Jackie Doyle-Price: My hon. Friend makes an extremely good point. To be fair, those suppliers have acted extremely honourably with regard to their obligations under the contract. When it became clear that they could not deliver the software under Lorenzo because it was not fit for purpose, they took the honourable action and negotiated their way out. Such behaviour shows a lot about those suppliers. It is increasingly worrying that CSC in particular is finding itself in a monopoly position

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because it has acquired and strengthened its shareholding in iSOFT. Who we negotiate with in the future is a long-term worry.

I associate myself with the conclusions of my hon. Friend the Member for South Norfolk about when we should take a decision on this project. Is it time for an emperor’s new clothes moment, or are we going to continue throwing good money after bad in a project that is clearly not going to deliver?

John Pugh: Is it not enormously hard for parliamentarians to form a judgment on that when we are not party to the actual contractual details? We do not know what cancellation involves for the firm or for the development of the project.

Jackie Doyle-Price: That is a good point. I was coming on to say to the Minister that he must examine this matter with considerable rigour before deciding on the right course. The message that we got from the Department was that such contracts are complex, although it was rather unclear just how complex this one was. I urge the Minister to achieve maximum value for money because ultimately this is a lot of money that could have been spent on patient care rather than on delivering this programme.

My final point relates to how these big procurement projects should be managed. We have examined a number of them on the Public Accounts Committee. Too often we find examples of poor project management. Poor leadership is assigned to these projects, which then go on to spend incredibly large amounts of taxpayers’ money.

When Sir David Nicholson appeared before the Committee, he was unable to answer a number of questions that my hon. Friend the Member for South Norfolk put to him even though he has been the senior responsible owner of the project since 2006. Until the machinery of government can put in place good project management disciplines to deliver effective leadership, we will continue to spend a lot of money and to fail to deliver on the intended project. I hope that this is a lesson not just for the Department of Health but for the Government as a whole and especially the Cabinet Office as it looks at how it delivers these projects and puts in place good disciplines, so that this unhappy experience is not repeated.

11.56 am

Neil Carmichael (Stroud) (Con): I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on the important and fascinating debate. The detail he went into about the past 10 to 15 years was striking.

[Annette Brooke in the Chair]

There are some key issues that we need to consider. Procurement on this scale has to be properly thought out. The purposes of the project itself have to be properly defined. The question of value for money is obviously a key one. Let me go back to the introduction of the fax machine to illustrate my point. When the fax machine was first launched, lawyers found it difficult to accept that instant results could happen. They went through court cases to test the validity of a fax result, because it could deteriorate and so on. None the less, the problems had little to do with the technology and

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rather more to do with the culture of lawyers. There is a thread running through this whole sorry episode. We need not only better information sharing in the NHS, but the right culture and desire for it. Above all, we need a real reason for the system. I have been to one or two meetings about this whole scheme, and I have never yet really heard a proper description of its central purposes, except of course to exchange information. Obviously, one of the purposes is integration. I am talking about integrating the systems and the parts of the NHS that need to talk to each other rather more than they do at the moment.

Yesterday, I went to the Care Week event in the Jubilee Room and I met several carers, all of whom had similar stories to tell. One said, “The person I have been caring for has been going to two departments, but neither of them knew about each other.” That is the sort of cultural issue that we must tackle and think about when we talk about IT. The real danger about IT is that people think it is a good idea so they must use it and apply it, but it is actually the other way round. We must be careful and set out the proper parameters and purposes for this IT project, and ally it to value for money. My hon. Friend’s story shows that that has not been happening. We need to be much more careful about procurement, setting out commissioning requirements, understanding the need for cultural change, and properly looking at these contracts.

11.59 am

Liz Kendall (Leicester West) (Lab): Thank you for calling me, Mrs Brooke. It is a pleasure to serve under your chairmanship and to take part in this important debate.

I want to start by paying tribute to the hon. Member for South Norfolk (Mr Bacon) for his tireless work on this issue. His determination and tenacity in highlighting the problems and difficulties of a national programme for IT have been second to none. He frequently made the life of the previous Government difficult and I am sure that he will also be a thorn—perhaps a constructive thorn—in the side of the current Government. In his work, he has demonstrated the importance of effective parliamentary scrutiny and the difference that a Back-Bench MP can make. As a new MP, I hope to learn from his experience and follow, at least in some ways, his example.

The reason for the debate’s importance is that effective IT can and must play a key role in improving both the quality and efficiency of health care. At its best, IT helps clinicians and patients share information about the quality of services that are available, which not only supports patient choice but improves standards of care. Good IT can also help patients to get care in different parts of the system without having to give the same information repeatedly about their conditions and treatments to different doctors and nurses. In addition, it can help clinicians and managers to develop more effective and efficient services, organising treatments and services around the needs of patients rather than vice versa.

As the hon. Member for Thurrock (Jackie Doyle-Price) rightly pointed out, one of the key challenges facing the NHS is to ensure that GPs, their primary care teams, social care professionals and specialists work much

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more closely together, so that care is more effectively co-ordinated. Indeed, the NHS Future Forum said yesterday:

“Better information systems and the development of more integrated electronic care records will be a major enabling factor for this.”

The national programme was meant to help the NHS secure those objectives. However, as the hon. Member for South Norfolk has eloquently outlined and as countless reports from the National Audit Office and the Public Accounts Committee have also shown, the programme has fallen far short of achieving them. There were poor specifications about what was required by Government and what suppliers could deliver in return. In addition, as the hon. Members for Thurrock and for Stroud (Neil Carmichael) have said, there was over-claiming by both sides about what could be delivered and by what date. Furthermore, there were poor lines of accountability and responsibility for the programme, at least in its initial stages. All of those problems have led to one delay followed by another and, crucially, to a lack of control over costs.

I do not intend to go over those problems in detail. My knowledge of the subject is nowhere near as comprehensive or forensic as that of the hon. Member for South Norfolk. Instead, I want to take a step back and suggest three broad lessons that need to be learned from the problems of the national programme, as part of a constructive contribution to the Minister that he can take forward in his thinking on this subject.

The first lesson is that any IT system, whether it is in the NHS or elsewhere, must be led by its users. In the case of the NHS system, it must be clinically led. That is not only about getting clinical “buy-in” but about ensuring that doctors and nurses directly shape and develop the IT system so that it helps them do their job properly for the sake of patients.

NHS clinicians have said that they want IT to achieve five key objectives: first, allowing information about appointments to move around within hospitals, and between hospitals and the rest of the NHS, so that appointments can be booked; secondly, communicating information about discharges from hospital to hospital, and from hospitals to GPs and community services, so that staff in all parts of the system know what conditions patients have; thirdly, allowing staff to book tests such as MRI scans, ultrasounds and so on, and to get the results back to the patient and their clinician at the right time and in the right place; fourthly, the ability to schedule all the different tests, treatments, operations and so on that a patient has in a way that meets the needs of the patient; and finally, enabling electronic prescribing of drugs and the gathering of necessary pharmaceutical information to ensure that patient care is as safe and effective as possible.

Those five key objectives emerged from a consultation exercise with clinicians in 2008. However, as the hon. Member for South Norfolk has said, that was too late; the consultation exercise should have happened before the contracts were signed and not halfway through the process.

Can the Minister say how the Government will ensure that clinicians continue to be involved in developing the IT strategy for the NHS? Did the NHS Future Forum

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consider the IT strategy as part of its recommendations to Government? I ask because there was only one small line on the IT strategy in that report. Also, have the Government received any specific responses on this issue and, if so, will the Minister publish them?

On a related point, can the Minister say when he will publish the Government’s information strategy? In October 2010, the Government published “Liberating the NHS: an information revolution”. That document set out the Government’s plans to ensure that patients, the public, clinicians and managers have the information that they need to improve health and health care. I do not agree with some of the tone of that document; it seemed to suggest that the previous Government had done nothing on the matter. When Labour was in government, we acted on he issue. For example, if one considers a programme such as NHS Choices, to which there was quite a lot of opposition at the time, one can see that we moved the agenda forward. Having said that, I absolutely agree that we all need to go further.

My concern is that the consultation on the Government’s information strategy closed six months ago today. In that time, the Government could have provided more information to patients and the public to improve choice and quality. When will that strategy be published?

The second lesson that we can learn from the national programme is that we cannot have a one-size-fits-all IT system in the NHS, or indeed in any health care system. As Sir David Nicholson, chief executive of the NHS, told the PAC on 23 May, attempting to provide one type of medical record that covers everything for everybody everywhere in the country “has proved unworkable”. The challenge is striking the right balance between what—if anything—is delivered centrally and nationally, and what is delivered locally. That is a perennial challenge in all parts of the NHS and needs to be thought through.

The national programme is currently being reviewed by the Cabinet Office’s Major Projects Authority. On 18 May, the Minister told Radio 4’s “Today” programme that he wants to allow local hospitals to adapt their existing systems rather than to get rid of them altogether or, indeed, to scrap the national programme for IT. Last month, David Nicholson told the PAC that the Department of Health wants to move towards a situation whereby hospitals have their own direct relationship with software suppliers and where individual organisations take responsibility for their IT. However, he also said that, with all the reorganisation of the NHS that is going on, we need an interim step, a transitional body that will

“look very similar to Connecting for Health”.

He said that it was very important to have that body,

“to enable us safely to transit from where we are at the moment to a place where individual organisations take responsibility.”

I would like the Minister to explain a few things. What is that transitional body? Who will be responsible for running it? How much will it cost? How will it be different from Connecting for Health? At what stage will it disappear and how? Finally, if a national, centrally led programme has been part of the problem in the past, why will this new national, centrally led body somehow deliver the future when individual trusts are in control?

The final lesson that must be learned relates to a point that the hon. Member for Stroud made, which was about a much bigger problem for Government than

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the other problems that I have mentioned. How do the Government have an effective relationship with the private sector in contracting with it, not only in relation to IT projects but to all sorts of other projects? I am thinking, for example, about the problems that the Ministry of Defence has experienced with its contracting. Successive Governments have found it extremely difficult to negotiate effective contracts with the private sector, and not just IT contracts. It is fair to say that they have not exactly covered themselves in glory in that respect.

Duncan Hames: Will the hon. Lady reflect on whether one reason why Governments have such difficulty in controlling contracts with the private sector is that politicians routinely make policy changes that alter the specifications for what is required, and contracts are not able to accommodate that? I wonder what lessons she might learn if we looked, for example, at how the choice agenda was rolled out in the NHS during this period, and at the demands that that placed on changing requirements for private contractors.

Liz Kendall: The hon. Gentleman makes a very important point about the nature of the political process, with politicians frequently determined to fill the newspapers with headlines about new policies, while the difficult process of implementation takes far longer on the ground. When I had the privilege of working in the Department of Health, I saw the NHS Choices project and thought, “This doesn’t look like what I thought the politicians meant. It wouldn’t give me, as a patient, the information I needed about which consultant or hospital to choose.” There is, therefore, the problem of how about we go from a political idea to a policy on the ground, and how quickly that changes.

With the greatest respect to the civil servants sitting in this room, we have perhaps not thought through effectively what kinds of skills and experience are necessary in Departments. What steps has the Minister taken since the Government were elected to ensure that the Department of Health has people with the right skills and experience to deal with such high-level negotiations? Have the Government as a whole decided to look at that issue? Has the Cabinet Secretary, Sir Gus O’Donnell, considered how best to ensure that there are people across the whole civil service with the skills and experience that politicians urgently need to support them in their work?

I thank all Members for their contributions today. This is a very difficult subject, and we need to find a way through that does not waste more taxpayers’ money but understands that IT and information are crucial to improving health and health care. The key issue is how we get there.

12.12 pm

The Minister of State, Department of Health (Mr Simon Burns): It is a pleasure to take part in this debate under your chairmanship, Mrs Brooke.

I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on securing this debate. His forensic analysis of what has happened over the past decade or so made it clear that he has a justifiable reputation as a leading expert in the House on the subject, and it is due to his tenacity that things are done and things are found

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out, and that we can be kept on our toes through the legislature holding the Executive to account. In a mood of bonhomie, I also congratulate the hon. Member for Leicester West (Liz Kendall) on her tribute to my hon. Friend. That was particularly magnanimous of her because, for the vast majority of his 40-minute speech, he was criticising her Government’s performance in creating the situation we are in, and for the mistakes and problems that have flowed from the decisions taken at the beginning of the century.

I agree that IT is crucial to a modernised NHS. We need to be able to record, store and exchange information if we are to realise our ambition of having health outcomes that are consistently among the best in the world. The previous Government’s centrally driven, top-down vision of NHS IT began in 2002, and the original title was “Delivering 21st century IT support for the NHS.” Sadly, however, the vision took an approach that was more akin to the early post-war years of the 20th century. It was clear to us, even before we took office, that the approach made little sense, and that to deliver a modern health service we needed a more flexible and locally driven approach—a view shared, ironically, throughout the NHS.

Last September, I announced that we should no longer talk about a “national programme for IT”:

“Improving IT is essential to delivering a patient-centred NHS. But the nationally imposed system is neither necessary nor appropriate to deliver this. We will allow hospitals to use and develop the IT they already have”.

So, rather than the old “replace all” strategy of the previous Government, we favour a strategy of “connect all.” It makes no sense to rip out and replace systems that trusts already successfully use, and we have, therefore, put local NHS organisations in control of introducing new systems. Rather than a single national programme, we should view the strategy as a series of related projects, categorised under national infrastructure, national applications and local services.

It is clear that, over the years, the scope of the national programme expanded, but it is now vital that we focus our investment and energies on the things that will make a difference to the quality of care. We asked clinicians what they wanted from NHS IT systems and they came up with five things that they believed were critical to them and their ability to carry out their duties. They were: a patient administration system that integrates with other systems and provides sophisticated reports; order communications and diagnostic reporting; letters with coding for patient discharge, clinics, and accident and emergency; scheduling for beds, tests and theatres, and e-prescribing. In addition, we are focusing suppliers on key departmental systems, such as those needed to support maternity, child health and accident and emergency, which, taken together, will make a significant difference to the experience of patients and the working practices of clinicians and managers.

At the same time as changing the approach and scope of the programme, we have closely examined its costs. There is little we can now do about the money that has already been spent, but we have been able to reduce the cost forecast from 31 March 2010 by £1.3 billion— about 18%. The savings will come from the companies supplying services, from reduced local costs and from our internal overheads in managing the programme. Suppliers will reduce their costs by £670 million, local

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costs will reduce by £200 million and we expect to save £400 million on our internal central costs. That is a 25% saving of the total internal budget, and 40% of the amount that the previous Government expected to be spent from the end of March 2010 to the end of the programme.

We have asked local service providers—the companies delivering the contracts—to change their scope and their delivery model and to reduce their costs. We have reached agreement with BT but still have some way to go before we come to an agreement with CSC. We will absolutely maintain the principle that suppliers will get paid only when they deliver working systems. We are pushing harder for faster results, and have made it clear to suppliers that we will not tolerate further delays. It is important to state that every single penny saved will be reinvested in improving patient care.

When it comes to NHS IT, there are, I am afraid, no easy choices. Several Members have mentioned that we have just carried out another major projects review, the outcome of which we expect to know in two to three weeks’ time. Until we have had the opportunity to consider the review’s conclusions, we will not be making any decisions on future investment.

It should not be said, however, that nothing has been achieved over the past decade, as many essential elements have already been delivered. Regarding national infrastructure, there is the spine, which is the core service that connects all other systems at both national and local level and handles, among other things, more than 11 million daily queries made on the personal demographics service.

N3, the secure network that links all NHS organisations to each other, to outside data centres and to the internet, has almost 50,000 connections. The NHS internal e-mail service handles 2 million e-mails every day.

As for national applications, every day, choose and book processes about 30,000 appointments, the electronic prescription service sends about 660,000 prescription messages and about 2,000 records are transferred electronically using the GP2GP system. On the summary care record, as a result of the two reviews that I commissioned last summer, we now have agreement on the core data to be held and the approach to roll-out. More than 30 million patients have been contacted about the summary care record.

Systems implemented by the programme are making a difference to patients’ experiences and to clinical efficiency, safety and effectiveness. For example, at Morecambe Bay, infection prevention is now fully electronic, using the Lorenzo system. In St Barts, clinicians are alerted to all patients carrying MRSA through the Millennium system. The Royal Free hospital has also used Millennium to create safety procedure information, including for endoscopy data and bleeding guidelines.

Although progress in delivering local systems has been slower than anticipated, BT has delivered community and mental health systems to all trusts in London and the south that requested them, and the Cerner Millennium system to just over half the London trusts that require it. CSC has delivered to 83 acute trusts in the north, midlands and east of England using upgraded interim

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systems. It has also delivered iSoft’s Lorenzo e-patient record system to 10 trusts and completed delivery of 137 prison health IT systems across the country.

The NHS needs local systems to be fully integrated with the core components supplied by the programme. The interoperability toolkit will help. It is a core part of the “connect all” strategy, enabling trusts to exploit their existing systems fully. There is a great deal of interest in the approach; 78 suppliers and 71 health organisations attended the last forum on the toolkit. It is already being used to good effect at Newham hospital to deliver a patient check-in kiosk, and at Liverpool Broadgreen hospital to provide a consolidated view of patient information across multiple care settings.

All but 14 of the more than 8,000 GP practices in England have a system supplied by either the national programme or the GP systems of choice scheme, which has allowed us to maintain several small and medium suppliers in the market. In the south, we have used the additional supply capability and capacity framework for community and mental health to bring together 10 trusts to leverage their combined buying power while increasing their choice.

Security must always be at the front of our minds when we consider NHS IT systems. Great care is taken to ensure that systems are secure, and we carry out regular tests to ensure that they cannot be penetrated inappropriately. My hon. Friend will have heard late last week about the hacking of the SHINE sexual health website run by the East London NHS Foundation Trust. The website was an information-only site that carried no patient data and a local service that was not connected to any data held nationally. The issue was dealt with promptly, and the trust urgently reviewed its local security arrangements and is satisfied that no further breaches are possible. We also operate a rigorous process of role-based access controls to ensure that only the clinicians treating a patient have access to sensitive clinical data.

Because NHS systems are so critical, they need to be far more robust and stable than those outside the programme. We invest a great deal of money in ensuring that if systems go down, each and every component can be automatically recovered. Should a whole system fail, it can be recovered and made available for clinicians to use within two hours. Of course, such a level of disaster recovery does not come cheaply, which helps explain differences in price between some systems in the programme and similar systems procured by some trusts outside the programme. Systems bought locally will need to meet the technical and data standards laid down by the national commissioning board in order to participate in the networked environment.

I turn to the points raised by the hon. Member for Leicester West and my hon. Friend the Member for Thurrock (Jackie Doyle-Price). The hon. Member for Leicester West asked about the role of the NHS Future Forum. There were no specific responses about NHS technology systems, but it is clear that information flows are essential to link interventions and outcomes. However, as she said, we concentrated on the information revolution through the document that flowed from the White Paper last summer. As she also said, a consultation was held. We have been considering the responses, and we will publish them in due course. At the moment, I cannot give her a definite time.

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The reason for the delay—I hope that she will appreciate this—is that during the eight to nine weeks of the listening pause on NHS modernisation, a decision was taken not to publish the responses to the information revolution consultation, if only to help the hon. Lady, so that she could not accuse us of not pausing sufficiently to listen to people and of carrying on regardless of what was going on in the listening exercise. I hope that she will give us credit for holding a genuine listening exercise and appreciate why we did not publish during that period. It was not least to forestall her criticism of us for doing so.

The hon. Lady also asked about the transitional vehicle. As she will appreciate, it is required to manage the existing arrangements and support local systems. It will not determine what needs to be done; the shape, scale and timeline have still to be determined exactly. We are working on it as part of the response to the pause, and we will determine in due course how it will operate to provide that support and move forward under the auspices of the national commissioning board.

My hon. Friend the Member for Thurrock asked about ensuring value for money and checking everything. I can give her assurances on that, because it is crucial. There is little point continuing to talk about the past, partly because we were not responsible and would not have done things as the last Government did them. We are where we are. We must learn from our mistakes and move forward. I hope that my hon. Friend will accept from my comments that we have grasped the nettle, accepted that the approach was wrong and learned from our mistakes, and that we will continue to learn and to seek to ensure that we have the information system critical to a modernised NHS and improved and enhanced patient care and patient experience, while minimising the problems that have haunted this episode ever since its introduction a decade ago.

I hope that my hon. Friends and the hon. Member for Leicester West will accept that we are moving forward, learning lessons from the past and seeking to ensure that we have a system that meets the requirements of a modernised NHS and, above all, is fit for purpose and does what the NHS needs it to do.

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Property Regulation (Holiday Lettings)

12.29 pm

Andrew Stephenson (Pendle) (Con): It is a pleasure to speak under your chairmanship, Mrs Brooke. I am grateful for the opportunity to initiate this debate on the effect of property regulation on holiday lettings. This debate will be of interest to colleagues representing constituencies with beautiful countryside, coastline or other features that lend themselves to tourism. I am glad to say that Pendle is one such constituency, with rolling countryside and picturesque villages. Only last week, plans for a new 76-berth marina were approved.

Properties that are made available to let for holidaymakers are a vital part of tourism in the UK. Typically, these are attractive, domestic properties, owned by a couple or a family, and some are managed by an agency. They are the smallest of small businesses and in great need of protection from fruitless and costly regulation.

I have called this debate because I am concerned that holiday lettings are not getting the protection that they need. I wish to start with a quote from a “Dear colleague” letter that I received only last week from the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk). The letter mentions the “one in, one out” system of regulatory control introduced by the Government. Apparently, planned regulations have been cut from 157 to just 46, with only 11 of those adding to the regulatory cost on businesses. I welcome that, and emphasise that it is my intention to help the Government by identifying where they can clearly go further. I believe that we all want small companies to be relieved of pointless, costly and dubious regulations, and I applaud the Government’s record on that so far.

The letter finishes by saying:

“We are continuing to work hard to cap the cost of new regulations. In addition, we are tackling the stock of existing regulations, ending the ‘gold plating’ of EU regulations and have scrapped measures that would have cost SMEs £350 million each.”

However, holiday lettings face two costly challenges in upcoming regulations, one of which is being defended as a European Union requirement when it is not being adopted by any other European country. I refer to the change due to happen at the end of this month, whereby holiday lettings will be required to provide an energy performance certificate, and to the review of the controlled waste regulations that are due to be introduced later this year. Both will force an unnecessary, costly, pointless and, I believe, legally questionable burden on holiday lettings, doing damage to British tourism in my constituency and many others. I hope to present a case that the Government can and should reconsider both regulations.

Let me start by addressing the controlled waste regulations. On 14 January, the consultation closed on proposals to replace or amend the Controlled Waste Regulations 1992. It was a joint consultation carried out by the Department for Environment, Food and Rural Affairs and the Welsh Assembly Government. Will the Government look again at these proposals, which would place an unfair cost on the shoulders of small business owners?

Hoseasons, an agency representing those wanting to let their properties for self-catering holidays, which employs about 500 people in my constituency, produced

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a submission highlighting its concerns about the proposed changes, stating that they could damage the viability of letting self-catering holiday cottages. Having first been scheduled to come into effect on 6 April, the document has been postponed by DEFRA and will come into force sometime in the near future.

The publication tells us that waste from domestic properties used in the course of a business for the provision of self-catering accommodation will now be classed as commercial waste. This causes a discrepancy between properties that are let for long-term domestic residence and properties that are let for self-catering holidays. The person letting their property for the full calendar year has their tenants’ waste classed as domestic waste, whereas the person letting their property as a holiday cottage for more than 140 days of the year will be charged commercial rates, even though the property may be empty for the majority of the year.

That seems wrong, because the use of both properties is fundamentally the same: both are used for living in as a place of residence, and the owner of the property makes a profit in both cases. The injustice is that the owner of a holiday cottage incurs extra expense without necessarily receiving more income. That may lead owners to decide to let their property full time, to lessen their outgoings and increase their income. This in turn could impact the strength of the rural tourism industry, because the properties may no longer be viable as holiday lets. More than 67 million domestic holiday trips were made in 2009. I am sure that everyone will agree that the regulations are impacting the future not only of agencies such as Hoseasons in my constituency, but of every individual who lets their property to holidaymakers for more than 140 days of the year.

If we look at the proposals of the controlled waste regulations, we will see that the amount and type of waste in question is the same. Do we really need to charge different rates for the same collection, based on whether a property is being rented for a week or a year? Section 75 of the Environmental Protection Act 1990 defines household waste as from a domestic property that is solely for the purposes of living accommodation. Defining this waste as commercial would presumably require a separate collection service. Would this mean heavy-duty refuse trucks pounding down rural roads just to get to what are often small cottages, or are holiday lettings being asked to pay more for the same service, in which case, why increase the cost of waste collection?

My final point in relation to the regulations is on recycling, an issue important to us all. Most local authorities offer a free collection service of recyclable materials from all domestic properties. Classing waste from holiday properties as commercial would make them ineligible for this free service, thus providing a disincentive to recycle. The last time I stayed in a holiday let was a few years ago, when I decided to spend the new year with a group of friends. Needless to say, while, naturally, we are all very responsible drinkers, our stay resulted in several empty wine and beer bottles, which were dutifully placed in a recycling box for disposal when we left. I fail to see how making such properties ineligible for domestic recycling services—meaning that I would have had to put those bottles in a commercial

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waste bin—will do anything to help the environment. Will the Government look at the regulations, so that owners and guests alike are encouraged to recycle and can assist local authorities in meeting recycling targets?

I now turn to energy performance certificates, which were first introduced in England and Wales on 1 August 2007. They are required only for newly purchased or rented accommodation. The question is whether a holiday letting should fall into that category. I would like to run through a few of the reasons given for why they should, and why those reasons are not persuasive.

Anne Marie Morris (Newton Abbot) (Con): I commend my hon. Friend for calling this debate, because holiday lettings are key to our local tourism industries. I am glad that he has raised that point. Does he agree that the EPC certificate will, effectively, become a tax on tourism? It will also be extremely hard to enforce, because a lot of the lettings are not done through agencies. That, combined with the Finance Bill changes, which change the categorisation for relief, will give holiday lettings, which are small businesses, a real problem.

Andrew Stephenson: I thank my hon. Friend for that point. I know that this is an issue close to her heart. The certificate will be hard to enforce, because it applies only to holiday cottages that are being let for more than 140 days a year. How an owner of a holiday let will decide whether it will be let for more than 140 days over the coming year is up in the air. How can anyone predict how good, bad or indifferent the coming season will be? My hon. Friend has made a good point about how the provision will be enforced. I was not going to address that issue, but it is critical.

EPCs would not serve holidaymakers, because those who stay in a holiday letting do not pay the energy bills. They have no need to see an EPC, unlike a prospective buyer or tenant, who needs to see one when looking at the energy performance of a property. When someone rents a property long term, they become liable for the energy bills, which is something that a holidaymaker in a holiday let never becomes.

The argument could be made that a holidaymaker would prefer to stay in an energy-efficient property, purely for environmental reasons. If so, we already have ways for customers to identify not just environmentally friendly holiday lettings, but those that have gone the extra mile through schemes such as the green tourism awards. Malkin Tower farm in Blacko in my constituency is an example of an excellent holiday letting that has been awarded a green tourism award and was the 2008 winner of the Pendle environmental business award.

One could argue that all properties ought to have an EPC, since all properties consume energy and we need to tackle climate change. Therefore, according to that argument, holiday lettings should have an EPC. I think that the fact that that is not Government policy—as I found out when I asked my hon. Friend the Minister, in a written question, what the policy was—means that it cannot be the reason why the Government want to push ahead with introducing EPCs for holiday lettings. The only reason that can be given for this additional cost and red tape on small business is the idea that this change will bring us in line with Europe, specifically the energy performance of buildings directive. That is the justification the Minister gave me on 7 June in response

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to a written question on the subject asking how the new rules could be brought in, given the moratorium on new regulations from April 2011 for businesses with fewer than 10 people.

It will therefore surprise hon. Members to learn that England and Wales are the only EU countries currently choosing to force EPCs on holiday lets. We should remember that that change is due to come into force on 30 June this year, which is a matter of days’ time. To be fair, France previously required EPCs for holiday lets but, after consideration and consultation, it revoked the law requiring them. I believe that, since 12 July 2010, no other EU country has forced EPCs on to holiday lettings and that England and Wales will be the only countries doing so.

I know that because I have, again, consulted Hoseasons, which has sister companies operating in the holiday letting market in more than 20 countries around Europe. It tells me that none of those companies reports any requirement for EPCs for holiday lets and it is therefore confused that the Government believe we are being brought into line with Europe. This is a classic case of the UK gold-plating an EU regulation—something that Ministers had promised to stop.

For the avoidance of any confusion, I understand that the EPBD states that all buildings are subject to the regulations unless specifically excluded. As holiday lets are not specifically excluded, it has been construed that the regulations must apply to them. However, the regulations also state that EPCs should apply only where a building is to be sold or rented. The question comes back to whether, when a customer makes a booking for a holiday let, that creates a tenancy, with the legal ramifications that go with it. I have received a copy of a document from Local Government Regulation that clearly suggests that it does not. I know that it has been in contact with the Department for Communities and Local Government to express its views on the matter and to make similar points to those I am raising today; for example, the fact that the holidaymaker simply has no benefit from having access to an EPC for the property where they are staying. It is fair to say that I agree with Local Government Regulation in its considered and sensible opinion:

“To apply ‘rent’ in the usual sense to holiday accommodation is absurd and inconsistent with the generally accepted understanding of the term ‘to rent’”.

Given that no country in Europe takes such a view, why does the DCLG, even when it has received advice to the contrary from Local Government Regulation? I hope that the DCLG will reconsider its position as a result of today’s debate.

I come back to what I said at the beginning: it is my intention today to help the Government here. There is a real need to cut regulation, to free up small business and to kick-start growth. Overall, the Government have done exceptionally well so far on that score. The Government’s red tape challenge aims to reduce the amount of unnecessary regulation on business, but introducing unnecessary EPCs and waste regulations on holiday lettings is surely going in the wrong direction.

With an estimated 62,500 holiday lettings in Britain, the introduction of EPCs will create a bill of around £10.4 million. That is a serious burden to impose on genuinely small businesses. By abandoning these proposals, the Government would be acting in support of domestic tourism and helping to keep the cost of a holiday in the

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UK within the reach of those on lower incomes. The Government would be acting in support of small businesses and in support of reducing red tape and pointless regulations. The Government have done a lot right, but they are in danger of getting it wrong on holiday lettings. By introducing EPCs and treating the waste from a holiday let as commercial, the Government would be upping the costs on an important but vulnerable sector of the British tourism industry.

I would like to leave hon. Members thinking about a holiday let in my constituency—Bobbin cottage in Earby. Bobbin cottage is a small, beautiful cottage with only two bedrooms which is ideally situated for the nearby walking trails. What will the impact of these changes be on Bobbin cottage? What benefit will there be from additional refuse trucks pounding their way through the rural roads of Earby to dispose of the latest holidaymakers’ week’s worth of banana skins and used teabags? Will the holidaymakers read the EPC for Bobbin cottage and think, “Well, it would be a nice place to stay, but will the landlord be paying too much for the steamy hot bath that I’ll need to take after walking across Kelbrook moor?”

The reality is that these changes will not have a positive impact. They will make Bobbin cottage more expensive to run, which will be reflected in the cost of staying there and will make it harder for Britons to experience one of the most scenic parts of my constituency. For Bobbin cottage, domestic tourism and the tens of thousands of small business owners out there affected by these new regulations, I urge the Minister to reconsider.

12.44 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): I thank my hon. Friend the Member for Pendle (Andrew Stephenson) for bringing this issue to the House and the measured way in which he has made his case. As he rightly says, the matter covers two completely separate issues. Indeed, just to complicate my response, it covers two completely different Departments. I am speaking as a Minister from the Department for Communities and Local Government, so I will certainly ensure that his words about the controlled waste consultation reach the ears of DEFRA Ministers. However, I am sure he will understand that I am not in a position to give him too much of a glimmer of light in respect of that, although I would be very happy to ensure that he gets a response from my colleagues in DEFRA on the matter.

What I can do—and hope I will do—is set out the position on energy performance certificates. I am not at all surprised that my hon. Friend has reported confusion and concern. I have to tell him that that has been followed up by a lot of correspondence. So I have confusion, concern and correspondence to sort out in my role as Minister. The first thing to say is that the matter is not a pretty picture as far as the Department’s previous performance is concerned. As he said, the EU directive came into force in 2007 and it clearly applies to all buildings. Just for reference, about 6.4 million energy performance certificates have been issued to homes in this country, so we are not dealing with a trivial number of homes.

When the directive was first published and approved at a European level by the United Kingdom among others, it provided that countries could if they chose to

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do so put in place a derogation for holiday lets of less than 4 months. The first mistake is that that opportunity to take a derogation was not pursued by the United Kingdom. If it had been taken, the derogation would be there now and today’s debate would not be needed. However, as I say, that derogation was not taken.

To compound matters, unfortunately I have to tell my hon. Friend that, a year after that—in 2008—the Department issued guidance that, contrary to the position outlined in legal parlance, claimed all holiday lets were exempt. That was the exact opposite of the legal position then in force. During 2009, it came to light in reviewing the application of the regulations that that double mistake had been made. That led to a consultation last year and, in February 2011, the Government announced their intention to apply the EU directive—if I may put it this way—in an underogated state, starting in June this year. There has been a very unsatisfactory record of missed opportunities and mistaken advice on the matter and, understandably, a large number of hon. Members have been approached by constituents who are confused but, more to the point, concerned by what has happened.

Let me first set out some of the facts of the situation and the reason why the Government are now saying what they are saying. EPCs are required on the sale, rent or construction of a building, including any property that is rented out as a holiday let for a combined period of more than four months in any 12-month period. My hon. Friend challenged the interpretation that a holiday let was a tenancy. It is important to make clear to the Chamber that there is a definition that covers this in the Housing Act 1988. Perhaps that is unfortunate, from the point of view of my hon. Friend. It states:

“A tenancy the purpose of which is to confer on the tenant the right to occupy the dwelling-house for a holiday.”

In terms of interpretation, that is a crucial point. There is no doubt at all that, from the UK legal point of view, such a holiday let is a tenancy and is therefore caught by the EU directive.

My hon. Friend asked how landlords and owners would know whether their property was to be let for four months, or six weeks if it was a bad season. The directive is clear. The point is whether the owner intends to rent out for more than four months—the intention is the question that has to be decided. I bring that to the Chamber simply to report the facts of the case. I do not seek to rebut every point made by my hon. Friend.

Andrew Stephenson: On the difficulty of enforcing the regulations, will the Minister clarify how intention can be proved? If every owner in the country decided that it was their intention to let their properties for only 130 days a year and they happened to let for longer, would they fall foul of the regulations? Their intention would have been to let the property for less than 140 days.

Andrew Stunell: My hon. Friend asks a worthwhile question. I imagine that it would be quite difficult to achieve a burden of proof to prosecute somebody for underestimating their intentions. I understand that the Department is not aware of any prosecutions under the regulations. Compliance is self-driven, rather than driven by prosecutions.

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My hon. Friend raised the issue of cost. Undeniably, there is a cost to having an EPC—probably in the range of £50 to £80, depending on the provider. My hon. Friend quoted the figure of £10 million. That figure is for the total cost over a 30-year period, so we need to keep the scale of the problem in perspective. If the EPCs led to owners improving the energy performance of the cottages and homes that they let, they would receive a payback of £15 million in that 30-year period. There is, therefore, a net benefit in the provision of EPCs and the implementation of the energy-saving results that they will reveal—as there is for EPCs for the 6 million-plus that have been issued to ordinary homes. I want to ensure that we have it clearly on the record that there is a first cost, but that there is a potential for saving, too. As my hon. Friend recognised, that also makes a contribution to reducing the United Kingdom’s carbon output.

I would like to correct one of my hon. Friend’s facts, and to explore one of the propositions that he brought forward. He said that England and Wales would be the only countries enforcing this. They are already required in Scotland and Northern Ireland, so, depending on what we define as a nation, other places in the UK require EPCs. I asked my officials whether there was evidence of non-conformity by other European countries. I have been told that, having made inquiries to the European Commission, they are not aware of any country that is not implementing the EU directive in the manner that we now propose should be the case in England.

My hon. Friend produced some information about what France had done, and referred to the fact that a provider of holiday lets in his constituency had evidence from a much wider field around Europe. I hope that he will accept, as a glimmer of light, that the very first thing I shall do after the debate is seek whatever validation we can for those two pieces of evidence. We do not want providers in England to be at a disadvantage to other European countries simply because we have taken too robust a view of how the directive should be interpreted.

My hon. Friend referred to the Local Government Regulation document. I think that he has slightly over-egged his case. It has produced advice that says that an EPC is not required. The Department has attempted to get in touch with Local Government Regulation, which is a subset of the Local Government Association, to challenge or examine how it came to that view. Unfortunately, the member of its staff who prepared that advice is no longer with the organisation and we are having difficulty establishing how its view was arrived at. It may, quite reasonably, have been based on the advice, issued by the Department in 2008, to the effect that all holiday homes were exempt, but that was clearly not correct and clearly contradicted by the reality that no derogation was entered into by the UK in 2007.

My hon. Friend has raised these matters at the highest levels in government, and has made it clear that he believes that there are unnecessary burdens that could be lifted by the Government. As he acknowledged, the Government have a very good record on this. Indeed, an important part of what my Department attempts to do is to bust barriers. Barrier busting is something on which we wax eloquent. If my hon. Friend has, as he believes, found two barriers that we can bust, I give him an assurance that we will see what we can do to achieve that. However, the UK Government must correctly

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interpret and comply with EU legislation. It is also extremely important to reduce the carbon output of the UK. Half the carbon output in the UK comes from buildings, and a quarter comes from homes. Tackling this sector is important. EPCs are an important part of what we need to do to set the climate, atmosphere and culture that will lead owners and occupiers to use their buildings in an energy-efficient way. I hope that he will accept my assurance that we are listening to the points that he has made. However, we have a duty to ensure that we not only comply with European legislation, but live up to our target to be the greenest Government ever and ensure that all kinds of householders play a full and active part in helping us to do so.

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Motoring Fuel Costs

12.59 pm

Robert Halfon (Harlow) (Con): It is a privilege to speak under your chairmanship, Mrs Brooke. I am grateful to Mr Speaker for allowing this debate, and I want to congratulate FairFuelUK on its campaign for British motorists and for all the British businesses that have to buy petrol or diesel.

Let us get one thing straight: cars, vans and lorries are the lifeblood of British industry. More than 34 million vehicles are licensed in this country, which is one for every two people. That is why the current cost of petrol and diesel is one of the biggest brakes on economic growth and is crucifying many families who are struggling to keep their heads above water. That is especially true in my constituency of Harlow, where high costs are hurting many small businesses. I want to look at the current situation, the record profits of energy companies and what is to be done. As The Sun newspaper said in its editorial last Saturday:

“It’s welcome news that Parliament is to investigate why petrol prices remain sky-high even as the cost of oil plummets.

While they’re at it, they can look at why gas customers face 19 per cent rises from a firm with annual profits of more than £1 billion.

Consumers are being fleeced from all sides when buying essentials.

It's time our MPs stood up for us.”

I am here, with my colleagues, to stand up for motorists.

Mr Marcus Jones (Nuneaton) (Con): Does my hon. Friend agree that there is huge frustration throughout the country about how, when the price of oil falls, the prices at the pumps seem to reduce very slowly and perhaps not to the same level, but when the price of oil increases, the petrol and diesel prices at the fuel filling stations seem to go up within minutes?

Robert Halfon: As ever, my hon. Friend has hit the nail on the head. I will set out in my remarks what is happening and what we should do about it.

Let us look at the numbers. In my constituency of Harlow, there are 33,000 households and 37,000 cars and vans. According to the Royal Automobile Club, which has done excellent work on the fair fuel campaign, we drive 9,000 miles a year. At 32 miles per gallon, an ordinary Harlow motorist is using 281 gallons or 1,277 litres every year. The cheapest unleaded petrol in Harlow that someone can buy is £1.33 a litre but in most cases Harlow motorists are spending £1,700 a year just to fill their tank. For most people, £2,200 of income before tax goes on that. That is a tenth of the average Harlow salary.

Caroline Nokes (Romsey and Southampton North) (Con): I congratulate my hon. Friend on securing this debate. He has quoted some interesting statistics, such as the average driver in Harlow travelling 9,000 miles a year, but in rural constituencies such as Romsey and Southampton North the statistics are more frightening, because the average motorist is travelling 10,000 miles a year simply to access essential services. Does he agree that the problem is particularly distinct and severe in rural areas?

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Robert Halfon: I very much agree that rural people are also being crushed by the price of fuel. I am glad that my hon. Friend is here today to represent her constituency and the many rural residents who are suffering so much.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): Coming from an area where fuel is more than £1.50 a litre at all our fuel stations in the Hebrides, and regularly so, I am grateful that the hon. Gentleman has secured this debate. Does he agree that the Office of Fair Trading has to show more teeth in looking at the distribution of fuel? As noted, when the oil price goes up, the price at the pump increases quickly, but when falling, it does not happen at the pump at all. The OFT must start investigating the trade for fairness.

Robert Halfon: I agree that that should happen. I also have another proposal, which I will set out later. I congratulate the hon. Gentleman on his work on fuel prices in a debate in the main Chamber some months ago.

Anne Marie Morris (Newton Abbot) (Con): My hon. Friend is being very generous in giving way.

Although the focus has very much been on the individual motorist, we have spoken a little about small business. If we combine the issues of rural businesses and micro-businesses, they are the ones that are badly hit. That is where we need the economy to grow. As for the range of prices, my hon. Friend talked about an average of £1.36 a litre, but in fact it is between £1.30 and £1.51, mostly in rural areas.

Robert Halfon: My hon. Friend is right. I will set out in a minute what the Federation of Small Businesses says about how the fuel price is crushing business and economic growth.

In total, my town is spending at least £63 million a year on petrol, of which about £40 million is tax. That does not even include gas and electricity bills, which are spiralling out of control. The budget of my local council is only £13.5 million a year. Imagine if people could keep even a fraction of that money in their pockets, to spend on the local economy, rather than giving it away to big oil companies, foreign countries and, dare I say it, the Treasury. However, I welcome what the Chancellor has done so far. When he refused to implement Labour’s petrol tax of 4p in April, and cut duty by 1p, he saved Harlow motorists at least £2.5 million every year, putting fuel into the tank of the British economy when we need it most.

Rory Stewart (Penrith and The Border) (Con): I thank my hon. Friend for giving way and for securing this debate.

On the subject of the Chancellor’s initiatives, does my hon. Friend also support the decision to have rural fuel pilots, and acknowledge that constituencies such as my own of Penrith and The Border, where we have nearly twice the distance to travel to GPs, post offices and job centres, need to be recognised in a different way? The Chancellor is to be congratulated on the steps he has already taken on rural fuel, and he should extend them.

Robert Halfon: I very much welcome that initiative. I will say later that I believe a commission ought to be set up to look at all kinds of ways of reducing the price of petrol for motorists—that is one of them.

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David Simpson (Upper Bann) (DUP): rose

Robert Halfon: I give way again, but then I must make progress.

David Simpson: The position in Northern Ireland is somewhat different from that in Harlow, because we have a land border. Currently, the Government are losing £280 million to £300 million a year on fuel smuggling and laundering of fuel. We are currently looking at the whole issue of corporation tax in Northern Ireland but, if duty on fuel were reduced or even if the suggested pilot scheme were in Northern Ireland, it would save the Government an absolute fortune, and would help the motorist and commercial enterprises in the long term.

Robert Halfon: As so often in Westminster Hall, as I said last week, I find myself agreeing with the hon. Gentleman. That might form part of the commission’s inquiry. At the end of July, I plan to go in a truck to Europe, to see how truckers there manage to get all their fuel cheaply, while English truckers are paying far more. The hon. Gentleman makes an important point.

Returning to my constituency, we are a town held to ransom by petrol prices. Motorists are robbed of a tenth of their salary just to fill their petrol tank. Fuel poverty is defined as spending more than a tenth of income to stay warm. That is all about domestic homes, but what about spending a tenth of income just to drive to work, which is what motorists are doing? The issue is also one for welfare reform. I welcome the Government making great strides with universal credit, lower taxes for lower earners and the Work programme. Yet all those benefits could be wiped out by the rising cost of fuel. Every 1p increase in the pump price will cost the average Harlow motorist £13 a year. For someone on a low income, perhaps commuting from Harlow to Basildon, the actual cost would be much higher. Inflation soon adds up, and we must not let petrol prices become part of the poverty trap and deter people from getting off benefits and into work.

Nor should we forget rural constituencies. My hon. Friend the Member for Hexham (Guy Opperman), who cannot be here because of his recent operation, has campaigned for many years against the fuel poverty suffered by his constituents. He wrote to me yesterday:

“fuel is a necessity in a constituency of 1,000 square miles, not a luxury.”

Throughout the country we see the same tragedy.

Naomi Long (Belfast East) (Alliance): I congratulate the hon. Gentleman on securing the debate. He mentioned specifically job creation and its importance in welfare reform. In a survey earlier this year, one of the issues the FSB picked up was that companies faced with rising fuel bills would stop creating jobs and might also look at laying people off. That has huge implications, in particular in Northern Ireland, where we have a higher proportion of small to medium-sized enterprises, as well as heavier reliance on fuel because all our freight, for example, is road-based.

Robert Halfon: I welcome the remarks of the hon. Lady. I am about to come on to the FSB, but she is so right in what she says. I am glad that there is so much consensus in the Chamber among all parties.

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Andrew Percy (Brigg and Goole) (Con): I thank my hon. Friend for giving way. He is being very generous. The hon. Lady’s point about the Federation of Small Businesses is important, but we must not underestimate—my hon. Friend is not doing so—the impact of fuel prices on workers. My constituency has a low-wage economy in a large rural area, and an announcement was made today that the Humber bridge tolls will rise to £3 for each crossing. That will conspire to put people off looking for work, because they cannot afford to get to work.

Robert Halfon: That is my whole point. High fuel prices have become part of the poverty trap, and are a disincentive for people to get back into work, despite the Government’s excellent programmes, including the Work programme. I thank my hon. Friend for raising the matter.

Long-term stats from the Department of Energy and Climate Change show that in 1970 we used 25 million tonnes of petroleum in the transport sector. That has risen year on year, and doubled to 50 million tonnes today. But despite the UK being a net exporter of petroleum products, and despite the fall in the international oil price, our petrol prices are still sky high. In January this year, members of the Federation of Small Businesses said that if petrol prices continue to rise, 62% will be forced to increase their prices, risking inflation; one in 10 may have to lay off staff; 26% will be forced to freeze wages; 36% will have to reduce investment in new products and services; and 78% will see

“their overall profitability in jeopardy”.

Taxation is only part of the problem, and another major concern is transparency. As the AA, RAC, and FairFuelUK have said, if the 2p drop in the market cost of petrol had been passed on to motorists earlier this year by energy companies, it would have wiped out most of the impact of the 2.5p VAT rise. In May, I wrote to the chief executives of Shell, BP, Total, and ExxonMobil asking for price transparency so that we can see why prices are not falling. So far, only Total and BP have replied, but their replies essentially said, “Nothing to see here.”

In 2009, before the disaster in the gulf of Mexico, BP boasted profits of £8.7 billion. This year, Shell has reported first quarter profits up 40%, making its global profits nearly £2 million every hour.

Susan Elan Jones (Clwyd South) (Lab): I thank the hon. Gentleman for giving way again, and for securing this debate. I particularly support the points made about rural constituencies. Does he favour statutory obligations on those companies to be transparent and to pass on their profits to consumers?

Robert Halfon: I do not want to unveil all my secrets at once, and if the hon. Lady waits a bit, I will give her my proposal.

Total’s profit rose 34% year on year, and ExxonMobil saw a 69% profit jump to $10.5 billion. We must acknowledge that some companies make a good return for pension funds, but a balance must be struck. I remember the fuel protests in 2000, when we were

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seriously concerned about the threat of petrol at 80p a litre. According to PetrolPrices.com, the excellent price comparison website, the most expensive unleaded fuel in the UK is now £1.51 a litre.

I accept that 64% of the petrol price is taxation, and I welcome the Chancellor’s steps to slash some of the planned taxes, but the big oil companies must play their part. Why are prices so different at petrol stations, and why are they raking in such astronomical profits when small businesses are being forced into bankruptcy by fuel costs?

Mr Russell Brown (Dumfries and Galloway) (Lab): The hon. Gentleman rightly mentioned the oil companies. Did he witness the same thing as I did in my constituency eight or 10 weeks ago when some of the major supermarkets embarked on a price reduction of 5p a litre if customers spent a specific amount on goods, and at the same time raised the price of fuel by 4p or 5p a litre, which in turn forced the independents to put up their prices? The situation was contrived by some supermarkets.

Robert Halfon: The hon. Gentleman makes an important point, and that is why I am arguing for transparency. If supermarkets reduce prices, they must do so properly. We cannot have situations such as the one he describes. We often bash bankers, but oil barons are far worse, because they enjoy a semi-monopoly in the UK market, and most motorists have no alternative but to buy their products. We need transparency above all. Oil prices are falling, and we must ensure that the big companies cut their prices at the pump.

The green movement makes a case for expensive petrol, but modern vehicles have lower carbon emissions. Cars account for only 13% of our man-made carbon emissions. My argument—some hon. Members may say that it is controversial—is that environmentalism sometimes becomes a luxury for the rich, with no substantive answers, other than regressive taxes on energy. It is all too easy, in the cause of saving the planet, for the wealthy to insist that the poorest families should pay more in petrol taxes, and gas and electricity bills.

The impact of high fuel prices is particularly severe on road freight companies, and they are a major employer in Harlow. Road freight carries nearly 97% of everything we eat, wear or build with. High and rising fuel costs force the road freight companies to try to pass on the extra cost, and that stokes inflation. If they fail to pass on the increased costs, they go bust.

The road freight companies face a further cruel impact that the UK green lobby must consider. Fuel duty levels on the continent are about 24p a litre lower than in the UK, so hundreds of thousands of foreign lorries pour into the south-east of the UK and undercut UK hauliers. Foreign trucks pay no road tax here, and I welcome the Government’s plans to introduce a £9 a day charge, although I believe that it should be a lot higher. Those trucks pay no fuel tax in the UK as their tanks are big enough to last all week and all their fuel is bought abroad. They pay no employment taxes. They simply come into the UK, drive our UK freight companies out of business, and pay nothing to the Exchequer.

Mr MacNeil: Will the hon. Gentleman give way?

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Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Will the hon. Gentleman give way?

Robert Halfon: I must make progress, but I will give way to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) as he has not spoken.

Jonathan Edwards: I congratulate the hon. Gentleman on securing the debate. He is making some important points about green taxation. I agree with such taxation, but does he agree that it should be linked to clear environmental criteria, and that if it is not it will lose public confidence, which would be a crisis for the Exchequer and for environmental policy?

Robert Halfon: Of course there should be environmental criteria, but people too often have their heads in the clouds and do not realise that low petrol prices would make a huge difference to ordinary people who must use their vans to drive to work, drive their trucks to do their job, drive their minicabs, or drive their kids to school.

What is to be done? I believe in competition and choice. First, when a market is cornered by vested interests and semi-cartels, such as big oil companies, it is right for the Government to establish conditions for a fairer market. We need a fuel rebate so that when the oil price falls, big companies face a choice: either they cut prices, or the Government will impose a windfall tax on profits, and use the money to cut petrol prices anyway. That would be the solution to the great British petrol rip-off. Instead of the oil companies having us over an oil barrel, it would make them honest, and stop them profiteering at the expense of small businesses and families on the breadline.

Secondly, we must commit to no more petrol tax rises in this Parliament. The Government are pro-business and pro-growth, and have already given a commitment to scrap the fuel duty escalator, which was pushing up prices above inflation. The Chancellor has delayed inflationary rises by a year for the next two years, but will the Government go further, and consider abolishing even the inflationary rises?

Thirdly, we must establish a commission to look at radical ideas, and other ways for the Government to raise revenue, and to address the unfairness of UK fuel duty being so out of line with the rest of Europe. We must consider more toll roads in exchange for significant cuts in fuel duty, and how a fuel price stabiliser could work.

In conclusion, we need fair fuel reform with a fair fuel rebate to push prices down, no new taxes during this Parliament, and a commission to look at radical ideas to get petrol taxes down to the European average in the longer term. The 37,000 motorists in Harlow and the 34 million vehicle owners in the UK are being fleeced. For the sake of future growth and jobs in our economy, we urgently need reform.

1.20 pm

The Economic Secretary to the Treasury (Justine Greening): It is a pleasure to serve under your chairmanship, Mrs Brooke, and I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing this important debate—Harlow is a place I know well as I

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used to work there many years ago. He is one of a number of MPs who represent their constituents well by talking to the Government and Ministers about the concerning cost of fuel, and about how that is impacting on the ability of businesses across Britain to employ people, and on families and household finances.

In the short amount of time available, I would like to say why the Government agree that the cost of fuel is a concern, and mention some of the actions that we have taken to try to address that. I will then say a little about some of the things that we think need to happen during the rest of this Parliament.

Mr MacNeil: Does the Minister, or her Department, have any suspicion that high oil prices are the revenge of oil companies for the £2 billion that the Chancellor raised in the Budget through the North sea tax, which also threatens perhaps 15,000 jobs? Oil companies are losing money to the Government in one way, and are penalising consumers and people up and down the country.

Justine Greening: The hon. Gentleman raises an interesting point, but the price of oil is a spot price driven by commodity markets. We are talking about a part of the industry that is different from the area in which we chose to raise tax. We are working with industry to ensure that we mitigate any risk of a lessening of investment in the North sea as a result of that tax. As my hon. Friend the Member for Harlow pointed out, we needed to strike a balance to take into account the overall effect of high oil prices as they fed through into the broader economy in petrol prices and energy prices more generally.

The hon. Gentleman will be aware of the report from the Office for Budget Responsibility. It showed clearly that, although the Exchequer has some growing tax receipts, the dampening effect of the rest of the economy is also significant. We felt that although there was an overall impact on the economy, one sector—the oil companies—was doing much better from a high oil price. It seemed fair and sensible to look at how we could balance some of the value that was being generated by the high oil price, and to create a fairer split between oil companies and those motorists and businesses that bear the brunt of the prices at the pump. We are working hard with industry to mitigate the impact of our policy on investment—the impact was analysed as being small by industry observers such as Wood Mackenzie. This is an important debate, and the Government recognise that motoring is an essential part of life for households and businesses. Fuel costs affect us all, and as the price of petrol continues to rise, those costs have become an evermore significant part of everyday life for people and companies. We were keen to look at what could be done.

The previous Government left us facing the introduction of a fuel escalator from the 2009 Budget that would have involved seven fuel duty increases. I realise that in this half-hour debate, only a Government Minister gets the chance to respond to the Member who secured it, but I am disappointed that a shadow Minister is not present to listen to some of the concerns raised. One of our biggest challenges concerned how to deal with the proposed above-inflation increase in fuel duty. That increase could have resulted in average prices at the

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pump being 6p per litre higher than they are currently. We would have seen above-inflation rises in 2012, 2013 and 2014. When we took office, no plan was in place to support motorists, and within the huge financial constraints in which we found ourselves, and with little room for manoeuvre, we had to see what we could do to address such an important issue.

Mr Russell Brown: I am sure that my colleagues will read Hansard tomorrow to see exactly what has been said. The Government inherited potential increases in fuel duty and the Chancellor has done the right thing by removing the fuel duty escalator, just as the previous Labour Government did. We also froze proposed increases in fuel duty on 11 occasions because of the increase in the price of crude oil.

Justine Greening: What was missing, however, was any kind of long-term plan for how to deal with changes in the price of oil feeding through to the pump. We wanted to look at how a stabiliser mechanism would work, which we felt would be in the interests of households, companies and the overall economy.

Mr Robin Walker (Worcester) (Con): I have been listening carefully to the Minister and, like other hon. Members, I am grateful for the actions that the Government have already taken. One issue that has been raised by Back Benchers from all parties concerns differential pricing around the country. There are sharp differentials—a difference of about 5p between petrol prices in Worcester and those 20 miles away in Cheltenham. Will the Minister comment on how the Government could address that issue and increase transparency, as my hon. Friend the Member for Harlow (Robert Halfon) has urged?

Justine Greening: My hon. Friend is right to raise that point. In a sense, the most extreme examples of that problem are the reason why we are bringing in a pilot scheme for the rural fuel rebate. We are making progress on that.

Mr MacNeil: When might we see that welcome rural fuel rebate and rural fuel derogation? We have been calling for such a measure for years, and although we welcome the progress made, we would like to have a date fairly soon.

Justine Greening: I say, “Me too” to that. We are working with the European Commission, and once we have clearance, we will get on with the pilots as soon as

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possible. We are keen to make progress on the issue, and I assure the hon. Gentleman that we are working and making our case in Europe. We must get agreement from the Commission, and unanimous agreement from European Finance Ministers. Once we have that agreement, we will be pushing on with the pilot schemes.

Andrew Percy: If we left the European Union, we would not need that permission—that is a debate for another day. I have some concerns about the rural fuel derogation applying in some areas but not in others. Rural areas such as my constituency have a low-wage economy. We have poor bus services and high toll-bridge costs—I know the Minister is committed to doing something about that, which is pleasing. A rebate should not apply to one rural area but not to others; we should be careful about doing that.

Justine Greening: We need to help families across the board. That is one reason why raising the personal tax allowance was critical—in any other Budget that measure would have got a huge amount of attention, but perhaps because of the other things we did, it got less consideration. The provision will benefit the lowest paid workers, and this year’s rise in allowance, together with that of next year as announced in the Budget, will take 1.1 million people out of paying income tax altogether. We are right to have a targeted package to help motorists, and we know how important that is. We are also right to make progress on our commitment to increase the personal allowance. Such a measure will help many of those who feel the pinch most when the cost of living goes up.

Anna Soubry (Broxtowe) (Con): I am meeting hauliers next week and I speak on behalf of many people. Does the Minister have a message of hope for all motorists and hauliers in particular?

Justine Greening: We scrapped the fuel tax escalator and we understand how motoring impacts on the broader economy. Prior to the Budget, I was keen to meet groups such as FairFuelUK and motoring stakeholders. I assure my hon. Friend that I will continue to do what I can to stay close to the industry, and I will work with my hon. Friends in the Department for Transport to look at an overall approach that will support our economy as well as supporting hauliers, motorists and businesses.

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Queen Victoria School, Dunblane (Military Covenant)

1.30 pm

Mrs Anne McGuire (Stirling) (Lab): It is a pleasure to have the debate under your chairmanship, Mrs Brooke. I am delighted that the hon. Member for North Wiltshire (Mr Gray) is present to take part in it, not least because he grew up in the town in which Queen Victoria school is situated. I am also delighted to have been offered the opportunity to introduce this short debate on Queen Victoria school, Dunblane, and its contribution to the military covenant.

As far as I have been able to trace, this is the first time that there has been a specific debate on Queen Victoria school, even though it has been in existence since it opened in 1908. It is therefore worth highlighting for the record the reasons for its foundation, the original aims of the school, why it was an early manifestation of what we now call the military covenant and why it deserves to continue making its unique contribution.

Built through subscriptions from serving personnel and other interested parties, Queen Victoria school was created in memory of those who had died in the South African wars of the late 19th century. At that time, it was for boys only. It was opened on 28 September 1908 by King Edward VII. At that time, he also laid the foundation stone for the school chapel, which was completed in 1910 and is Scotland’s memorial to Queen Victoria. Various buildings have been added over the years, including the Macmillan sports hall to mark 50 years of the school’s existence. Other changes included the admission of girls in 1996 and the move to a staff comprised almost entirely of civilians.

The school has always been under the control of the Ministry of Defence in its various manifestations; in fact, the school was administered originally under the auspices of the Department of War. The school was established under royal warrant. The situation was unique. The warrant was initiated by Queen Victoria but enacted by her son, King Edward VII, who signed it in 1908.

The warrant is interestingly worded. It says that the Department of War shall take over the said buildings—those that had been built by subscription—

“to uphold the same in proper condition and repair, and to efficiently maintain therein a School as aforesaid…under the name and title of the Queen Victoria School for the Sons of Scottish Sailors and Soldiers; As also out of funds to be voted in Parliament to meet and defray the whole cost of such maintenance, and all rates, taxes, feu-duties…and other annual and other outgoings in respect thereof”.

The warrant also states that the then Secretary of State—in continuum, I suppose, through to the current one—

“further undertakes for himself… that the Said School and Chapel shall be maintained in perpetuity as a Scottish School in Scotland for the Sons of Scottish Sailors and Soldiers, that it shall be so maintained, managed, and administered on the lines indicated in a Royal Warrant which His Majesty is to be asked graciously to grant”.

I am sure that the Minister has looked over the royal warrant. It is an impressive piece of drafting, which is designed to make the warrant watertight against the exigencies of future pressures, whether financial or otherwise. I can imagine that at more than one point in

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the school’s history, the warrant has been pored over with great precision by MOD lawyers to try to discover whether there is a get-out clause.

The school was established to educate children of “other ranks”—in other words, not the children of officers. For most of its history, that has essentially been the pool of children from which pupils have been drawn. There are pupils whose parents are or may be officers, but for the most part, those parents have come through the ranks. From the outside, with its large campus, playing fields and, dare I say it, the somewhat Victorian if not slightly gothic look of some of the older buildings—I am sure that the hon. Member for North Wiltshire recognises that description—it looks like any other private boarding school, yet it is unique.

When the school was established, and through the greater part of its history, it would have offered pupils a very different experience from what is gained there now. From my observations of that history, there is no doubt that there was an emphasis on training the boys—only boys at that time—of soldiers and sailors to follow in their fathers’ footsteps. For reasons that were prevalent at the time, and perhaps things that we do not quite understand now, it was not considered particularly important to open out options, particularly academic options, for those boys. The education would undoubtedly have been based on the model of the day: a strong emphasis on discipline—probably a harsh discipline—and on training and drill; and strong encouragement to follow dad into the Army or Navy.

The governance of the school is undertaken by Her Majesty’s commissioners, with the current and long-standing patron being the Duke of Edinburgh. A comparison between the list of commissioners of only 30-odd years ago and those of today is informative. It gives an immediate impression of how the school has developed and now takes more account of modern educational and pastoral practice. A glance at the list of commissioners in 1974, for example, would, I think, cause us some concern in today’s world. There is General Sir Philip, Admiral Sir Angus, General Sir Gordon, Air Marshal Sir Brian, Air Vice-Marshal A.—whoever A. is—a Major-General, a Lieutenant-General and a Vice-Admiral Sir. There is not a woman in sight until we get to the name of the residential school nurse. The ultimate authority at that time was not a head teacher, but a commandant, who was a retired brigadier. I am sure that they were all good men—I certainly do not wish to impugn the character of any of those who were commissioners at the time—but I suspect that they were drawn from a very elite pool and had very little if any educational experience apart from that of their own school days.

That contrasts with today’s commissioners. The chairman, Bart McGettrick, is an eminent educationist with a national and international reputation. The commissioners, although still with their quota of military personnel as dictated by the original warrant, are drawn from a wider pool, including a Scottish woman sheriff who has extensive expertise in child care matters, and a local chartered accountant who lives in Dunblane, Mr Alan Plumtree.

The school also has links to the Stirling state network and the wider Scottish independent school network. Those links have been developed during the past 14 years or so and bring to the school a wider ambit of educational experience. Although no Stirling head teacher is currently

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serving as a commissioner, there was one until recently. I trust that that important connection with both the mainstream state sector and the local educational sector will not be lost in future commissioner appointments.

However, I wish to highlight the contribution of Queen Victoria school to the modern military covenant. I want to test the Minister on one or two points to ensure not only that he currently values its contribution, but that the MOD takes seriously the commitment made in 1908 of support “in perpetuity”.

Although QVS has changed over its 103 years, it still provides stability and continuity of education within the Scottish system for the children of armed forces personnel who are Scottish, have served in Scotland or are part of a Scottish regiment. That means that the pupils’ parents can be in the Scottish regiments. Indeed, I know from my own experience that there are young Fijian children at the school, as well as children whose parents have volunteered for the Scottish regiments.

Sadly, the school is still needed in the same way it ever was. Although there are fewer orphans at the school nowadays, about 50% of the children were orphans at one point, because they had priority in the admissions process. Improved medical techniques mean that there are far more survivors of military conflicts, but some parents who return will be seriously disabled, and children of such battlefield survivors are coming before the QVS admissions board. In August, there will be at least one new pupil whose father is an amputee from a current conflict.

Unquestionably, many QVS families—probably the majority—could not afford boarding education for their children, even if they were in receipt of the continuity of education allowance. The MOD is tightening the CEA eligibility criteria, but even those who are still eligible will have to pay about 10% of their fees, as well as the extras levied by fee-paying schools. Such things would be beyond the means of most families with children at QVS. Even under the rumoured plans for more static Army, Air Force and Royal Navy units, there will still be some need for mobility, and that will not be limited to those—mainly officers—who can afford boarding with the help of the CEA.

There is also a sound educational justification for the MOD to maintain its commitment to QVS. A recent Ofsted report on the education of children of military families clearly identified the fact that there were significant issues with the quality of the educational experience of children whose parents were mobile or on active deployment. It noted:

“A key feature of life in the Armed Forces is that families are likely to move home, to different parts of the UK and abroad, on a regular basis. The number of moves will be dependent on the length of service of the serving parent and their role within the Armed Forces… However…parents invariably identified the disruption, caused by their geographical mobility, as beingj the biggest challenge faced by themselves and their children. Disruption is further exacerbated for children in these families as they had to change schools generally outside of normal school term dates”,

which adds to their difficulties.

Those are the very children QVS caters for, and the constantly improving educational achievement at the school is testimony to what it does. The exam results at QVS are above the Scottish average at O-grade and higher levels. The increasing ambitions of the children and their parents are being realised. On visits to the

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school over the past few years, I have seen that the young people leaving the school are going to university and college in greater numbers than ever before—something that I did not see when I became the MP for the area some years ago.

Mr James Gray (North Wiltshire) (Con): I congratulate the right hon. Lady on the excellence of the debate. I lived in Dunblane all my formative years and saw the superb education provided at Queen Victoria school. I entirely take her point about children of military families moving around. Does she agree that it is extremely disappointing that we have a Queen Victoria school in Scotland but no equivalent in England? Is it not time that we had one down here, too?

Mrs McGuire: The Minister might be venturing a step too far if he answers that at this point, but the MOD should perhaps take the QVS model slightly more seriously, particularly in some of the discussions it is having about the continuity of education allowance, because there are perhaps some options there.

I have some brief questions for the Minister. Given the importance of the military covenant, will he make it clear that his Department recognises the contribution of QVS and does not see it as some anachronism from a bygone age? I use the word “anachronism” because it was used in a report by the Select Committee on Defence four or five years ago, although the Committee also recognised the importance of maintaining the school.

Does the Minister recognise that mobile service personnel who cannot afford to access the continuity of education allowance should have their children’s needs supported and that QVS offers a valuable resource to meet those needs? I am sure the Minister has heard the comments of the hon. Member for North Wiltshire on the issue.

Will the Minister encourage his officials to work with the commissioners to look at options to expand the facilities at QVS and to use them and the school’s expertise to the benefit of a greater number of the children of mobile service personnel, giving them the opportunity to benefit from the stability and pastoral care offered by the school?

Next week, we will have armed forces day. On 24 June, QVS will have its grand day—a mixture of school prize-giving and end-of-term celebration. I hope that the Minister, before he perhaps moves on to higher offices in another Department—

The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan): Or gets sacked.

Mrs McGuire: I would never use that word to a Minister. However, I hope that the Minister will have the opportunity to come to the school to see its grand day. It is a fantastic celebration of the school, and I have been privileged to be present at it for the past 14 years. In front of their parents and families, the students parade in their Victorian scarlet uniforms and kilts to the beat of their own superb, internationally recognised pipe band. It is a day of high celebration and some emotion, as the sixth-year pupils leave the school for the last time. Grand day is a public statement of this country’s support for these children, who allow us—the civilian population—to borrow their parents to protect

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our freedoms. Thankfully, most of the families will be reunited in safety. Sadly, some parents will not return, while others will be disabled for life.

I do not wish to see the school preserved in aspic. There are still ways in which it can develop its educational and pastoral potential, and I am obviously happy to discuss my views with the Minister on a future occasion. However, I want to leave him with some words from one of the pupils, which perhaps sum up why a facility such as QVS is so important to the children who attend it:

“Here are some numbers. The first is nine. Nine is the number of times my life has been loaded onto a lorry and taken miles away, sometimes across one border, sometimes across several. The next number is seven. Seven is the number of times I’ve had said to me, ‘So how was your first day?’”

That is why there is a continuing role for QVS and an opportunity to see it expand as part of the Government’s valuable commitment to the military covenant.

1.48 pm

The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan): I congratulate the right hon. Member for Stirling (Mrs McGuire) on securing this short debate to highlight the work of Queen Victoria school in Dunblane. She takes a close interest in the school and has presented prizes there—perhaps she will do so on grand day on 24 June. I congratulate her on her obvious passion and support for the school.

The school has a long and proud history, which the right hon. Lady detailed. Its work chimes well with the Government’s commitment to our armed forces and their families, which is part of the armed forces covenant. The right hon. Lady’s first question was whether the Government recognise the value of QVS and, anachronistic or not—the school is rather unusual—we certainly value its work. I will discuss that further later in my speech.

The history of QVS is unique, although there are similar, but different schools in England. As the right hon. Lady said, the school was founded in 1905 by royal warrant. I was not going to mention the “in perpetuity” bit, but, unfortunately, she has already mentioned it. The school was originally founded by public subscription, but the Secretary of State for War undertook to maintain it for the sons of Scottish sailors and soldiers. Those responsibilities are now vested in my right hon. Friend, the Secretary of State for Defence. Responsibility for its day-to-day governance rests with the board of commissioners, and the right hon. Lady has told us who they are. I was glad that she did not want to attack the senior and distinguished commissioners from 1974. The commissioners report to the Adjutant-General on behalf of the Secretary of State.

Since 1908, the opportunity has been taken to widen and modernise the remit of the school, while staying in the spirit of its founding constitution. In 1919, just after the Royal Air Force was formed, the school was opened to children of RAF personnel. It became co-educational in 1996, when entry was extended to daughters of service personnel, and, as the right hon. Lady said, it accepted the children of officers in 1999. Its basic purpose remains consistent with the aims of those who contributed so generously to its establishment: to provide secondary boarding education for the children of Scottish personnel and personnel who have served in Scotland

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or are part of a Scottish regiment. Although parents are not charged fees, they make a modest contribution to ancillary costs, which is slightly more than £1,000 a year.

The two elements of the school—the fact that it is Scottish and for the services—have combined to give it the very special ethos and nature that makes it unique in the UK. As well as providing a sound academic education, the school offers its pupils the opportunity to participate in various Scottish activities, including Scottish dance and performing in a pipe band. I was in an English regiment in the Army, but the one thing that would have persuaded me to join a Scottish regiment was not so much the kilts—my legs notwithstanding—but the fact that I love marching to a pipe band. I am glad to know that that activity continues in Dunblane.

It is in understanding and meeting the specific needs of service children that QVS is most special. The recent Ofsted report on children in service families, which covered England and Wales but contains lessons equally applicable to all our service families, found that some service children’s learning slowed or receded with the frequent moves that service life requires. It should be pointed out though that that does not feed through to attainment and there is no evidence of underachievement. Indeed, in the paper, “The Armed Forces Covenant, Today and Tomorrow”, the Department for Education states that in England attainment in exams for service children is not below average. It also demonstrates that at some stages of their education, service children have better attainment than their non-service counterparts.

QVS offers full continuity of secondary education for the children who attend and most importantly it offers it in a secure and safe environment that recognises and understands the special pressures on children that their parents’ life in the services can bring. The disruption caused by service life can be worsened when parents are deployed on active service, and the operational tempo has remained high for over a decade. The Ofsted report to which I referred found that some service children were susceptible to social and emotional disturbance when a parent or family member was on active deployment. Those pressures are especially well understood and catered for in a school where the staff are alert for their signs and where pupils can understand and share one another’s concerns.

Over the years, Her Majesty’s inspectorate of education and the Care Commission, which inspect Scottish schools, have commented favourably on the supportive environment that QVS offers to service children. The school plays a valuable part in supporting elements of the armed forces covenant in Scotland, which provides an answer to another of the right hon. Lady’s questions. Against that background, the Ministry of Defence has continued to provide for the needs of the school. As well as financing its running directly, much support is provided by the local military. Headquarters 2 division, based in Edinburgh, offers practical help in a number of ways, such as security and transport.

The school has concerns about the state of its buildings, and it is not unique in that. The pressure on the estate, which has to support the wide range of activities for which the MOD is responsible, is unrelenting, and when distributing limited resources, the needs of the school, however worthy, must be balanced against other operational and welfare priorities for our people and the wider

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needs of defence. The fact that some of its rather beautiful buildings are listed adds to the attractiveness of the school, but also to the costs of maintaining it. Within that difficult environment, I am pleased to say that QVS has seen some £2 million-worth of refurbishment, improvement and maintenance works over the past couple of years, including the replacement of a significant number of windows within the grade II listed main school building.

I am aware however that not all the perceived needs and aspirations of the school have necessarily been addressed. Therefore MOD officials, some of whom serve as commissioners, are working closely with the school and the whole board of commissioners to develop a strategic plan, not just to preserve the achievements of the school, but to improve on them. That will include identifying the investment required in the infrastructure, but it is by no means confined to that. For example, with Her Majesty’s commissioners we are exploring closer integration with Service Children’s Education, which provides education for service children overseas. I am not suggesting that Scotland is overseas, because I know that doing so would get the right hon. Lady going, but there is a certain synergy in the provision of education. The school is unique, and it might be better dealt with by the SCE because it deals specifically with the education of service children.

Mrs McGuire: Does that mean that some of the criteria I highlighted would be lost? I appreciate that the Minister is looking at administrative ease, but the mobile service personnel element and the particular and unique support that QVS gives could be lost if it is absorbed into something that does not quite fit. He has just revealed this idea, and I am interested in the option.

Mr Robathan: The right hon. Lady asks a very good question. We are examining the possibility, but it is not the intention to slot the school into a neat package. It is about where it would be best administrated and this is an administrative matter. I can already see that if we were to undermine the school, she would be back like a shot to ensure that did not happen.

Closer integration with the SCE could help to provide greater specialist support to QVS and greater integration with other service schools overseas, which some of the children will have been to already. Against the severe financial constraints we inherited, within which the MOD and the rest of Government are working, it is extremely challenging to increase the resources devoted to the school, notwithstanding the benefits it brings—and

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it does bring benefits—and the underpinning it provides in Scotland to our commitments under the armed forces covenant. Like everything else in our budget, it must compete with other extremely high priorities, but we are committed to working with the school and its commissioners to identify the most beneficial and cost-effective way forward through the development of a medium-term strategic plan.

The right hon. Lady particularly asked whether it was possible to expand the school, which is one of the things at which we will certainly look. It is not cost-free and we are strapped for cash, but if children go there rather than to other independent schools, where the continuity of education allowance has to be paid, it could be cheaper. I understand the value of QVS to those who are not in receipt of CEA, because it provides a different way forward for schooling.

Finally, we have delivered a scheme to provide scholarships to bereaved service children and a new fund announced by the Secretary of State on 20 May provides £3 million a year for state schools with service children. The new fund will assist schools and academies that have children with parents in the services or the reserves, to help mitigate the impact of mobility and deployment within the armed forces.

Before I close, I want to say that I am grateful for the opportunity to speak on this topic. I was interested in what the right hon. Lady had to say. I have not been to Dunblane, but QVS is obviously very good. I will correct one thing that she said: approximately 50% of CEA is paid to officers’ families and 50% is paid to others—I think that is right. If I am wrong, I shall write to her to apologise. I think that 50% is within 5% of the right figure, but of course it changes each year.

It is always nice to hear a Labour politician praising an independent school. It cheers me up no end, because we do not always hear it. I assure the House that the education of service children, wherever they learn—in state schools in this country, in service schools abroad, in independent schools supported by CEA and certainly at QVS—is one of our highest priorities. I went to Welbeck defence sixth-form college only two weeks ago and have been to the Duke of York’s royal military school in Dover, which are of course different from QVS, but I take an interest in this subject. I have been delighted to respond to the right hon. Lady today.

Question put and agreed to.

1.59 pm

Sitting adjourned.