learn the lessons of this debacle? She cannot ride roughshod over the people on a policy for which she has no mandate. By offering her 30% cut across DEFRA she has set herself on a collision course with anybody who loves the countryside-and if she will not stand up for the countryside, we on the Labour Benches most certainly will.
Mrs Spelman: As I am sure you, Mr Speaker, and the House are aware, I volunteered to make an oral statement, and an oral statement does not appear on the Order Paper.
I made the decision with the Prime Minister. We have spoken about the matter, as the hon. Lady would expect, on a number of occasions. We spoke face to face about the options open to us, and we made the decision together.
The hon. Lady talks about the savings that I have had to make in my Department without a trace of acknowledgement that the reason why Government Departments are having to make savings is the mess that her Government left this country in. I do not accept her argument that the proposals outlined in the consultation would have impacted adversely on the stewardship of our woodlands and forests. Since we are on the subject of stewardship, I remind her that, notwithstanding the savings that we have had to make in our Department, we have protected the expenditure on stewardship, precisely because we know that it is so important.
The many friends of forests that the hon. Lady listed will in many cases have written to hon. Members on both sides of the House to express their concern about their understanding of the forestry clauses in the Public
Bodies Bill. In their minds, those clauses gave rise to a concern that their particular dearly loved forest might in some way be under threat. It is clear from my statement that, with the withdrawal of the forestry clauses, there can be no question about the protection of their forests in future.
The hon. Lady asked me about the planned sales. They have been suspended, and we await the outcome from the panel. She asked how many responses we had received. The Forestry Commission has received approximately 7,000 direct responses and 2,500 e-mails, and it has sent out 400 hard copies of the consultation document.
With regard to the composition of the panel, it will represent the broad range of views of all those who share with all of us a love and cherishing of the forests, and want to see them protected. It will be broad. Let me help the hon. Lady with her understanding of the deregulation taskforce, which fulfils a completely different function from that of the panel. We have invited Mr Richard Macdonald to advise Ministers on the simplification of regulation, particularly the regulation of agriculture. The consultation is complete: we have received the responses and we await Mr Macdonald's report. As I said, this is a completely different function from that of the panel that I have announced today.
I found it quite hard to take the hon. Lady's comments about the support that the previous Labour Government had given to the countryside-and the reaction of Members to those comments was enough to reinforce that point. Finally, as regards humility-perhaps, ultimately, that is the difference between her and me. I am prepared to come here and show genuine humility. If we heard some acknowledgement from the hon. Lady that her Government sold off forests with inadequate protection, we might begin to take what she had to say more seriously.
Andrew George (St Ives) (LD): The Secretary of State is, of course, right in the reassurances that she gave about the Public Bodies Bill, and I certainly welcome the statement she made last week about the 40,000 hectares, as previously announced in the comprehensive spending review. Will she reassure us that the well-constructed questions posed in the consultation will not simply be lost, or submerged by what has been announced today?
Mrs Spelman: Yes, I can give that assurance. Those were perfectly reasonable questions to ask, and I would expect members of the independent panel to look at all the questions raised in the consultation document-and, indeed, at some additional wider questions that members of the public asked to be considered.
Mr Speaker: Order. May I gently remind the House that Members who came into the Chamber after the Secretary of State had started to deliver her statement should not expect to be called?
Mr David Winnick (Walsall North) (Lab):
If there is any personal sympathy for the Secretary of State today, it is because she has been publicly humiliated by the Prime Minister and the Chancellor. Can she bring herself to congratulate the many people up and down
the country, certainly including my constituents, who fought and campaigned so hard against the selling off of one of our most precious national assets?
Mrs Spelman: As I have said, I have no difficulty in life in being frank when I have got something wrong; I have come to the House and said as much. As regards the many people up and down the country whose love for their forests is quite apparent from the responses I received, I would like to reassure them that it was never the Government's intention to sell off the forests to the highest bidder- [Interruption.] That was never in our minds.
Mr Roger Gale (North Thanet) (Con): The statutory protection of right of access for walkers and riders, the statutory protection of the environment and the national habitat and the long-term securing of our natural woodlands were all contained in my right hon. Friend's proposals, but none of them was put forward either by Her Majesty's Opposition or-dare one say it?-by the push-button campaigners. Those protections need to be hung on to. My right hon. Friend was not wrong; she was right. Will she make certain that this Government protect our forests for the future, as the Opposition, when they were in government, never did?
Mrs Spelman: Of course, I am happy to give that undertaking. It is important to remember that a number of statutory protections-governing access, rights of way, wildlife protection, planning, the care of our woodlands and felling-are already in place. In addition to all that, we Ministers have made it clear on a number of occasions that we want to increase protection for access and other public benefits, because it is apparent from the sales made by the previous Administration that parts of that are not adequate.
Mr Kevan Jones (North Durham) (Lab): I welcome the decision to pulp this policy. The Secretary of State's attitude towards the House today seems to be that nanny has been misunderstood, and that if people had understood Government policy better they might have embraced it. Let me tell her, on the basis of experience in my constituency, that that is not the case. How will the right hon. Lady ensure that the millions of people who wrote to their MPs and marched against the policy will have their voices heard on the independent panel?
Mrs Spelman: I thought that I made it perfectly clear, and said quite straightforwardly to the House, that in this case we got it wrong; we listened, and we are going to take a fresh approach.
Neil Parish (Tiverton and Honiton) (Con): I very much welcome the Secretary of State's response, because I think we can now be very positive about this, and think about how we manage the forests, how the Forestry Commission can help the smaller forests and how we can get greater public access and biodiversity in them.
Mrs Spelman: I thank my hon. Friend for that observation. It is encouraging that the Forestry Commission agrees that reform is needed, and that we together should have the ambition to do better for our forests and woodlands and to enhance and protect their biodiversity.
Mr Ben Bradshaw (Exeter) (Lab): Did the Prime Minister offer to come and give the Secretary of State his support in executing this humiliating U-turn? As my hon. Friend the Member for Wakefield (Mary Creagh) said, the real problem is that we have a Prime Minister who almost prides himself in not knowing what is going on in Government Departments, and likes to float above everything as a non-executive chairman. It is he who needs to get a grip, not just the Secretary of State.
Mrs Spelman: Well, that might have been the right hon. Gentleman's experience of the previous Prime Minister, but I have spoken to the Prime Minister on a number of occasions over the last few weeks, as it was quite apparent that we were having difficulty with the consultation. I have been very grateful for his support.
Bob Russell (Colchester) (LD): I thank the Secretary of State for her pragmatic approach. I seek her assurance that there will be an attempt to achieve not only political consensus but a consensus across the country, in the hope that we can go forward with a better scheme-in sharp contrast, it has to be said, with the sales by stealth made by the Labour Government, whose financial policy appears to be that money grows on trees.
Mrs Spelman: I thank the hon. Gentleman for his observation, and his wonderful turn of phrase. He is, of course, absolutely right that this is a difficult issue, as previous Administrations have found. I am encouraged to think that the amount of interest generated in constituencies will encourage Members on both sides of the House to participate in this fresh approach to finding the best future for our woodlands and forests.
Caroline Lucas (Brighton, Pavilion) (Green): On behalf of the many hundreds of constituents in Brighton, Pavilion who wrote to me in opposition to the forest sell-off, I warmly welcome this U-turn. May I press the Secretary of State on the question of the independent panel? How, precisely, will it include the voices of those inspirational grass-roots movements that led the campaign against the forest sell-off? Will she guarantee that its meetings will be held in public?
Mrs Spelman: I hope that the hon. Lady will have heard in my statement what I said about the helpful contributions of the large grass-roots campaigning organisations to debate on this subject. I am quite sure that they will be part of the wide group that we will draw in on our independent panel.
Mr Desmond Swayne (New Forest West) (Con): I welcome the statement, and I do so also on behalf of my hon. Friend the Member for New Forest East (Dr Lewis), who as you know, Mr Speaker, is detained elsewhere. [Interruption.] On the business of the House, Mr Speaker!
Mr Speaker: I am greatly reassured by what the hon. Gentleman has just said.
Does my right hon. Friend agree that the course she has set is much more likely to ensure that some of the opportunities inherent in her proposals for the New Forest will be brought forward and implemented than would have been the case under the previous
means of consulting the House? May I also say to you, Mr Speaker, that I am surprised and shocked by the singular lack of grace shown by some hon. Members?
Mrs Spelman: I would certainly like to give my hon. Friend that assurance, and the vehicle of an independent panel representing a wide range of views to advise Ministers is, as he suggests, likely to produce a better outcome.
Barry Gardiner (Brent North) (Lab): I welcome the Secretary of State's apology to the House for this debacle, and the spirit in which it was given. Will she explain the situation in respect of the receipts that were anticipated from the sale of up to 15% of the land? Will she also reassure the House that in considering how to proceed with the English forest estate, she will pay particular attention to the green infrastructure of land around cities and the climate change connectivity necessary to extend forests into such areas so that the effects of climate change are mitigated?
Mrs Spelman: There are quite a few dimensions to that question. As the permanent secretary said when she and I were interviewed by the Environment, Food and Rural Affairs Committee in the autumn, she would have regarded any revenue from the planned sale of 15% of the land as a bonus, because she could not be sure about that. Now that those sales have been suspended, the situation depends on the outcome from the panel, but our Department's spending plans are not affected by the change.
It is clear that extra woodland cover in proximity to urban areas has a greatly beneficial effect, and the Government have an ambition to plant 1 million trees, which I hope will also enhance biodiversity.
Nick Boles (Grantham and Stamford) (Con): The Secretary of State has had the honesty and guts to come here to say that she presented ideas to the British public, but the British public did not much like them, so she said sorry and came up with a new approach. Is it not instructive that that is in such amazing contrast to the behaviour of that lot on the Opposition Benches who, no matter how many acres of woodland they sold and no matter how much gold they sold and at what price, nevertheless ran our economy into the ditch, from which we are trying to dig it out?
Mrs Spelman: My hon. Friend is absolutely right. As part of restoring trust in politics, it is important that the electorate see that the Government will listen. It is also very important in our new politics to be transparent, and I agree that had the previous Government consulted and been transparent about the terms and conditions of the sale of the public forest estate, it might have greatly helped the understanding of this issue.
Sir Gerald Kaufman (Manchester, Gorton) (Lab):
Is not this humiliating climbdown-[Hon. Members: "Oh!"] Oh yes, you all voted for it; every one of you. Is not this humiliating climbdown a tribute to the anger of huge numbers of people, including large numbers of my own constituents, who said they would not have this? Is it not deplorable that the right hon. Lady has been made to stand in the corner with a dunce's cap on her head by a Cabinet that two weeks ago drummed the whole lot of
them on the Government Benches-Liberal Democrats and Tories-to vote for the opposite of what she is saying now?
Mrs Spelman: It is only humiliating if we are afraid to say sorry, and one of the things we teach our children is to be honest. It is not a question of humiliation; it is my choice.
Karen Bradley (Staffordshire Moorlands) (Con): When the Labour party was in office, were any consultations held in which the views of the public were actually listened to?
Mrs Spelman: The one that comes to mind is the Post Office consultation, which we all remember really was a sham.
Bridget Phillipson (Houghton and Sunderland South) (Lab): A huge number of my constituents have written to me in the strongest possible terms on this important issue. Will the Secretary of State set out clearly and fully how they can make their views known in public directly to the panel?
Mrs Spelman: I think the hon. Lady will know from the e-mails she has received that the fears of many of our constituents were raised by their understanding of the forestry clauses in the Public Bodies Bill, and one of the things she can do is write to her constituents to explain that those clauses have now been removed. The Department always responds to all correspondence directed to it, and the hon. Lady has more than one vehicle to suggest by which the public can engage with us on the way forward in forestry and woodland policy in this country.
Andrew Percy (Brigg and Goole) (Con): I welcome the statement, and its tone certainly contrasted with the somewhat ungracious response from the Opposition Front Bench; we got no apology for the 25,000 acres they flogged off. The concern in my constituency generally relates to private forests and the public protections we need to ensure we continue to have a benefit. Will the independent panel and the review continue to look at the protections for private forests as well as the public estate?
Mrs Spelman: I can give my hon. Friend that assurance. The public forest estate accounts for 18% of woodland cover in this country, so the vast majority of forest and woodland is in private ownership, and part of the point of moving to a fresh approach with an independent panel and widening the range of questions under consideration is to look at forestry policy and woodland policy in general.
Joan Walley (Stoke-on-Trent North) (Lab): I welcome the Secretary of State's climbdown on behalf of the constituents who have expressed anger and disbelief to me about what is happening, but given both that the Government have said this is meant to be the greenest Government ever and that they have got rid of the Sustainable Development Commission, is it not about time that what has happened to this policy does not happen in all the other areas of biodiversity? Is it not time that the Government set out how they are going to embed sustainable development in all future policy in both urban and rural areas?
Mrs Spelman: The hon. Lady is Chairman of the Environmental Audit Committee and I respect that, but I encourage her to look at the Government's first nine months in the round. In that period, my Department has had the success of concluding a multilateral agreement on biodiversity, as well as making sure we have a ban in place on commercial whaling, and protecting and enhancing biodiversity through maintaining the environmental stewardship scheme, to name but three measures to put in the balance. Later this spring, a natural environment White Paper will be published as well, of course.
Sir Peter Bottomley (Worthing West) (Con): I gave a ministerial answer once saying, "I'm sorry, I made a mistake." That was not duplicated once during the 13 years of the Labour Government. Will the Secretary of State consult Felix Dennis and the Tree Council about voluntary planting, and will she also allow me to say that many of the messages on this got caught in spam filters, so many of the 500,000 people who sent e-mails may not have received a reply?
Mrs Spelman: My hon. Friend is living proof that it is perfectly possible to say sorry and continue to provide a very valuable service in this House. The point he makes shows why humility is a good quality in a politician.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op): I thank the Secretary of State for changing her mind; it is a relief she has done so. May I also ask her to seize the opportunity, because what she tried to do has brought to light a passion for our woodlands and forests that many of us did not realise was so great? As chairman of the John Clare Trust, I appeal to her to use it. Forests are wonderful, and natural forests are even better, but we have got to get children and families to visit forests. The likelihood of a child visiting any green space has halved in a generation, so will she also consider how we can expand forests and get people to use them?
Mrs Spelman: That is a constructive suggestion, which I am sure the panel will take forward. Many non-governmental organisations and green groups have spoken to us about the opportunity such a panel presents to deal with some of the issues that beset our forests and woodlands, and to address their own aspirations to do better by them.
Robert Halfon (Harlow) (Con): Will my right hon. Friend confirm that we definitely will not be pursuing the policies of the previous Government, such as selling 25,000 hectares of forest without any access granted? Will she also confirm that the thrust of Government policy will be to transfer forests to communities so that they can own them via co-operatives or other community bodies?
Mrs Spelman: Ministers have on numerous occasions given reassurances to the House that we would not proceed with those planned sales without better protection being in place. I am sure the independent panel will look at the genuine interest from community and local groups in being more involved in the management and ownership of their local forests. There are many examples of communities that have successfully provided a safe future for the woodlands and forests near where they live.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Will the right hon. Lady please explain to my constituents why she has wasted so much of her time scurrying between TV and radio stations, desperately trying to defend selling off our forests before having to make an embarrassing U-turn today, when she could have been taking action to tackle urgent issues such as dangerous dogs?
Mrs Spelman: I have not been anywhere near a TV or radio station all day because I understand the primacy of Parliament. It is important to come here first and make a statement. Naturally, as a Minister, in addition to dealing with the issue of forests, I have a large number of matters with which the Department is dealing. We always ensure that they are not compromised or affected by anything that we may be dealing with at one point in time.
Tessa Munt (Wells) (LD): I welcome the Secretary of State's announcement today, and I regret the lack of clarity on access for the public and on the protection for biodiversity and landscape. I do not understand why we are cancelling a consultation when the new panel will need to hear and make its decision by autumn. It might be more logical to continue with the consultation for the remaining ten and a half weeks so that the public can continue to add their views to the current process.
Mrs Spelman: It is clear from the early responses that members of the public are responding in many cases to what they have read in the press or what they have heard, rather than necessarily understanding the policy. Many of the responses were received before the publication of the policy on 27 January. Looking at those early responses, it is difficult for Ministers to proceed with the consultation as it is. None the less, all those responses and the questions contained in the consultation will be part of the work that the independent panel will review.
Paul Blomfield (Sheffield Central) (Lab): Will the Secretary of State clarify what the impact of this welcome U-turn will be on the Forestry Commission's plans to cut 400 jobs across the country?
Mrs Spelman: I can explain to the hon. Gentleman that the Forestry Commission's plans to make savings in line with the savings that my Department and other Government Departments must make have no connection at all to the consultation or the setting up of an independent panel. Savings are necessary because we have to fill a hole in the nation's finances that was left behind by the Government of whose party he is a member.
Mr Mark Spencer (Sherwood) (Con): May I put on record my thanks to the Secretary of State for listening to me and my constituents over the past month, and may I encourage her not to listen to the Opposition, who sold off woodland greater in area than the city of Nottingham during their term in office? I wonder whether this is an opportunity to increase the biodiversity of woodlands such as Sherwood in Nottinghamshire, by increasing the number of broadleaf trees and oaks rather than the coniferous woodland that exists at present.
Yes, I can give my hon. Friend that assurance. I thank him for his positive approach. There certainly is an opportunity to improve and enhance
biodiversity. Non-governmental organisations such as the Woodland Trust have expressed a desire to increase the rate of restoring plantations on ancient woodland sites, and the Royal Society for the Protection of Birds is keen to look at the restoration of heathlands. That is precisely the opportunity that this fresh approach affords.
Steve McCabe (Birmingham, Selly Oak) (Lab): I am not sure that it is ever wrong to terminate a failed policy, but given the sudden and abrupt end to the right hon. Lady's plans, will she tell us how much public money has been wasted on this fiasco so far?
Mrs Spelman: The advantage of modern technology is that documents such as consultation documents are now largely viewable online, so in the figures that I gave about the number of responses that we had received and the number of hard copies dispatched, the hon. Gentleman will be able to see that the public expenditure is minimal.
Caroline Nokes (Romsey and Southampton North) (Con): I thank and commend the Secretary of State for her bravery and honesty on this subject. What has emerged from the woodwork is not just thousands of constituent e-mails, but a significant number of eminent academics and professors with knowledge of the subject. How can they feed in their views to the expert panel?
Mrs Spelman: I can assure my hon. Friend that honesty is always the best policy. That is what I always try to teach my children. The interest in the subject has produced very good suggestions from scientists and academics about ways in which we can improve biodiversity and the protection that currently exists for woodlands and forests. They, too, will have the opportunity to feed in to the panel through the Department or directly to the representatives on the panel.
John Woodcock (Barrow and Furness) (Lab/Co-op): Will the Secretary of State take the opportunity to dissociate herself from the disgraceful comments from the hon. Member for North Thanet (Mr Gale), who is no longer in his place, that the many thousands of people who were roused to anger by the proposals were push-button campaigners?
Mrs Spelman: I am unaware of those remarks and not in a position to comment. The hon. Gentleman has heard from me that I entirely respect the passion that people in our country have for their woodlands and forests-a passion that I share and applaud. I want to make sure that it is responded to by creating the best possible future for our forests and woodlands.
Roger Williams (Brecon and Radnorshire) (LD): I am a member of a partnership that is in receipt of farm woodland grants to promote public goods such as access and biodiversity-but in Wales, not in England, which is the subject of the statement? I am very pleased that the Secretary of State has broadened the consultation to cover private forestry and woodland, which, when well managed, can deliver both commercially and in terms of public goods. How does she intend to recruit people to represent this part of the industry, or is she looking for volunteers?
Mrs Spelman: I am always interested in volunteers. We are looking particularly for those who have a good understanding of the issues involved in the management of forests and woodland. I have named before the House a number of green groups that have a long heritage of protection of our environment, but it is important that we have representatives of the private forest estates, so if the hon. Gentleman has suggestions he should let me have them.
Mr David Anderson (Blaydon) (Lab): I am sorry that the Chancellor has gone, because I wanted to thank him as well as the Secretary of State for the great boost they have given to Blaydon Labour party over the past few weeks during this fiasco. I thank my hon. Friend the Member for Wakefield (Mary Creagh) for mentioning the great work that is being done by the people fighting to save Chopwell woods. My message to them is, "Don't stop fighting." What has happened today is not the end of the story. I want to ask the Secretary of State one specific question. Will there be a representative of the work force on the independent panel? They know what is going on.
Mrs Spelman: As I said clearly, the representation on the independent panel will be broad, with as wide a range of views as possible of those who have an interest in our forests and woodlands.
Dr Thérèse Coffey (Suffolk Coastal) (Con): My right hon. Friend is aware that I have three forests in my constituency-Rendlesham, Dunwich and Tunstall-and I held a public meeting last Friday. People there will welcome the announcement that she has made today, particularly those who are concerned about access. I am encouraging those people to join bodies such as the Suffolk Wildlife Trust and Friends of Sandlings Forest, but a particular point came up about access. Horse riders, carriage drivers and cyclists are slightly concerned that some of the organisations that my right hon. Friend mentions are closing access now, supposedly to protect biodiversity, wildlife and so on. Will she being that to the attention of the panel when it meets?
Mrs Spelman: I would be delighted to bring those concerns to the panel. I know that my hon. Friend has met large numbers of people in her constituency and approached the whole issue with great diligence. I think she would therefore acknowledge that there are some important questions to resolve, and tensions between different access groups. This is precisely one of the aspects that I will ask the independent panel to look at.
Kevin Brennan (Cardiff West) (Lab): I congratulate the Secretary of State on at least resolving a centuries-old philosophical problem-namely, if a tree falls in the forest and one takes one's eye off it, it does make a noise. It makes a noise sufficiently loud to be heard right across the country and to expose the lack of grip that the Prime Minister has on his Government's policies.
Mrs Spelman: I do not think that there was a question at the heart of that. The whole point of my statement was to make it abundantly clear that we are a Government who listen and, having listened, are prepared to take the right action.
Greg Mulholland (Leeds North West) (LD): I take it that the shadow Secretary of State has a commitment to recycling, given the way she shamelessly plagiarised the joke by my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron), the president of the Liberal Democrats. I praise the Secretary of State for her honesty and courage, which the public want to see more of in our politicians. I am proud to be part of a Government who listen to people, unlike the previous Government. I ask that, as we go forward, we do not lose some of the positive proposals, particularly those on real, long-term protection for our important heritage forests.
Mrs Spelman: I can give the hon. Gentleman that assurance. In the normal sequence of events, the independent panel would give advice to Ministers, and if Ministers judged it to be correct we would then proceed with a consultation White Paper, which might give rise to legislation if changes in the law were required to provide the extra protection.
Sheila Gilmore (Edinburgh East) (Lab): I genuinely welcome the Government's response. One of the plagues of politics is that it can sometimes be very difficult to back down and admit that something was wrong. I urge the Secretary of State, having reprieved vulnerable trees, to urge some of her colleagues to reprieve vulnerable people who will be subject to benefit cuts.
Mrs Spelman: I thank the hon. Lady for the good spirit with which she received my statement to the House, but I am sure that she will understand that the protection of vulnerable people in other regards is outwith my Department's responsibilities.
David Morris (Morecambe and Lunesdale) (Con): I congratulate the Secretary of State on this decision and thank her on behalf of the 1,000 constituents who e-mailed me requesting a review. May I also make her aware of the fact that the Opposition, when in government, sold off forest land three times the size of Blackpool before this policy was even put before Members?
Mrs Spelman: My hon. Friend makes a clear point, which we would have liked to have seen acknowledged by the Opposition, but let us try to be more generous-spirited and learn from their previous mistakes. If it was wrong to sell off the public forest estate with inadequate protection, we as a new Government can do better.
Dr Andrew Murrison (South West Wiltshire) (Con): I congratulate the Secretary of State on her statement and the manner in which she delivered it. More than 300 constituents have written to me on the subject and will be reassured to have a Government who are prepared to listen to them and act on their concerns. I urge her to resist any temptation to take any lessons from the Opposition, whose consultations in general, and on woodlands in particular, were either lamentable or non-existent.
I thank my hon. Friend for that observation. It is right that I should acknowledge fully before the House that we have all received much correspondence as constituency MPs, whether electronic or in hard copy. This is an important opportunity for us as parliamentarians to demonstrate that we do debate in Parliament, that we are able to communicate with our constituents and that we listen and are prepared to
respond to them. I hope that hon. Members will be able to use today's statement to communicate with the many people from whom they have received correspondence.
Heather Wheeler (South Derbyshire) (Con): Like all Government Members, I congratulate the Secretary of State on this extremely important statement. May I put on the record the number of people in South Derbyshire who support the national forest and who were very concerned, but whose fears I am now able to allay? The national forest is such a good product that I hope we will be to make it larger once the independent panel has been set up.
Mrs Spelman: I can certainly give my hon. Friend that assurance. We should have the ambition to try to increase woodland cover, and the national forest is a good example of an amenity that reaches out to a wide cross-section of society, providing the opportunity for enhanced biodiversity and public access. It is the Government's aspiration to plant more trees, and the national forest is a good example of how that can be done well.
John Glen (Salisbury) (Con): I welcome the statement and applaud the fundamental decency, integrity, transparency and humility that the Secretary of State has shown. Given the hundreds of e-mails that we have all received, I suggest that there is an opportunity to harness the great interest in a sustainable woodland for the benefit of the country. Perhaps she would set out ways in which those many people can contribute to that future that they seek.
Mrs Spelman: I thank my hon. Friend for his kind remarks. This has been a difficult issue, as I have said, but it has also provided an opportunity to encourage all those people who corresponded with us to be more involved in the protection and enhancement of our woodlands by volunteering. Engaging with our constituents in the opportunities to plant more trees and protect our woodlands is a good outcome for all of us who love our woods and forests.
Mr Aidan Burley (Cannock Chase) (Con): Under the policy of the previous Labour Government, Cannock chase could have been sold off without any protection for access whatsoever. That would have been completely reversed by the granting of heritage status under the Secretary of State's previous proposals. The people of Cannock chase will rightly feel that today's decision leaves their forest as exposed as it was under Labour, so what reassurances can she give that the granting of heritage status will remain an option for the independent panel and that there are no plans, and never were, to sell off Cannock chase?
Mrs Spelman: I can give my hon. Friend an absolute assurance that, as Ministers have said many times, we wish to protect access and other public benefits for all woodlands and forests. I will certainly encourage the independent panel to look at the issue of heritage forests. He has done an admirable job of speaking up for Cannock chase and made a strong case for it being considered a heritage forest, and I am sure that his constituents will thank him all the more for that.
David Rutley (Macclesfield) (Con): The residents of Macclesfield enjoy the wonderful benefits of access to Macclesfield forest, which is owned by United Utilities. As my hon. Friend the Member for Suffolk Coastal (Dr Coffey) has said, access for horse riding groups, climbers and walkers will be important and needs to be considered in future. Will the Secretary of State confirm that access will be at the heart of the terms of reference that will be crafted for the new independent panel?
Mrs Spelman: I can give my hon. Friend that assurance. It is important that the panel looks at all forms of access, including access for walkers, riders and cyclists, because sometimes their needs are not completely compatible. As has been explained to me, if a horse ruts a path, it is not easy for a cyclist to go along that same path. A good way forward for the panel is to look at those different forms of access. We want to expand access to our forests and woodlands because it is in everyone's interests that we do so.
Matthew Hancock (West Suffolk) (Con): The Secretary of State will be aware that the third largest forest in England, Thetford forest, is largely in my constituency, and I received an awful lot of correspondence on the subject. I will be sending all correspondents a copy of this exchange, because I think that the dignified way in which she has carried herself has been exemplary and they will be reassured by everything she has said. The overwhelming point they made to me was that the most important things for the future of the forests are access rights, the protection of biodiversity and not using the matter as a political football, as some have sought to do.
Mrs Spelman: My hon. Friend's constituents are absolutely right: forests and woodlands are precious to this country and we should be seeking to protect them and enhance their biodiversity. The aspiration of the Woodland Trust to accelerate the rate of restoration and plantation on ancient woodland sites is a good example of how we can provide an even better future for our forests.
Kris Hopkins (Keighley) (Con): I welcome the Secretary of State's statement and thank her for listening to the robust challenges from myself and other Government Members. It takes a lot to put your hand up, say you got it wrong and say sorry in a place like this, but I believe that, in doing so, the Secretary of State and the Government will have earned a great deal of respect from the country.
Mrs Spelman: I thank my hon. Friend for that. I do remember his robust advice to me, and I hope he feels reassured to know that I have heeded it. We can all learn throughout life from all the decisions that we take, and I am certainly part of the wide body of mankind that will do so.
Guy Opperman (Hexham) (Con): I thank the Secretary of State for having the common sense to change her mind and to preserve Kielder, which is larger than Thetford, for sure.
Mr Burley: But not as nice as Cannock chase.
Guy Opperman: And even better than Cannock chase.
In reality, the Opposition's criticism is wrong, because many of us got into this business and ran for Parliament because we thought that the way the
countryside was being treated was manifestly wrong. Over the years, they rode roughshod over us, and that was totally wrong.
Mrs Spelman: It is more than my life is worth to get drawn into a competition over who has the best forest, as we all have candidates, but my hon. Friend is right, and he can be reassured that the Government, drawn from two parties with a large number of rural constituencies, have taken rural issues and the needs of the countryside very close to their heart indeed.
Stephen Williams (Bristol West) (LD): I, too, commend the Secretary of State on the very gracious way in which she made her statement, which in itself executes a welcome policy re-think, showing that this Government, at least, listen to the views of constituents. In that regard, will she help me to reassure the 1,250 people who wrote to me in Bristol West about the issue-the biggest postbag I have ever had on any issue in my six years' membership of the House-that the primary focus of the independent panel will be to enhance public access to woodlands, whether they are under Forestry Commission management or not?
Mrs Spelman: I am not going to get drawn into who had the largest postbag, either, but I absolutely can give the hon. Gentleman that assurance. Our absolute priority, as I said, is to protect and to enhance access to, and other public benefits of, our forests and woodlands, so I hope that he can reassure some of the 1,250 people with whom he corresponded that that is the case.
Christopher Pincher (Tamworth) (Con): I, too, thank my right hon. Friend for listening to public concern, but when she sets up her independent panel, will she ensure that it supports small-scale independent nature reserves such as my local Hodge lane nature reserve in Tamworth, where every week volunteers come together to do important work, including coppicing, planting and clearing? The work that they do for their environment needs to be supported, too.
Mrs Spelman: I can give my hon. Friend that assurance. I hope that he heard-through some of the groups that have talked to our Department about the issue, including the Wildlife Trust-that we do appreciate the huge amount of volunteering and work by the public, who care passionately about nature and their nature reserves, woodlands and forests. That will, indeed, be integral, and fostering that spirit of volunteering, in the spirit of the big society, is something that the panel will very definitely look at.
Andrew Bridgen (North West Leicestershire) (Con): Does the Secretary of State agree that it makes a hugely refreshing change to have a Government who consult and genuinely listen to the mood of the people, rather than just dogmatically driving through policy in the face of public opposition, as the previous Labour Government did? I compliment the Secretary of State on her courage and honesty and offer her the comfort of remembering that there is never a bad time to do the right thing.
Mrs Spelman: Those are very wise words, indeed, and a very important lesson for all of us is that no Government should ever stop listening. Listening is part of what we are called to do as parliamentarians, and I for one hope never to stop listening.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab): On a point of order, Madam Deputy Speaker. In a response to a question that I asked yesterday about 150 job losses at the Department for International Development's East Kilbride office in my constituency, the International Development Secretary said:
"DFID is not immune from the cuts and will see reductions of some 33% in its administrative spend. I had the opportunity of speaking to all the staff at Abercrombie house just a few days ago to make sure that that was understood."-[ Official Report, 16 February 2011; Vol. 523, c. 947.]
In making that statement, the Secretary of State suggested that he had broken the news of the job losses personally. In actual fact, he visited the office in East Kilbride on 3 February-a week before the job losses were announced. Can I ask your advice, Madam Deputy Speaker, on how we can correct what was probably an inadvertent mistake by the Secretary of State and set the record straight?
Madam Deputy Speaker (Dawn Primarolo): I am grateful to the hon. Gentleman for raising that point of order. The Leader of the House will have heard his comments and, I am sure, be able to pass them on, but I also suggest that the hon. Gentleman goes to the Table Office specifically with a request on how he can pursue the matter through the House in order to clarify the situation.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op): On a point of order, Madam Deputy Speaker. On the protection of Back Benchers' rights, those of us who attend departmental questions regularly are becoming increasingly worried by the way in which Government Whips systematically organise the tabling of questions. Today, if one looks at the Order Paper, one sees that eight questions-eight out of 25-all ask:
"How many apprenticeship starts there have been in the academic year 2010-11".
We all know that Government Whips use that method to block off other questions; I know it goes on, and I think you know it goes on, Madam Deputy Speaker. If the Whips are going to use it, however, could they be more inventive? They could at least ask people to ask different questions. Indeed, could we not have a method whereby if eight questions are tabled, we take just the
first two and exclude the rest? The current situation is an abuse of Back-Bench freedoms.
Madam Deputy Speaker: The tabling of questions is not one of the responsibilities of the Chair, but I am sure that all Members heard the hon. Gentleman's observations. Seeing as he has a proposal for dealing with the point, I suggest that he might ask the Procedure Committee to consider whether the issue is within its remit. It is certainly not within mine as a Deputy Speaker.
Chris Williamson: On a point of order, Madam Deputy Speaker. In response to a question about atomic veterans from my hon. Friend the Member for Scunthorpe (Nic Dakin) at the most recent Defence questions, the Under-Secretary of State for Defence, the right hon. Member for South Leicestershire (Mr Robathan), inadvertently misled the House when he said that
"the courts have found that there is no causal link whatever between many of the disabilities and illnesses suffered and exposure to any radiation."-[ Official Report, 31 January 2011; Vol. 522, c. 573.]
The truth is that the courts have made no such finding, and all attempts to get the Minister to correct the record have so far proved unsuccessful. Could I therefore ask you, Madam Deputy Speaker, to remind Ministers of the importance of correcting the record when they get their facts wrong?
Madam Deputy Speaker: I hope that no Member needs to be urged by the Chair to correct the record if they felt that something they had said in the Chamber was not correct. I feel that the hon. Gentleman is trying to open up the debate again, but, if he wants to pursue the issue, I would give him the same advice as I gave a few moments ago, in that he should pursue with the Table Office the question of how to ensure that it is clarified. All Members-Ministers and Back Benchers-are responsible for what they say, however, not the Chair.
Motion made, and Question put forthwith (Standing Order No. 145),
That this House agrees with the Report [15 February] of the Liaison Committee.-( Sir George Young.)
Madam Deputy Speaker (Dawn Primarolo): I understand that it will be for the convenience of the House if we take motions 2 and 3 together.
The Minister of State, Department for Work and Pensions (Steve Webb): I beg to move,
That the draft Social Security Benefits Up-rating Order 2011, which was laid before this House on 3 February, be approved.
Madam Deputy Speaker: With this we shall discuss the following motion on pensions:
That the draft Guaranteed Minimum Pensions Increase Order 2011, which was laid before this House on 3 February, be approved.
Steve Webb: I shall deal briefly with the Guaranteed Minimum Pensions Increase Order 2011. The order provides for contracted-out defined benefits schemes to increase by 3% their members' guaranteed minimum pensions that accrued between 1988 and 1997. Increases are capped at this level when price inflation exceeds 3%. This is a technical matter that is attended to on an annual basis, and I suspect that it will not be the focus of our discussions.
The broader uprating of social security benefits this year is a landmark event for two reasons. First, it enshrines the restoration of the earnings link for the basic state pension. Secondly, it introduces a clear and consistent approach to price measurement through the move from the retail prices index to the consumer prices index. I suspect that a lot of our debate will focus on that issue, but I want to turn first to pensions and pensioners. It is more than 30 years since the link between the basic state pension and earnings was broken. Although Labour Members talked a good game towards the end of their time in office, they had 13 years in which to restore that link, and they failed every year to do so.
The coalition Government said that they would restore the earnings link for the basic pension, and that is precisely what we have done. Indeed, we have gone one better with the introduction of our triple guarantee, which means that the basic pension will be increased by whichever is highest of earnings, prices or 2.5%. We estimate that the average person retiring on a full basic pension this year will receive more than £15,000 extra in basic state pension income over their retirement than they would have done under the old prices link. This important change will be a benefit to existing and future pensioners. It will provide a more generous basic state pension, giving a solid financial foundation from the state. So from this April, the standard rate for the basic state pension will rise by £4.50 a week, taking it from £97.65 to £102.15 a week. The introduction of this triple guarantee will finally halt the decline in the value of the basic state pension for current and future pensions. It will also mean that even in times of slow earnings growth, we will never again see a repeat of derisory increases such as the 75p rise presided over by the previous Government in 2000.
In addition to restoring the earnings link, we have taken action to ensure that the poorest pensioners do not see the increase to their basic state pension clawed
back in the pension credit. This has been done by linking the minimum increase for the pension credit to the cash increase for the basic state pension this year. Therefore, from April 2011, single people on pension credit will receive an above-earnings increase to their standard minimum guarantee of £4.75, which will take their weekly income to £137.35. Of course, as you will be well aware, Madam Deputy Speaker, this is in addition to the key support for pensioners that the coalition protected in the spending review: free NHS eye tests; free NHS prescription charges; free bus passes; free TV licences for over-75s; and winter fuel payments exactly as budgeted for by the previous Government. In addition, we have reversed a planned cut-one of Labour's many ticking time bombs that I discovered in my in-box. The previous Administration had planned to reduce the cold weather payment from the pre-election-I use that phrase deliberately-rate of £25 a week to just £8.50 a week. We took the view that despite money being tight, helping elderly people on a low income to heat their homes in winter was vital and a priority for the coalition. I can update the House by saying that we have paid slightly more than we thought-an estimated 17.2 million payments worth an estimated £430 million, which we believe is money well spent.
Kate Green (Stretford and Urmston) (Lab): Naturally, elderly people will be relieved by the news about the winter fuel and cold weather payments. However, is not the Minister concerned that in the longer run the cut in funding for Warm Front will mean that those pensioners have higher fuel bills?
Steve Webb: The hon. Lady is absolutely right that home insulation is an important part of this: it is not just about helping people to pay their fuel bills, but about improving the insulation standards of their homes. Our colleagues at the Department of Energy and Climate Change are working on the issue and will shortly introduce proposals that will build on the energy rebate scheme, which took place in 2010, whereby low-income pensioners and others-the most vulnerable households-received direct payments. I understand that a further scheme will shortly be brought forward which will benefit exactly the people that she talks about.
Despite the pressure on public expenditure, the coalition, through these orders, will be spending an extra £4.3 billion in 2011-12 to ensure that people are protected against cost of living increases, and of that, fully £3.4 billion will be spent on pensioners.
Let me move on to the second landmark change-the move to the consumer prices index. At one stage, the House thought that it might have a jolly three hours on price indices after an all-night sitting, so we are probably all relieved that we got a bit more sleep before entering this territory. The purpose of the annual uprating exercise is to ensure that the purchasing power of social security benefits is protected against inflation. We view the CPI as the most appropriate measure of price inflation for this purpose, although we would acknowledge no single index is perfect. The CPI is
"more reliable because, taking account of spending by all consumers, this consumer prices index gives a better measure than the old RPIX measure of spending patterns. It is more precise because, as in America and the euro area, it takes better account of consumers substituting cheaper for more expensive goods."-[ Official Report, 10 December 2003; Vol. 415, c. 1063.]
They are not my words, but those of the then Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). I could not agree more. Increases in line with the growth in the CPI maintain benefit and pension value. The CPI is the country's headline measure of inflation, forming the target for the Bank of England's Monetary Policy Committee. I remind the House that the legislation under which this order is made requires that we reflect the "general level of prices".
It would be remiss of me not to thank the Leader of the Opposition for his support for our position on this issue. When Laura Kuenssberg of the BBC challenged him at a press conference on 11 January, saying,
"You've said time and time again that you will not oppose every cut; but four months into the job, the list of cuts that you will support remains pretty short,"
the Leader of the Opposition said:
"Let me just say on the cuts, I listed four cuts that we had not opposed, but it's not just four cuts...from Employment Support Allowance to some of the changes to Disability Living Allowance, to the changes to the Consumer Price Index and RPI, to a range of other measures, we're not opposing all the cuts."
I am very grateful to him for his support.
Dame Anne Begg (Aberdeen South) (Lab): Would the hon. Gentleman like to quote the Leader of the Opposition further, where he said that if there were a case to be made for shifting to the CPI, it would be a temporary move, not a permanent one?
Steve Webb: I am grateful to the hon. Lady. I have heard it intimated that the Opposition support using a temporary measure of inflation before using a different one in the future. I can see the politics of that, but not its coherence. The duty on my right hon. Friend the Secretary of State is to measure the general increase in price levels in an appropriate way, and it would be very odd if he were to decide one year that the CPI, with its method of calculating on a basket of goods, was the right answer, and then four years later, because there was a bit more money, that there was a different answer. That is not the legal duty on my right hon. Friend.
Dame Anne Begg: Will the hon. Gentleman clarify whether the move from RPI to CPI has anything to do with deficit reduction, which would be a reasonable argument as to why it might be temporary?
The hon. Lady asks an important question. I will deal specifically with the budget deficit. However, when we looked at this issue as a new Government, we were prompted particularly by the context of a year in which the RPI had been negative. We arrived in May 2010. In April 2010, uprating had been nil for the state earnings-related pension scheme, public sector pensions and all the connected pensions. That is not because inflation for pensioners had been nil-I have never met a pensioner who thought they had negative inflation in the year to September 2009-but because that is what the RPI said. The RPI was clearly not doing its job then, and that focused our mind on whether it was the right thing. It is true that, on average, the CPI tends to be lower-not always, but generally. I have looked at the past 20 years, and in five of those the RPI has been lower than the CPI. That improves the situation in a
difficult financial position; I would not pretend that it does not. However, our job is to have an appropriate, stable measure of inflation, and that is what the CPI achieves. [ Interruption. ] Indeed, it is much less volatile.
I sometimes think-perhaps this makes me sound a bit sad-that if the CPI were a person, it would be taking people to court for slander and libel for some of the things that have been said about it over the past few weeks and months. It is almost as if it is a stray number that we found on the back of a fag packet and decided to use to up-rate benefits. In fact, it is a careful calculation by the Office for National Statistics, with excruciating amounts of thorough methodological detail about the general increase in consumer prices. It is not the only measure, but it is an entirely decent and proper one.
I want to respond to some of the myths that have grown up about CPI, and to stress that this is not a choice between a good index and a bad index, but about trying to find the most appropriate measure for the purpose. The first argument that is made is that CPI is always lower. As I have pointed out, that is not true, although it is lower on average over the long term. People criticise the methodology that is used. I will explain what the difference is and why we think it is appropriate. Somewhat more than half the difference between RPI and CPI is to do with the way in which CPI assumes that people change their behaviour when prices change. CPI uses a substitution method, which assumes that people substitute for cheaper goods. Interestingly, the Institute for Fiscal Studies, which has looked at this issue, has said that that difference is a
"sound rationale for the switch"
that we are making today. RPI does not do that. Even the Royal Statistical Society, which has been critical of aspects of our proposals, states that RPI arguably overstates inflation as a result. I stress that we are trying to find not a high number or a low number, but an appropriate number with an appropriate method. Particularly for those on benefits, the substitution approach is important.
It is worth adding in parenthesis that people who say that RPI is the only possible way in which we can uprate pensions, because it is appropriate for pensioners, seem to be oblivious to the fact that RPI excludes the poorest fifth of pensioners from its consumption patterns. Their spending patterns are deliberately excluded in the construction of RPI. It seems odd that people are so wedded to RPI on purity grounds when it excludes the most vulnerable pensioners, about whom we should be most concerned.
The second myth is that the UK Statistics Authority does not think that CPI is a proper measure of inflation. [ Interruption. ] The hon. Member for Leeds West (Rachel Reeves) says that she has not said that, but I assure her that I have seen it in plenty of letters. The UK Statistics Authority oversees the Office for National Statistics, so it would be very odd if it thought that the ONS was producing dodgy figures. CPI is the headline measure and it is the target for the Bank of England, so it is hard to see how it is not a proper measure of inflation.
Thirdly, some say that the Royal Statistical Society does not like CPI. It has certainly criticised some aspects of the change, but it takes a more balanced view and sees limitations in CPI and RPI. As I have said, no single measure is perfect. The Royal Statistical Society has highlighted the issue of housing costs, and I will come on to that because it is clearly important.
The fourth thing that people say is that this is a real cut to the value of benefits. [ Interruption. ] The hon. Member for Glasgow East (Margaret Curran) says that it is, but it is not. What we are doing is measuring inflation in an entirely proper manner and increasing benefits-revaluing and reflating them-every year in line with inflation, measured in an appropriate way. That is what indexation is meant to do. There is no argument for saying that it is a cut when we are increasing benefits and pensions by inflation. Only a couple of nights ago, the lead story on the BBC news was "Inflation hits 4%". Indeed, CPI inflation had hit 4%. That was the headline, that is inflation, and that is what we are uprating benefits by.
Stephen Timms (East Ham) (Lab): I think that I know the answer to my question on the basis of what the Minister is saying, but I want him to confirm it. Is it the Government's intention that the change from RPI to CPI will not be temporary, but permanent?
Steve Webb: Yes. For all the reasons I have been giving, we regard CPI as a more stable and appropriate measure for uprating pensions and benefits. We see no reason to change it in the future. The arguments that I am advancing, it seems to me, will stand the test of time.
There is an issue with the treatment of housing costs. One of the reasons why CPI is more appropriate than RPI for pensioners is that only 7% of pensioners have a mortgage. Mortgage interest fluctuations dominate the changes in RPI, sometimes swooping it up and sometimes swooping it down. The year in which RPI went negative, it happened because mortgage rates slumped. Not only was that of no benefit to the vast majority of pensioners; it was a penalty to the vast majority of pensioners because their savings rate fell. Just at the point when pensioners were suffering through low interest rates, RPI came along-to humanise it once again-and kicked them in the teeth and said, "Oh, inflation is falling so you don't need a benefit rise." I do not see how that can be right.
Kate Green: I am interested in the Minister's argument for making CPI permanent. Will he comment on Lord Freud's response to the Select Committee on Work and Pensions on the indexation of housing benefit, in which he suggested that it would be for this Parliament only?
Steve Webb: To be clear, my noble Friend was talking about the indexation of the housing benefit limit of the 30th percentile to CPI. We have said specifically that that will be looked at after two years, so that is a quite separate point. The fundamental point I am making is that the more one looks at the argument for using CPI for pensioners, the more powerful it gets.
There is an issue about the role of owner-occupier housing costs, as CPI includes rents and certain housing costs. The CPI advisory committee has said that the ONS should consider whether owner-occupier housing costs should be included. We are entirely open to that proposition and do not rule it out. It is interesting that the CPI advisory committee has already ruled out doing so by lumping in mortgage interest payments in the same way as in RPI. It accepts that putting that into CPI in the way it is put into RPI would not be a good way of doing it. We will obviously consider what the committee comes up with.
Sheila Gilmore (Edinburgh East) (Lab): Will the Government give the House a time scale in which it will consider these matters to do with CPI? Obviously, council tax also has to be taken into account.
Steve Webb: I am grateful to the hon. Lady for raising that point. We are, of course, driven by the Office for National Statistics, so we are not cobbling together our own index. It is undertaking careful work over the next two years. We will then look at its findings and consider whether it is appropriate to use a CPIH-type measure. We are governed by the ONS's time scales.
I will comment briefly on benefits for people of working age. Unfortunately, last year the Government got themselves into a bit of a mess over uprating. As I have said, RPI was showing negative inflation, mainly as a result of falling mortgage interest. As a result, benefits such as additional state pensions did not increase at all. They would have done under CPI. Other benefits, mainly the disability and carers' benefits, were the subject of what my notes call a bewildering fudge-I think that roughly sums it up. In the end, disability and carers' benefits last year were increased by 1.5%, but on the proviso that the pre-election-sorry, that word slipped out again-increase in 2010 would be clawed back in 2011. In other words, that would have happened this year in this order. [ Interruption. ] The Secretary of State says that we had to decide whether to pick up the ticking time bomb of that 1.5% clawback as well.
Members will be pleased to know that the 2011 uprating order before the House today contains no such sleight of hand. It is based on the straightforward proposition that, aside from increases in the basic pension and pension credit that have already been explained, the other mainstream social security benefits and statutory payments will increase by 3.1%, in line with the annual growth in RPI. There will be no attempt to recoup the value of the 1.5% fudge that we inherited from the previous Government.[Official Report, 7 March 2011, Vol. 524, c. 3MC.]
Finally, I will touch on occupational pensions. Such pensions are not directly the subject of the orders. The changes that relate to the revaluation and indexation of most occupational pensions were the subject of the revaluation order that was tabled before Christmas. However, because of the close link in all pensions matters-everything is connected to everything else-I ought to say a word about this matter. CPI is being used for all social security benefits and additional state pensions, and through statutory linkage, CPI applies to public sector pensions. We had to decide what to do for private sector pensions. I stress that the role of Government is to set the floor for increases to private sector pensions and we had to make a judgment on that. We took the view that the Secretary of State could not decide that inflation was CPI for things that we pay out, but RPI for things that other people pay out. As far as we are concerned, inflation is inflation and we have to be consistent. CPI is therefore the right floor for occupational pensions. However, I stress the word "floor". Schemes are entirely at liberty to make more generous increases if they wish. This statutory requirement increases only in respect of service after 1997, whereas some schemes index service before that.
Dame Anne Begg:
Will the Minister quantify the number of private occupational pensions that will not adopt the floor? When the initial announcement was
made, the impression was that all private occupational pensions would move to CPI rather than use RPI. I understand a number of them have RPI in their schemes and therefore will not move to the new index. Can the Minister say anything about the volume of such occupational pensions?
Steve Webb: When we produced the initial impact assessment on the changes, we divided schemes into four groups according to whether they revalued by RPI or CPI and whether they indexed by RPI or CPI. We found that a good deal of revaluation was done in terms of the revaluation order and hence would go to CPI, but that a lot of the indexation was in terms of RPI. We have gone out into the field and talked to those administrating schemes, and we are revising our estimates of the proportion that will respond to this change.
The hon. Lady brings me on to the point that I wanted to make: some schemes have RPI hard-wired-for want of a better phrase-into them. We faced the difficult decision of whether to override that and put CPI in or whether to say, "Rules is rules, scheme promises are scheme promises," and keep it how it was. We announced at the start of December that we felt that people's confidence in pensions is important, and therefore that we would not override scheme rules. If someone has joined a private sector occupational scheme that has RPI in the scheme rules, we will not override it. Obviously, each scheme will make its own decision on how to respond if they have the flexibility to do so, but many schemes do not have that, and therefore will not make the change. We will publish updated estimates of the proportions.
Mr Jim Cunningham (Coventry South) (Lab): I apologise to the Minister and to you, Madam Deputy Speaker, for coming in late to the Chamber.
Will that also apply to the public sector schemes, because I have had a number of letters about those? Will the Minister clarify that matter for me?
Steve Webb: I am grateful to the hon. Gentleman for that point, because there is a difference between public and private schemes. The latter very often have the words "retail prices index" or "in line with statutory provisions" in their rules. The rules of public sector pensions did not have the words "retail prices index" in them; statutorily, they simply link to whatever the Government of the day do with state earnings-related pension schemes. Whatever amount or percentage SERPS went up by has always been the legal entitlement for members of public sector schemes, and we have not changed that or the law on it. Obviously, we are defining inflation differently, but the legal entitlement of members of public sector schemes was always whatever happened to SERPS, and we have not changed that.
Albert Owen (Ynys Môn) (Lab): The Minister is giving the House a very thorough outline of his plans, but does he acknowledge that the people he just mentioned-many thousands of them, and those on deferred pensions-will lose out considerably because of the change brought about by the order?
It is important for the people who have contacted the hon. Member for Coventry South (Mr Cunningham) to remember that we are changing
two things. We are changing, first, the indexation of the basic state pension that they will receive, and secondly, the indexation of SERPS and therefore public sector pensions. Overall, most pensioners, and particularly those on lower incomes, will benefit net from the two changes taken together. In other words, although earnings are depressed at the moment, in the long term the earnings link is a substantial boost. The CPI change on average means about 0.8% or 0.9% less over the long run, and the earnings link means close to 2% extra, so people with very large private or public sector pensions will lose net, but people with smaller pensions-the people who are most worried about the changes-will probably gain net. I am grateful to the hon. Member for Ynys Môn (Albert Owen) for raising that point.
Albert Owen: Can the Minister say how many people he is talking about? No one has written to me to say that they will benefit from the change, but considerable numbers of people have said that they will lose. I realise that that is the nature of the beast, but has the Minister done any impact assessment?
Steve Webb: People often miss one important point. The numbers on pensions in payment are in a sense straightforward, because we know the level of the state pension and the average pension in payment. To give the hon. Gentleman a flavour, the average occupational pension in payment is £70 a week, and the basic state pension is of the order of £100 a week. If we give an extra 2% on the £100 and take 0.8% off the £70, it is clear that people in that typical situation will be better off. Those are long-term changes, so there will be a big cumulative effect for someone who is 25. Of course, they do not see the boost to the state pension-they do not see that, in 40 years' time, 40 years' worth of earnings link will be embodied in their state pension. It is very hard to project that, which is why those people do not see it. Overall, I am confident that large numbers of pensioners will be net beneficiaries of the change.
Rehman Chishti (Gillingham and Rainham) (Con): I am grateful to the Minister for clarifying the situation on SERPS. Will he confirm that the previous Government did not uprate SERPS in 2010?
Steve Webb: My hon. Friend is quite right. One of my first tasks as a Minister was quite strange. I had to write ministerial letters to say why we the Government-meaning my predecessors-had frozen people's SERPS pensions, which was precisely because the RPI was negative, yet inflation was not.
Katy Clark (North Ayrshire and Arran) (Lab): When the Chancellor announced the change in his emergency Budget last June, he said that it would save more than £6 billion a year by the end of this Parliament. If that is true, it must surely mean that individuals will be worse off.
Just to be clear, my right hon. Friend the Chancellor was talking about the CPI indexation of all social security benefits, not just pensions. Clearly, compared with previous plans, benefits for people of working age will generally increase by less over the Parliament, which will lead to significant savings. I should mention therefore in passing that any political party that went into the election promising to reverse that would also have to
indicate where many billions of pounds would come from over the course of a Parliament. However, specifically for pensioners, the earnings link in the long-term is much more generous than the reduction from the CPI change.
Stephen Timms: The Minister says that the order enshrines the earnings link. Is there a reference in the text to earnings uprating? I could not find it, but if there is one, where is it?
Steve Webb: No. This is the first set of upratings to which we have applied the triple lock. Indeed, we have gone further, and said that because RPI was built into the spending plans, we did not want to go lower than that, so there is an RPI increase of 4.6% this April. When we reintroduced the earnings link last summer, we did not know what the earnings figures would be, but had earnings been higher than any of those figures, we would have used it.
I ought to move on, because many hon. Members want to contribute to the debate. To conclude on occupational pensions, we have not overridden scheme rules. As the Chair of the Work and Pensions Committee pointed out, many people will still get RPI, if that is what the scheme rules say, but those that are free to link to CPI may do so. We will report shortly on our research on the balance between different schemes.
The approach adopted in the uprating order seeks to strike a fair balance between the interests of benefit recipients and pensioners, and the burden placed on the taxpayers of the UK, who often end up footing the bill. Despite the fact that the nation's finances remain under severe pressure, this Government will spend an extra £4.3 billion in 2011-12 to ensure that people are protected against cost-of-living increases.
We have restored the link between earnings and the basic pension and confirmed that most people on pension credit will benefit from the cash increase enjoyed by those on the state pension. The move to CPI for the uprating of the majority of other pensions and benefits will result in an uplift of 3.1% from April, and sets the future of uprating on a more appropriate, consistent and stable basis that is fair to individuals and fair to the taxpayer. Through this package of uprating, I have outlined our firm commitment to ensure that no one is left behind, and I commend the order to the House.
Stephen Timms (East Ham) (Lab): It is a happy coincidence that we are debating the order on the same day as the publication of the Welfare Reform Bill, and I am pleased to see the Secretary of State in the Chamber. I welcome the opportunity to make some observations on the Bill-of course, only in so far as they impinge on matters in the order.
However, I want first to respond to some of the Minister's remarks. The truth is that the two orders signal the start of an ideological move from the use of RPI to CPI as the measure of inflation for uprating benefits, including pensions. The Minister told us that this is the first outing for the much-vaunted triple lock, but actually, in their first effort, the Government have had to override the triple lock. Had they not done so, they would have been rightly criticised for a very low increase to the basic state pension.
The Minister set out in some detail and at some length why it is right to use CPI rather than RPI, but the order uses RPI and not CPI. If he is so persuaded by his arguments on why CPI is the right measure to use, why has he used RPI in the order? The argument that he has put to the House is holed below the water line by the fact that he clearly does not believe it, because on this occasion, he has used RPI.
My hon. Friend the Member for Aberdeen South (Dame Anne Begg), the Chair of the Work and Pensions Committee, rightly asked whether the measure is to do with reducing the deficit. Of course, both the Government and the Opposition agree that we need to cut the budget deficit, even if we take very different views on the speed at which that ought to be done, but we should be clear from the outset that the orders, despite what the Government will tell us fundamentally about deficit reduction, are part of a wider quest. Changing permanently from RPI to CPI, other than in this year, and keeping things that way even after the deficit is long gone, is plainly not a deficit reduction measure-it is ideologically driven, and the Opposition do not support it.
As my hon. Friend the Member for Aberdeen South hinted in her intervention, there would be a case for a time-limited change ensuring that benefits do not fall behind earnings in the next few years. That might well be a fairer alternative to deep cuts in departmental expenditure. Were that on the table, it would be an argument that we would be willing to discuss, and we would work with the Government to consider it. However, that is not the proposal. As the Minister rightly made clear, the Government want a permanent change, with entitlement and pensions continuing to be reduced every year relative to RPI, saving money for the Government even long after the deficit has been eliminated. We will be making our position on that very clear as we go through these debates, and as we seek to amend the Pensions Bill, when the same matter is raised.
Mike Freer (Finchley and Golders Green) (Con): If the right hon. Gentleman looks at the local authority pension schemes here in London, he will see that there is only 75% or 80% viability on future liabilities. A lot of the contribution rates and the inflation from RPI to CPI are about balancing the books for future pensioners, not deficit reduction.
Stephen Timms: I was familiar with the call often made when I was in the Minister's office to release occupational funds from the constraints under which they had long operated, and RPI uprating was one of them. However, the question that has to be asked is whether it is right to change the rules at this stage, effectively to undermine the accrued rights that people have always believed they would benefit from in retirement, and to shift the goalposts. I will come to that very point in a moment. However, I suggest to the hon. Gentleman that this change raises a very serious question about fairness.
Of course, we need to get the economy back on track, but that will take some time. The coalition is doing it too fast. Why do they want pensioners, the armed forces and those on the lowest incomes and least able to bear the burden to continue to lose out even long after the deficit has gone? On average, RPI is between 0.5% and 0.75% higher than CPI, as the Minister pointed out, so
in any given year, benefits linked to CPI will give people a lower income by that amount. The CPI for the year to September 2010 is 3.1%, and the RPI figure is 4.6%. At 1.5%, that is a very big percentage point difference. The Minister has decided, perhaps because of the scale of that difference, to use RPI and overrule his triple lock in its first year. However, if the Government intend, as they clearly do, to make CPI indexation permanent and apply that across the pension system, experts estimate that it could cost pensioners 15% of the income that they expect in retirement.
Jane Ellison (Battersea) (Con): We are weeks away from the point when the Opposition, had they won the election, would have commenced their own deficit reduction plan. Given the enormous sum that the welfare bill represents within the public finances, it is inconceivable that the right hon. Gentleman could intend to go through this debate without addressing some serious long-term issues regarding his own policy on deficit reduction.
Stephen Timms: I am grateful to the hon. Lady, because that is exactly the point that I have been making. If this was about deficit reduction, there would be a worthwhile point to debate. However, the Government are saying that they want this change to be permanent and lower uprating to be a feature of the pensions and benefit system not just while we are reducing the deficit-I agree with her that there would be an argument for doing it during that period-but long after and into the indefinite future.
Jane Ellison: In part, Government Members are talking about addressing the much longer term problems that this country faces, of structural deficits building up and having to be addressed. The right hon. Gentleman has only to look around the world, at the problems in California and all sorts of places where enormous long-term structural problems have built up, particularly in relation to pensions. It is inconceivable that he cannot take a long-term view on this issue.
Stephen Timms: The hon. Lady makes an interesting argument. I have to say, however, that before the election I did not hear from her and her hon. Friends the argument that the structural deficit required a reduction in the incomes of the least well-off people in the land. That is the implication of what she is putting to the House. The real key to reducing the deficit is to secure new growth, new investment and new jobs in the economy. As we saw yesterday in the new unemployment figures, however, that is what the Government's policies are signally failing to produce.
Mike Freer: The problem is that for public sector pensions, the fund can meet only 75% or 80% of future liabilities. If we do not reduce the indexation to reduce that drain on future liabilities, we will have to increase contribution rates. Which would the right hon. Gentleman do?
My point is that people who have been contributing to those schemes throughout their working lives have done so on the basis of a promise, but the Government are now saying that that promise should be torn up, perhaps just a few months before
somebody retires. Is that fair? As I am sure that we will hear in this debate, a lot of people feel that it is deeply unfair-and we can all understand why they take that view.
Lord Hutton's report on public sector occupational pensions pointed out:
"This change in the indexation measure"-
"may have reduced the value of benefits to scheme members by around 15 per cent on average. When this change is combined with other reforms to date across the major schemes the value to current members of reformed schemes with CPI indexation is, on average, around 25 per cent less than the pre-reform schemes with RPI indexation."
Even the Minister's own Department, in numbers slipped out at the end of last week, estimated a fall of £83 billion in the value of occupational pensions over the next 15 years as a result. For the 2 million members of defined benefit schemes, that is broadly the same as a pay cut, on average, of between £2,250 and £2,500 a year.
The figure of £83 billion has gone up by more than 8% since the Department last calculated it in December. We ought to know why the Department got their figures so wrong last time round. My worry is that the Department does not really know what the impact of this ill-thought-through measure will be in reality. I ask the Minister, therefore, whether he can assure us that this-in itself alarming-estimate of the scale of the loss to defined benefit pension scheme members will not be revised any further.
Rehman Chishti: Am I right in thinking that the shadow Minister was a Treasury Minister in the previous Government? If so, will he clarify the fact that when the coalition Government came into office last May, we inherited the worst financial deficit of the G20 and the worst structural deficit of the G7 countries, and that that is why we have to make some tough decisions?
Stephen Timms: I was indeed a Treasury Minister-on four separate occasions. We managed the global economic crisis with great skill, to the extent that the increase in unemployment, which was widely anticipated before the crisis hit, did not happen. Under the previous Government there was about half the unemployment and half the home repossessions that we experienced in the recession of the early 1990s. I was indeed a Minister at the Treasury when those successes were being achieved.
Rehman Chishti: The shadow Minister talks about unemployment and the previous Government's actions. Is that why my constituency of Gillingham had 30% unemployment for 18 to 24-year-olds in 2006? The figure for youth unemployment remained at 30% in 2007 and 2009, and was the same in 2010 before we came into government. Will the right hon. Gentleman apologise to my constituents for that record?
Stephen Timms: I agree with the hon. Gentleman about the damaging impact of youth unemployment, and I hope that he shares my deep regret that it has increased again. It is now the highest that it has been since comparable figures began to be compiled nearly 20 years ago. The highest figure ever recorded was published in the statistics yesterday. I certainly take the view that the Government need to do more to reduce that figure.
The estimate of a hit of £83 billion on defined pension schemes makes it clear that long after the deficit is gone, the Government will be keeping pensioners out of pocket. I fear that the order is the start of a move that will mean that millions of pensioners and other benefit claimants experience a fall in the value of their benefits every year, relative to RPI. If the Government had simply applied the much-vaunted triple lock this year, the basic state pension would be uprated next year far below the RPI level that the previous system would have delivered. That is the problem with the Government's proposition.
That is not the only Government measure to hit pensioners. The Minister proudly and fairly read out a list of excellent things that the previous Government did for pensioners, which the present Government will not abolish. I am glad that they will not. However, they have increased VAT, which means that pensioner couples will be £275 a year worse off, and single pensioners £125 a year worse off.
The Pensions Bill means that some women approaching retirement will have their state pension delayed by up to two years, with very little time to prepare. That will mean a loss of up to £10,000 in basic state pension, and up to £15,000 for those who would have qualified for pension credit.
My hon. Friend the Member for Leeds West (Rachel Reeves) asked the Minister previously about an individual's accrued rights, and I referred to that in response to an earlier intervention. Let me press the Minister again on the same subject. Why has he made such an abrupt U-turn? Before the election, he said:
"We are very clear that all accrued rights should be honoured: a pension promise made should be a pension promise kept. Therefore we would not make any changes to pension rights that have already been built up. I have confirmed that I regard accrued index-linked rights as protected."
I am sure that the Minister would agree that all those who contracted out-all those in the local government scheme that was mentioned a few minutes ago-did so on the basis that RPI would be used for uprating. On the basis of what the Minister said before the election, those rights should also be protected. They are not; they are being explicitly downgraded in the Government's proposals.
Mr Robert Syms (Poole) (Con): I am listening carefully to the right hon. Gentleman. Can we be clear about the Labour party's position? Do you oppose the CPI? Do you oppose it just for this year-or are you in favour this year and next year, but want to go back to the RPI in a future year?
Stephen Timms: There is a persuasive case for making a change to CPI uprating for a period of time while we are tackling the deficit. However, I do not agree that that should be a permanent change. That aspect of the Government's proposal is very damaging.
Jane Ellison: Does that mean that in the Labour manifesto for the next general election, the Labour party will commit itself to reverting to RPI?
Stephen Timms: The whole country eagerly awaits the next Labour party manifesto, but I must urge the hon. Lady to be patient on that front.
We welcome the 4.6% increase in the basic state pension this year, for which the order provides, in line with RPI for next year, not the triple lock or the lower CPI. But this is something of a smokescreen to cover up the true nature of the Government's intentions, which we have been able to smoke out a little in this debate.
Why does the Minister think that CPI would be a better measure of inflation for pensioners than RPI? I am yet to be convinced of that. For pensioners and low-income families, a strong argument can be made that average inflation is more than either RPI or CPI, because of fuel and food. That point was certainly made in the representations that many of us will have received in recent weeks. In opening the debate, the Minister mentioned the views of the Royal Statistical Society. In its letter to my hon. Friend the Member for Leeds West, it said:
"while the consumer price index (CPI) is acceptable for macroeconomic purposes and for international comparisons within the EU we do not believe its coverage is generally appropriate for inflation compensation purposes".
That looks like a strong criticism by the society.
Guy Opperman (Hexham) (Con): When answering the question asked by my hon. Friend the Member for Poole (Mr Syms), you said you would-
Madam Deputy Speaker (Dawn Primarolo): Order. All hon. Members are doing this, not just the hon. Gentleman. When addressing the shadow Minister, if they refer to him as "the right hon. Gentleman", we will not have the problem of whether the Chair is planning the election manifestos of all the political parties for the next election.
Guy Opperman: The right hon. Gentleman mentioned "a period of time". How long would that be?
Stephen Timms: If that were the proposition, we would be happy to debate it and consider it, and perhaps work with the Government on it. Sadly, that proposition has not been made. The proposition before the House is that the change should be made for ever, and that is what I object to. It is not just me: the Civil Service Pensioners Alliance-
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): I had not planned to intervene, but I wanted to tease out the right hon. Gentleman's meaning. He is being a little disingenuous, so I invite him to be a little clearer. He knows that commitments are made for a Parliament, at most, and that if there were to be a change of power, the next Government could do whatever they want. He talks about "for ever", but decisions can be made at the next election. Can we tempt him to say on behalf of his party that during the lifetime of this Parliament-or perhaps for one year or two years-it supports the change to CPI? Or is he saying that his party utterly detests the change and will not support it?
Stephen Timms: The Secretary of State is putting a different gloss on this from the one that the Pensions Minister put on it. I asked the Minister directly whether this change was intended to be permanent, and he confirmed that. The Secretary of State suggests that it would be only for this Parliament- [ Interruption. ] Well, I am anxious to establish the Government's position. We have had two contradictory positions set out now-
Mr Duncan Smith: The right hon. Gentleman may have failed to understand my point. The Opposition are not in government, by definition, and they have to decide what they will do in this Parliament. What is his position in this Parliament? We have said that the change is permanent. Do they support that for this Parliament or not? Do they support it for a year, two years, three years or four years? What is their position on CPI? All we need to know is whether they support it for this Parliament.
Stephen Timms: Well, the Secretary of State has shifted back a little way towards the Minister by suggesting that the Government view the change as permanent. As for the view of my party, I simply refer the Secretary of State to what the leader of my party has said, which is that the suggestion that the change should be made for a period-perhaps up to three years-would be something that we could consider. If that proposition were on the table, we would be happy to consider it. But sadly it is not. As we have heard from the Minister-and as I think the Secretary of State has now reluctantly confirmed-the Government's intention is that this arrangement should be permanent. That is what I strongly object to.
I was just about to refer to what the Civil Service Pensioners Alliance said. It
"the assertion that the CPI is a 'better' measure of inflation for pensioners."
"to take account of the advice of their own statisticians before embarking upon a change which will adversely affect the incomes of pensioners for the rest of their lives and not just for the term of the current financial crisis."
Age UK has made a similar point.
All the main public service schemes are contracted out of the additional state pension. Of course, in the current climate we need restraint over public sector pay and pensions, but one group that the proposed permanent change will hit particularly hard is those who serve in the armed forces and their dependants, who rely on their pensions at an earlier age than almost anyone else. A permanent switch would, as I understand it, mean that somebody who had perhaps lost both legs in a bomb blast in Afghanistan could miss out on half a million pounds in benefit and benefit-related payments over the rest of their life. War widows, too, will lose out severely. For instance, if this change were made permanent, the 34-year-old wife of a staff sergeant killed in Afghanistan would be almost three quarters of a million pounds worse off over her lifetime.
If Ministers are going to pursue this policy, they need to explain why those serving in Afghanistan-already in some cases, as we have heard in the last few days, facing redundancy of which they were informed by e-mail-should see their pensions reduced for the rest of their lives compared with the expectations that they have had until now, and why-
The right hon. Gentleman has raised a serious point. I think both sides of the House would be united in our respect and admiration for our forces and our forces veterans, but surely the issue is that we pay decent forces pensions, not that we choose to measure inflation in a particular way. Those are two quite separate
issues. There is the adequacy of forces pensions and there is the proper measurement of inflation, but to conflate the two seems confusing.
Stephen Timms: In opening the debate the Minister accepted that in 15 years out of 20, CPI uprating is less than RPI uprating. My point is that those serving in Afghanistan have been contributing to their pensions on the understanding that their pensions, when in payment, would be uprated in line with RPI. Now the Government are saying, "No, they won't; they'll be uprated by a smaller amount," and that is a very worrying development. In view of the sympathy that the Minister has expressed for people in that position, the Government must give further thought to this matter-why war widows, who have had the person most special to them taken away, deserve to have the support that they would otherwise have been able to depend on cut as well.
John McDonnell (Hayes and Harlington) (Lab): May I, through my right hon. Friend, give the Minister an opportunity to respond to a question? Is it not clear that as we identify anomalies like this-and they are bound to arise-it is important for the Government to introduce corrective measures fairly quickly?
Stephen Timms: Yes, there are some serious problems here, and I hope we will hear responses to them. I pay tribute to my hon. Friend for the work that he has done on this subject, and I hope that the Government will think again.
The Welfare Reform Bill, which was published this morning, touches on a number of the points that the Social Security Benefits Up-rating Order also touches on. One of the Government's original proposals, which Opposition Members strongly opposed, was to cut housing benefit by 10% for people in receipt of jobseeker's allowance for one year. We were all absolutely delighted this morning to hear the Secretary of State say that the Government have reconsidered their position and will not implement that draconian cut. We understand from newspaper reports that the change was brought about as a result of pressure from the leader of the Pensions Minister's party. The Minister himself may well have had a hand in bringing about that change. If so, I-and many of us-would want to join in congratulating him on his success against the views of the members of the other coalition party, particularly, perhaps, the views of those serving in the Treasury.
As the Minister is on a bit of roll, may I suggest that he go further in changing the Government's proposals? Under the existing system, most out-of-work benefits are subject to savings limits-currently £16,000, but the Government intend to extend that threshold to in-work benefits as part of the universal credit, and I notice that that threshold is not uprated in the order before us. Under the proposed limit, in future anyone in work who would be entitled to tax credits but has savings of more than £6,000 will have their payment reduced. Those who have savings of more than £16,000 will lose their entitlement to tax credits altogether.
According to calculations by the Social Market Foundation, 400,000 families with children, who are now in receipt of tax credits, would be punished for having £16,000 in the bank by losing all their tax credits. For example, anyone saving up for a deposit to buy a
home would suddenly find that they had lost all their tax credits as a punishment for having £16,000 in the bank. Such families would have been doing the right thing, working and saving their money, perhaps to put down a deposit on a house. For many such families, putting down a deposit will be made not only difficult but impossible. The Opposition cannot possibly support the proposed change, and I cannot imagine that many Government Members would want to see such an extraordinary assault on family savings either. I hope that we shall see another initiative by Liberal Democrat Ministers-we saw the benefits of such an initiative this morning-to persuade the Government to abandon that policy as well.
I hope the Government will also scrap the proposal to remove eligibility for the mobility component of disability living allowance for those in residential care. The order does uprate disability living allowance, and my hon. Friend the Member for Glasgow East (Margaret Curran), who is on the Front Bench today, has been making powerful arguments to the Government about the iniquity of removing that benefit from people simply because they are in residential care. I hope the Government will think again about that, and I am delighted that the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), who is responsible for that part of the policy, is on the Government Front Bench today.
The Government are signalling today that they intend a permanent shift from RPI to CPI as the inflation measure for uprating benefits and pensions. The Opposition do not support that. It is not right to continue to reduce the incomes of pensioners, widows and those on low incomes long after the deficit has gone. [Interruption.] From a sedentary position, the Minister says that we will not vote against the order, but that is because it uprates the basic state pension next year by RPI. Therefore, it does not do what the Government have told us they want to do in perpetuity. The order overrides the policy that he set out today, and no Labour Member would object to uprating the basic state pension by RPI, as that was always the practice under the previous Government-and quite right, too. As the Minister rightly pointed out, pension credit, which has done an enormous amount to reduce pensioner poverty in the UK since its introduction, will also be uprated accordingly, and we support that as well.
Jane Ellison: As the right hon. Gentleman has opened up the debate about other welfare payments, I shall have one more go at my question before he concludes his remarks. Given the scale of the welfare bill and the fact that we are weeks away from when the Opposition's deficit reduction plan would have commenced, will he please comment on how he would reduce that bill if he were running affairs?
Stephen Timms: On a number of occasions during the debate I have made the point that there is a case for temporary lower uprating to contribute to reducing the deficit. My objection is to the permanent character of what is being proposed, and I hope the House will not support it.
The order does not uprate the basic state pension by CPI or by the triple lock; it overrides that, and increases the payment by RPI. I do not expect Labour Members to object to that, but the move to commit to CPI
uprating and to make the change permanent, not just while the deficit is being reduced but in perpetuity, is what we object to, and we will be working hard in the months ahead to try to persuade the Government that their policy on that is wrong.
Jenny Willott (Cardiff Central) (LD): Like the right hon. Member for East Ham (Stephen Timms), I refer to the Welfare Reform Bill, although we are debating the uprating orders. With the introduction of the universal credit when the Bill becomes law, the complicated changes that we are processing in these orders will become a thing of the past, which I think we welcome on both sides of the House. It will be much simpler for people to understand their entitlement to benefits, and there will be a much better deal for many people who are in receipt of working-age benefits.
Rachel Reeves (Leeds West) (Lab): The hon. Lady says that we will not debate uprating in the future, but because the Government have reneged on the universal pension, we shall be debating uprating for pensions every year.
Jenny Willott: I shall clarify my remarks in case anyone misunderstood me. I said that we will not be debating complicated uprating changes every year. Clearly, there will still be a debate every year, I assume, on the uprating of benefits; I should hate to think they will be frozen in future. I shall talk about pensions later in my remarks.
According to the Institute for Fiscal Studies, the universal credit will mean that 2.5 million families will be better off. They will get more money, which will in time help to reduce the total benefit bill by making it more worthwhile for people to get work and remain in work and off benefits. That should generate support on both sides of the House, as it is something we all want families to do.
As well as an improvement in prospects for those on working-age benefits, as the Minister said, this morning the Government introduced changes that will make a significant difference to pensioner incomes. The level of pensioner poverty in the UK is a complete disgrace in a civilised country. During the shadow Minister's remarks, it slightly got me that he seemed to criticise the Government for not sticking to the CPI increase for pensions and going for a larger increase in pensions this year. In 2000, the previous Government were happy to see an increase of only 75p in the state pension, which most of us found stingy, measly and completely unforgiveable. At least, this Government are tackling pensioner poverty and are willing to do something serious about it.
Labour's efforts to lift older members of society out of poverty resulted in a massively complicated, overly bureaucratic system based on means-tested benefits that has left 2 million pensioners still living below the poverty line. Clearly there is something wrong with the current system, so I am delighted that real progress is being made to safeguard the value of the basic state pension. Current pensioners will now be protected by the triple lock, which is welcome. I am delighted that a Liberal Democrat manifesto commitment is being implemented by the Liberal Democrats in government. What we promised we have delivered, and the state
pension will increase by earnings, 2.5% or CPI, whichever is greatest. People over the age of retirement will have the protection they deserve. As the Minister said, the amount can be quite significant. We are talking about £15,000 over a person's lifetime, which will make a significant difference for a large number of pensioners and will, I hope, have an impact on pensioner poverty.
I am glad to see that change. However, I believe that we are still building up problems for future generations of pensioners. Current pensioners' circumstances will improve significantly, but the ticking pension's time bomb was not tackled by the Labour Government or by previous Governments. I would like the current Government to take the bull by the horns and ensure that we do not end up with a problem in decades to come. Far too many people are not saving for retirement. Auto-enrolment will help in that regard, but people need to know that it will pay to save. We must reduce the amount of means-testing to ensure that people know that, if they save while they are working, it will benefit them in retirement.
We have an uncertain jobs market. There are no more jobs for life. Occupational pension schemes are closing at a terrifying rate. Many occupational schemes are defined-contribution, rather than defined-benefit, and far less generous. Even with the triple lock, problems will increase. I would be grateful if the Minister told us what the Government plan to do in the long term to tackle the time bomb. The triple lock will make a significant difference, but we need to look at the whole pension system to ensure that we reform it in decades to come so that it is more appropriate to the needs of society.
Clearly, a big issue is the move from RPI to CPI. I understand why people are concerned about that, but I say to pensioners who are worried about the impact on their basic state pensions that they will be protected by the triple lock. As the Minister made clear, the majority of people on public sector pensions will be protected from a potential reduction in their long-term benefits by the triple lock on the state pension, so they will end up better off in the long term. The impact on people will not be as great as many Opposition Members have said it will be.
I can see that benefits come with the change to CPI. It is more stable. It means that we will not face issues such as the one that arose last year when benefits were frozen, which caused significant hardship for many millions of people. CPI is also a more appropriate system as 70% of pensioners own their homes outright. As the Minister said, there is a negative impact for those pensioners as the rate of mortgage interest is taken into account under RPI. They do not benefit in any way from the massive fluctuations that that can generate in their pension increase.
Dr Eilidh Whiteford (Banff and Buchan) (SNP): One of the big concerns is that the Royal Statistical Society has said that the CPI is not a good measure for pension inflation. The differential impact of that measure is causing many Opposition Members concern.
I thank the hon. Lady for her comment. The issue is likely to be taken up by the Minister in his summing-up because, from his comments from a sedentary
position, he seemed to disagree with similar comments by the shadow Minister. I do not have a copy of the whole quote in front of me, but I am sure that he will be able to fill the House in on that and respond to her question later.
Kate Green: Does the hon. Lady accept that CPI is not a good measure for most working-age households precisely because of its exclusion of housing costs?
Jenny Willott: As I understand the way in which that relates to working-age households, people who are on benefits are much more likely to be living in social housing and so will not face large fluctuations in mortgage costs. For those of working-age who are on benefits and do have mortgage costs, there is a lot of assistance from the state. They are not bearing the full brunt of mortgage interest fluctuations because a lot of that is borne by the state. Therefore, I believe that CPI relates appropriately to that group, too.
The financial implications, over this Parliament and beyond, for the Government of the difference between CPI and RPI have been discussed a lot today. We are in very difficult financial circumstances and the Government have had to make some extremely difficult financial decisions. The Minister has laid out why the Government believe that CPI is the right measure to use, but the financial benefits of that for the Government coffers are significant. By introducing the triple lock, the Government are protecting the most vulnerable pensioners. The people potentially most penalised are being protected, while the amount of money saved is quite significant and will help the economy to grow in future.
The shadow Minister, the right hon. Member for East Ham (Stephen Timms), eventually made it clear that the Opposition will not vote against the orders and will support the changes and the uprating, which seems to suggest that they understand the logic and agree with the overall decision. Whether it be for the moment, for three years or until the next Parliament, I am not entirely sure, but it is good to see it when occasionally agreement breaks out across the House. It is also good and quite a novelty to see Labour Members finally supporting measures that will save the Treasury some money. If they plan to return to RPI in the future, I look forward to seeing how they plan to find the billions of pounds that will be necessary to implement it.
I congratulate the Government on introducing the triple lock for pensioners, which is a significant step forward. It is also pleasing for me as a Liberal Democrat to see a manifesto commitment implemented.
Hywel Williams (Arfon) (PC): The hon. Lady is generous. She has mentioned the triple lock many times. Is she at all concerned about the ratcheting effect of implementing it, which has been a consideration in the past?
Jenny Willott: I would have thought that being too generous to pensioners was a good thing.
Hywel Williams: I am unconcerned about it being too generous. When the ratcheting effect was considered in the '80s, when Barbara Castle presented her proposals for pensioners, I was supportive of her, but concern was expressed in the House at the time.
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