The third problem that is sometimes cited is that we might set some sort of precedent. Thames Water is, for example, doing a lot of infrastructure work with the
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Thames tunnel, and the argument is that if we make an exception for the south-west, recognising what has been done there, the injustice that has been suffered and the infrastructure that has had to be put in place, we would be setting a precedent for other water companies.
The answer is to design a scheme to address those concerns—something that should not be beyond the wit of man. I have raised the issue with the Minister before, so he will be aware of my suggestion for a fair discount scheme. There would be two key criteria at the heart of that formula. First, there would be affordability. We would use the definition of affordability cited in Anna Walker’s report, which says that anyone who spends more than 3% of their household income on water bills is water poor. We should ensure that all those who spend more than 3% are eligible for some form of discount. That would catch about 70% of South West Water customers, and millionaires with second homes in Cornwall would not be eligible because they would not spend more than 3% of their household incomes on water. That would deal with the second argument that I set out about people on low incomes subsidising millionaires.
The second key criteria at the heart of the scheme would be recognising fairness. The scheme would recognise in absolute terms the scale of the bills in the south-west. People often have bills of £700 or £800 a year, and I have even heard anecdotally of people getting bills of £1,000 a year. That is why water charges are a political issue in the south-west in a way that they are nowhere else. There is a real issue of fairness just in terms of the absolute size of the bills.
We would, therefore, have a discount, which would be tapered depending on how much people’s bills varied from the national average. We would say that people in the south-west, whose bills are double the national average in many cases, were entitled to the full discount, which might be £80 or £100 a year. They would still pay more than anyone else, but they would receive a significant discount, which they would recognise as making a real difference.
In areas such as that covered by Thames Water, people might be technically water poor, but the fairness criteria would recognise that water bills in London are already very low and, indeed, below the national average. The taper would ensure that the discount given to those who were water poor in the Thames Water area was far smaller, because we would be recognising that their bills were not such a difficult issue and started from a low level.
The provisions would ensure that we had a national scheme that was open and available to all. Such a scheme would target affordability and not subsidise millionaires. It would also recognise unfairness and the fact that water charges are a political issue in places such as Devon and Cornwall by having a taper and changing the discount depending on the variants.
I put those thoughts to the Minister a couple of months ago, and lots of work is going on. I commend the approach that he has taken; he has worked incredibly hard to find a solution. The coalition has given a commitment to address the problem, and we all have a reason for wanting a successful outcome. I very much hope that we can find a solution together.
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3.16 pm
Mr Jamie Reed (Copeland) (Lab): It is an absolute pleasure finally to serve under your chairmanship, Mr Amess. I congratulate the hon. Member for Torbay (Mr Sanders) on securing this debate. I have taken note of the attention that he has given these issues in parliamentary questions and, most recently, in early-day motions. I am well aware of the anger, frustration and even desperation that many of his constituents feel as a result of the long-standing problems with water and sewerage charges in his area.
As the hon. Gentleman will acknowledge, MPs of all political persuasions across the south-west have focused a great deal on this issue. I have talked about it at length with my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) and my right hon. Friend the Member for Exeter (Mr Bradshaw), who are particularly exercised by the lack of progress on the Walker review—an issue to which I will return—and by the continued suffering of their constituents, particularly the poorest ones.
It would be wrong of me not to pay tribute to the outstanding work of Linda Gilroy, who did a huge amount of work in ensuring that the previous Parliament was aware of and understood these issues, and any future progress will necessarily be down in part to the remarkable effort that she expended.
Andrew George: It is worth ensuring that that commendation for the work done by the former hon. Member, Linda Gilroy, has cross-party support. As a fellow officer of the all-party group on water, I know that her commitment and involvement took the campaign a great deal further than it would have gone otherwise. Her work certainly should be commended, and the Minister will no doubt recognise that, too.
Mr Reed: I thank the hon. Gentleman for those remarks. With his typical generosity, he demonstrates that a solution can be found on a cross-party basis.
As somebody who is closely associated with my own region, the north-west, I understand how Members of Parliament can form a regional identity and share concerns across party lines about issues that are of outstanding regional importance, as water is in the south-west. I also understand how politicians from other regions who pontificate about regional issues, where those almost certainly require national solutions, can quickly arouse suspicions among MPs from the region in question. As a Member of Parliament from Cumbria, which is surrounded by the Irish sea and the Cumbrian fells, which is partly within the Lake district, which is sparsely populated, where tourism is incredibly important and where water and sewerage bills have risen exponentially since 1989 to become the highest outside the south-west, I understand.
The average annual bill for water and sewerage services in the south-west has risen by 72.2% between 1989 and 2010-11—the highest increase in the country. As my hon. Friend the Member for Plymouth, Moor View stated in her Adjournment debate last year:
“The problem we face is simple: water rates in the south-west are 25% higher than the UK average, placing an unfair burden on…my constituents and all residents across the south-west of England.”—[Official Report, 14 June 2010; Vol. 511, c. 710.]
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The average bill for South West Water customers is significantly higher for 2010-11 than elsewhere in the country, at £486, as opposed to a national average of £339, as I think has been mentioned. In addition, unmetered customers also face much higher bills, with an average of £721 for South West Water consumers, as opposed to a national average of £394.
As has been roundly discussed, that does not happen by accident. The widely condemned Thatcher privatisation of the water industry in the 1980s led directly to many of the problems that we face today, but the south-west’s significant demographic and economic characteristics reinforce the problems associated with high bills. They must be understood in an integrated way. They cannot be considered in isolation. As has been touched on, 22% of South West Water customers are pensioners, although being a pensioner should not be used as a blanket term to denote people living in financial hardship; many hon. Members would share that view. In addition, I think that it has been proved that lone parents have more affordability problems than single pensioners. The percentage of lone parents in the south-west is at the national average.
An extremely high proportion of the population live in sparsely populated rural areas—something that I am familiar with. That makes service provision more expensive and diminishes economies of scale. The policy solutions should address the problems that are faced today. The fact that housing affordability issues are the most acute in the UK outside London should be considered. As has been alluded to, the region is the UK’s top tourist destination. The population rises more than by 25% in peak tourist weeks, with the result that the demand for water is a third higher than for the year as a whole.
I understand that South West Water understands those issues, and it should be commended, as it has been, in part, by hon. Members on both sides of the Chamber, for investing more that £1.5 billion in the clean sweep programme, which has done so much to transform sewage treatment and the natural environment. However, bills for consumers in the south-west are now 25% higher than those in the rest of the country, and for the most vulnerable in the south-west community—those struggling alone on a pension, lone parents trying to raise their families and single people living in rented accommodation—water bills present a struggle. It has been estimated that their bills can take 10% of their incomes. Surely, that cannot be acceptable. I pay tribute to the Consumer Council for Water for the work that it has done and continues to do in trying to influence prices for consumers not only in the south-west but throughout the country.
We can talk at some other stage—I have no doubt that we will—about the current economic situation, its causes and its potential remedies, but it is certain that the people in our society who will feel the effects of the recession the most, and who will without doubt feel the brunt of the Government’s cuts the most, will be those who already suffer the most from rising water charges, by comparison with other consumers. It cannot be right for up to 10% of their incomes to go on purchasing what is a basic entitlement—a right—while food and fuel costs are rising, the Government have raised VAT to 20%, unemployment is rising and job insecurity is everywhere. Action must be taken sooner rather than later.
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The issues associated with water and sewerage charging in the south-west are difficult. The hon. Member for Torbay called them intractable. The Minister knows that they are difficult and has said as much in this place and to the Select Committee on a number of occasions. He understands the difficulties of the decisions and recognises the difficulty for many people who face such water charges. I believe that the Minister wants to do the right thing, but wanting to do the right thing and doing it are very far away from each other. Intentions count for little. The difference between intention and action is the same as the difference between night and day. It is difficult for DEFRA Ministers, as the Secretary of State hovers around the exit door to get things done, and the Department risks becoming inert, like many others in Whitehall, as sackings loom and the near 30% departmental cut begins to bite, but a lot of the heavy work on this issue has already been done, in the form of the Walker and Cave reviews.
The Government announced in August 2010 that they would review the regulation of the water industry to assess whether the current framework, including Ofwat’s statutory duties, remained fit for purpose. Does the Minister believe that Ofwat is fit for purpose, and if not, why not? The industry review is also meant to assess how well Ofwat translates guidance from the Government and its statutory duties into its decision making. With that in mind, did the Government give any advice to Ofwat with regard to water pricing in the south-west before Ofwat set the price for the region for this financial year? Did the Government give any guidance to Ofwat about the problems being faced by south-west customers before the latest price rise was announced? Inflation is currently 4.7%, yet Ofwat’s allowed increase for South West Water customers averages at 5.1%. Have the Government discussed that with Ofwat at any stage, before or after the announcement, and is the Minister happy with that level?
I understand that the water review will directly inform the Government’s White Paper, to be published in June. Will the Minister confirm that the White Paper will be published no later than June? He will understand that it needs the fullest parliamentary scrutiny if it is to command broad support. The fundamental question is whether, almost a year after taking office, the Minister can explain what is halting the implementation of the Walker review. It was a superb piece of work that commanded support from hon. Members on both sides of the House and that held within it, as has been mentioned, many potential remedies to the problems of the south-west and South West Water consumers.
Will the Minister today give hon. Members a categorical assurance of a commitment in principle by the Government to implementation of the Walker findings and to a timetable for implementation? That is not much to ask. Further, will he confirm that the reduced capacity of DEFRA has in no way affected the implementation of the Walker recommendations? Will he also address fears that the Government’s review and the production of its White Paper have prohibited the implementation of Walker thus far? There are fears, which so far are justifiable, that the Government are backtracking on Walker. In the words of the American gospel hymn, “How long, O Lord, how long?”
Finally, the Chartered Institute of Environmental Health has defined water poverty as beginning when a household’s water bill equates to more that 3% of its
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income after tax. As we have heard, in the south-west, some households pay in the region of 10% of their income on water bills. Does the Minister know what percentage of people living in the south-west live in water poverty? Will he undertake to publish an assessment of how many people are living in water poverty by region and by constituency, and ensure that his White Paper will contain measures with which to eradicate water poverty? I believe that there is much common ground on which we can build.
3.27 pm
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon): It is a great pleasure to serve under your watchful eye today, Mr Amess. I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing this important debate. I also congratulate him on his long association with this issue and on standing up for his constituents, like so many other hon. Members, of all parties, this afternoon.
My hon. Friend raised several issues, but a key point was about the role of Ofwat. Other hon. Members, not least the Opposition spokesman, mentioned its role, and it is important to understand how it operates. I am surprised that the hon. Member for Copeland (Mr Reed) has not quite grasped the fact that it is an independent body. It would be entirely wrong of me, as the Minister, to try to influence its approach to its independent role, which is written in statute. That is not to say that we are sitting back and allowing the status quo to go on existing. We are testing, deeply and in great detail, whether Ofwat is fit for purpose and in a suitable condition to go to the next phase. Twenty years after privatisation, it is right for us to examine all aspects of the water industry.
David Gray, a highly respected individual who has great experience in the regulatory world, is carrying out a detailed review. I urge the hon. Member for Copeland and all those who are interested in this fascinating subject to understand the review that is taking place, and the role that Ofwat plays. I am determined that the constituents about whom so many hon. Members have spoken so movingly should be at the forefront of our minds while we consider the issues in question. Ofwat has an important duty to protect and stand up for them, independently of the Government. When the Government get things wrong Ofwat has a duty to tell them so. It also has a duty to ensure that the water companies, which have monopoly interests, are responsible to the people concerned. I take that duty very seriously.
The hon. Member for Plymouth, Moor View (Alison Seabeck), who is no longer here, made a point about water poverty. My hon. Friend the Member for Torbay and others mentioned that there might be some people in the House—I am yet to meet them—who believe that the south-west is full of comfortable people who have moved there in retirement and are relatively wealthy. I know that, largely, the opposite of that is true and that many people and communities suffer high degrees of deprivation. Of course, there are wealthier communities. However, if people assume that any community in the south-west can take such a water bill increase because there is no poverty, they make a fundamental error. That is something I take very seriously.
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Yes, I speak to people from the south-west, and, yes, I will listen. That point was raised by my hon. Friend the Member for Totnes (Dr Wollaston). I have listened and will continue to listen to people in the area. I know what an important issue this is and that it is a political as well as a social issue. The matter is fundamental to the concerns that hon. Members have voiced for much too long. I recognise that we must come forward with solutions and, in a moment, I shall talk about how we will achieve that.
I hope that I can address some of the other issues during my remarks and, of course, I remain willing to deal with them. A point was made about the adoption of private sewers. I cannot say precisely when we will introduce proposals on that, but the coalition has a very clear commitment to dealing with that important issue and to ensuring that we do so as equitably as possible. The hon. Member for St Ives (Andrew George) also has a long background in talking about the subject, and I appreciate the support, the many conversations that we have had and the assistance that he has given me on the matter. I accept his point about a default position, and I will follow that up with South West Water and continue to have conversations with him.
My hon. Friend the Member for Camborne and Redruth (George Eustice) has provided me with an interesting idea. I can tell him that officials are crunching his numbers as we speak and that he has contributed some thoughtful suggestions. At this stage, I cannot say how we will take that forward, but I will keep in touch with him. In passing, comments have been made about privatisation. All I shall say is that £90 billion has been invested in the water industry, which is a considerable achievement, and that other Governments have had endless opportunities to reverse what happened 20 years ago. I recognise the very real belief in the south-west that, in the case of that area, not enough thought was given. I will address some of those points, too.
First, I shall discuss the specific issue at hand. Ofwat has announced that average bills for household customers of South West Water in the coming year will increase from £486 to £517, which is an increase of 5.1%. Nearly all that increase is due to inflation, as water bill increases are linked to inflation.
Dr Wollaston: May I raise the point that the accepted figure is 8.1% because the figure that the Minister quotes assumes that people will be switching to water meters?
Richard Benyon:
My understanding is that that is the figure over the piece. However, I am happy to look into that and give my hon. Friend an absolutely clear and unequivocal answer, because it is important that we know that figure. In her earlier remarks, I think she raised the point about why we use the retail prices index rather than the consumer prices index. [
Interruption.
] Sorry it was not her; it was my hon. Friend the Member for Torbay. Bills have been tied to inflation since privatisation because, when inflation is higher, water companies’ costs increase. As is the case with other regulators, Ofwat uses RPI. Although RPI was higher than CPI this year, it was actually lower than CPI when last year’s bills were calculated, so average bills that year were
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lower. We can argue about percentage points, but that is an important factor. Let us take that matter forward in our consultation, which I will come to in a moment.
I am acutely aware that nobody wants to see higher bills, particularly in these tough economic times. However, we should not lose sight of the fact that the money raised will pay for £159 million of investment in the region during the next financial year, which will benefit customers. I know that that sounds trite, and I am not diminishing the effect of the increase, but we must recognise that there are also benefits, including £14 million to improve tap water quality, £10 million to repair crumbling sewers and £28 million to further reduce pollution incidents.
Mr Bradshaw: Given the severe squeeze on family incomes, would it not have been better for South West Water to have delayed some of that expensive investment and to have frozen the rise? The Minister seems to be giving the impression that the Government do not bear any responsibility for inflation, but it is, of course, his Government who have let inflation rip.
Richard Benyon: I chose to ignore the right hon. Gentleman’s earlier remarks about the Government being responsible for the rise in inflation at a time when commodity prices and oil prices are rising. He only has to read the newspapers to see what is happening to food prices and how that is being influenced by so many other different factors. I think I shall move on, because I simply do not accept his point.
Mr Bradshaw: Why is inflation in Britain more than twice as high as it is in Germany?
Richard Benyon: We could debate that at great length and talk about our reliance on oil, how that might differ from other countries, where we were working from a year ago and the impact of the previous Government’s activities, of whom he was a part. I will be happy to have that debate at another time but, at the moment, I want to talk about the right hon. Gentleman’s constituents and the impact of the increase in water bills. I also want to talk about the actions that are in my power to take to improve that. I am happy to take any interventions that he may wish to make on that.
We have been carefully considering Ofwat’s final advice in relation to the south-west, which I only received in January. These are difficult issues, and, as has been said, there are no simple solutions. It is essential to ensure that our proposals are workable, fair and affordable, particularly in the current economic climate. We hope to issue our consultation on the Walker review soon, but it is essential that we get this right.
Hon. Members have discussed the differential between metered and unmetered bills. The average bill for a metered household in the south-west is around £400, while the average bill for an unmetered household is around £720. Hon. Members have given examples where both types of bill are considerably higher than those averages. That is because—as we have heard—70% of households in the south-west are metered. Average metered and unmetered bills reflect the estimated water consumption between those households. Unmetered households pay more, because, on average, they use more water than metered households. As hon. Members are aware from
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previous debates, bills vary between companies. That reflects the cost of providing water and sewerage services in an environmentally sustainable way in different regions with different circumstances.
In all cases, Ofwat—as the independent economic regulator of the water industry—ensures that bills are no higher than they need to be to finance the investment required to provide water and sewerage services. My hon. Friend the Member for Totnes and others have discussed how unfair it is that 3% of the population pay to clean up 30% of the coastline, and I know that that is the prevailing view in the south-west. The Walker review looked closely at whether environmental improvements are public or private goods and who should pay for them. Anna Walker concluded that spending on environmental improvements, such as cleaner beaches, is largely required to make sure that the disposal of sewage does not harm the local environment and that the benefits are mainly local. In particular, having a sewage system and beautiful clean beaches delivers huge benefits to the region through tourism. I know that there are many people—I am one of them—who enjoy the beaches and the coastline, but who do not pay those bills. The complication of trying to devise a scheme where we can hypothecate is something that not just I, but my predecessors and many others in this House, have sought to tackle.
Support is available now for low-income and vulnerable households. Currently, the national WaterSure tariff caps the bills of qualifying households at the average metered bill for their company. Households qualify for WaterSure if they are metered and in receipt of means-tested benefits, and either have three or more children living at home under the age of 19, or someone in the household who has a medical condition that necessitates a high use of water.
Individual cases were raised today. As they were described to me, those people should qualify, but are not receiving WaterSure. I want to take those cases up. My hon. Friend the Member for Totnes raised a case about a multiple sclerosis sufferer. I would like to know whether multiple sclerosis has an increased water requirement, and why that case is not covered by WaterSure. That is something that we may have to look at through the consultation that we are about to undertake.
WaterSure ensures that such households do not cut back on their essential use of water due to fears about the size of their bill. This year, some 31,200 households are benefiting from WaterSure and approximately one in three of those households live in the south-west. We are looking at whether WaterSure should offer a more generous cap, which could cap bills at the lower of the national average metered bill, or the company average metered bill, as recommended by Anna Walker. That would deliver substantially lower bills for those households that live in high-cost areas. We are also looking at whether it would be more fair to share the cost of WaterSure across customers in England, rather than fund WaterSure at the company-specific level. We will be inviting views on that when we publish our Walker consultation.
Some have asked why the Government have not made those changes already. We have been considering them alongside Ofwat’s advice on tackling the problem of high water bills in the south-west. I received Ofwat’s final advice only in January. I am sure that hon. Members
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agree with me that we must ensure that our proposals are workable, fair and have the support of interested parties. I am determined, as I have said frequently—I make no apologies for saying it again, although I wish that we had got there by now—to get this right.
Andrew George: On the various alternatives, I know that each one is not easy, as the Minister has made clear. He is clearly very seized of the challenges of coming to an equitable solution. Does he not agree with me that in having a solution that is simply within the company itself—a social tariff within the company boundaries—there would be inevitable unfairness, wherever the line was drawn? People on moderate incomes, who would have difficulty paying the bill, would be subsidising other people in the same company area, when they are already suffering from very high water bills.
Richard Benyon: I entirely accept what my hon. Friend has said, which is why I am sure that in the south-west it would be more popular for us to use the national average, which is one of the suggestions that we will be taking forward.
We have started to prepare our guidance on company social tariffs under section 44 of the Flood and Water Management Act 2010, which will enable companies to introduce social tariffs within their own areas to help households that would otherwise struggle to pay their bills in full. We hope to issue our guidance in the autumn, so that companies can consider it ahead of the 2012-13 financial year. Indeed, this afternoon the Department for Environment, Food and Rural Affairs is hosting a discussion with water companies and others to exchange views on what the guidance needs to cover. South West Water is participating in that discussion. I understand that it is very keen on the possibility of bringing forward a company social tariff. It has indicated to me that changes to how it levies sewerage charges could potentially raise about £7.5 million per annum to fund a company social tariff without adding a penny to household bills. That would potentially reduce the bills of 100,000 households in the south-west by about £75 per annum. I strongly encourage the company to look favourably at that possibility.
The hon. Member for Copeland asked when we are going to implement the Walker review. The Walker review identified a number of options. Implementing the review would involve implementing all those options, some of which were more-or-less dismissed by Anna Walker herself. She did, however, identify a number of options that would help to address the problems associated with high water bills in the south-west, in addition to proposed changes to WaterSure. Ofwat has been exploring those options, and we are currently considering the information that it has provided. Some options could potentially benefit all households in the south-west, and not just those on low incomes, which should address some of the comments that have been made today. Options include a one-off, or annual, adjustment funded by the Government, an annual adjustment funded by water customers nationally, a range of tariff options, rebalancing charges and the sale of surplus water. Decisions will be taken imminently, and we will set out our proposals for the south-west in our Walker consultation.
I recently received Ofwat’s final recommendations. I can address the concerns raised by the hon. Member for Copeland and others by saying that we will be taking those forward very soon. I should also mention some of
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the initiatives that South West Water is taking. Since 2007, its WaterCare scheme has helped households in debt by offering them a benefit and a water tariff check including, if appropriate, a meter. Metered customers also receive a free home water audit and simple low-tech water-saving devices. I have seen those schemes in operation, and they are successful in reducing the amount of water that households use, with minimal impact on their lives. In fact, in some cases there is an improvement, and I applaud any roll-out of such schemes.
South West Water recently announced that it is enhancing its current WaterCare scheme to WaterCare Plus. That will include home energy audits and advice on claiming grants. In addition, in the coming year, it is investing £1 million in its FreshStart programme to offer advice to customers with general debt problems. Both the WaterCare Plus and FreshStart schemes are fully funded by South West Water and do not impact on customer bills. The company will also be making free water-saving packs available to its customers, and it will be promoting them through the local media this month and next. I very much welcome and support those initiatives.
Metering offers an opportunity for some households to save money. Ofwat estimates that three in 10 single pensioners, working-age adults who live alone and, to a lesser degree, pensioner couples in the south-west are currently unmetered and could expect to see their bills go down, if they were metered. South West Water has already undertaken two advertising campaigns—in Plymouth, and in Exeter and Torbay—aimed at encouraging low-income unmetered households to look at whether a meter can reduce their bills. I believe that more can be done to build on that. For example, all unmetered households can investigate whether a meter can save them money by using the Consumer Council for Water’s water meter calculator, which is available at the Consumer Council for Water’s website.
May I reiterate to my hon. Friend the Member for Torbay, who secured the debate, and to other hon. Members for whom the issue is of great concern to them and their constituents, that the Government are very aware of the problem of high water charges in the south-west? Support is already available to help the vulnerable and low-income households with their bills. We will build on that, and our Walker consultation will point the way forward. I hope that hon. Members will bear with me for just a little while longer. I will, of course, be happy to meet any hon. Members with constituencies in the south-west to discuss this and to ensure that they have the understanding that they need to communicate our consultation, when we bring it out. I again commend my hon. Friend the Member for Torbay for bringing this matter to the Chamber today.
Mr David Amess (in the Chair): Order. If no other hon. Members want to contribute to this debate, the sitting is suspended until the Minister arrives for the next debate.
3.50 pm
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Animal Welfare
3.57 pm
George Eustice (Camborne and Redruth) (Con): It is a pleasure to serve under your chairmanship, Mr Amess, for this debate on animal welfare and trade negotiations.
The importance that we place on the welfare of other animal species on the planet is a measure of how civilised our society is. We all know that animals feel pain and fear. They have maternal instincts. Anyone who has ever had a dog knows that they can even feel emotions such as loneliness and jealousy. How we treat sentient animals that are raised in captivity for food really does matter and says something about us as a society.
Animal welfare is an area in which legislators should be prepared to take action. The truth is that the public care deeply about the welfare of animals, but the paradox is that in a modern, sophisticated society, people are often separated from farming practices and the slaughter of the animals that they consume. There is therefore a danger that the human conscience of consumers ends up being dissipated by the simple fact that, for the majority of people, farming and slaughter processes are, frankly, out of sight and out of mind. The only way to bridge the gap between the empathy that people might feel for animals and the information that they have about farming is by legislators exercising judgment and implementing laws that recognise the ethical dimension of how we produce our food.
There is another element to this. Farming is sometimes described as an industry, but I would say that it is not like any other industry—it is unique. It is not just about churning out a product for consumption at a given unit price. Farming is intrinsically linked to life itself and entwined with the environment, of which humans are just one part. If we take the special nature of farming for granted, we end up in trouble with animal health problems, disease and even human health problems. In recent decades, that is exactly what has happened. Consideration of animal welfare standards has been trumped by an apparently more important theory about free trade. That is wrong.
I am a Conservative, and no one believes in the concept of free trade more than I do, but even I can see that the concept of free trade is frankly a lower order consideration when compared with more fundamental issues such as animal welfare and the health of our environment. All too often in recent decades, moves to take a lead and to improve animal welfare standards at home end up being stopped in their tracks by the threat that we will merely export our industry to countries that have even lower welfare standards. That fear is entirely justified.
When the UK unilaterally banned sow stalls for pig production, our industry lost out to that in other countries where pigs were treated less well. The concern that our farmers will lose out as a result of improved welfare legislation means that the policy response has typically been to trim our ambitions and to stifle our consciences, because the theory of unfettered free trade has been considered to be a concept that is beyond challenge in any circumstances, and seen as a principle that trumps concerns such as animal welfare.
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It is time to challenge that muddled thinking. A civilised society should have a system that encourages competition to raise animal welfare standards, not to lower them. We should not jeopardise our farming industry simply because of some arbitrary rules set down many years ago in the general agreement on tariffs and trade and since enforced by the World Trade Organisation. I shall return later to some of the relevant articles in GATT, because I shall argue that many of the provisions to recognise animal welfare standards in the world trade system already exist, but we have not been good enough at taking them up.
First, I shall speak about the coalition Government’s position, and that of the Conservative party. Just a year ago, in February 2010, the Conservative party published a very good document, “A New Age of Agriculture”, which was our agenda for British farming. The section on animal health and welfare contained an explicit commitment:
“We will promote animal welfare at an international level and work towards the inclusion of production standards in WTO negotiations.”
That could not be more unequivocal or clear, but I decided a couple of months ago to follow it up and to see what progress there had been in making the case to the WTO and internationally for the changes. I tabled a parliamentary question asking what discussions had taken place on this important issue. The response was:
“None. The World Trade Organisation’s…Sanitary and Phytosanitary Agreement only allows controls on food safety, plant and animal health grounds. While we are totally committed to improving animal welfare standards the situation is that unanimous agreement of the WTO’s membership would be needed to change this to include production standards such as those relating to animal welfare. Such agreement is unlikely to be forthcoming because many of the WTO’s members would regard such standards as likely to facilitate protectionism rather than trade.”—[Official Report, 2 December 2010; Vol. 519, c. 957W.]
What I really want to know from the Minister is whether that represents a change in the Government’s position, and if so did the coalition require that? I would find that surprising. The Conservative party has its differences with the Liberal Democrats, but I would have thought that Liberal Democrats cared about such issues as much as we do. I wonder whether it is simply that the Department has other priorities and has not yet managed to put the matter back on the agenda. I would like some clarity on that from the Minister.
Returning to GATT and the WTO, I want to say a little about how we can get from A to B—from wringing our hands about the problems of animal welfare and how we improve it within the WTO system to being able to implement and obtain agreement. I am conscious that it is easy for people to say, “Oh well, it’s impossible to achieve change because of the difficulty of getting worldwide agreement.” The WTO is undoubtedly reluctant to recognise what are described as process and production methods—PPMs—when dealing with world trade disputes. As I said earlier, farming is unique and unlike any other industry. That is why we must ensure that the WTO opens its eyes to those wider considerations and takes a look at issues such as animal welfare. The truth is that the provisions to do that already exist in GATT. All we need is the confidence to get on and implement them effectively.
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First, article XX makes it absolutely clear that animal health is a legitimate factor to be considered in trade negotiations, but the European Union has been weak in arguing that. It states that
“nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:
(a) necessary to protect public morals;
(b) necessary to protect human, animal or plant life or health”.
We should be arguing that the health of an animal is intrinsically linked to its welfare, and that under article XX that should be a legitimate consideration that is factored into trade negotiations.
Secondly, article III is also relevant to the issue. It deals with regulations within countries and says that there should be equal treatment for like products. It states:
“The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin”.
The debate is about the definition of “like products”. All too often in the recent past, people have said that a chicken is a chicken regardless of how it is produced. That is simply not the case. In the egg industry, it is recognised clearly that the method of production counts and that eggs are not all alike: all eggs sold in the UK must have a number from 1 to 4 to designate whether they were produced in cages, or are barn eggs, free range eggs or organic eggs.
The Minister will be aware that there is much discussion in the poultry industry about the danger that the new EU legislation being introduced to improve conditions for cage-reared birds may be implemented disproportionately. It may be implemented properly in the UK, but not elsewhere in countries such as Poland. That is causing a lot of concern in the poultry sector, and I understand that the Government may even be considering banning eggs from EU countries where they have not been produced to the new legally required minimum standard.
What an upside down world it is when we argue that it is okay to ban products that do not match our legal standards in the EU, where we supposedly have a single market and are all part of one happy family, but that adopting similar measures and a similar stance as countries outside the EU is considered to be a bridge too far and a step that simply cannot be taken, although the methods of production would be illegal in the UK. Clearly, something has gone wrong. When it comes to agriculture, we must be very clear that a “like” product must mean a product produced to the same standard of animal welfare. The principle that we have established in the egg industry, for example, should be applied to all meat products.
Before concluding, I want say a little about labelling and consumer choice. We have got ourselves into a bit of a muddle in some areas. We sometimes apply asymmetric legislation to farmers, and then tell them to compensate for those new laws by trying to command a premium in the market, to have better labelling and to try to obtain a higher price for their product. I think that is a cop-out because an important principle is involved. If a farmer makes the conscious choice to adopt farming practices such as organic farming, which go well beyond the legal minimum required, he does so voluntarily and having made a judgment that he will be able to command a premium in the market. However, if that farmer is
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forced by law to improve animal welfare standards, the responsibility is on legislators to ensure that he is not exposed to unfair competition due to others using practices that would be illegal in this country. Otherwise, we simply export cruelty abroad, and no one wants that.
My second point about consumer demand is that, notwithstanding my earlier argument about farming practices and slaughterhouses being remote from modern, sophisticated societies, in recent years there has been a sharp increase in demand for ethically produced food. There has been a huge growth in demand for free range eggs and other organic foods. Some argue that that is the solution, and that it is evidence that we do not need to change the rules of the World Trade Organisation, but I think it proves something different. If consumers are willing to recognise that there is a difference between products based on how they are produced, why cannot legislators recognise the same? During one test case at the WTO, it was held that
“differing consumer tastes and habits”
was a legitimate and relevant factor in determining whether products were, or were not, alike. The fact that consumers distinguish between food products based on the system of production strengthens the case for the Government to argue under article III that we should recognise higher animal welfare standards. Food produced to such standards is not like food that has had a lower level of production.
To conclude, it is time to modernise the World Trade Organisation and the world trade system generally. We should give nation states the right to safeguard their markets against imports produced in third countries to less civilised standards. We should not be asking the World Trade Organisation how to interpret articles III and XX, we should be telling it. Some say that such an approach risks protectionism and would undermine the interests of developing countries, but that claim does not stand up to scrutiny. It does not follow that welfare standards are lower in developing countries. Indeed, some of the worst excesses of the industrialisation of agriculture and factory farming tend to be associated with developed—not developing—countries. In many cases, developing countries pursue less intensive and more traditional farming practices that are better for animal welfare. Quite often, production processes in those countries are already informally regulated by large retailers in the UK who often insist that food produced in developing countries is produced to the same welfare standards as in the UK.
In truth, the latest Doha round of the World Trade Organisation has been stalled for several years. Rather than leave those negotiations in limbo, bogged down and making no progress, why should we not be realists and reconcile ourselves to the fact that, for all the reasons that I have identified, farming—especially livestock farming—is a special industry and a special case? That would free up the position as far as negotiations on other products and industries are concerned.
Requiring all exported meat to be produced at least to the same standards of the country to which it is destined is less radical than it sounds, and it could have a huge impact on our culture and on attitudes towards animal welfare. I hope that the Minister will take some of those points on board.
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4.14 pm
The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice): I congratulate my hon. Friend the Member for Camborne and Redruth (George Eustice) on securing this debate, and I am sorry that it is only a short Adjournment debate. The issues that he raises go to the heart of things that the Government and I hold dear. He started by reminding me of what I wrote in the Conservative document on agricultural policy about a year ago, and I do not resile from those objectives. I want to explain to the House what we are doing and how we are trying to take forward the objectives that we share. As part of the business plan for the Department for Environment, Food and Rural Affairs, we want to support and develop British farming, encourage sustainable food production and improve standards of animal welfare.
The previous Government’s Animal Welfare Act 2006, which had cross-party support, makes it an offence to cause unnecessary suffering to any animal and contains a duty of care and the five freedoms and so on. The 1999 treaty of Amsterdam requires the Commission and member states to consider animals as sentient beings. I was a Member at that time and know that that was seen as a significant step forward, and it was later reinforced by the Lisbon treaty. Therefore, a large body of EU legislation improves animal welfare. As my hon. Friend said, we have experience in this country of taking unilateral action for the most noble of motives, such as improving the welfare of pigs. I am thinking of pig stalls and tethers, but that action had a catastrophic effect on the pig industry in this country, and there was probably no substantial gain in pig welfare.
My hon. Friend referred to a chicken being a chicken. I was going to relate that not to production in the way that he described, but to concern for animal welfare. It may salve our consciences to raise standards of animal welfare in this country and not care about the rest of the world, but if that means that we simply export those lower standards of animal welfare, it is not a case of a chicken being a chicken—the chicken in England has moved to being a chicken in another country kept at a much lower standard. There is a tremendous amount to be said for doing our best to raise standards across the piece, not just unilaterally, and that is important.
My hon. Friend referred to the directive on caged hens, and I do not want to be led at this stage to say what we might do in this country if the situation does not improve. We have strongly emphasised our views to the Commission, and we believe that the matter must be dealt with at European level. It is abundantly clear that a number of European countries will not have complied by the end of the year with the requirement to replace all their conventional battery cages. Sadly, the Commission seems to suffer from the illusion that that is still possible, but I assure my hon. Friend that the Secretary of State publicly stated in an Agriculture Council meeting a fortnight ago that we are not prepared to contemplate any extension of the time scale, that the measure must work and that the deadline should not be delayed.
My hon. Friend also referred to competitiveness, which is what we saw in the pig industry. Extra costs can be involved in higher welfare standards, and the European Commission—thankfully—now considers international competitiveness as part of the impact assessment of new policies.
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My hon. Friend made a significant point about the World Trade Organisation. What I said in the written answer to which he referred is factually correct. As we see it, the WTO does not allow measures to be taken to ban imports on the grounds of animal welfare. It is, of course, wide open to any member of the WTO—or in our case, the EU—to impose a ban on whatever it likes. However, that would be done in the knowledge that the ban might be challenged and various trade measures taken to deal with that.
My hon. Friend referred to the fact that the Doha round is in a complete state of stagnation. My colleagues in the Foreign Office and the Department for Business, Innovation and Skills are anxious to get those negotiations back on track, but that will take time. That is the reason for the perhaps somewhat terse written answer that I gave my hon. Friend. While all eyes are on Doha, we cannot start changing the very framework of the WTO.
I shall now deal with the specifics about the WTO, the general agreement on tariffs and trade and various other global agreements to which my hon. Friend rightly referred. He referred to article XX of GATT and read out the relevant justifications: protecting public morals and protecting human, animal or plant life or health. Another justification is conserving exhaustible natural resources. Whether animal welfare could come under any of those headings is, frankly, untested, and I fully understand his desire that we should seek to test that.
It is worth making the point that certain measures have been taken internationally. In some cases, they have been contested. They do not relate directly to farmed animals, at least not in the UK. My hon. Friend will be aware of the seal trade ban—the ban on products from sealing. The European Commission banned them and used the justification of a distortion of trade, but I stress that that is being challenged under the GATT treaty. There is a serious risk that the WTO court will find against it.
The Commission also imposed a ban on importing cat and dog fur, which came mainly from China. That was also done on the basis of distortion of trade. It has not been challenged, although it may be in the future, so one could argue at the moment that we have got away with it. A longer-standing ban, which the previous Conservative Government pressed hard for back in 1991, is the EU prohibition on furs and pelts—primarily from Canada—harvested by using leg traps. That has never been challenged.
I am giving my hon. Friend some encouragement that some ways through this issue have been found, but those are not mainstream agricultural issues, as I am the first to recognise. I fully agree that, in an ideal world, we would get this issue considered at WTO level.
I want to pick up some other comments and then, if there is time, I might return to one or two other aspects of the WTO. My hon. Friend referred to the sanitary and phytosanitary rules, known as the SPS rules. To refer to an issue that is closer to home, Europe has banned the use of hormones in beef production on the basis that we believe that there are public health risks in not doing so. However, the United States has challenged us, and the matter is progressing through the judicial process at the moment.
Again, we have a problem there and we have to think through carefully what we do, but we can do other things in the immediate term. I do not think that even
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my hon. Friend would expect us to get the WTO rules changed very quickly, and I want to spend a few moments on that. The first point to impress on people is that improving animal welfare standards can benefit producers, because quite often they get higher productivity from animals if they are kept in better conditions, although some costs can be involved.
The second issue, to which my hon. Friend rightly referred, is the role of what are sometimes called private standards—the role of the retailers in demanding higher standards. That has been very successful across the world in raising production standards. There is some evidence, as we might expect, that when the cash figures go the wrong way, retailers turn round. This example is directly pertinent to a point that my hon. Friend made. I was very concerned to hear only last week that one of our major retailers that until now has been sourcing all its organic pig meat from the UK—that meat is certified to Soil Association standards—has now decided to stop doing that and to source organic pig meat from abroad. That meat is up to European organic standards, but they are not as high as the Soil Association ones. If what I have said proves to be correct, it is a pretty shameful approach and does not show much support for our own industry.
My hon. Friend made the point, which I have to repeat, that many people and organisations see welfare restrictions as some sort of ban on trade. The same can apply to the private standards to which I referred. The EU made a commitment to support international initiatives to raise awareness and to create a consensus on animal welfare through its action plan for the period from 2006 to 2010, and we want that to be continued through the strategy for the period from 2011 to 2015.
It is fair to say that animal welfare has not been a major priority for many Governments in recent years, either because they have believed that it is a trade issue and market forces will work, as my hon. Friend described, or perhaps because the alleviation of human poverty has been the predominant concern. However, we are making progress. The EU has recognised that the first step in getting third countries fully engaged in the development of animal welfare standards is to create a wider understanding and awareness of animal welfare, including among Government officials and the exporters. A conference on global trade and animal welfare was organised by the Commission in 2009.
We also have to recognise the OIE—the World Organisation for Animal Health—with which the Commission is working closely. The OIE was created a long time ago, in 1924, and has 178 member countries. However, it began getting involved in animal welfare only in 2001. By the end of 2004, it had developed guiding principles for animal welfare, and it held a conference in 2008 with more than 400 participants. The most important outcome of the conference was the identification of key needs and the tools necessary to help OIE member states to strengthen their capacities, including in relation to good governance and relevant infrastructure. The world assembly of OIE delegates has adopted seven animal welfare standards. Therefore, there is clear evidence that most of the world is moving in the right direction. I hope that my hon. Friend will take a lot of comfort from that. On-farm animal welfare
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issues are now beginning to be addressed by the OIE, but that will take a bit longer. I cannot get away from that.
None of that prevents higher standards through bilateral agreements. The EU is now emphasising that. Since 2004, we have addressed animal welfare specifically in a number of trade agreements with Canada, South Korea, Colombia, Peru and central American countries. I understand that it is also part of the negotiations with the Mercosur countries that are taking place at present. That work is clearly a step in the right direction.
My Department is working hard to provide training in welfare science and legislation to the veterinary services and non-governmental organisations in a number of countries. We have made a significant contribution to the EU Better Training for Safer Food programme and on welfare-during-transport training for veterinarians. Of course, we also continue to invest in research, because that is hugely important.
My hon. Friend and I are in exactly the same place on this issue. There may be a slight variation in nuance on precisely how we go forward. However, the Government remain determined to do whatever we can to increase animal welfare standards, not just at home but across the world, and to ensure that our producers are not unfairly discriminated against by imports produced to lower standards. I conclude by reminding my hon. Friend that we are also committed, in the document to which he referred, to ensuring that Government money is not spent on buying food produced to lower standards than pertain in this country, and that policy commitment will come to fruition in the next few weeks.
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Health and Safety (Construction Industry)
4.29 pm
Jim Sheridan (Paisley and Renfrewshire North) (Lab): It is a pleasure, Mr Amess, to serve under your chairmanship. May I express my sincere appreciation for being given time to debate this important subject?
I wish first to express my thanks and appreciation for the helpful information and advice given to me while researching for the debate by a number of organisations—none more so than the Union of Construction, Allied Trades and Technicians, the National House-Building Council, the National Federation of Roofing Contractors and the TUC.
As the construction industry hopefully recovers, the number of fatalities and serious injuries is likely to increase—an increase in fatalities followed previous recoveries in the construction industry. The rise was the result of good practices being lost when companies were forced to lay off staff. Due to inadequate training as the industry recovers, new inexperienced companies and workers will enter the industry, and their lack of safety knowledge will often prove fatal.
The cutting of corners to get one job finished quickly in order to start the next is a major killer. Another is workers working excessive hours. Working long hours leads to tiredness, which leads to mistakes. Indeed, the Prime Minister recently said on television that he does not work long hours, because it leads to bad decisions, so we have at least one supporter.
The most common cause of death is falls. In 2009-10, 25 workers were killed through falls, a 19% increase in deaths over the previous year. The number of people being killed as a result of being hit by a moving vehicle slightly increased in 2009-10.
As part of the comprehensive spending review, the Health and Safety Executive’s budget will be cut by at least 35% by 2015. It is impossible to make such large cuts without affecting front-line services. It has already been announced that the contracts of the 20-plus temporary construction inspectors, whose contracts run out later this year, will not be replaced.
As well as the loss of temporary inspectors, there will be a reduction in the number of front-line inspectors. That is directly contrary to the Donaghy report, which recommended an increase in the number of inspectors. Cuts in the number of inspectors will inevitably lead to a reduction in inspections, enforcement activity, prohibition notices, prosecutions and convictions.
Mr Andrew Smith (Oxford East) (Lab): I am grateful to my hon. Friend for giving way. I congratulate him on securing this tremendously important debate and on the research that he has done for it. On the theme of the impact of the cut in the HSE grant, has he heard of the letter that was leaked to the BBC yesterday, which said that the Health and Safety Executive was proposing to reduce unannounced workplace inspections by a third? That would be disastrous if it affected the construction industry, as workers there are six times more likely to lose their lives than those in other industries.
Jim Sheridan: I have not seen the letter, but I have heard of it. My right hon. Friend is correct that it would be disastrous, not only for the HSE but for workers in the construction industry. We should watch this space and see what happens.
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Recent research shows that the level of enforcement activity and the number of prosecutions being undertaken by the HSE is at a record low. Due to a lack of resources, the HSE can investigate only one in every 10 accidents. Cuts to the HSE’s budget are likely to increase the under-reporting of accidents under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995, which are otherwise known as RIDDOR.
Research by the university of Liverpool shows that only 32% of injuries involving employees were reported under RIDDOR—for the self-employed, the percentage was only 12%. The proposals under consultation will weaken those regulations, which were originally proposed by the Young review. That will increase under-reporting, and, as a result, poor health and safety practices will not be picked up early, which could result in further fatalities.
There have been several notable deaths recently. The circumstances are indicative of the industry. On Friday 21 January, four construction workers were killed in Great Yarmouth. The men were working on foundations when adjacent steelwork fell on them. It was the worst accident for more than a decade, given how many workers were killed. Despite that, there was little or no mention of the accident in the national papers. In October 2010, immediately following the announcement that the HSE could lose 35% of its budget, seven construction workers were killed. The deaths occurred all around the country.
Mr Stephen Hepburn (Jarrow) (Lab): I congratulate my hon. Friend on securing this important debate. He speaks about the incidence of deaths. Does he not agree that the figures will inevitably increase with the reduction in the Health and Safety Executive budget? The story that is doing the rounds at present—we should be pressing the Minister on this—is that unannounced inspections at construction sites will be scrapped altogether. There were 42 deaths on building sites last year. Does my hon. Friend agree that that figure will inevitably increase?
Jim Sheridan: My hon. Friend is right. It is obvious that the cuts will result in increased fatalities. I am sure that the Minister will respond to this, but it is important to remember that even though we are trying to reduce the deficit—if, indeed, it is reduced—such people will not get their lives back, and they will not get their limbs back. It is important that we try to keep focused on health and safety.
We warmly welcomed the publication in July 2009 of Rita Donaghy’s report on construction fatalities. The then Government commissioned that independent report following strong lobbying by a number of trade unions and other agencies. It was the most significant and far-reaching report into construction safety for well over a decade. The 96-page report was entitled “One Death is too Many: Inquiry into the Underlying Causes of Construction Fatal Accidents”. It made a number of major recommendations, two of which were the extension of the Gangmasters (Licensing) Act 2004 to cover the construction industry, and the introduction of statutory directors’ duties. The extension of the 2004 Act was recommended in recognition of the fact that
“The further down the subcontracting chain one goes the less secure the worker and the less satisfied with the management of
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health and safety on site. Society should accept that there needs to be a standard below which no construction worker should have to work.”
We have long campaigned for the introduction of statutory directors’ duties. It is virtually impossible to hold individual directors to account if a worker is killed at work. The report states:
“As with most advances in society, e.g. seat belts in cars, drink driving, there comes a time when good practice has to become a legal requirement.”
“I recommend that there should be positive duties on directors to ensure good health and safety management through a framework of planning, delivering, monitoring and reviewing.”
The introduction of directors’ duties would mean that if a worker is killed and it is discovered that a company disregarded health and safety legislation, there is the possibility of an individual director receiving a custodial sentence.
The construction skills certification scheme was set up in 1995 by the construction industry to maintain a record of construction site workers who achieve, or can demonstrate that they have already attained, an agreed level of competence. The CSCS card issued to successful applicants offers a vital means by which cardholders can record and provide proof of their skills and occupational competence. Cardholders are also required to take a health and safety test relevant to their occupation. The aim of the scheme is to help the construction industry reduce accidents and improve competency and safety for individual site workers.
There are currently more than 1.6 million cardholders, and the CSCS works with 10 affiliated organisations to cover more than 350 construction-related occupations. The scheme is now widely used on the majority of construction sites, and all major contractors and homebuilders—
Ian Lavery (Wansbeck) (Lab): I congratulate my hon. Friend on securing this debate. Does he not agree that there is a need to enshrine the CSCS in legislation? Such a move would surely have a huge impact on the safety and health of people working in the construction and building industries. If legislation were passed and the scheme were rolled out—it has been rolled out for 1.6 million people at this point in time—throughout the industry, does he not think that that would have a huge impact on health and safety?
Jim Sheridan: My hon. Friend is absolutely right. As I understand it, there will not be any major financial impact if this card is introduced. Perhaps the Minister can give us an insight into his thinking on the CSCS when he makes his reply.
All the major contractors and homebuilders insist on those cards, as the cards demonstrate their commitment to safe and efficient working for construction workers and clients. CSCS cards provide additional security and peace of mind, as a fully carded work force is safer and better trained. Government should lead by example and require the use of CSCS on all public sector sites. Indeed, they already require the use of these cards or their equivalent on public sector sites as set out in the Office of Government Commerce common minimum standards for the procurement of built environments in the public sector.
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The CMS recommendations state:
“Clients are to include a contract clause requiring that all members of their supply teams who are workers on or regular visitors to a construction site are registered on the Construction Skills Certification Scheme (CSCS) or are able to prove competency in some other appropriate way.”
The CSCS welcomed these recommendations, which were accepted by the previous Administration in their response to the report. The CSCS would welcome clarification from the Government on which of the Donaghy recommendations they intend to take forward.
In a parliamentary written answer, published in December 2010, the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), said that the Government will
“therefore progress those of the Donaghy recommendations accepted by the previous Administration which we consider are supported by the available evidence.”—[Official Report, 1 December 2010; Vol. 519, c. 867W.]
In his reply, will the Minister commit to raise awareness of the need to specify CSCS in all public sector contracts? Will he say what progress has been made on the review of the OGC common minimum standards and whether the requirement to specify the use of CSCS will be retained and promoted? Which recommendations in the Donaghy report do the Government intend to take forward, and what action do they intend to take to monitor the eligibility of migrant workers to work, and their qualifications and training?
Let me touch now on the issue of blacklisting in the construction industry, which also has a major health and safety perspective. Safety representatives have been targeted by their employers, and many have had to leave the industry as they were unable to find work. Despite being the most dangerous industry in Britain, construction has the lowest number of independent safety representatives, and all the major contractors have been involved in blacklisting.
In recent years, there has been a huge increase in employment agencies and gangmasters operating in the construction industry. That has further casualised and fragmented the construction industry, which has implications for safety in a number of ways. Often there is little effective screening of workers, and inexperienced workers are placed on construction sites without the appropriate training. The workers are highly vulnerable, so they are unlikely to complain about dangerous practices. Agencies are increasingly forcing workers to pay for their own personal protective equipment, which is illegal.
Agencies often flout the working time limit of 48 hours a week. With workers undertaking excessive hours, accidents are more likely to occur.
Ian Lavery: Is my hon. Friend aware that there is a huge problem in the construction industry with regard to safety wear? In a meeting last week with the Health and Safety Executive, I heard about the huge problems with fake safety wear—helmets, boots and protective clothing. If that continues, we will see more problems within the industry. Does he agree that the Government should do everything in their power to uncover the source of this crooked gear and get rid of it to ensure that people in the industry are safe?
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Jim Sheridan: My hon. Friend is right. If workers are placed in the position in which they have to choose between buying their own safety equipment or feeding their families, one knows which option they will take. The Donaghy report made the clear link between agency labour and construction safety.
Finally, let me touch on the false self-employment that is going on in the construction industry. Well in excess of 50% of the industry are falsely self-employed. The falsely self-employed do not have employment rights, so they can be sacked at a moment’s notice. They are unlikely to raise safety concerns or refuse to undertake tasks that they consider to be dangerous. Sites which use false self-employed labour are unlikely to have independent safety representatives, as no one will be willing to undertake this role in the fear of being targeted, victimised and sacked. Research has found that independent safety representatives can help to reduce accident rates by up to 30%.
In conclusion, I recommend the leaflet that was published by the all-party parliamentary group on occupational safety and health. It sets out our concerns, if those cuts were to go ahead. I certainly hope the Minister will read this document, so that we can do what we can to protect those in the workplace. Fundamentally, I believe that when someone leaves for work in the morning, they have the right to return home safe.
4.48 pm
The Minister of State, Department for Work and Pensions (Steve Webb): I congratulate the hon. Member for Paisley and Renfrewshire North (Jim Sheridan) on securing the debate, on all the work that he does as chair of the all party parliamentary group and on the well-informed and measured way in which he has raised these issues. As he rightly said, one death is too many, which is the title of the Donaghy report. There were 42 fatalities in 2009-10 and that is not something to be proud of. I should just say that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), who takes the lead on these matters, is on the Front Bench in the Commons responding to the Welfare Reform Bill and so I am standing in for him today. I know that he welcomes the fact that over the past decade there has been a significant improvement in the number of fatalities in the construction sector.
Let me give a feel of the progress that has been made. The reason I mention this is that if we can see that progress has been made over a decade—although that until we get to zero deaths we should not rest, and even then we should not rest—the challenge for us is to see what delivered the progress and whether we can continue doing more of those things or whether fresh duties, fresh structures and fresh obligations are the best way forward. I want, therefore, to give some figures for the record. Ten years ago, in 2000-01, there were 105 fatalities, compared with 42 last year. There are also figures relative to the scale of the industry, which obviously fluctuates. Measured relative to every 1,000 workers, in every year except one of the last 10, the rate of fatalities has fallen. The Health and Safety Executive, the trade unions and the industry deserve some credit for the improvements that have been made.
The hon. Member for Paisley and Renfrewshire North quite properly asked, “But what of the future?” He speculated that fatalities would rise. I know that the
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HSE will be working very hard, in partnership with industry, the trade unions and the Government, to ensure that that does not happen. However, although he rightly says that there have been construction industry inspectors at the HSE on temporary contracts, they were always intended to be on temporary contracts. This Government have not decided to make them temporary. They were always fixed-term appointments that were due to end this summer. Nevertheless, even if we exclude those inspectors, as at January 2011 we have more HSE construction division inspectors in post than ever before.
I just want to give some idea of the sorts of people that I am talking about. Currently, 150 operational inspectors visit sites on a day-to-day basis—up by nearly 25 from three years ago. There are 24 line managers who also conduct inspections. In addition, there are 16 inspectors in construction sector and policy; 20 specialist inspectors who provide expert input on the causes of accidents and advice on technical issues; and 27 visiting officers in the construction sector. As things stand, therefore, there is a very significant commitment by the HSE to the construction sector.
As with all aspects of Government, budget cuts have been required of the HSE, but I stress that the HSE will inevitably continue to concentrate its work on the highest-risk sectors—
Ian Lavery: Will the Minister give way?
Steve Webb: I hope that the hon. Gentleman will allow me to continue for a moment. As I was saying, the HSE will continue to concentrate its work on the highest-risk sectors, such as construction.
I also want to respond to the specific point made by the hon. Member for Jarrow (Mr Hepburn) in his intervention. He suggested that there might be an end to unannounced inspections in the construction sector. I am happy to confirm on the record that there is no intention to stop unannounced inspections in construction and indeed the HSE will be paying greater attention to smaller sites, where we fully recognise that there are still poorer standards. Indeed, it is on those sites that the majority of fatal accidents happen.
Mr Andrew Smith: Will the Minister give way?
Steve Webb: If the hon. Member for Paisley and Renfrewshire North is happy for me to give way, I will give way, but I have only eight minutes left to respond to his speech. I am in his hands. If he is happy for me to give way, I will give way.
Jim Sheridan indicated assent.
Mr Andrew Smith: I am grateful. I welcome the assurance from the Minister. Can he assure us that there will not be a reduction in the number of unannounced inspections?
Steve Webb:
Obviously, the HSE will introduce its proposals for responding to the budget changes. Indeed, the Government will announce our health and safety strategy relatively shortly, in response to the Young
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review and other changes. Details about all those things will be made clear to the House in due course. However, the key thing is that I have no doubt—in preparation for this debate, I have obviously had helpful discussions with the HSE—about the HSE’s commitment to an ongoing and high level of effective intervention in the construction industry.
One feature of the construction industry is that it is clearly different from other industries. At its best, it is capable of great things and great successes, and it has a great deal of expertise in controlling health and safety risks to workers. Of course, even many of those temporary inspectors I mentioned, who soon will not be working for the HSE, will go back into the industry and take their expertise with them.
I said that there were just over 100 fatalities a decade ago. Two decades ago, 154 construction workers were killed. Progress, therefore, has been made—fairly considerable progress over a period of 20 years or more. The hon. Member for Paisley and Renfrewshire North mentioned the Donaghy inquiry and the issue of the Gangmasters Licensing Authority. I know that he has been involved with previous private Member’s legislation on the GLA and I also know that there is a private Member’s Bill on the matter before the House at the moment.
Jim Sheridan: The Minister has just announced figures about fatalities. Do they include people who lost their lives as a result of occupational or industrial disease, such as mesothelioma?
Steve Webb: The figures that I gave—for example, the figure of 154 fatalities for two decades ago—were for construction workers who were killed in accidents at work. I entirely take the hon. Gentleman’s point that issues that emerge during refurbishment work, for example with asbestos, silica and so on, are also very important. Indeed, I will try to reassure him on that particular point, as he raised it. The HSE is undertaking work on refurbishment and even as we speak that work is ongoing. The national refurbishment inspection initiative targets small refurbishment sites where a disproportionate number of serious and fatal accidents occur. The current initiative has been run periodically for several years and it is going on now between 14 February and 11 March. Although full data are not yet available, to date nearly 1,200 sites have been visited, involving more than 1,400 contractors and, alarmingly, breaches of health and safety legislation were found to be so significant that enforcement notices were required at 254 of those 1,200 sites. I join all hon. Members who have contributed to the debate in not being remotely complacent about where we are now on health and safety in construction.
The challenge is to ask what effective regulation would look like. I fully respect the argument that says, “Bring the Gangmasters Licensing Authority supervision into construction”. I can see why that argument is made. My reservation is that the health and safety rights of people in the construction industry are there already. The hon. Member for Paisley and Renfrewshire North mentioned bogus self-employment. Whether somebody is self-employed or employed, they have health and safety rights. Regarding some of the points that the hon. Gentleman made about those in bogus self-employment, there are obviously issues about tax. However,
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there is not much evidence—if any—that construction fatalities are higher among those who are notionally classified as self-employed as opposed to those who are employed.
The Gangmasters Licensing Authority is clearly a generalist authority that looks at issues such as minimum wage compliance, tax and national insurance, as well as health and safety. The danger is that if we bring construction within the scope of that authority we might get, at one level, duplication and potentially we might get a sort of box-ticking mentality, whereby people think, “We’ve got to satisfy this regulator and that regulator”. There could be regulatory confusion if we have different bodies trying to enforce health and safety.
I also want to give an idea of the scale of what might be required if we bring construction within the scope of the GLA. At the moment, the GLA licenses 1,200 gangmasters. If the licensing scheme was extended to cover the construction industry comprehensively, we could be talking about 200,000 licences. The cost of regulating the 1,200 licences in the sectors covered by the GLA already—agriculture, horticulture, shellfish gathering and associated industries—is just over £4 million a year, of which the taxpayer pays about £3 million. Clearly, there would be economies of scale if the GLA’s licensing scheme was extended to cover the construction industry, but simply pro rata-ing those figures to the full size of the construction industry would mean licensing costs of £600 million.
Steve Webb:
I will give way shortly. Of that £600 million, the taxpayer would pay £400 million. On a pro rata basis, we would potentially need 8,000 new inspectors. I do not claim to be an authority on the subject, but I find it difficult to imagine that there are 8,000 spare inspectors out there to be had, although people could be trained to become inspectors. In addition, creating this type of parallel regulatory structure alongside the HSE’s work is problematic. If there was £400 million
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to be spent—or indeed anything like it—channelling it through what is quite an effective existing regulator, enabling it to do more, might be a better idea.
Jim Sheridan: The Minister has referred to £3 million of taxpayers’ money being used to pay the licensing costs of the GLA. However, does he take into account the fact that gangmasters are then registered and legalised, and migrant workers are registered and legalised and they then pay tax and national insurance, which they would not be paying otherwise, so there is a net benefit to the Treasury?
Steve Webb: The figures that I am referring to are the gross running costs of the GLA and the revenue from licences. I am not sure about the potential payback of such a scheme in the construction sector. One thing to consider is that we would end up licensing in practice the entire sector—as it were, the good guys and the bad guys—and there would be a lot of dead weight in areas where there already was compliance with tax and national insurance legislation.
The hon. Gentleman also asked about the role of the construction skills certificate scheme. That is certainly a well regarded industry-run scheme and a big one, although there are many similar schemes across the industry, as I am sure he knows better than I do. My understanding is that the CSCS or an equivalent is already required under Government contracts, which I very much welcome. However, when it comes to legislating for the CSCS, for example, one issue that arises is whether we should choose that particular scheme or others. On balance, the health and safety at work and construction regulations already require workers to be trained for health and safety.
To conclude, I take the issues that the hon. Gentleman has raised very seriously. We want to make more progress on them and further announcements will be made by the Government in due course, but we will continue to take construction industry safety and fatalities seriously, as the hon. Gentleman quite properly says that we should.
4.59 pm
Sitting adjourned without Question put (Standing Order No. 10(11)).