There will be long-term challenges in relation to low carbon, and the packaging industry and the demands placed on it are one of the areas that will be affected. There has to be a closer relationship, and consumers, industry and Government need to have a better understanding of the issues facing the packaging industry. There is a real threat to a large number of jobs; some 85,000 people are employed in such manufacturing in
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the UK. We all want more, not fewer, people to be employed in the packaging industry, so we need to make the UK the place of choice for investment in packaging companies. I am afraid that, at the moment, it is clear from the representations we all receive from the industry that that is simply not the case. We need to take a long, hard look at what is different about packaging companies and our successful companies in the UK. We need more successful companies and more successful sectors.
I talked about regulation earlier, and would like to pick up on an area mentioned by the hon. Member for Rugby: consistency of regulation as far as local authorities are concerned. Localism is a little like motherhood and apple pie; everyone is in favour of it, and would like to have a hospital on their street corner and everything sorted out between them and their next-door neighbour. In the real world, however, that is not practical. Localism, with each local authority determining different policies on waste, causes great difficulty, or difficulties that need not be there, for many businesses.
The packaging sector is efficient. I challenge everyone, including Jeremy Paxman, to visit a packaging company. I suspect that he has not visited many during his career, but if he did, he would see that packaging companies are, without exception in my experience, very efficient. If they were not efficient, they would not be in business. Their focus on cost-reduction and energy use is second to none. They work extremely hard at it. We need to ensure that they are enabled by Government to do the right thing. They need to be able to work closely with local authorities, to develop more efficient supply chains through the industry, and to ensure that waste is not made too complicated for business. That is a real problem and is part of the inevitable tension between centralised practices, which in some respects make things much easier for business, and the pool of localism, whereby there are very different approaches in local authorities. I am still unsure about why recycling practices have to be different in every local authority, and I am sure that that makes things difficult for businesses in general.
The Energy Intensive Users Group and the TUC have produced an impressive report on energy. It has some good recommendations, and I urge the Government to look at them. The sector is under pressure. It needs to be listened to more than it has been, and not just by this Government; this has been an issue throughout my time in Parliament, and when I was a Minister in the Department for Business, Innovation and Skills. This has been a difficult time for the industry, but we still have very good and strong companies in the sector in the UK. We need to ensure that those companies have a future in the UK, and that they work to provide the jobs that we all want to see in the UK economy.
First, we need to educate consumers. The cucumber packaging example that the hon. Member for Rugby gave is a good one—packaging can be a good thing. Secondly, we need a closer working relationship between the industry and Government, and perhaps the Government need to listen a little more to the industry. Thirdly, we need to work hard to get the right regulations in place, and we need to engage with all the institutions that create the regulations to ensure that they are clear and fair. That means having very early engagement.
This is a very important industry for the UK that can have a future, if we make the right choices. I urge the Government to engage as much as possible with not just
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the industry, but the all-party group on the packaging manufacturing industry. I am celebrating my 10th anniversary of membership of that group this year. Thank you, Ms Osborne—I note that you have magically appeared in the Chair—for allowing me to speak.
12.10 pm
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk): I congratulate my hon. Friend the Member for Rugby (Mark Pawsey) on securing the debate and, indeed, on the comprehensive range of his remarks, which demonstrate his knowledge of the industry. I do not think you were fortunate enough to have the opportunity to hear his contribution, Ms Osborne, but I know that Sir Alan and the rest of us were fascinated by the range of issues raised. I will do my best to deal with all of the 10 action points raised in my hon. Friend’s remarks and with some of the excellent points made by my hon. Friend the Member for Amber Valley (Nigel Mills) and the previous speaker, the hon. Member for Wrexham (Ian Lucas). Everyone has highlighted a different aspect of the subject.
I want to make a small plea. This subject relates to substantial areas that are far beyond my remit and come under the Department of Energy and Climate Change and the Department for Environment, Food and Rural Affairs. We work closely together, and I will do my best to answer hon. Members without creating new policies for my ministerial colleagues.
As has been pointed out, packaging is part of our everyday lives and, in a sense, is commonplace. At the same time, the different elements and materials—the metals, plastics, glass and paper—feed across the whole of manufacturing as they are very broad and are part of a wide range of supply chains. That is why it is right to say that there is a genuinely competitive role for UK industry in the sector. There have been some encouraging signs of innovation both as a discrete sector and as a process that is part of manufacturing as a whole. My hon. Friends the Members for Amber Valley and for Stroud (Neil Carmichael) have set out a couple of good examples of the kind of innovation that hon. Members across the House want to be encouraged.
As has been accurately pointed out, the packaging industry employs 85,000 people and has a value of £10 billion. In terms of the share of the manufacturing industry, it represents about 3% of the work force. It is worth noting—I am keen to put this on the record to demonstrate that we are mindful of this as a Government—that the productivity of the sector is double that of industry’s average performance. We are not talking about an industry that is sitting back and waiting for things to happen; it is very responsive. I will come to that point in a moment.
I shall thematically pull together the 10 actions mentioned by my hon. Friend the Member for Rugby and the other points made. He mentioned the industry’s role within manufacturing and what the Government can do to help, energy costs—which were raised by several hon. Members—and the broader issue of waste regulation and how that impinges both on the customers of the packaging industry, who are very often industry and business themselves, and the sector.
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On the industry’s place within manufacturing, my hon. Friend is absolutely right to say that we need to make sure that we rebalance that economy. We want to ensure that an over-reliance on a too-narrow group of sectors is replaced with a broader base, so that manufacturing has a key role to play. As the Minister with responsibility for manufacturing, I include in that not only what we might think of as high-tech, but industry as a whole.
On perceptions, which were rightly raised by the hon. Member for Wrexham, in the past 12 months, there have been good signs in terms of output, investment, exports and, in some parts of manufacturing, jobs, which is encouraging. He mentioned the automotive industry. There have been some encouraging signs in the investment that Jaguar Land Rover, BMW and Nissan all want to make. There are reasons to be encouraged, and we have had a good opening year, but we need to do a lot more. That is why the Government are determined not only to take corporation tax down from 28% to 26%, but to take it on down to 23%. At the end of that process, we will be putting £1 billion back into the coffers of industry, including packaging. That money can be reinvested. As we have heard, one of the key ways in which industrial sectors keep ahead is not simply by trying to reduce costs all the time, although that is important, but by innovating to keep ahead of competitors. That reinvestment capability—the £1 billion extra a year—is a very important part of that equation.
In addition, the Chancellor set out our plans in the Budget to improve short-term capital asset release and to extend it to eight years instead of just four. From talking to a number of people in industry, I know that that is a real boon, because when people invest in an industrial project, more so than perhaps in services, the payback time is often more than four years—it is often five, six, seven or eight years, and in some cases it is beyond that. My hon. Friend the Member for Rugby knows that, because he has worked in the industry. That is another important incentive to enable the packaging industry to progress.
It is also important to bear in mind—several hon. Members made this point—that it is not only the hard capital issues that matter, because soft capital issues and skills matter, too. That is why we have made a determined change in the investment in and development of apprenticeships. During this Parliament, 250,000 additional apprenticeship places will be created. That is particularly important in an industry such as packaging, because it has to adapt and to be able to cope with conventional packaging issues and the growing issues around climate change and the environment. It is a crucial part of the equation for the packaging industry to be able to reskill its work force.
On that note, the hon. Member for Solihull (Lorely Burt), who sadly is not in the Chamber at the moment, raised a point in response to my hon. Friend the Member for Rugby on the perception of industry. Indeed, the hon. Member for Wrexham also highlighted that important matter. There is an outdated perception of industry that is often blown away when someone gets the chance to go and see an industrial facility. We note the generous invitation issued by the hon. Gentleman to Mr Paxman to visit a packaging company, and he is right: we need people to visit centres and see what an industrial facility is all about in the modern era. That is why, last week, we
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started a pilot project called “See Inside Manufacturing.” I went to the north-west to encourage and talk to careers advisers and teachers. In the autumn, we want to roll out the programme, so that it works not only with the automotive industry—as it does at the moment—but with the whole of industry.
I extend to the packaging industry an invitation to consider joining that programme in the coming few months, so that we can consider how we can show young people and the public as a whole the broader opportunities in that field. It is also important to change people’s perception of what is involved in the range of different careers. People often assume that the range of skills and careers in industry is narrow, but it is actually very broad and people are highly skilled in many different ways. I certainly want to see the packaging industry play a part in the “See Inside Manufacturing” programme. I will leave it to the hon. Member for Wrexham to decide whether to accompany Mr Paxman on a visit. It would certainly be good if were to get a broad range of people to see what the industry does.
Let me turn specifically to the challenges faced by the packaging industry. My hon. Friend the Member for Rugby raised the question of getting the balance right and of Government and public dialogue about the role of packaging. He is right that packaging and the packaging industry are not the principal problems in waste management. The statistic that packaging makes up less than 3% of landfill has rightly been mentioned. However, packaging clearly has a role to play if we are to ensure that we have a more effective waste strategy. Our approach is to work with producers and encourage a change in consumer behaviour. That issue was rightly mentioned in a number of contributions. When we consider how consumer patterns have changed in the past few years, we realise that we are a world away from where we were before.
We live in a 24-hour, seven-days-a-week culture in which people expect all kinds of produce that for our parents were never available at certain times of the day, let alone at certain times of the year. We expect them, however, to be available 24 hours a day, seven days a week. Inevitably, the industry has responded to that challenge and has changed the nature of how packaging is produced. I suspect that is why, as my hon. Friend the Member for Amber Valley has pointed out, people suddenly find themselves with things wrapped in things wrapped in things wrapped in things, and wonder why. It is right to say that if we were not to wrap effectively, we would find that food waste would be significantly greater. It is important that while we work with the industry—I will discuss the Waste and Resources Action Programme in a moment—we ensure that consumers are encouraged to change their habits positively.
Let me look briefly at what the industry is already doing because, as my hon. Friend the Member for Rugby has rightly said, that is often something that we do not recognise. It is important that we recognise that lightweighting of packaging in the supply chain has been going on for many decades. In the past eight years, household expenditure rose by 20%, but packaging increased by only 3%. While there has been, perhaps for an individual household, the sense that they have more packaging to recycle at home, the gap between expenditure and actual packaging strongly suggests that the industry is being responsive and responsible in this area.
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Several hon. Members have raised good examples of that. Asda saved itself approximately £10 million in 18 months simply by changing basic packaging processes. The Home Retail Group looked at the dreadful waste one has when one gets a new sofa or new piece of equipment—not that we have been able to manage one of those in the Prisk household in recent years—and introduced reusable sofa bags. That particular retail outlet has cut packaging by 1,800 tonnes every year just by that simple change, which is an important example. My hon. Friend the Member for Penrith and The Border (Rory Stewart) raised the point that this industry has models of good practice, particularly regarding local impact in more remote areas, and he is right about that.
The hon. Member for Wrexham is right to say that there needs to be a good, open dialogue in the relationship between an industry sector and the Government. I have sought to develop and continue that in the Department. This is where I suspect the opportunity for the packaging industry, perhaps through such forums as the Green Economy Council, could help us crack the problem to which he has alluded. We have developed a road map, which allows us to look at the issue in the round. As we heard in the debate, the problem in packaging is that it is not quite as simple as just a sector. The nature of what it does inevitably means that it strays into areas relating to waste, water and energy. If we could encourage different parts of our industry to get into that dialogue, that would be good and it is certainly something that I want to encourage.
On energy costs, we recognise that our impact, when we look to set the right energy and climate change polices, needs to reflect both generators of electricity and their users. That is a natural tension in any form of energy or climate change policy. It is also important to stress that we, as a Government and not just as a Department, want to ensure that industry, and especially industry with a high or intensive use of energy, remains competitive. There is an issue about how different forms of energy have risen in price. Information from last year shows that, in the past five years, average industrial electricity prices have gone up by approximately 35% in real terms. In that same period, average gas prices have increased by 10%. It is therefore clear that there is a specific issue around electricity pricing, which might pose a risk to the competitive future of those sectors.
The hon. Member for Wrexham rightly pointed to a joint report by the TUC and the Energy Intensive Users Group. That is a powerful document that highlights the estimated cumulative impact of the future energy price in the coming years. That is why not only the Secretary of State in my Department, but our colleagues in the Department of Energy and Climate Change and in the Department for Environment, Food and Rural Affairs, are working together with the encouragement and involvement of Downing street to ensure that we specifically look at and address those concerns around industry.
Later this year, we will announce a package of measures, particularly for energy intensive businesses, where there may be a danger that their international competitiveness is affected. I appreciate that, per se, the packaging industry would not necessarily be classified as energy intensive. Self-evidently, however, some of the key materials it uses—metals and chemicals—are included. That is one way that we can help. I have always made it clear to
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industry as a whole that I want to know where the pinch points are—the carbon floor price is a good example—so that we do not end up with the danger that has been highlighted. We do not want unintentionally to export jobs and industrial capability, which in the end does not help the climate at all. Several hon. Members have raised that important point.
Mark Pawsey: Does the Minister have any particular advice for the packaging industry to ensure that it is considered as energy intensive and subject to the benefits that he has just outlined?
Mr Prisk: Yes; I want to encourage industry to ensure that specific aspects of the carbon floor price or other elements of our commitment to reduce carbon are incorporated, so that both my Department and other Departments are crystal clear as to where those issues are and that those issues are fed into the current dialogue. I know that there is a dialogue in hand at the moment, but it is important that the industry keep that pressure going.
Mr Russell Brown (Dumfries and Galloway) (Lab): I hope that the Minister will take from the debate the point that for most of the industry energy costs are significantly greater than the average profit margin, which is a massive issue that needs to be tackled.
Mr Prisk:
I am mindful of that, and the hon. Gentleman has made a good point about overheads. Clearly, energy is a crucial issue. That is why, while we want to ensure that we set the right regulatory environment so that generators in renewables come forward, we do not unintentionally to create an unreasonable detrimental
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impact on the users of energy. That is a difficult balancing act to perform, but that is why we have made it clear that, while we want to pursue the regulatory framework, we want to look at those industries that find themselves under particular pressure with regard to their use of energy. Clearly, electricity rather than gas is the centre of that process.
Other regulatory issues have been raised with regard to waste policy. The waste strategy is focused on waste reduction, driving recycling and the reduction of packaging. We take the view that that can best be achieved in partnership with the sector. That comes back to the important issue, which a number of hon. Members have raised, about the balance between carrot and stick. We genuinely believe that voluntary agreements are one of the best ways forward. In a sense, that is the way in which WRAP operates. It started in 2000 and was designed to advise and help businesses change and innovate—for example, the Courtauld commitment focuses on how waste management can be improved. There have been some important changes. WRAP has been able to secure backing for infrastructure projects with savings of approximately 120 million tonnes of waste from landfill. It also backs programmes such as Rethink Waste, which looks specifically at working with manufacturers to reduce waste and improve resource efficiency. A number of hon. Members have mentioned food and drink. I point to the Federation House commitment, which is important.
In conclusion, this has been a positive debate. We recognise and value the industry, and the change that it is making is important. It is crucial to support and encourage consumer behaviour that enables innovation. We want to work with the industry in a positive dialogue in the weeks and months to come.
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Debt Management Plans
12.30 pm
Nic Dakin (Scunthorpe) (Lab): It is a pleasure to serve under your chairmanship, Ms Osborne, to have secured this debate, and to see so many hon. Members in the Chamber. Many other hon. Members have contacted me to say that they would have liked to be present, but unfortunately cannot attend. I thank the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey), for meeting a delegation from the all-party group on debt and personal finance a few weeks ago. He had a positive discussion with us about debt management plans.
Unfortunately, increasing numbers of people are getting into debt. In the Scunthorpe county constituency, for example, the average debt of clients of the Consumer Credit Counselling Service is £16,870. I fear that the trend might continue in the years ahead. When people summon up the courage to ask for help in dealing with their debts, they need to get the best support to clear their debts, not to make matters worse. However, at present, people who try to take responsibility for their debts can find themselves at the mercy of unhelpful, aggressive and sometimes unscrupulous practices that can make dealing with debt an even more unbearable experience.
Gordon Banks (Ochil and South Perthshire) (Lab): A debt management plan has a real purpose: to return something to the creditors, but also to get the consumer out of debt as soon as possible. Does my hon. Friend have similar concerns to mine, about the many instances in which consumers find themselves with more debt, rather than less?
Nic Dakin: My hon. Friend makes his point well. Under a debt management plan, a debt management company collects a single monthly payment from its clients and administers the repayments on their behalf to each of the non-priority creditors, such as for consumer credit debt. Usually, the client pays for the service, although some organisations will do it for free, such as the charity Consumer Credit Counselling Service and the company Payplan, which are funded through the “fair share” approach to debt management, the virtues of which my hon. Friend extols. Such an approach ensures that the creditor, rather than the debtor, pays for debt advice and support by returning a percentage of the payment made by the debtor to the debt management plan operator. The creditor, however, credits the debtor with the amount of the full payment. That is the best possible approach to debt management, because it aligns the debtor and the debt management company, which is in their interests and the interests of the creditor. That model enables charities such as CCCS to help the nine out of 10 people lacking the means to repay their debt.
Other debt management companies also behave responsibly, but some companies’ practice has significant risks for the client. Most DMCs charge an initial up-front fee, which can be quite high, as well as an administration fee each month, leaving the clients with less money to pay off their debts. CCCS estimates that clients of commercial DMCs will take up to two years longer to repay their debts.
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Jonathan Edwards (Carmarthen East and Dinefwr) (PC): I thank the hon. Gentleman for securing this important debate. Before my elevation to this place, I used to work for the citizens advice bureau movement, and I saw how debt problems had risen significantly in our community. The hon. Member for Makerfield (Yvonne Fovargue), who is present, surely shares that viewpoint. Is it not the case that those debt management companies often target the most vulnerable in society, and that their plans are doomed to fail, which is why we need regulation of the sector, and especially of debt sharks?
Nic Dakin: Although there is some good practice, which we need to recognise and celebrate, a number of DMC practices identified by the CAB cause me great concern: cold-calling and aggressive marketing; charging up-front fees for services that fail to materialise; or poor advice in some cases, particularly when other debt remedies would be more suitable for a client’s circumstances.
Justin Tomlinson (North Swindon) (Con): It is a pleasure to hear the hon. Gentleman’s contribution on a subject on which he has spoken on many previous occasions. On his point about poor advice, the obvious answer is that we need some form of quality mark, so that when people seek help—more often than not, the most vulnerable people, who are least well equipped to ascertain whether they are getting good or bad advice—they have the assurance that they are taking the right steps.
Nic Dakin: That is a good point. We certainly need more in the system than is there. Other examples of bad practice include: failure to pass on payments to a client’s creditors; ignoring priority debts, such as mortgage or rent, fuel, and council tax, which involve the ultimate sanction of loss of home, fuel supply or even liberty; and excessive charges for debt management services. All such practices have occurred.
Tessa Munt (Wells) (LD): I have been consulted by a debt management company in my constituency. The gentleman who runs that company said that, if I wanted to become a bailiff, he could probably make me one by next Monday morning, because the legislation on, and control over, the bailiff system is sadly adrift from what it should be, and an awful lot of bailiffs do not act as they should. Does the hon. Gentleman agree that the legislation needs to be tightened up, so that it gives some sort of scrutiny of the process?
Nic Dakin: The hon. Lady makes a good point which, in a sense, underlines that made by the hon. Member for North Swindon (Justin Tomlinson) about the need for tighter regulation, or a tighter quality mark, in this area generally. Recent research by the Association of Business Recovery Professionals has confirmed worries about a lack of impartial advice, insufficient information about fees, and agreement of too many debt management plans that were always going to be unworkable.
Jim Shannon (Strangford) (DUP):
The hon. Gentleman has been generous in giving way. Does he feel that, given the benefit changes that are to be made next year, there will be a greater need for debt management? Also, does he feel that the desperation that arises from debt will
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fuel an already volatile situation? Does he agree that social security officers and housing associations could give expert advice to help?
Nic Dakin: The hon. Gentleman makes a good point. Sadly, we are moving into more austere times, in which more people are likely to get into difficulty. Indeed, the Joseph Rowntree Foundation this morning published figures suggesting just that. The Office of Fair Trading reported widespread non-compliance, misleading advertising by businesses involved in the area, and a lack of competence among front-line advisers working for DMCs. Sadly, the OFT found that self-regulation is not working and continues to be an abject failure.
Yvonne Fovargue (Makerfield) (Lab): Is my hon. Friend as concerned as I am that even where there is evidence of unfair practice, the OFT has taken more than two years to close companies down? In those two years, the companies still operate, make a profit and charge vulnerable customers. The OFT needs more power to investigate such companies and shut them down early.
Nic Dakin: My hon. Friend has much knowledge and expertise in this area, and she makes a powerful point about the need for the Government to act now to protect vulnerable people. I know that the Minister has concerns, and I look forward to his response.
Citizens Advice believes that there should be a statutory scheme, with better powers for the regulator, coupled with improved funding of free debt advice. The solution, to improve current arrangements and protect vulnerable people from getting further into debt as a result of the behaviour of those to whom they turn for support and advice, might be to have a regulated environment in which providers are independently audited to standards set by an independent body, fees are controlled, and there is clear certainty about the repayment term, for creditors and debtors alike.
Gordon Banks: My hon. Friend is generous in giving way. He has hit the nail right on the head. This is a little bit of advertising: I hope later this year to promote a private Member’s Bill on this very issue, providing for a statutory scheme that is binding and includes a rigorous audit process and a fee cap. Does he agree—this has already been touched on today—that when someone approaches a debt management company for advice, they are at their most vulnerable? If they are told, “Give me £50”, or £200 or £600, “and I will sort the matter out, and spread that payment over a period,” that is exploiting their vulnerability.
Nic Dakin: My hon. Friend makes a powerful point. We look forward to his private Member’s Bill, which will raise the issue again. We need a regime that will encourage providers to compete on quality, rather than the size of their advertising budget. Debt management plans would then be more likely to lead to debt repayment and genuine resolution of debt problems for the majority of customers who entered into them. That would be achieved at far lower cost than under the current regime, and would significantly increase the speed with which creditors were repaid. That would be good for debtors, good for creditors, and good for UK plc.
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12.40 pm
Damian Hinds (East Hampshire) (Con): I congratulate the hon. Member for Scunthorpe (Nic Dakin) on securing this important and timely debate. I thank him and the Minister for allowing time for several hon. Members to make short contributions. The issue is not party political, and it is encouraging that hon. Members from six political parties are here. We had an opportunity to debate related issues in the House yesterday, and almost everyone now coalesces around the fact that a proper approach to the issue must have three strands: education, regulation and provision of alternatives. The important issue that we are discussing, which relates to a growing problem, touches on all three strands, but has to do with regulation especially.
I am a Conservative Member of Parliament, and not a great fan of new regulation, but this is one area where it is needed. It is astounding that when some markets are grappling with sometimes unreasonable regulation, regulation of debt management has not hitherto been more effective. I daresay some hon. Members may take a purely libertarian, “caveat emptor” view of the matter, but I have not yet met them. If I have, I have not heard them expressing that view. As has been said, the market that we are considering deals with some of the most vulnerable consumers. “Vulnerable” is a word that is used an awful lot these days for all sorts of things, but it applies in the purest sense in this case. Much as it may challenge our view of economic theory and so on, the fact is that many people are not making rational choices, and the debt solutions that they seek are often about the first advert that they see, rather than what is most appropriate for them.
Gordon Banks: The hon. Gentleman’s point is appropriate; people get sucked in by the first or last advert that they see. However, there is another side. As I have said, one objective must be to give money back to creditors, and the more that is paid in management fees, the less goes back to creditors. We certainly want to help consumers, but we must also recognise that creditors are entitled to repayment of debts.
Damian Hinds: The hon. Gentleman makes a fine point. The “fair share” model works for various not-for-profit organisations and can be effective. We should foster and encourage that. A lot could be done with regulation in this area. I want to focus on a couple of measures that the hon. Member for Scunthorpe mentioned, which are relatively straightforward and would be effective.
The first is the banning of cold-calling canvassing for new business, and the second is the banning of up-front fees. The two together would make a big difference. On up-front fees, many people suspect that some operators in the market have a cash-flow model that recognises that they may not be around for ever. Those are not the sort of debt management companies that we want. There are responsible operators, and those are the ones that should be encouraged.
I want to make a final, brief point about the visibility of various debt management services. The Consumer Credit Counselling Service, citizens advice bureaux and others offer free advice services, and the internet is an important source of information for people these days. When people get round to looking into ways of solving their problems, they should be able to find those services
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easily. I hope that search engine providers, particularly Google, which to all intents and purposes is the search engine provider, will be encouraged to act.
Mrs Jenny Chapman (Darlington) (Lab): I congratulate my hon. Friend the Member for Scunthorpe (Nic Dakin) on securing this debate. Will the hon. Member for East Hampshire (Damian Hinds) add to his list a ban on the sale or passing on of information about people to debt management companies? We have been concerned about that practice in the motor industry, with regard to insurance claims. Does he share my concern that the same practice takes place in debt management?
Damian Hinds: I do indeed. By definition, a ban on cold-calling would include the selling of lists and the sharing of data.
I conclude on the point about search engine marketing, and encourage search engine providers, as part of their corporate social responsibility agenda, to take a different view, so that rather than considering only the pay-per-click bid times the click-through rate, they consider what they can do to help people in some of the most difficult circumstances. I again congratulate the hon. Member for Scunthorpe on securing the debate.
12.45 pm
Yvonne Fovargue (Makerfield) (Lab): I congratulate my hon. Friend the Member for Scunthorpe (Nic Dakin) on securing this debate, which we have needed for some time. I confirm that I believe that creditors must be paid, but the practices of some debt management companies do not encourage that. They load the fees up front, and recoup all their charges in the first two years. They provide no encouragement for people to carry on with a sensible plan, because the up-front loading discourages people from continuing after that period, and frankly they do not worry about that, because those two years are where they make their money. They cannot offer the full range of solutions, and are not allowed to do so, because only authorised providers can produce debt relief orders, and in the main those providers are citizens advice bureaux.
There was great concern last year when the financial inclusion fund was due to finish. Fee-paying debt-management companies were circling like sharks, thinking, “We’ll be the only option, and debt advice will not be available.” I urge the Government to consider a financial inclusion fund and free debt advice, because that is all that will stop some debt management companies.
I am worried about the link between such companies and high-cost lenders, some of which now have another arm: a debt management company. They get people into debt, charge them for that, and then put them through to their own debt management company, which will charge to get people out of the debt that it put them into in the first place. That is not acceptable. Regulation was introduced in the United States and Australia, which are not countries noted for over-regulation, and it has worked. That is why there is a proliferation of debt management companies here.
Gordon Banks: I suggest that my hon. Friend ask the Minister to look over the border at Scotland, where there is a system that works much better than that in the rest of the UK.
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Yvonne Fovargue: I agree that regulation has worked, which is why American companies have come over here. It is too hot for them to operate over there, so they are now operating in England, and our consumers are suffering. Along with regulation, we must give the organisation that has the regulatory power the means quickly to close down companies, or suspend them from trading, when there is consumer detriment and bad practice. Two years is not acceptable.
I thank the Minister for listening last time we were here, and ask him to consider free debt advice. I appreciate that debt management companies have a role to play, but they must be regulated if they are to play the kind of role in society that we all want them to—a responsible role.
12.48 pm
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey): I congratulate the hon. Member for Scunthorpe (Nic Dakin) on securing this debate. I was pleased that he did, and it is good that so many hon. Members have contributed to it and aired their concerns. The Government are acutely aware of those concerns, and we share many of them. It is a sign of our desire to protect vulnerable individuals that debt management issues were a major part of the questions that we asked as part of the joint Treasury and Department for Business, Innovation and Skills call for evidence. The “Consumer Credit and Personal Insolvency Review” was published last year, and covers all aspects of the consumer credit life cycle, including what happens when things go wrong.
Hon. Members will appreciate that it is difficult to obtain a precise picture of the debt management industry, even to the extent of obtaining accurate figures for the number of plans in place. Some of the concerns that we have heard recognise that lack of information. I cannot give details today, but I am keen to improve the quality of information about the industry. I will say more about that when we publish our response to the call for evidence, which will be soon.
Despite the constraints, improvements have recently been made to protect the most vulnerable debtors. By extending the eligibility criteria for debt relief orders, we have enabled more of the most vulnerable people to find a way out of unsustainable debt. Some safeguards are already in place, although I understand that several of my colleagues would like us to go further, and I will go on to talk about that. Providers of debt management plans are required to hold a consumer credit licence, and holders of those licences are monitored by the Office of Fair Trading. The OFT has strong enforcement powers. Following its compliance review last year, it issued warnings against 129 companies, of which 43 have since left the market and investigatory work is ongoing in many other cases. The OFT is determined to see that work through as soon as possible.
The OFT has recognised the need to improve its guidance, and it recently published proposed revised guidance for debt management plans. That guidance sets out the standards that the OFT will expect of debt management businesses, and makes it clear that, among other things, such businesses must be fully transparent about the service on offer and the fees charged; explain to consumers the risks and benefits of each proposed
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solution; not use misleading names or advertising, including misleading web-based adverts; and ensure that the advice provided is in the best interests of customers. Any business that fails to adhere to that guidance can expect strong action to be taken against it, including, where appropriate, the removal of its licence. The industry has recognised the need to improve its practices, and it is welcome that a number of debt management organisations have joined the Debt Managers Standards Association, which, as the OFT has recognised, is trying to improve standards.
What more needs to be done? The Government believe strongly that those struggling with debt must be assured that they will receive the best advice and be directed to the solution most suitable for their needs.
Gordon Banks: Will the Minister give way?
Mr Davey: I am concerned about the time; perhaps I can make a little more progress and then give way to the hon. Gentleman.
Free and impartial advice is available for people in difficulty. We need to make sure that such advice is well publicised and that vulnerable people know where to find it and can avoid unscrupulous businesses that may seek to take advantage of them. We know about Citizens Advice, and I was pleased that the hon. Member for Scunthorpe mentioned the Consumer Credit Counselling Service, which is a fantastic organisation. He also, quite rightly, mentioned Payplan. We must ensure that people are aware that they can get quality advice for free. That is essential.
Hon. Members have expressed concern that the aim of some fee-charging debt management companies is to make money for themselves, rather than to ensure that an individual finds the appropriate solution for their circumstances. We have also heard, both today and on previous occasions, that some individuals who enter a debt management plan find that they emerge from that plan in a worse position. Clearly, that cannot be right.
I am concerned that those who are in a vulnerable position might seize on an advert that offers what appears to be an easy way out of their difficulties. If they are told that the organisation that they approach will deal with all their debt problems, they may not ask about the likely costs and that will create difficulties. The answer to that complex problem does not necessarily lie in more regulation. We need to empower debtors to find the right information, access the right sources of impartial advice, and find the solution that best meets their needs. We confirmed some time ago that we will fund the face-to-face debt advice project for a further year, while work is done to move the provision of such advice to a more sustainable footing. As my hon. Friend the Financial Secretary to the Treasury said yesterday in the House,
“it is the intention that the Money Advice Service—which is funded by the financial services industry—will take on that work.”—[Official Report, 4 July 2011; Vol. 530, c. 1254.]
It is important that free debt advice is available through Citizens Advice, the Consumer Credit Counselling Service and other quality, free debt advice services.
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I want to look at what more can be done to ensure public awareness of reputable debt advice sources, whether online, over the telephone or face to face. Everyone involved in the debate—creditors, debt advice agencies and providers—should be involved in finding the best way forward. When we publish our response to the call for evidence, we will make proposals designed to foster that collaborative approach and help people with unsustainable debts to get the help and advice they need to take control of their lives once more.
Gordon Banks: The Minister talks about ensuring that creditors get the best advice. Many of the major lenders fund debt management processes through Payplan, for example. Is there any mileage in making the main funders of an organisation such as Payplan, which could be the major creditor of someone entering a debt management plan, have a role in guiding someone from a fee-paying to a non-fee-paying organisation?
Mr Davey: The hon. Gentleman makes an interesting point. It is surprising that many public bodies—whether local authorities, utilities or lenders—do not make those who cannot pay their bills or are in debt as aware as possible of quality, free advice services. We need to talk to those organisations because raising awareness is critical.
Mr Davey: I will give way in a moment to the hon. Lady; she made a very valuable contribution.
When people are in debt, that can affect their health and there could even be mental health consequences. We must ensure that people do not end up in the clutches of a company whose advert they heard and do not recognise that there are free, quality advice services. We must deal with that issue.
Yvonne Fovargue: Does the Minister accept that we must not only make people aware of the free agencies available, but ensure that those agencies have quick, available appointments? When somebody wants to get out of debt, they do not want to wait six weeks for an appointment. That is where the debt management plans win; they say, “We’ll deal with you immediately.”
Mr Davey: The hon. Lady makes a vital point. We must ensure that people are aware of all the different options. Online options are increasingly being taken up; they are effective and can be accessed 24/7. There is a high usage of online helplines, and if people are vulnerable or ill, they should have access to quick and quality face-to-face advice. I agree with the hon. Lady.
We have heard a number of ideas during the debate, and we will reflect on them, just as we have reflected during the call for evidence. We have heard interesting ideas such as that from my hon. Friend the Member for East Hampshire (Damian Hinds) about whether search engine providers ought to think about their social responsibilities when people search for advice. There are issues about audits and so on.
Mark Durkan (Foyle) (SDLP):
May I take the Minister back to when he referred to the more robust guidelines that the OFT will produce? He said that the OFT will move against firms that breach those guidelines, possibly
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by withdrawing their licences where appropriate. Who will determine when such action is appropriate? What will be the exact criteria? If those decisions are open to challenge, will the OFT end up having a paper power that it never exercises? The firm from which the OFT might wish to withdraw a licence will always have deep pockets, and the OFT might feel that a challenge is not worth its while.
Mr Davey: The OFT is the regulator. If it deems an organisation to have breached the guidance, it can act. Indeed, it has acted. Some 43 out of the 129 companies that it identified and investigated have left the market. The idea that it is a regulator that does not take action or track companies down if they do not behave properly is not correct. That does not mean, however, that we cannot improve the overall framework.
When I met the hon. Member for Scunthorpe and a number of his colleagues from the all-party group on debt and personal finance—which, I should say, is doing fantastic work—we had a number of discussions, some of which were reflected in the debate. We share a lot of the concerns that have been raised today. I cannot prejudge the response to the call for evidence, which will arrive soon, but I share the views of colleagues and we will take action.
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Neuroblastoma
12.59 pm
Neil Parish (Tiverton and Honiton) (Con): It is a great pleasure to speak under your chairmanship, Ms Osborne. I thank Mr Speaker for granting me this debate on primary care trust funding for neuroblastoma. I am delighted to welcome the Minister with responsibility for care services and look forward to hearing his response to these grave matters.
Neuroblastoma is a rare solid tumour cancer that tragically occurs in very young children and infants, primarily under the age of five years. It accounts for 17% of cancer deaths in children. Only 100 children are diagnosed with neuroblastoma each year in the UK. That is a blessing in itself, but it is of little comfort to the parents coping with the emotional strain of knowing that their child must face the long, hard battle against cancer.
The disease is caused by the development of cancerous cells in neural crest nerve cells, which play a key role in the development of the sympathetic nervous system. Most neuroblastomas begin in the abdomen or adrenal gland, next to the spinal cord or in the chest. In nearly 70% of children diagnosed, the disease has metastasised, which means that it has spread to other parts of the body. That makes it a particularly hard cancer to treat. The disease commonly spreads to the bones, and it can cause pain and difficulty in walking. Occasionally, it can affect the spinal cord, causing numbness, weakness and loss of movement in the lower part of the body.
The symptoms depend on where the cancer starts and whether it has spread to other parts of the body. Initial symptoms can seem as innocent as tiredness, fever and loss of appetite. The vagueness of those symptoms makes neuroblastoma hard to diagnose in the early stages. Because neuroblastoma usually develops in the abdomen, the most common symptom is a lump in the stomach, which can make the child’s tummy swell, causing pain and great discomfort.
The disease is treated through a variety of means, including surgery, chemotherapy and stem cell replacement. However, even after those treatments, high-risk neuroblastoma remains a major cause of death due to malignancy—patients have a two-year survival rate of approximately 20%. On top of that, the majority of high-risk neuroblastoma patients will experience disease relapse.
It saddens me, then, that a young constituent of mine, named Sam Daubany-Nunn, is being denied funding by his local primary care trust to receive vital treatment in Germany that might well be curative. Sam was diagnosed with neuroblastoma at the age of 16 in July 2008. Such a diagnosis is quite unusual in someone as old as that. At the time, Sam was undertaking his GCSEs at Colyton grammar school. He went through eight hours of surgery, gruelling high-dose chemotherapy, a stem cell transplant and radiotherapy. Fortunately, he responded well to his treatment and, despite his illness, he excelled at school, achieving high grades in every subject. He went on to pursue his studies at sixth-form level. I met Sam and his family in Seaton in my constituency. They live in Uplyme, right on the border between Dorset and Devon. That is why Dorset PCT is in the dock today.
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Sadly, Sam became ill again in October 2010 and the family were informed that he had relapsed and that the neuroblastoma had come back. Sam went through six further courses of chemotherapy, two cycles of metaiodobenzylguanidine treatment at University college London and another stem cell transplant.
Following that, a new treatment was added to the front-line protocol in the UK for all new children diagnosed. That new treatment is a targeted cancer therapy called monoclonal antibody therapy. Monoclonal antibodies are made in a laboratory and introduced to the body intravenously. They attach themselves to areas on the cancer cells. In this case, the antibodies bind to a protein called GD2 on the surface of neuroblastoma cells. Those antibodies operate as markers for the patient’s own immune system, encouraging it to attack and destroy cancerous cells. Without those markers, the immune system would not attack cancerous cells, as those tumours are part of the body.
I was pleased to receive a letter from my right hon. Friend the Secretary of State for Health in response to a point that I raised with my right hon. Friend the Leader of the House at business questions. The letter informed me that UK patients now get access to that treatment via the Cancer Research UK-supported European trial and that there is now wide clinical agreement that all children with high-risk neuroblastoma who might benefit should have access to monoclonal antibody treatment, as it increases survival rates to about 70%. That is extremely important. However, that clinical trial, led by Dr Penelope Brock from Great Ormond Street hospital, is not available in this country for relapsed cases—it is available for newly diagnosed cases only—and five or six patients a year would not meet the strict criteria for the trial.
A second trial is being established with wider eligibility criteria, and it will include those children who, like Sam, have relapsed, but it will not be available until January 2012. That is an unworkable time frame for neuroblastoma sufferers who cannot wait for the UK trials to start. That is certainly the case for Sam. As a result, some parents have opted to take their children for treatment in Germany, which is piloting the new trial that will be available across England in 2012. That has been paid for by their local primary care trust after an individual funding request. However, Dorset primary care trust, near my constituency, has refused to support the funding request in Sam’s case. His family have been raising funds to pay the €80,000—a very big sum—that the treatment in Germany costs. Indeed, they have remortgaged their house. Hon. Members will understand that not everyone can take that action, which is why I am raising this matter with the Minister today in the House.
Sam’s case is not isolated. After raising neuroblastoma funding in both the House and the media, I was contacted by a father whose son, Adam, suffers from neuroblastoma. Like my constituent, he is not eligible for the clinical trials in the UK and he made an individual funding request to Surrey primary care trust, which, like my constituent’s, was rejected. I understand that Adam’s father is now in contact with his local MP. I wish him and his family well and hope that he can receive the treatment that he needs.
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That contrasts with the decision made by NHS Northamptonshire’s individual funding request department in an almost identical case involving a constituent of my hon. Friend the Member for Wellingborough (Mr Bone). I will take this opportunity to thank my hon. Friend for all the assistance that he has given me in this regard. A young boy named Zach, whose case my hon. Friend has previously debated in Westminster Hall and who, like Sam, was not eligible for the clinical trial, was offered funding for monoclonal antibody treatment in Germany. In its letter to the family, the individual funding request department made this clear:
“Given the timescales involved NHS Northamptonshire does not wish further obstacles to stand in the way of treatment and we have agreed that if necessary the cost of monoclonal antibody treatment in Germany would be covered by NHS Northamptonshire.”
Fortunately for my constituent, there has been a last-minute change of heart by Dorset primary care trust. I received a call last night from the chief executive of Dorset PCT, who informed me that it had reviewed Sam’s situation and concluded that his was a unique case and that it would be unfair not to support the request for funding. That is fantastic news, and I extend my thanks to Paul Sly, the chief executive of Dorset PCT, for his assistance and for reviewing the original decision. However, I cannot help but feel that this case may not have had such a happy ending had I not been contacted by Sam’s family, written to the chief executive of Dorset PCT, raised the matter in the House, written on the subject in the press and finally secured this debate today.
I emphasise that other families might not be able to raise the funds to go to Germany. It is essential that Samuel gets this treatment now; otherwise, his chances of survival will be hugely limited. That is why it is good to raise this matter. That raises the question of how two primary care trusts can come to two completely different conclusions and why some people should be denied potentially life-saving treatment in such an ad hoc manner. People should be treated fairly throughout the country, and although I realise that the PCTs probably have a great deal of autonomy, I urge the Minister to iron out the problems, if he can. We can then get to January and February next year, when monoclonal antibody treatment will be available in this country.
Finally, I want to read from the conclusion of the letter from Paul Sly, the chief executive of NHS Dorset and of NHS Bournemouth and Poole:
“Our local processes for individual treatment requests are set up to try to deal fairly with the vast majority of requests. However as we went through the request it became apparent that the only possible funding route for Samuel at this time was a referral to the National Cancer Drugs Fund. Unfortunately as the Fund only covers ‘drug costs’ they were unable to assist.
In the light of the above, we carried out a further review of Samuel’s situation and concluded it is unique for three reasons…the treatment will be available in the UK later this year…he meets the trial inclusion criteria…he has to have the treatment within a specified time frame and cannot wait for the UK trial to start”.
I have put the issue on record. I hope that the problems faced by Samuel Daubany-Nunn and his family will reach a good conclusion. I reiterate to the Minister that there are not many such cases in the country, but it is extremely important that people receive this treatment when they need it, otherwise their chances of survival are very limited. I therefore ask the Minister to look at
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the general process. I am certain that NHS Dorset will honour the position that it has taken in its letter, but I am naturally keen to ensure that the Daubany-Nunns get help with funding Samuel’s treatment, because they very much need it, and it is only fair that people are treated similarly throughout the country.
1.12 pm
The Minister of State, Department of Health (Paul Burstow): It is a pleasure to take part in the debate. I congratulate the hon. Member for Tiverton and Honiton (Neil Parish) on securing it. A quintessential feature of Adjournment debates is that they give Back-Benchers the opportunity to bring to the attention of the House and a wider audience issues that are of real importance to the lives of our constituents—literally, in this case. I therefore thank the hon. Gentleman for bringing this issue before us.
Few things are more distressing for a parent than learning that their child has cancer. Everyone’s heart would go out to any family that found itself in the same circumstances as Sam’s family, and I shall say more about their case in a moment. First, however, I want to say a little about the Government’s overall approach to paediatric cancer. I then want to say something about neuroblastoma and the Government’s approach to it. Finally, I want to say something about this case.
On paediatric cancer services, the Government are committed to improving outcomes for all cancer patients, especially children and young people who have to deal with this disease at such a young age. That means ensuring that patients have timely access to high-quality treatments based on the best available clinical evidence. That is very much the Government’s ambition and goal. We want to deliver care that is safe and effective and that provides the best possible experience for young patients. Let me highlight a number of things to demonstrate that commitment.
First, we will ensure that the recommendations in the guidance from the National Institute for Health and Clinical Excellence on improving outcomes for children and young people with cancer continue to feature in all commissioned services.
Secondly, one of the recommendations includes ensuring that children and young people with cancer are offered entry to any clinical research trial for which they are eligible and that adequate resources should be provided to support such trials. We expect providers and commissioners of services to be mindful of that recommendation, and that goes to the heart of the hon. Gentleman’s concerns about the lessons that need to be learned from this case.
Thirdly, NICE guidance recommends that children who are not eligible for clinical trials should be treated according to agreed treatment and care protocols based on expert advice and that resources should be provided to monitor and evaluate progress and outcomes for the patient.
Fourthly, we have committed more £150 million over the next four years to the expansion of radiotherapy capacity and to ensuring access to proton beam therapy for all high-priority patients who need such treatment. Evidence shows that, compared with standard radiotherapy, PBT leads to improved outcomes and reduced acute and late effects, such as growth deformity, loss of hearing
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and lowered IQ, which can lead to learning difficulties. We are exploring options for developing PBT facilities in England to treat up to 1,700 patients a year.
Through the national cancer survivorship initiative, we are improving the quality of services supporting the long-term needs of children and young people. That needs to provide for a seamless transition from children’s to adult services and a constant focus on outcomes.
We are demonstrating the affordability and efficiency savings that one-to-one support for cancer patients can bring. Based on the emerging evidence from test sites and the core principles defined by the children and young people group, four models were identified and are being piloted in four sites to help to bring innovation to the delivery of support for children with cancer. Those models include a primary treatment centre aftercare model; a shared care model of aftercare, in which care is shared between the primary treatment centre and GP and primary care services; and a nurse-led model of care, which may include variations such as a telephone or text message model of aftercare.
The Royal Marsden hospital, in my constituency, has tested the benefits for the patient experience of introducing a clinical nurse specialist to their late-effects set-up. That has been combined with developing psychological screening tools to improve access to appropriate psychological therapy services. A number of things are therefore being done, as we strive generally to improve paediatric cancer services.
Let me turn now specifically to neuroblastoma. As the hon. Gentleman said, neuroblastoma is a cancer of specialised nerve cells involved in the development of the nervous system and other tissues. It can occur anywhere in the body, but it most often occurs in adrenal glands, particularly in the tummy, as he said.
About 100 children, usually under the age of five, are diagnosed with neuroblastoma each year. Of them, about 50 are in the high-risk group, with the most serious forms of the disease. We want to give every one of those children the best chance to beat the disease by ensuring that they have access to specialist oncology centres and good access to clinical research trials.
The UK has a good and long track record of achievement in basic cancer research, and the Department of Health invests more in cancer research than in any other area of human health. We now have the highest national per capita rate of cancer trial participation in the world. That is relevant to the debate, because there is now wide clinical agreement nationally that all children with high-risk neuroblastoma who might benefit should have access to a trial of monoclonal antibody treatment.
For the benefit of the hon. Gentleman and others who are following the debate, I should explain that the monoclonal antibody is not available as a normal drug supplied by a pharmaceutical company. To obtain it, a production run must be commissioned and produce enough doses to treat a large number of children. Most UK patients will now access this treatment through the Cancer Research UK-supported European phase III trial. The trial is led in the UK by Dr Penelope Brock from the Great Ormond Street hospital, as part of the UK Children’s Cancer and Leukaemia Group.
On 12 May, my ministerial colleague Lord Howe was privileged to visit Great Ormond Street to see at first hand the impact of Dr Brock’s work on families affected by neuroblastoma, as well as the real hope it offers to
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those most seriously affected. The national cancer research network of the National Institute for Health Research provided the NHS support for the trial, which is running in all 20 childhood cancer clinical trial centres across the UK. It is anticipated that the trial will recruit 160 children between 2009 and 2013, and it is estimated that about 40 children a year in the UK will be eligible for the treatment.
The hon. Gentleman was right to raise concerns about children, particularly those with high-risk neuroblastoma, who have unfortunately been considered ineligible for the first trial. Dr Brock is now setting up a second trial, which should benefit those five or six patients a year who do not meet the strict eligibility criteria for the first study. The Department has agreed to fund a second batch of antibody for that purpose. I understand that Dr Brock is planning to run the second trial in five centres in England, from this autumn—not next year.
The proposal is with the clinical trials academic review board for Cancer Research UK, and once it is approved it will go to the Medicines and Healthcare products Regulatory Agency for approval. While the trial proposal is progressing, Dr Brock’s colleague in the European monoclonal therapy trial, Professor Holger Lode, has been piloting the new trial at the SIOPEN centre in Germany, which the hon. Gentleman mentioned. It is perhaps inevitable that one or two patients will be identified as needing the treatment while the trial proposal is going through the necessary approval stages. The hon. Gentleman highlighted in that regard his own constituency case and that of the hon. Member for Wellingborough (Mr Bone).
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I am aware that some PCTs have paid for patients who meet the eligibility criteria to go Germany for the treatment. Non-routine treatment abroad will usually be considered in exceptional circumstances and primary care trusts may at their discretion take into account the individual circumstances of the patient and authorise treatment abroad that they do not normally fund. Each case needs to be considered on its merits as issues such as progression, relapse and the use of second-line treatments can all affect an individual’s suitability for treatment, including clinical trials. Each case needs to be discussed carefully with experts in the field.
The hon. Gentleman talked about his case experience and Sam’s diagnosis and mentioned the good news that the PCT has further considered the matter and, I understand, has taken into account Dr Brock’s views about the way the trial will work. I think that that has materially affected the judgment that the panel made originally and allowed it to make a new decision to allow for the funding of the monoclonal antibody treatment in this case.
I hope that the treatment, which, I understand, may already have started, will be a success and that that will be further good news for the family and offer them hope for the future. I hope that the hon. Gentleman will pass on my best wishes and those of my ministerial colleagues for Sam’s future and the success of the treatment and that we shall draw lessons from the case to ensure that, when other PCTs consider cases with exceptional circumstances, they are properly aware of the criteria that they should use.
1.22 pm
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Great Lakes (Africa)
1.27 pm
Eric Joyce (Falkirk) (Lab): I want to say a few words, in opening, about the nature of the debate. It is a little unorthodox, in the sense that normally there would not be several hon. Members speaking in such a short debate; however, there was great interest in the subject. The all-party group on the great lakes region of Africa went to the Congo recently. I was not on that trip. There is a great deal going on there, of course, and I am sure that the Minister will say more.
Although most hon. Members who are present are aware of the broad context and much of the detail, it is worth setting out some of the things that are happening. Some things that are happening in the Democratic Republic of the Congo are very important, one of which is that very soon, we hope, there will be an election. That is planned for November, which is a little later than it might have taken place. Nevertheless, it is a good sign. The UK was very involved the last time round, and sent several official observers. Members of this place and the other House went with non-governmental organisations to observe the elections. It was a very successful election process for the region, all things considered. There was a good, high turnout at the last presidential and prime ministerial elections in the DRC, and an independent commission ran things. International observers from all sorts of NGOs, UK bodies and Governments thought it went pretty well. There was a pretty good tick in most of the boxes.
Some years later, there is a rather different backdrop to the elections. The cost of the elections last time was about $225 million. One assumes that the cost is similar this time, but the international community was more reluctant, understandably, to find the large amount of money needed to run such a large-scale election in a place as difficult as the DRC, which is the size of western Europe but covered in tropical rain forest, making the logistics very complex. The election was well run last time, but this time there are one or two question marks. That is not to say that the election will not be legitimate. However, political development in the country over the past five years has been modest.
I have met Mr Tshisekedi, the person who would probably be considered the leader of the opposition, in so far as one can be considered to exist. He is an important figure in Congolese politics, and he is capable of putting together an alternative platform in the presidential re-election campaign. At root, however, it seems to be a fairly basic offer. One assumes that unless the elections are run tidily and independently, there will be questions about the process.
The elections have been put back a bit, and the constitution has been changed to take out the second round in the presidential elections. That is significant, as some think that President Kabila may not win a second round. Nevertheless, he will certainly get the majority of votes in the first round; so many people stand as presidential candidates that it is hard to prevent that, but who knows? What gave the last election considerable legitimacy was the fact that it was a tightly run process; the result was 57% to 43% in the second round, which was a clear result for everyone. It was clear that there was a genuine opposition, albeit the chap who was the opposition is now banged up in The Hague. That is a pity, but there it is.
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This time round, the electoral commission is being run by an ally of the President, which is cause for concern. This is primarily a Foreign and Commonwealth Office issue, but although the Minister may have a view, my instinct is that he will want to wait and see how it goes. It is fair to say that we should let the processes take place and express our judgment after the elections. The elections are important, because they change other things that are happening at the same time.
Jim Shannon (Strangford) (DUP): Does the hon. Gentleman agree that the formation of an integrated and professional army that does not abuse the people, but gives them the chance to express themselves, is important? It is essential that people can use the ballot box unhindered.
Eric Joyce: I thank the hon. Gentleman for making that profound point. We cannot do anything in countries such as the DRC unless we have security. We cannot have justice, effective infrastructure, hospitals and schools if people are too frightened to leave their houses or move around the place safely. In parts of the east—not only there, but significantly in the east—that is very much a fact of life for many. They live in dour conditions, and security is of the first order.
The FARDC, the army, has a history of having some competently trained people—trained in conjunction with the UK and the French. I do not want to say anything pejorative, but it does not have a high capacity, if I could put it like that. It has one or two people who are perfectly competent, and a large number of people who are not. First and foremost, the DRC needs a proper security regime, but in a good way; in effect, the country needs the army function, rather than a policing function. At a different stage of development, we would be talking about police, but it is a case of the army trying to maintain law and order.
There are some programmes, particularly from the United States, and there is a common European effort to assist in building capacity, but it is a long-running process. One of the early things that has to be done is to get the army to behave decently towards its own people. Poor discipline—it often breaks down, particularly in the east, where deployment of the army is coincidental to the mining operations—is a matter that should be scrutinised by us and international authorities, but the hon. Gentleman makes a profound point.
I turn to the question of minerals. The DRC is enormous, and its mineral reserves are unbelievably huge. One thing that prevents their full exploitation is that many companies are still concerned about the environment and corruption, and the damage that that does to their brand. The DRC produces about 18% of the world’s diamonds, but mainly in an artisanal manner; they are not produced industrially, as one might imagine it being done in South Africa, because the big companies are reluctant to play in the DRC. Some companies have invested in proper infrastructure—they have built proper mining operations—but they find things quite unstable at the moment.
I have waxed rhapsodic endlessly in the main Chamber, and in Westminster Hall, about a deal that involved First Quantum Minerals. It is a quite famous case that also involved ENRC, a FTSE 100 company, but I do not want to bang on too much about it and bore all who
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have heard me talk about it before. The essence of the case is that if there is an unstable trading environment, a company’s reputation could be damaged by one or two decisions that a Government may make in places such as the Congo, which may make it difficult for companies to invest properly.
First Quantum was the largest taxpayer in the Congo, which collects very little corporate tax and almost no income tax per annum. At the time, First Quantum was employing several thousand people at a mine in Kolwezi near the Zambian border. The mine was effectively expropriated by the Government, sold on for a small amount and then sold on again for a large sum. The question is where the bit in the middle went. No one knows, but we can guess. That, of course, makes it hard for other mining organisations, who saw that mine being expropriated, to invest in DRC. Sadly, that mine is an exemplar of what can happen; it sits empty, basically rotting, with no work going on there. There are no jobs. Companies that can provide several thousand jobs are a rarity all over the Congo, but particularly in the east and south, where jobs are a lifeline for the extended family. Those jobs have gone; there are no operations, and of course no tax is being paid.
As other Members wish to speak, I shall conclude by mentioning PROMINES. I am speaking without notes, so I am not sure whether I have mentioned it already, but ProMines is an excellent effort by the British Government, working in conjunction with other Governments, to increase transparency in the mining industry, and to make it legit so that people can invest with confidence. I understand that things were held up briefly at the time of the First Quantum deal, because the World Bank was concerned about that expropriation. The project stalled as a result, but I believe that it is on the go again. It is an essential developmental issue and a super idea. I hope that Minister will speak about it when the debate concludes.
1.37 pm
Paul Uppal (Wolverhampton South West) (Con): I am delighted to serve under your stewardship, Ms Osborne. I congratulate the hon. Member for Falkirk (Eric Joyce) on securing this most important debate.
I shall highlight some of the ongoing problems in the DRC, and particularly the eastern region. Time will not allow me to go into the topic in great detail—I am sure that everyone is aware of the complex and wide-ranging problems that the country faces—so I shall speak instead about women in the DRC, and the frightening and dangerous situation that many women face.
In a recent survey by leading gender experts, the DRC was named as one of the worst places in the world to be a woman. Sexual violence is widespread there, and there are instances of it being used as a weapon of war. I am encouraged that, in recent years, the international community has highlighted the problems of women in the DRC and has campaigned against sexual violence. However, as news reports show, the issue is ongoing, with hundreds of women—and also men, I understand—being sexually assaulted.
To empower women, we need to ensure that stability and peace are brought to the region, a point made by the hon. Gentleman. I was disappointed to learn from
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news reports yesterday that violence has marred the registration process for the elections. It is important for the international community to ensure that elections are free and fair, and that everyone is able to vote—most importantly, of course, women. If better governance is to be created, it is imperative that the elections be conducted correctly.
I was encouraged to read the Foreign and Commonwealth Office action plan to implement stricter legislation on sexual violence. Progress has been made in recent years with the Congolese law on rape in 2006, coupled with a better understanding and legal qualification of what constitutes rape, and the introduction of UN Security Council resolution 1888. Stability is essential, but we must work to tackle the attitudes and conditions that allow such violence to take place. Training and education for the army is essential, but it must be coupled with a strong legal system that will bring those who commit such crimes to justice.
Tackling corruption is vital. We must also ensure that high-level officials are brought to justice for crimes committed. Government aid to local NGOs, including that provided by the UK, is imperative to ensure that those organisations have the funding to allow them to reach people in towns and villages across the DRC. Such organisations can also encourage women to speak out, empower them to be involved in public life and help to reconcile them to the past. They can also address the issues at a local level. The NGOs will remain after the conflict ends and help to ensure that women’s rights continue to be protected. Those are short-term measures, so let me address more long-term issues.
Sexual violence should not just be seen in the context of the instability in the eastern areas. It did not originate from the conflict; the conflict intensified an existing problem. Discrimination against women is of long standing and will need to be tackled, alongside promoting peace, to ensure that women are in a better situation in the years ahead.
1.40 pm
Stephen Twigg (Liverpool, West Derby) (Lab/Co-op): I congratulate my hon. Friend the Member for Falkirk (Eric Joyce) on securing this important debate and the hon. Member for Wolverhampton South West (Paul Uppal) on his contribution. The hon. Member for Oxford West and Abingdon (Nicola Blackwood), Lord David Chidgey for the Liberal Democrats and I were part of an all-party parliamentary group that had the privilege to visit the DRC in May. The two speeches covered some of the issues that we addressed and I want to say a bit more about each of them.
As the Department for International Development is responding to this debate, may I begin by praising the excellent work that it is doing in the DRC and the great lakes region more broadly? It was encouraging to see that the work that was started under the previous Labour Government is continuing under this Administration.
I echo what my hon. Friend the Member for Falkirk said about the elections. Will the Minister tell us what progress has been made towards free and fair elections? My hon. Friend also mentioned the importance of monitors in the previous election. Clearly, monitoring
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will be even more vital if the election is to be run by the Congolese themselves rather than by the international community, as has happened previously.
I echo what the hon. Member for Wolverhampton South West said about the role of women in the Congo. Although we met some amazing women politicians in the region, women are sorely under-represented in Congolese politics. When we were in Goma, we met women who had survived rape and other forms of gender-based violence. An incredibly courageous five-year-old girl who had been the victim of a rape calmly told this group of strangers from the United Kingdom the story of her ordeal, which she had already had to describe in court.
I ask the Minister to say something about progress towards the millennium development goals. There is real concern about the continuing high levels of infant mortality in the Congo and low levels of primary school enrolment.
A major focus of our visit was the minerals question, which my hon. Friend rightly focused on today. Perhaps the Minister will update the Chamber on progress at a European level to some kind of European version of the Dodd-Frank legislation that has been adopted in the United States.
At the end of the visit, I had the opportunity briefly to go to Kigali in Rwanda, which has made remarkable progress since the genocide in 1994. The United Kingdom has played an important role in supporting that progress. Clearly, there are concerns about relations between Rwanda and the DRC, especially in relation to the impact of the Rwandan Government’s wish to invoke the cessation clause in December 2011, which might exacerbate tensions in the Kivus. I would be grateful to the Minister if he were to say something about that today.
Clearly, there is concern about lack of freedom of the media in Rwanda. I had an excellent meeting with the UK high commissioner in Kigali, and I recognised that the British Government are supportive of efforts to see an opening up of the Rwandan media. I want to put it on record that I appreciate the efforts that are being made by the UK high commission in Kigali.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): The hon. Gentleman has raised his justifiable concerns about Rwanda. Having been to Rwanda myself with RESULTS UK earlier this year, one of the things that came home to me are the great strides that have been made there. Kagame might have his critics, but if he was being toted around Africa as part of a transfer system for political leaders, he would probably be No. 1 in the African transfer want league.
Stephen Twigg: I agree with the hon. Gentleman. In the five years when I was out of the House, I worked with the Aegis Trust, which established the Kigali memorial centre to the genocide. As friends of Rwanda, we should put it on record that incredible progress has been made under President Kagame, but we must also be candid when we have concerns. I want to put my concerns on the record without in any way detracting from the truly remarkable achievements of that country since 1994.
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1.45 pm
The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien): I thank the hon. Member for Falkirk (Eric Joyce) for securing this debate and for giving me the opportunity to reply. I am glad that DFID has been chosen to reply, because it will give me a chance to cover some of the development issues. Much of what is relevant to the DRC is Foreign and Commonwealth Office business, but hopefully I will be able to cover both areas.
The hon. Members who have recently returned from their visit to the region will have had a rewarding and informative visit, as indeed I did when I went with the Minister with responsibility for Africa on a joint visit to the DRC. I went to Rwanda last year. Great challenges remain in all the areas that we visited. The overriding priority is to continue to bring sustainable peace and prosperity to the great lakes region.
There are also an enormous number of potential opportunities, but many of them are choked off, because the conditions for them to be usefully explored are simply not yet in place. Much of the potential is still largely untapped. Let me address the points that have been raised by setting them in the appropriate context. I want to take this opportunity to explain how her Majesty’s Government, through DFID in particular, are trying to help to unlock the potential in the DRC and the great lakes region.
The DRC is still recovering from the shock of Africa’s first inter-state war in the modern age, which was laid on top of decades of corruption and misrule. Recovery is hampered by continuing lawlessness and armed violence, particularly in the east. The country is physically disconnected, and politically highly disjointed. The hon. Members for Falkirk and for Liverpool, West Derby (Stephen Twigg) have mentioned that the elections must be seriously monitored. That monitoring process will be welcome, because it will encourage independent verifiability At the same time, we must work with civil society organisations to enable them to use their voice and express the various views across the DRC. We all welcome the broad sentiments that were expressed. We hope that the elections go well, and we will do everything that we can to assist the country at this time. It is important for the credibility of the Government that the elections go well. At the same time, though, we must not rush to judgment, and we must enable the process to go through rather than assuming the worst.
The DRC has some of the worst social indicators in the world, and it is far from achieving any of the millennium development goals, which is one of the questions that I have been asked. Violence against women is endemic and horrifying. The country is second to the bottom of the “doing business” league table. Although growth has been sustained through the past decade, the public purse is still far too small to meet basic needs, so there may well be a very small tax take on taxable transactions of value even under normal regulatory conditions. Clearly, there is a lot of work to be done there.
We must all recognise that the MDGs are way off track. That is true whether we consider the number of children being enrolled at school or the number of girls staying on at school. All of us who care about development issues need to consider how we can meet the MDGs and
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how the UK, through DFID, can make a transformative difference and help to deliver on those MDGs, The DRC has to be our main focus, which is something that we are determined to do.
There are signs of hope, and our new country programme in the DRC aims to build on those signs. Macro-economic management has improved, which led to international debt relief being granted last year, as I am sure hon. Members know. In addition, levels of violence are slowly dropping, although the amount of violence in the DRC is still extremely high as measured against all comparators. Nevertheless, we must recognise that there has at least been progress in terms of the trend rate. And the DRC Government are showing a greater will—the practice is a long way behind, but there is a greater will—to get the minerals sector under control. I do not mean “control” along the lines of one unfortunate recent incident, which actually amounted to sequestration. What I mean by “control” is appropriate regulation, whereby there is an appropriate opportunity for businesses to take a risk in a predictable environment and for there to be a yield to the country’s exchequer under a system of democratic and transparent accountability, which will then be used for the benefit of the people of the DRC rather than to reward any form of elite.
Anas Sarwar (Glasgow Central) (Lab): I am sure that the Minister is sick of the sight of me, after he spent two hours in front of the Select Committee on International Development this morning discussing this very region and specifically Burundi. I want to make a point about mineral extraction. As he knows, members of the International Development Committee have recently returned from visiting the DRC and one of the most shocking statistics that we heard while we were there is that $400 million of gold is extracted each month in the DRC, but only $28,000 is paid in tax each month for that gold. What is his Department doing to try to get greater transparency and hopefully some binding agreements along the lines of the extractive industries transparency initiative and the Dodd-Frank Act?
Mr O'Brien: The hon. Gentleman is entirely right to make that observation. There are various estimates about the DRC, but what he has just said is broadly what we all understand to be the case. Part of the answer lies with what the hon. Member for Falkirk hinted at earlier. He suggested that the lack of confidence among foreign direct investors—confidence they can take the risk of going into the DRC and using their world-class skills to extract the unique assets that the DRC is particularly blessed with—means that 80% or more of all the gold that is mined in the DRC is extracted by artisan extraction, as is the case with the other valuable minerals found in the DRC that are sought on world markets. Of course, that makes it almost impossible to capture the revenue from that activity within any kind of regulatory environment.
That is why we are putting such emphasis in the design of the DFID programme on considering what will create the conditions for private sector development. By that, I mean not just foreign direct investment, which is important, but measures that will help regional economic integration. That economic integration is
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important not only in the east of the region, which we discussed extensively in the International Development Committee this morning, but across the various corridors in the region, particularly the north-south corridor that includes the copper belt in Zambia and the Katanga region of the DRC. That corridor will be vital for the future of many countries in southern and eastern Africa as trade passes up and down it.
The hon. Member for Glasgow Central (Anas Sarwar) referred to the extractive industries transparency initiative. As he knows, we are a strong supporter of that initiative for resource-rich countries. It is absolutely the right way to ensure that, as part of the measures to build confidence and credibility, people are genuine in both countries—both the UK and the country from which the materials are being extracted—and companies must sign up to it. Both the hon. Gentleman and I welcome the DRC’s efforts fully to implement the EITI.
On the Dodd-Frank issue, I hope that the hon. Gentleman knows that my right hon. Friend the Chancellor made it clear at the G20 Finance Ministers meeting in February that the British Government support the development of new international rules that, to some degree, are prompted by the Dodd-Frank Act in the US. Such rules would require oil, gas and mining companies to report payments that they make to Governments. The UK seeks to make progress on that issue in both the G20 and, very importantly, within the EU. This process will work if we move together, so that both a combined, common purpose and combined, common standards and values are reflected in the way those reporting mechanisms are developed.
While I am discussing minerals, perhaps I should talk about PROMINES, which the hon. Member for Falkirk referred to. As he knows, the British Government are co-funding that project with the World Bank, and I was grateful for his complimentary remarks about it. It is a major minerals sector reform programme. A PROMINES agreement is about to be signed with the DRC Government, and it will tighten up regulation in the DRC’s minerals sector. Obviously, we hope that it will improve conditions for mine workers and increase tax revenues from mining, which is another issue that we have discussed. That agreement has been cleared by the World Bank’s executive board, and we expect the DRC Government to sign it within the next few weeks. That is progress.
If the hon. Gentleman will forgive me, I will not comment on the particular case of First Quantum Minerals, because it is the subject of an ongoing dispute.
In recent years, we have gathered a lot of evidence about how to work effectively in war-torn and fragile states, and the key issue is ensuring that we learn from that evidence. Learning from such evidence, alongside a renewed emphasis on results and value for money, has helped us to develop the new country programme that we have now put in place for the DRC. Through that programme, we believe that we can deliver fantastic results in what is, by any test, one of the world’s most difficult aid environments. We believe that we can combine major improvements in basic services, which are much needed, with new efforts to promote trade and investment and, of course, new efforts to create wealth. If we can find ways to create wealth for the broader population, that would be the biggest reliever of poverty.
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Over the four-year period of the spending review, we have a total aid budget for the DRC. For the two inner years of that four-year period, we have settled on a budget of about £147 million and £165 million respectively. We will review the progress that is made in the DRC, because we want to ensure that milestones are being identified and that we are achieving results. If progress is made, we have signalled that we want to have a total aid budget for the DRC over the four-year period of about £790 million. That would obviously mean a significant increase in the two outer years of that four-year period.
Without wanting in any sense to undo the absolutely essential element of being in a partnership with the DRC Government in this work, the modalities of delivery have to take place. Often that means that we are unable to use Government systems—for no other reason than that the Government systems do not exist. We must ensure that there is a sense of “earned increase” because progress has been banked and secured, because it is real and sustainable, because it is pro-poor and because it does not benefit those for whom aid might be regarded as being unjustified.
That aid programme will allow us to address the point that was made very forcefully by my hon. Friend the Member for Wolverhampton South West (Paul Uppal) about women in the DRC who are subject to appalling violence, including sexual violence such as rape and female genital mutilation, and who lack access to economic opportunities, including any form of land registration, which would give them the incentive to move into the economic sphere. We hope that we learn the lessons about all those factors.
Jim Shannon: Does the Minister have any concern about the influence of China in the region at present? I believe that there is great concern about it among a great many people in this Parliament and indeed in other countries, too.
Mr O'Brien:
The issue is how we all operate in the various countries of Africa. The essence of that is partnership and recognising that we can make a great contribution through development spend, giving aid where appropriate but also having a programme whereby over time we can graduate away from giving aid. Equally, China has an enormous interest in terms of capital expenditure and infrastructure development. Instead of seeing that as a form of competition, there is a real opportunity, which we hope to develop, of having more
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of a consortium approach, whereby we can partner and perhaps use some of our technical assistance skills allied to the resources of what is unquestionably the world’s greatest capital investor. We must also ensure that the benefits of such investment are truly mutual, because nobody enters into a contract without mutuality. Moreover, mutuality must include the poor people of the countries in which the operations take place. Those are ideas that we want to take forward.
I am very conscious that this debate is not only about the DRC but about Rwanda and Burundi, too. Although the neighbourhood issues, not least those affecting areas across the border from Rwanda, are still not sufficiently calm, settled and satisfactory, there has been enormous progress given the cycles of conflict that have played out over recent decades, both in the post-colonial period and more recently. I am pleased to see the hon. Member for Liverpool, West Derby in Westminster Hall today, because I know myself, having been to Rwanda, the great work that the Aegis Trust has done to find a fitting and indeed deeply moving memorial to the events in Rwanda in the 1990s—it defies belief that those events were taking place in our lifetime.
The future progress of Rwanda cannot be taken for granted. There is still an awful lot that needs to be done to build upon the successes that have been achieved so far. There must be strong and legitimate institutions, security and the rule of law to ensure that there is a more open political space, an ability to tolerate media plurality and a lessening of the strains with neighbouring countries. As is widely known, we have a plan to increase our commitment to Rwanda in the future.
I will touch on Burundi briefly. Burundi was discussed extensively in the International Development Committee this morning, but in the last half-minute of this debate I hope that I can at least summarise matters and say that we have thought very carefully about the appropriate modality of delivering continuing aid to Burundi. In particular, we can work through TradeMark East Africa, which is the operating end of the East African Community, and Burundi stands to benefit enormously from the improvements in infrastructure and lowering of costs that are necessary to participate in economic development, while other donors—particularly multilateral donors—fill the gaps.
2 pm
Sitting adjourned without Question put (Standing Order No. 10(11)).