to ensure that such persons have adequate standards of competence and integrity. Again, that was a feature of the discussion in Committee, and we were keen for reforms to be brought forward to ensure that future banking misconduct is prevented, whether that is fixing LIBOR rates or mis-selling financial products. In Committee we argued that similar regimes have applied to other professionals, and there is no reason in principle why that should not be the case in the banking and financial services sector. Just as with lawyers, doctors or other professionals, misconduct in banking and financial services causes potential injury, injustice or financial loss. In the financial sector, the consequences and costs
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of bad behaviour cost billions and harm the whole of society, so we believe it right to introduce safeguards similar to those in other professions.
We tabled new clause 3 because we wanted to introduce our senior persons regime and revised set of banking standards rules, as recommended by the Parliamentary Commission on Banking Standards, and it is good that the Government intend to take that forward. In his response, will the Minister provide a further flavour of how he intends to do that and give some detail, particularly on the scope of the legislation he proposes to introduce?
Why did the Government not feel able to introduce such a measure at an earlier stage in Committee? We would have welcomed the opportunity to scrutinise, discuss and probe the Bill in slightly more detail then. Will everything now be done in the other place, and will there be time for consideration in this Chamber? In his opening remarks I think the Minister gave an assurance that there would be ample opportunity to discuss those issues in the Chamber, but it is worth noting that when the Bill passes into statute as a result of all the work done to it, it will be very different to the one initially introduced, and it is right and proper that we have the opportunity to scrutinise it at every stage.
The Minister will be familiar with the amendment that we tabled in Committee on the duty of care, and we have now tabled new clause 4, which would introduce duties of care for ring-fenced bodies—first, a fiduciary duty in relation to the carrying out of core services, and secondly a more general duty of care across the financial services sector. As I outlined in Committee, we bring this forward because we feel that it would send an important signal to the general public, who still have some way to go before trust is restored in the banking and financial services sector.
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The fiduciary duty, which characterises the requirement to serve in good faith, would help the banking sector focus on and return to some of its earlier principles connected with helping and informing customers, generating prosperity and not making a profit inappropriately from consumer inertia or ignorance. We know that the idea of the duty of care is supported by several external organisations because of the previous failures of the banks. For example, in March, a Which? survey found that banks were failing to give the right advice in many instances on transferring and managing cash ISAs. We had some discussion on that in Committee. As a test of that issue, Which? placed 180 calls to 15 leading banks and building societies to assess the quality of advice given to people who wanted to transfer their cash ISA savings. It said that several banks, including some of the major, well-known banks, failed to give correct answers to three simple cash ISA questions in more than half of the calls. That is the kind of thing that does not endear the financial institutions to the public, who want to believe that the banks have their best interests at heart as well as having the information on what would be best for them at their fingertips.
New clause 4 would enter on the statute book a concept that would add a great deal to ensuring that consumers could have that full confidence that their best interests were being served, and that those selling
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financial services products were doing so in a prudent and ethical manner. In terms of a stronger duty of care, the industry would have to take customers’ interests into account not only when designing the products, but when providing advice throughout their life cycle.
Mr Love: The current regime for the regulator is “treating customers fairly”, which is exactly what the banks did not do in the PPI scandal. Does my hon. Friend agree that we need something stronger, and that a duty of care is a step in the right direction, signalling that we need to do something about the scandals that have happened in the past?
Cathy Jamieson: My hon. Friend is right and he speaks with great experience, both because of the work he has done in this House and on the banking commission. He is right to say that the scandal of the PPI is exactly why today’s consumers want further assurances that the banking industry and the financial services sector are not simply about using consumers’ possible lack of knowledge or understanding of the system to turn a quick profit with no thought to the longer term, either for the individuals or for the wider financial sector. That is why we have tabled the new clause.
I suspect that the Minister may say much the same to me this evening as he said in Committee, as he felt that the amendment was unnecessary. Nor was it drafted in the most technically perfect way. However, it would be helpful if he were able to confirm that at the least the idea of a fiduciary duty—a duty of care—will be significant. I feel minded to test the will of the House on this new clause.
Mr Ruffley: On a point of information, what fiduciary duties, other than a duty of care, does the hon. Lady envisage?
Cathy Jamieson: I could go back through some of the issues that were raised in Committee. As I outlined, some of the duties that would be expected are those defined and accepted in common law already. What we want to do is try to put them in legislation to give a clear signal to consumers that things have changed and to try to rebuild trust in the banking system. I do not think that the customers of the banks think that it is unreasonable to have something that says that the banks should act in consumers’ interests when looking after their money.
New clause 5 reflects another amendment that we tabled in Committee. It is important to have assurances from the Government in the absence of knowing their intentions about remuneration reform. We tabled new clause 5 because we want the banks to take account of performance and stability over a five to 10-year period. That would reduce unnecessary risk-taking, force bankers to take a longer-term view, and end rewards for short-term profit. We tabled an amendment on this in Committee, and the parliamentary commission took a similar view in its report, which states:
“The Commission recommends that the new Remuneration Code include a new power for the regulators to require that a substantial part of remuneration be deferred for up to 10 years, where it is necessary for effective long-term risk management.”
That was raised by the Treasury Committee in January, when the Bank of England director Andy Haldane called for various reforms.
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Stephen Barclay: Does the hon. Lady not recognise that the difficulty with catch-all provisions, such as that for a 10-year period, is that they capture the good as much as the bad? New clause 2 would create targeted regulation to focus on those who have done wrong, instead of a catch-all provision that captures everyone.
Cathy Jamieson: I might have been tempted to support new clause 2 had the hon. Gentleman decided to put it to the vote, and I look forward with interest to hearing what the Minister has to say. I understand the issues relating to length of time and the dangers of a catch-all provision but, in the aftermath of the banking crisis, the legal and regulatory structures, and the further changes that the Government promise to introduce, we need to ensure that the banking culture really changes. New clause 5 attempts to ensure that banks think for themselves about how to ensure that their performance is sustainable. Now that the Government have moved to an acceptance of the broad principle, the devil will be in the detail of what they do next. Perhaps the Minister will have more to say on that.
Mark Garnier: The shadow Minister raises the 10-year deferral of bonuses recommended by the Parliamentary Commission on Banking Standards. We made that recommendation so that we could at least see the business of a bank through a business cycle, as it can take 10 years to expose irregularities. One problem occurs that when people in receipt of such bonuses—there are already some deferred bonuses, in particular in UBS—want to move to another institution, they are bought out of their held-back bonus. Does the hon. Lady have any proposals to deal with that?
Cathy Jamieson: The hon. Gentleman makes an extremely good point. It is perhaps worth remembering that not only did the Parliamentary Commission on Banking Standards make that recommendation, but Andy Haldane supported it when he came before the Treasury Committee. I am sure that the Minister will have something to say on that when he sets out his next set of actions.
New clause 7 relates to protection for whistleblowers. It is important to ensure that workers are protected if they make a disclosure in the “reasonable belief” that misconduct has occurred, is occurring or could occur. The new clause would amend the Employment Rights Act 1996 and impose a duty on managers to inform the bank chairman—or chairwoman, if that is the case—of any report of wrongdoing that qualifies as a “protected disclosure”. This is an updated version of a clause tabled in Committee, and reflects the final report of the parliamentary commission, which in paragraph 788 states:
“A non-executive board member—preferably the Chairman—should be given specific responsibility under the Senior Persons Regime for the effective operation of the firm’s whistleblowing regime. That Board member must be satisfied that there are robust and effective whistleblowing procedures in place and that complaints are dealt with and escalated appropriately. It should be his or her personal responsibility to see that they are.”
In new clause 7 we are attempting to trigger a cultural change in the financial services sector. There is no doubt that a bank employee would wrestle with their conscience before deciding to break ranks. If an honest trader suspects wrongdoing and is considering informing the authorities, there must be protections to mitigate his or her fear of losing their job.
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The LIBOR scandal illustrates the importance of making it easier to report wrongdoing. At that time there was a quite a lot of speculation in the press and elsewhere about the accuracy of LIBOR, yet nobody came forward with the evidence. New clause 7 seeks to bolster the maintenance of law and order—I think everyone would generally agree with that—and would make it easier for the regulators and the banks’ compliance teams to do their jobs.
I looked closely at the Government’s response to the commission today, which says:
“The Government recognises the important role that whistleblowing can play in exposing wrongdoing”.
“BIS is publishing a ‘call for evidence’ to establish a strong evidence base to help Government better understand the operation of the whistleblowing framework in today’s employment environment”.
It seems that the Government are now linking whistleblowing in the financial services sector with the wider review. We need to be careful about how a code of conduct, support for regulators and the role of regulators—including their interaction with employment tribunals, which is how the report couches this issue in context—are dealt with. Will the Minister say in his response when he anticipates the review being completed and what legislative vehicle would be proposed to implement any recommendations? It was not immediately apparent to me on reading the report that that had been established or thought through. Does he agree that any delay in dealing with the issue would risk putting that change out of sync with some of the other important changes that will be made to banking and the banking culture?
David Rutley (Macclesfield) (Con): I am following the hon. Lady’s argument with interest. Proposed new section 43B(g) of the Employment Rights Act 1996 refers to where
“a breach of regulated activities under FSMA 2000…has been committed…or is likely to be committed.”
So that we can understand the new clause better, how would she determine whether something was “likely” to be committed?
Cathy Jamieson: The hon. Gentleman makes a useful and probing point—I wish I had had the opportunity to probe the Government’s proposals in the same way. The point is to look at patterns of behaviour and conduct. The important thing is that this change or anything that the Government introduce should be robust and should stack up. That is why I was particularly keen to know how the Minister sees this issue being taken forward. However, I recognise that there is a wider context, so if he could respond by giving me some assurances on this issue, I would probably be tempted not to press new clause 7 to a vote.
Let me briefly mention new clause 11, which deals with criminal sanctions. New clause 11 was also inspired by the work of the Banking Commission. It would require the Government to bring forward proposals for the new offence of reckless misconduct in the management of a bank covering the people licensed under the senior persons regime and would seek civil recovery of money from people found guilty of the offence. Although that might be controversial in some areas, it is important. I welcome the fact that the Government now seem to be moving on this, and I await the detail with interest. It is
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vital that bankers are held to account for their actions. That is important not just for any action after a future crisis, but as a deterrent, should any bank executives be tempted to take unnecessary or reckless risks.
Richard Fuller: I do not wish at this moment to be unduly partisan, but could the hon. Lady advise us on the evolution of the Opposition’s thinking? Was the imposition of criminal sanctions for the reckless management of banks discussed in the previous Government?
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Cathy Jamieson: As I am sure the hon. Gentleman is aware, I was not in this place or, indeed, a member of the previous Government. [Interruption.] I hear someone saying “Shame”. I do, however, think it would be appropriate to look at the circumstances in which we are operating at present. In the same way as the hon. Gentleman did not wish to be partisan, I will resist the temptation to make an incredibly partisan response. Instead, I simply say it is important that the Government look at this. I welcome the fact that they seem to be willing to move on this, and the parliamentary commission was very clear that:
“It is inappropriate that those found guilty of criminal recklessness should continue to benefit from remuneration obtained as a consequence of the reckless behaviour.”
That statement sits in the context of the issue of being able to claw back.
Mr Love: This recommendation emerged from an all-party commission, with all parties supporting it. It is important to remember that it has the effect of signalling that we treat so seriously the misdemeanours that have occurred in the banking sector that we deem that those found guilty should face a criminal sanction.
Cathy Jamieson: Again, my hon. Friend makes an important point that this is an all-party stance and that everyone on the banking commission took this issue seriously.
It is worth remembering that in response to a question from the Leader of the Opposition last month, the Prime Minister told the House that he would use this Bill to implement the report of the parliamentary commission. The Leader of the Opposition asked:
“Following the Parliamentary Commission on Banking, can the Prime Minister confirm that he supports its important recommendations on bonuses and criminal penalties, and that he will use the banking Bill to implement them?”
“Yes, I do support both those measures...Penalising, including with criminal penalties against bankers who behave irresponsibly— I say yes. Also, making sure that for banks in receipt of taxpayers’ money we can claw back and have a ban on bonuses—I say yes too.”
The Leader of the Opposition then asked a further question, to which the Prime Minister replied:
“We will be using that Bill to take these important steps.” —[Official Report, 19 June 2013; Vol. 564, c. 883.]
I hoped the Minister would have been able to bring forward appropriate amendments or new clauses—or whatever is needed—at this stage, rather than leaving
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that to elsewhere. I hope he will be able to give us some further information on how the work will be progressed and when he now expects to give us more detail.
New clause 13 relates to the financial services crime unit in the Serious Fraud Office. We raised this issue in Committee, and my hon. Friend the Member for Nottingham East gave an eloquent description of some of the areas that an FSCU would be able to address. This new clause would require the Treasury to report on the establishment of the FSCU and to do so within six months of the Act coming into force.
I fear the Minister might sigh and think, “Here go the Opposition once again, asking for another report to be produced.” Before he says that or any Member seeks to intervene to make that point, I will say that the reason we are asking for these reports to be produced is to ensure that progress is made and that things do not just gather dust on a shelf somewhere.
We know we have to look at the resources available to tackle white collar crime. Financial products are becoming ever more complex, and they are being traded faster, and increased resources could enable specialist police officers to develop their expertise. There are huge financial incentives in looking at developing this, too. It is worth remembering that fraud costs Britain about £73 billion a year, according to the Home Office’s National Fraud Authority. As my hon. Friend the Member for Nottingham East recalled in Committee, Andrew Bailey, the PRA chief executive, said it was “more than odd” that bank directors had not faced formal charges over the events leading up to the crisis. The Serious Fraud Office has a bit of a mixed record on tackling the high-profile cases. The Home Secretary was forced to perform a bit of a U-turn on her plans to abolish the SFO. It is clear that the SFO needs to be improved. The LIBOR scandal again shows that misconduct in financial services can have ramifications for traders, for industry, for shareholders, for the reputation of the City and, indeed, for criminal law.
Stephen Barclay: I seek to understand the scope of new clause 13 and the financial crime unit. Would it have taken criminal sanctions against the auditors of RBS, who so failed that they required the then permanent secretary of the Treasury to seek a letter of direction?
Cathy Jamieson: I am sure the hon. Gentleman will not be surprised to learn that I am not going to go into the detail of that case. He has had a career in the banking sector dealing with such issues, and he will be as aware as I am that looking at one case in isolation is sometimes not the best way to appreciate the overall picture. The overall picture is what I am interested in, and why I specifically mentioned LIBOR, because it is already a criminal offence to attempt to fix that rate. We need to seek to ensure that the SFO has the resources necessary to tackle this and to prevent any further scandals.
We have tabled new clause 13 to give Parliament a chance, once again, further down the line to discuss the creation of a new agency, and we hope it would send a firm message to those tempted to engage in criminal conduct. I hope that the Minister may be able to say something more on that in his response. He did not seem to be persuaded in Committee of the need for a new unit or even a subdivision. My recollection is that
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he took that view, “Its all fraud and there is no need to have a specific unit or part of an organisation dealing with it.”
I think I have covered a number of issues relating to these proposals. Once again, it is important to put on the record the fact that although we have had the opportunity to raise some of these issues in Committee and this evening, it is unfortunate that on Report we are not going to be able to scrutinise the detail of some of the new clauses—it is fair for us to assume that they might have been tabled at this stage. I seek the Minister’s further reassurance that we are going to get the important detail of how he intends to proceed, that we will see as much as is possible of the draft new clauses and legislation as things are taken forward, and that we will have an appropriate opportunity to discuss all that further in this place.
Richard Fuller: I am very grateful for the opportunity to catch your eye, Madam Deputy Speaker. I wish to discuss the proposals in this group, particularly new clauses 11 and 2. I am not a member of the Treasury Committee, I was not a member of the Parliamentary Commission on Banking Standards and I was not even on the Public Bill Committee, so I hope that other hon. Members will permit me to make a few perhaps less-informed commentaries about these proposals on conduct and remuneration, and the issues they raise, and perhaps come at this from a different perspective.
May I start by thanking the commission for its work on this issue and, in particular, my hon. Friend the Member for Wyre Forest (Mark Garnier), who made an extraordinarily strong contribution? Collectively, they have a much greater claim than Goldman Sachs to have been doing God’s work on financial services. I thank the Government and congratulate them on their speedy response to the recommendations. I also thank the Minister for allowing us to see the document ahead of today’s debate.
I remember the evening when the membership of the commission was established. It was a late evening, and quite warm. It might have been 10.30 pm, 11 pm or even later and hon. Members were keen to get back to their duties in responding to their constituents. I got up to speak with some trepidation, as hon. Members were hoping that the membership would go through on the nod, to make the point that for my constituents in Bedford and Kempston the commission would fail in its duty if, as a result of its actions, nobody went to jail. It is in that spirit that I want to comment on the new clauses today.
Mr Love: I was present on that occasion and the commission took very seriously the point that the hon. Gentleman made.
Richard Fuller:
I am grateful for that intervention. A lot in the commission’s recommendations reflects the seriousness with which it considered that point, and rightly so. In the intervening 12 months, I have dealt with constituents whose businesses have been put at risk because of the fraud of interest rate swap mis-selling and whose lives have been rent asunder by payment protection insurance mis-selling, and the Government have also taken action on the fiddling and fixing of LIBOR. Beyond that, some of us have been dealing with regulatory failures on Equitable Life. My view is
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that jail for such bankers and for those responsible is the only fair outcome for the victims of those scams. Despite the intervention from the hon. Member for Edmonton (Mr Love), I must still ask where justice is to be found for the victims of those crimes in the recommendations and in the amendments tabled today.
Banking is full of honest and decent men and women. As my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay) said, one of the attractions of new clause 2 is that it focuses like a laser beam on the individuals who are responsible and culpable. If we fail to do that and those people do not go to jail, where is the justice for all the other people who work in financial services honestly on behalf of their clients every day?
It is not a habit of this House to consider retrospective legislation, but I want to mention that in a minute. First, let me ask the Minister a couple of questions. In the senior persons regime and the actions that would be covered by new clause 11, the focus is on named individuals at the top. As we saw in the interest rate swaps, a lot of the decisions made by the senior ranks at the banks were translated into budgets and business plans and transferred down through the hierarchy of the banks. Perhaps the Minister, when he considers the issue of conduct, could answer the question of how those extensions beyond the senior persons regime will be handled.
Mark Garnier: I am grateful to my hon. Friend for his comments about my contribution to the Parliamentary Commission on Banking Standards. He raises a number of points and as the chairman of the sub-panel that considered below board level corporate governance I can say to him that the management structures of banks are so fiendishly complex that there is little way that the senior managers of banks can translate their wishes all the way down to the bottom. Other evidence gave reasons why the senior management in banks can effectively set up what amounts to an accountability firewall, thereby putting wilful ignorance between them and the activities that go on in the front line and absolving themselves from any responsibility for any misconduct at the bottom end of the bank. That is a very serious issue.
Richard Fuller: I am grateful for that intervention, but I do not want to attempt to get into the debate that the commission has considered thoroughly and much more knowledgably than I would be able to do.
The House does not frequently indulge in passing retrospective legislation, but if the senior persons regime is appropriate, is there merit in applying it retrospectively, if only in the form of an exercise through which to judge the conduct of those involved in financial services—in the banks and elsewhere? Whether that took the form of a self-audit conducted by the financial institutions themselves, or further work for the banking commission, to the extent to which that would be feasible, it would be welcome.
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Much of the commission’s work relates to sanctions that would be applied to those directly in the financial institutions themselves, but what about others? My hon. Friend the Member for North East Cambridgeshire
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talked about the role of auditors, but why are the regulators allowed to get off scot-free? Why are there no criminal sanctions for those who set the regulations?
I was extremely pleased that the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), for whom I have tremendous admiration, spoke about new clause 11 only lightly, because it would be unwise for her to press the point behind the measure too strongly, given that it seems to some people that the previous Government idled by and doled out knighthoods, but never thought about jail. Where on earth was the thought for the people who were suffering owing to the scandals that were under way at that time? I was pleased that she did not press her point aggressively because, as we deal with the current problems, it is clear to many of us whose fingers are all over the crime. We do not need an Inspector Luther or a Miss Marple to know that people in government were responsible for setting the framework under which criminal activity was allowed to run unchecked. Many of us believe that it isnot just the bankers who should hold their heads in shame, but the people in charge of regulation at that time.
Stephen Barclay: Does my hon. Friend share my incredulity that when David Strachan conducted his review at the Financial Services Authority following the Legal and General case and brought forward his recommendations for a light-touch enforcement regime, the vice-chair of the FSA was Sir James Crosby, who is one of the three figures who are especially criticised in the banking commission’s report? We have a multi-layered, light-touch enforcement regime that often creates a disincentive to the regulator—this is why market abuse often involves criminal sanctions, not civil sanctions. One of the people criticised in the banking commission report actually designed the system that applies to the regulator.
Richard Fuller: I am appreciative of that intervention, which adds not only to my body of knowledge, but to the commonly held disgust that, following all these efforts involving the best minds we can put in place, no one is going to jail. In the absence of anyone going to jail, we have gone through all the fraud, all the mis-structured, light-touch regulation and all the mis-positioning of responsibilities without a single person being truly accountable. If there is a point on which I disagree with my hon. Friend, which I rarely do, it is that he said in his speech that financial penalties are likely to be more successful. He might have a point in saying that there will be more successful prosecutions, but the loss of one’s liberty cannot be put in a discounted cash flow—there cannot be a beta high enough. If we want to change behaviour, we have to show that people will go to jail and lose their liberty. If, having gone through the worst financial recession that we have experienced in our lifetimes, not a single person goes to jail as a result of all our work, I do not care that there is a cross-party consensus because, in my view, this is failing the people.
Jonathan Edwards: To what extent has the hon. Gentleman been influenced by events in Iceland, where the bankers were all purged? They were jailed, as were some very senior politicians, including the then Prime Minister.
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Richard Fuller: I must admit that I am not particularly familiar with Iceland—certainly not as familiar as the hon. Gentleman is—but he makes an important contribution. Other regimes look at things differently, and are far stricter than we are. Normally, we would look at how United States regulations dealt with some of these things. In the past, they have been more successful than they have been recently as regards criminal prosecutions in financial services. Many people in the United States were held criminally responsible for their actions in the savings and loans scandal; the same has not happened in this financial crisis.
I respect the work of the commission, and I am nowhere near as smart as it is on these issues, but I have to say that no one has gone to jail, and that is not good enough.
Mr Love: I will comment on the commission’s thought processes on some of the issues that the hon. Gentleman mentioned. He will remember, as we all do, the evening on which we set up a special parliamentary vehicle in the wake of the LIBOR rate-rigging scandal. Since 2008, there have been a variety of critical events, including the credit crunch and the recession. All that led to a catastrophic decline in the reputation of the financial services sector. Trust in bankers sank to an all-time low, and frankly LIBOR was the last straw. This was truly shocking behaviour on an unprecedented scale. Something had to be done, and the focus was very much on our terms of reference on standards and culture.
As a result, the commission had to answer some tough questions, and the hon. Member for Bedford (Richard Fuller) has posed some of them: why had so few bankers been held to account for their failings? Why had it appeared that bankers pocketed the gains, but passed on the losses to the taxpayer? Why were customers who should have been treated fairly treated in the exact opposite way—a point that my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) raised? We tried to answer those questions through three themes that came out in our report. The first theme is individual responsibility.
When all the head bankers came before us, we were genuinely shocked to hear that they denied any responsibility for what happened in their banks. Whether it was ignorance of the serious failings happening under their noses, or because there was collective decision making, the result was the same: no one could be held to account. That, we discovered, was the result of the failure of the approved persons regime, which did not attribute responsibilities to senior staff, who, as a result, could not be held to account.
Two steps are proposed to try to address that problem. First, we have already mentioned the new senior persons regime, designed to ensure that the most important responsibilities are assigned to specific individuals, who will more easily be held to account for them. Secondly, for a much wider group—not every employee, but those who could do serious harm to the bank, or its customers, due to their customer-facing position—we propose a new licensing regime, with a set of banking standard rules that enable them to be held to account.
However, for people to be held to account, we need more effective sanctions, and that is the second theme of the commission’s report. Identification of those responsible under the new regime will provide a stronger basis for the regulator to enforce existing civil penalties, such as
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fines, restrictions and bans. One of the great difficulties was assigning responsibility; we hope that individual responsibility will address that.
Given the seriousness of the wrongdoings—an issue mentioned in earlier contributions—the commission is recommending two new, far-reaching powers. New clause 2 does not address this point, but under certain conditions, the regulator should be able to impose a full range of civil sanctions, unless the person can demonstrate that reasonable steps were taken to prevent or mitigate the failing. In effect, that does what new clause 2 suggests: it reverses the burden of proof, but only under certain conditions.
Stephen Barclay: In essence, the hon. Gentleman is describing the purpose of new clause 2. Earlier, I alluded to the fact that there is a condition that militates against the effectiveness of the new clause: the tool can be used only if there is a successful prosecution, which gets in the way. As much as I agree with my hon. Friend the Member for Bedford (Richard Fuller), does the hon. Member for Edmonton (Mr Love) agree that we need to be careful about changing the law retrospectively, particularly on custodial sentences? One of the issues that we are addressing today is how we get it right for the future, and what the sanctions should be.
Mr Love: Personally, I oppose retrospective legislation. It was not considered by the commission, which does not make any recommendations on it. I suspect, however, that none of its members would be in favour of addressing these issues in that way.
The other change is the much publicised criminal offence of reckless misconduct in the management of a bank, which normally carries, as has been suggested, a custodial sentence. Importantly, we have laid down preconditions before a charge of that nature can be brought. There must be a cost to the taxpayer—the bank has turned to the taxpayer to bail it out; or there are consequences for the financial system—stability is critical, and anything that destabilises the system should be subject to a criminal sanction; or there is serious harm to customers. We think that we have framed a big change in the law. Bankers continually ask why they are singled out as the only commercial group that can be charged in that way. It is a delicate balance, and I hope that the Government will look seriously at what we are trying to do.
The third area I want to touch on is remuneration and incentives. The reality is that rewards have been huge, and still are huge for a more limited supply of senior bankers. That incentivises excessive risk taking and, occasionally, misconduct. The commission concluded that risk and reward are still misaligned, particularly when making pay awards over a short period. It therefore sees advantages in making a significant portion of remuneration variable, rather than fixed. We do not have much sympathy for the European solution in relation to that, but we think that reform is necessary in this area. More variable pay should be deferred to take into account changing circumstances at the bank at which the banker works, with power for the regulator to extend the period for up to 10 years. To those who say that that is a long time, many banks have a good year, but then some less good years, and the commission wanted to recognise that that can go on for an extended period.
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Regulators should be able to limit or prohibit sales-based incentives. We were shocked at the way in which sales-based incentives were used to create the mis-selling scandals of PPI and interest rate swaps. There was a cascading group of incentives from senior management through to the customer-facing end of the bank, and we think that that made a major contribution to the problems that arose. We want to give the regulator much stronger powers. Where a bank requires taxpayer support, the regulator should have discretionary power to cancel all deferred compensation. It is shocking that, as happened in some banks, they were still paying remuneration to employees after the bank had taken on taxpayer funds.
The issues of conduct and remuneration that I have raised lie at the heart of what the commission thinks needs to be done in respect of culture and standards. These recommendations have been much debated and discussed. We have done everything we can to make them practical and realisable, and I hope that, when there is an opportunity to debate them in the other House, or when they come back to this place, the Government will give serious consideration to those recommendations.
9.15 pm
Mr Ruffley: I shall make two brief points. First, I congratulate my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay) on drawing attention to something very important to the House—that it is this Government who have got behind the idea that there should be, in certain limited circumstances, a custodial sentence for breach of a new criminal offence. It is worth reminding ourselves that although the crash occurred in autumn 2008, the then Labour Government had 2009 and the first five months of 2010 to do something about it, but it is this Government who have made their intentions clear regarding custodial sentences. For that, Ministers should be congratulated.
The second and final point is that we cannot let this debate pass without reminding ourselves of the fact that existing criminal law was not being enforced in relation to the allegations of LIBOR rigging. The Parliamentary Commission on Banking Standards came into existence as a direct result of the allegations about rigging the LIBOR market. The custodial sentences available for those activities were not seriously taken on board by the Serious Fraud Office, for in 2011, it is said, the SFO inquired into whether existing criminal offences had been committed by those manipulating the LIBOR market, and concluded that they had not.
This time last year the Chancellor of the Exchequer told the House that he would ask the Serious Fraud Office to take another look to see whether criminal offences had been committed under existing criminal law. Leading counsel advised me and I said in the Chamber that there were, on the face of it, breaches of section 2 of the Theft Act 1968 through false accounting, the common law offence of conspiracy to defraud, breach of the Proceeds of Crime Act 2002, and possibly even breaches under the Fraud Act 2006.
Although the Minister clearly cannot intervene in investigations by the Serious Fraud Office because prosecutorial authorities are quite separate from the Executive, which has always been the case and will, I am sure, continue to be the case for centuries to come, it would be useful for him to indicate what the state of
8 July 2013 : Column 135
play is in relation to breaches of existing criminal law that might give rise to custodial sentences in the case of those engaged in LIBOR rigging.
Greg Clark: It is a pleasure to respond to this well-informed debate. I start by welcoming the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) to the Opposition Dispatch Box. She proved rather more persuasive in Committee than her hon. Friend the Member for Nottingham East (Chris Leslie), as I was able to accept at least one of her amendments. I think that it was a single word, but I am sure that it was an excellent one, historically so.
We are considering a large group of amendments, as has been evident in the range of the debate, and it has given us the opportunity to have an initial discussion of the parliamentary commission’s recommendations on questions of individual accountability and corporate governance. We agree with the recommendations that have been made. The commission’s report has at its heart the essential point that the UK banking system depends totally on the trust it commands. If it cannot count on the trust of its customers, it cannot truly serve businesses and people, which is the only purpose of banking. If it cannot count on the trust of businesses and people in this country, it cannot possibly sustain a reputation for international pre-eminence, which is what we all want to see.
The commission’s conclusions are comprehensive. Never again must directors of banks be able to preside expensively over failure or misconduct and then claim that they simply did not know what was going on. Never again must banks simply, as the commission sees it, contract out ethical judgments to the regulator. Never again must senior bankers be able to make one-way bets with the money of ordinary working people and walk away financially unscathed, leaving taxpayers with a crippling bill.
Specifically, we will enact the new senior persons regime that the commission proposes and introduce new banking standards rules to require high standards among all staff. We will introduce the new criminal offence of reckless misconduct that has been suggested for senior bankers. We will reverse the burden of proof so that the bosses are held accountable for breaches within their areas of responsibility. We will work with the regulators to implement the commission’s proposals to defer bonuses for up to 10 years and to enable 100% clawback of bonuses where banks receive state aid. We will ask the regulators to implement the commission’s recommendations on corporate governance to ensure that firms have the correct systems in place to identify risks and maintain standards of ethics. As I have said in earlier debates, where legislation is required, we will propose amendments in the autumn in the other place.
Let me deal specifically with today’s amendments and new clauses. New clause 2 was ably moved by my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay). In a powerful speech delivered without notes, he explained that the new clause seeks to reverse the burden of proof when taking action against a senior person where there are regulatory failings by a firm in that person’s area of responsibility. As the hon. Member for Edmonton (Mr Love) pointed out, that is one of the parliamentary commission’s recommendations, but I think
8 July 2013 : Column 136
that my hon. Friend campaigned for that even before the commission reported, drawing on his own experience as a regulator. I say to the hon. Member for Kilmarnock and Loudoun that my hon. Friend needs no tawdry trinket of the Government accepting his amendment to be lionised in this House for the contribution he has made. We very much accept the thrust of his recommendation and that of the parliamentary commission.
“Senior managers of banks will no longer be able to hide behind an accountability firewall, where they are too distant from the consequences of their responsibilities to be held directly accountable when things go wrong.”
At present, the regulator has to be able to show that the person knew what was going on. That cannot be right. It means that while regulators can take action against the firm’s junior employees who might be implicated, they are unable to pin responsibility on someone higher up the chain just because, as the Commission put it, the e-mail trail goes cold when it reaches their level of management. I will take on board the case my hon. Friend made on whether it is necessary to require the corporate offence to be committed, and we will reflect on that before the Bill goes to the Lords.
New clause 3 reproduces a new clause that was considered in Committee, when I predicted that the parliamentary commission would have something to say about the approved persons regime and a code of conduct. My predictions proved uncannily accurate. The commission’s recommendation that the approved persons regime should be replaced is, of course, a major feature of its report, which we accept. We will bring forward amendments to introduce the new senior persons regime to replace FSMA’s approved persons regime. As the commission recommends, the new regime will ensure that key responsibilities within banks are assigned to specific individuals who are aware of those responsibilities and have formally accepted them. As part of the regime, we will implement the commission’s more detailed recommendations, including reversing the burden of proof, which I have just mentioned, and allowing regulators to make the approval of senior persons subject to conditions and time limits.
The regulators will also be able to make rules about the conduct of senior persons, replacing the current system of statements of principle and codes of practice. The new clauses will put in place new arrangements for regulating the conduct of individuals who are not covered by the senior persons regime. The arrangements will include provisions to allow the regulators to make rules covering financial services employees whose appointments are not subject to regulatory pre-approval.
My hon. Friend the Member for Bedford (Richard Fuller) is absolutely right: it is plausible that the deficiencies in the approved persons regime may affect not just the banking sector but other parts of the financial services industry. The relevant FSMA provisions apply to all parts of the sector, so it might be operationally simpler to apply the regime to the industry as a whole. The Government will consider, with the regulators, whether the relevant provisions should allow for the wider application that my hon. Friend has in mind.
As the hon. Member for Kilmarnock and Loudoun said, new clause 3 would not deliver the extent of the reforms that the Parliamentary Commission on Banking Standards is seeking. On that basis, I hope that the hon. Lady will withdraw the new clause.
8 July 2013 : Column 137
New clause 4 also reflects a debate that we had in Committee. The commission did not recommend the introduction of a fiduciary duty or duty of care, but it did recommend an alternative route. It said that the Department for Business, Innovation and Skills should consult on changing the duties of the directors of ring-fenced banks, to prioritise the safety and soundness of the firm first, over the interests of shareholders.
The Government strongly believe that bank directors must maintain an awareness of their responsibility to safeguard the security and stability of the firm. Changes that will support a focus on stability and soundness—for example, giving directors specific duties under the proposed senior persons regime—will help. We will indeed consult on whether changing directors’ duties will help further to accomplish those intentions. I hope that that will reassure the hon. Lady.
A duty of care specifically towards customers across the financial sector is difficult to make sense of, as we have previously discussed. Would it mean, for example, that a bank had a duty of care not just to its own customers and those of its competitors but, as the proposed duty is to customers across the financial sector, the customers of an insurance company with no relevance to the firm itself? The new clause has been tabled to confirm the Government’s intentions on the wider duties of banks and their directors, and I hope that the hon. Lady is satisfied.
New clause 5 refers to remuneration. Of course, the Government have already taken significant steps in that regard; under the remuneration code, large parts of bonuses must be deferred and paid in shares, and cash bonuses must be limited. However, it is a question of not just the quantum of bonuses, but how they are decided in the first place. Next year, shareholders will have a binding vote on executive pay.
We strongly support the proposals made by the parliamentary commission. In particular, the commission has recommended that the regulator should have the power to require a substantial part of remuneration to be deferred for up to 10 years when that is necessary for effective long-term risk management. There is a subtle but critical distinction between the commission’s recommendation and the new clause. The power should be with the regulator to determine whether and in what circumstances to require extended deferral; my hon. Friend the Member for North East Cambridgeshire made that point.
The commission has commented that no single deferral period is appropriate but that it should be determined in accordance with the nature of each business and the risks and activities of the employee in question. The Government agree and will ask the PRA to consider the powers that it has to extend deferral periods as part of its consultation on implementing the commission’s proposals. I hope that that commitment will reassure the hon. Member for Kilmarnock and Loudoun and that she will not feel the need to press the matter further.
New clause 7 deals with protections for whistleblowers. As the hon. Lady said, we debated this in Committee, so I do no want to detain the House further today other than to reassure her that, as I explained on that occasion, these provisions already exist in legislation. Disclosures about criminal offences are already covered by the Employment Rights Act 1996. Disclosures about regulatory
8 July 2013 : Column 138
breaches are covered by FSMA. This proposal would cover, for example, disclosures about the breaches of the regulatory requirements in relation to the ring-fence. I assume that the second requirement is designed to give effect to the commission’s proposal that a non-executive board member, preferably the chairman, should be given specific responsibility under the senior persons regime. Again, the powers to enact this are already available to the regulator under FSMA, and we have indicated that we support the thrust of these recommendations.
9.30 pm
The Department for Business, Innovation and Skills will shortly launch a call for evidence on whistleblowing generally. This will help the Government to establish the evidence base in looking at whistleblowing protections and considering whether further changes are required. The commission’s recommendations on whistleblowing will be considered in that context.
New clause 11 concerns the new criminal offence of reckless misconduct recommended by the parliamentary commissioner. As we have already announced, we agree with the commission’s recommendations and will over the summer draft amendments to create such a legally watertight criminal offence, including compliance with the European convention on human rights. As my hon. Friend the Member for Bedford suggested, the commission did not recommend retrospectivity, and these provisions are intended to enact its recommendations. I hope that he will understand that.
My hon. Friend the Member for Bury St Edmunds (Mr Ruffley) was absolutely right to point out that it was of course this Government who first raised the possibility of criminal sanctions for managerial misconduct in July last year. We are grateful to the commission for its extensive work. We will follow its advice on misconduct committed by persons covered by the regime that is being set up. The commission noted the legal challenges involved in mounting a successful prosecution, but we absolutely agree that the creation of this offence should be justified by the signal that it sends and the potential deterrent effects it can have. We have to make it clear that reckless behaviour by those in charge of our banks cannot be tolerated.
New clause 13 proposes to create a new financial services crime unit. A similar amendment was discussed at some length in Committee. I can assure hon. Members that the Government fully recognise the importance of tackling financial crime. There is to be a dedicated command within the new National Crime Agency responsible for directing the national response to economic and financial crimes. The economic crime command will have a clear remit to reduce the threat from economic and financial crimes, working collaboratively across the different sectors. Substantial progress has already been made in establishing the National Crime Agency and driving early operational success against criminals who seek to engage in economic and financial crimes.
The Government accept the broad recommendations of the parliamentary commission on each of these matters. We will be acting quickly to take the opportunity afforded by this Bill to make amendments that are
8 July 2013 : Column 139
legally watertight and likely to pass into law in the early part of next year, just six months after the parliamentary commission’s extensive report. In acting in this way, we are keeping faith not only with the recommendations of the parliamentary commission but with the urgency of the need to enact these reforms, which I commend to the House.
Stephen Barclay: We have had a full and constructive debate that builds on the cross-party nature of the work of the banking commission. That has been reflected in the consensual tone of hon. Members’ speeches. I am very reassured by the comments of my right hon. Friend the Minister about the Government’s willingness to look at the outcome that new clause 2 seeks, which is in line with the comments made by Members across the House. For that reason, I will not press the new clause to a vote but ask leave to withdraw it.
Duty of Care
‘At all times when carrying out core activities a ring-fenced body shall—
(a) be subject to a fiduciary duty towards its customers in the operation of core services; and
(b) be subject to a duty of care towards it customers across the financial services sector.’.—(Cathy Jamieson.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
The House divided:
Ayes 217, Noes 272.
Division No. 48]
[
9.34 pm
AYES
Abbott, Ms Diane
Abrahams, Debbie
Ainsworth, rh Mr Bob
Alexander, rh Mr Douglas
Ali, Rushanara
Allen, Mr Graham
Anderson, Mr David
Ashworth, Jonathan
Austin, Ian
Bailey, Mr Adrian
Bain, Mr William
Balls, rh Ed
Banks, Gordon
Barron, rh Mr Kevin
Beckett, rh Margaret
Begg, Dame Anne
Benn, rh Hilary
Berger, Luciana
Betts, Mr Clive
Blackman-Woods, Roberta
Blears, rh Hazel
Blenkinsop, Tom
Blomfield, Paul
Blunkett, rh Mr David
Bradshaw, rh Mr Ben
Brennan, Kevin
Brown, rh Mr Nicholas
Brown, Mr Russell
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Byrne, rh Mr Liam
Campbell, Mr Alan
Campbell, Mr Gregory
Campbell, Mr Ronnie
Caton, Martin
Champion, Sarah
Chapman, Jenny
Clark, Katy
Clarke, rh Mr Tom
Coaker, Vernon
Coffey, Ann
Connarty, Michael
Cooper, Rosie
Cooper, rh Yvette
Corbyn, Jeremy
Crausby, Mr David
Creagh, Mary
Creasy, Stella
Cryer, John
Cunningham, Alex
Cunningham, Mr Jim
Cunningham, Sir Tony
Curran, Margaret
Dakin, Nic
Darling, rh Mr Alistair
David, Wayne
Davidson, Mr Ian
Davies, Geraint
De Piero, Gloria
Denham, rh Mr John
Dobson, rh Frank
Docherty, Thomas
Donaldson, rh Mr Jeffrey M.
Donohoe, Mr Brian H.
Doran, Mr Frank
Doughty, Stephen
Dowd, Jim
Doyle, Gemma
Dromey, Jack
Dugher, Michael
Durkan, Mark
Eagle, Ms Angela
Eagle, Maria
Edwards, Jonathan
Ellman, Mrs Louise
Engel, Natascha
Esterson, Bill
Evans, Chris
Farrelly, Paul
Field, rh Mr Frank
Fitzpatrick, Jim
Flello, Robert
Flint, rh Caroline
Flynn, Paul
Fovargue, Yvonne
Francis, Dr Hywel
Gapes, Mike
Gardiner, Barry
Gilmore, Sheila
Glass, Pat
Glindon, Mrs Mary
Godsiff, Mr Roger
Goggins, rh Paul
Goodman, Helen
Green, Kate
Greenwood, Lilian
Griffith, Nia
Gwynne, Andrew
Hain, rh Mr Peter
Hamilton, Fabian
Hanson, rh Mr David
Harman, rh Ms Harriet
Harris, Mr Tom
Havard, Mr Dai
Healey, rh John
Hepburn, Mr Stephen
Hermon, Lady
Hodgson, Mrs Sharon
Hoey, Kate
Hopkins, Kelvin
Hosie, Stewart
Howarth, rh Mr George
Hunt, Tristram
Jackson, Glenda
Jamieson, Cathy
Jarvis, Dan
Johnson, rh Alan
Jones, Graham
Jones, Helen
Jones, Mr Kevan
Kaufman, rh Sir Gerald
Keeley, Barbara
Kendall, Liz
Khan, rh Sadiq
Lavery, Ian
Leslie, Chris
Lewell-Buck, Mrs Emma
Lewis, Mr Ivan
Long, Naomi
Love, Mr Andrew
Lucas, Caroline
Lucas, Ian
Mahmood, Shabana
Mann, John
Marsden, Mr Gordon
McCabe, Steve
McCann, Mr Michael
McCarthy, Kerry
McClymont, Gregg
McDonagh, Siobhain
McFadden, rh Mr Pat
McGovern, Alison
McGovern, Jim
McGuire, rh Mrs Anne
McKechin, Ann
McKenzie, Mr Iain
McKinnell, Catherine
Meacher, rh Mr Michael
Mearns, Ian
Miller, Andrew
Morden, Jessica
Morrice, Graeme
(Livingston)
Morris, Grahame M.
(Easington)
Mudie, Mr George
Munn, Meg
Murphy, rh Mr Jim
Murray, Ian
Nandy, Lisa
Nash, Pamela
O'Donnell, Fiona
Onwurah, Chi
Osborne, Sandra
Pearce, Teresa
Perkins, Toby
Phillipson, Bridget
Pound, Stephen
Raynsford, rh Mr Nick
Reed, Mr Jamie
Reed, Mr Steve
Reynolds, Emma
Reynolds, Jonathan
Riordan, Mrs Linda
Ritchie, Ms Margaret
Robertson, Angus
Robertson, John
Robinson, Mr Geoffrey
Rotheram, Steve
Roy, Mr Frank
Roy, Lindsay
Ruddock, rh Dame Joan
Sarwar, Anas
Sawford, Andy
Seabeck, Alison
Sharma, Mr Virendra
Sheridan, Jim
Shuker, Gavin
Simpson, David
Skinner, Mr Dennis
Slaughter, Mr Andy
Smith, rh Mr Andrew
Smith, Nick
Smith, Owen
Spellar, rh Mr John
Stuart, Ms Gisela
Sutcliffe, Mr Gerry
Tami, Mark
Thornberry, Emily
Timms, rh Stephen
Trickett, Jon
Turner, Karl
Twigg, Derek
Twigg, Stephen
Umunna, Mr Chuka
Vaz, Valerie
Watts, Mr Dave
Weir, Mr Mike
Whitehead, Dr Alan
Wilson, Phil
Winnick, Mr David
Winterton, rh Ms Rosie
Wishart, Pete
Wood, Mike
Woodcock, John
Woodward, rh Mr Shaun
Wright, David
Wright, Mr Iain
Tellers for the Ayes:
Susan Elan Jones
and
Heidi Alexander
NOES
Adams, Nigel
Afriyie, Adam
Aldous, Peter
Amess, Mr David
Andrew, Stuart
Arbuthnot, rh Mr James
Bacon, Mr Richard
Baker, Steve
Baldry, Sir Tony
Baldwin, Harriett
Barclay, Stephen
Barker, rh Gregory
Barwell, Gavin
Bebb, Guto
Benyon, Richard
Berry, Jake
Bingham, Andrew
Blackwood, Nicola
Blunt, Mr Crispin
Boles, Nick
Bone, Mr Peter
Bottomley, Sir Peter
Bradley, Karen
Brady, Mr Graham
Brake, rh Tom
Bray, Angie
Brazier, Mr Julian
Bridgen, Andrew
Brokenshire, James
Brooke, Annette
Bruce, Fiona
Burley, Mr Aidan
Burns, Conor
Burns, rh Mr Simon
Burrowes, Mr David
Burstow, rh Paul
Burt, Alistair
Burt, Lorely
Byles, Dan
Campbell, rh Sir Menzies
Carmichael, rh Mr Alistair
Carmichael, Neil
Carswell, Mr Douglas
Chishti, Rehman
Clappison, Mr James
Clark, rh Greg
Clifton-Brown, Geoffrey
Coffey, Dr Thérèse
Collins, Damian
Colvile, Oliver
Cox, Mr Geoffrey
Crabb, Stephen
Crockart, Mike
Crouch, Tracey
Davey, rh Mr Edward
Davies, David T. C.
(Monmouth)
Davies, Glyn
Davies, Philip
Dinenage, Caroline
Djanogly, Mr Jonathan
Dorrell, rh Mr Stephen
Doyle-Price, Jackie
Drax, Richard
Duncan, rh Mr Alan
Duncan Smith, rh Mr Iain
Ellis, Michael
Ellison, Jane
Ellwood, Mr Tobias
Elphicke, Charlie
Eustice, George
Evans, Graham
Evans, Jonathan
Evennett, Mr David
Fabricant, Michael
Fallon, rh Michael
Farron, Tim
Field, Mark
Foster, rh Mr Don
Fox, rh Dr Liam
Francois, rh Mr Mark
Freeman, George
Freer, Mike
Fullbrook, Lorraine
Fuller, Richard
Gale, Sir Roger
Garnier, Sir Edward
Garnier, Mark
Gauke, Mr David
Gibb, Mr Nick
Gillan, rh Mrs Cheryl
Glen, John
Goodwill, Mr Robert
Graham, Richard
Grant, Mrs Helen
Grayling, rh Chris
Grieve, rh Mr Dominic
Griffiths, Andrew
Gyimah, Mr Sam
Halfon, Robert
Hames, Duncan
Hammond, rh Mr Philip
Hammond, Stephen
Hancock, Matthew
Hancock, Mr Mike
Hands, Greg
Harper, Mr Mark
Harrington, Richard
Harris, Rebecca
Hart, Simon
Haselhurst, rh Sir Alan
Hayes, rh Mr John
Heald, Oliver
Heath, Mr David
Heaton-Harris, Chris
Hemming, John
Henderson, Gordon
Herbert, rh Nick
Hinds, Damian
Hoban, Mr Mark
Hollingbery, George
Hollobone, Mr Philip
Holloway, Mr Adam
Hopkins, Kris
Howarth, Sir Gerald
Howell, John
Hughes, rh Simon
Hunt, rh Mr Jeremy
Hurd, Mr Nick
Jackson, Mr Stewart
Jenkin, Mr Bernard
Johnson, Joseph
Jones, Andrew
Jones, Mr Marcus
Kawczynski, Daniel
Kelly, Chris
Kirby, Simon
Knight, rh Mr Greg
Kwarteng, Kwasi
Laing, Mrs Eleanor
Lamb, Norman
Lancaster, Mark
Latham, Pauline
Laws, rh Mr David
Leadsom, Andrea
Lee, Jessica
Lee, Dr Phillip
Leech, Mr John
Letwin, rh Mr Oliver
Lewis, Brandon
Lewis, Dr Julian
Liddell-Grainger, Mr Ian
Lidington, rh Mr David
Lilley, rh Mr Peter
Lloyd, Stephen
Loughton, Tim
Luff, Peter
Lumley, Karen
Macleod, Mary
May, rh Mrs Theresa
Maynard, Paul
McCartney, Karl
McIntosh, Miss Anne
McPartland, Stephen
McVey, Esther
Menzies, Mark
Metcalfe, Stephen
Miller, rh Maria
Mills, Nigel
Milton, Anne
Moore, rh Michael
Mordaunt, Penny
Morris, Anne Marie
Morris, James
Mosley, Stephen
Mowat, David
Mulholland, Greg
Mundell, rh David
Munt, Tessa
Murray, Sheryll
Murrison, Dr Andrew
Newmark, Mr Brooks
Newton, Sarah
Nokes, Caroline
Norman, Jesse
Nuttall, Mr David
Offord, Dr Matthew
Ollerenshaw, Eric
Opperman, Guy
Ottaway, Richard
Paice, rh Sir James
Parish, Neil
Patel, Priti
Paterson, rh Mr Owen
Pawsey, Mark
Penning, Mike
Penrose, John
Percy, Andrew
Phillips, Stephen
Pincher, Christopher
Poulter, Dr Daniel
Prisk, Mr Mark
Pritchard, Mark
Pugh, John
Raab, Mr Dominic
Randall, rh Mr John
Reckless, Mark
Redwood, rh Mr John
Rees-Mogg, Jacob
Reevell, Simon
Reid, Mr Alan
Rogerson, Dan
Rosindell, Andrew
Rudd, Amber
Ruffley, Mr David
Russell, Sir Bob
Rutley, David
Sanders, Mr Adrian
Sandys, Laura
Scott, Mr Lee
Selous, Andrew
Shelbrooke, Alec
Simpson, Mr Keith
Skidmore, Chris
Smith, Miss Chloe
Smith, Henry
Smith, Sir Robert
Soames, rh Nicholas
Spelman, rh Mrs Caroline
Spencer, Mr Mark
Stephenson, Andrew
Stevenson, John
Stewart, Bob
Stewart, Iain
Stewart, Rory
Streeter, Mr Gary
Stride, Mel
Stunell, rh Sir Andrew
Sturdy, Julian
Swales, Ian
Swayne, rh Mr Desmond
Swinson, Jo
Swire, rh Mr Hugo
Syms, Mr Robert
Teather, Sarah
Thurso, John
Timpson, Mr Edward
Tomlinson, Justin
Truss, Elizabeth
Turner, Mr Andrew
Tyrie, Mr Andrew
Uppal, Paul
Vara, Mr Shailesh
Vickers, Martin
Walker, Mr Charles
Walker, Mr Robin
Ward, Mr David
Weatherley, Mike
Webb, Steve
Wharton, James
Wheeler, Heather
White, Chris
Whittaker, Craig
Wiggin, Bill
Williams, Mr Mark
Williams, Stephen
Williamson, Gavin
Willott, Jenny
Wilson, Mr Rob
Wollaston, Dr Sarah
Wright, Simon
Young, rh Sir George
Zahawi, Nadhim
Tellers for the Noes:
Mark Hunter
and
Nicky Morgan
Question accordingly negatived.
8 July 2013 : Column 140
8 July 2013 : Column 141
8 July 2013 : Column 142
8 July 2013 : Column 143
Bill to be further considered tomorrow.
Business without Debate
European Union Documents
Motion made, and Question put forthwith (Standing Order No. 119(11)),
Combating Child Labour
That this House takes note of European Union Document No. 9198/13, a Commission Staff Working Document on Trade and Worst Forms of Child Labour; welcomes the document as an important contribution to the debate that is central to both development and trade policy; and supports the Government’s efforts in the fight against child labour.—(Anne Milton.)
Delegated Legislation
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Public Bodies
That the draft Public Bodies (Abolition of Administrative Justice and Tribunals Council) Order 2013, which was laid before this House on 18 December 2012, in the last Session of Parliament, be approved.—(Anne Milton.)
The House divided:
Ayes 274, Noes 214.
Division No. 49]
[
9.47 pm
AYES
Adams, Nigel
Afriyie, Adam
Aldous, Peter
Amess, Mr David
Andrew, Stuart
Arbuthnot, rh Mr James
Bacon, Mr Richard
Baker, Steve
Baldry, Sir Tony
Baldwin, Harriett
Barclay, Stephen
Barker, rh Gregory
Barwell, Gavin
Bebb, Guto
Benyon, Richard
Berry, Jake
Bingham, Andrew
Blackwood, Nicola
Blunt, Mr Crispin
Boles, Nick
Bone, Mr Peter
Bottomley, Sir Peter
Bradley, Karen
Brady, Mr Graham
Brake, rh Tom
Bray, Angie
Brazier, Mr Julian
Bridgen, Andrew
Brokenshire, James
Brooke, Annette
Bruce, Fiona
Burley, Mr Aidan
Burns, Conor
Burns, rh Mr Simon
Burrowes, Mr David
Burstow, rh Paul
Burt, Alistair
Burt, Lorely
Byles, Dan
Campbell, rh Sir Menzies
Carmichael, rh Mr Alistair
Carmichael, Neil
Carswell, Mr Douglas
Chishti, Rehman
Clappison, Mr James
Clark, rh Greg
Clifton-Brown, Geoffrey
Coffey, Dr Thérèse
Collins, Damian
Colvile, Oliver
Cox, Mr Geoffrey
Crabb, Stephen
Crockart, Mike
Crouch, Tracey
Davey, rh Mr Edward
Davies, David T. C.
(Monmouth)
Davies, Glyn
Davies, Philip
Dinenage, Caroline
Djanogly, Mr Jonathan
Dorrell, rh Mr Stephen
Doyle-Price, Jackie
Drax, Richard
Duncan, rh Mr Alan
Duncan Smith, rh Mr Iain
Ellis, Michael
Ellison, Jane
Ellwood, Mr Tobias
Elphicke, Charlie
Eustice, George
Evans, Graham
Evans, Jonathan
Fabricant, Michael
Fallon, rh Michael
Farron, Tim
Field, Mark
Foster, rh Mr Don
Fox, rh Dr Liam
Francois, rh Mr Mark
Freeman, George
Freer, Mike
Fullbrook, Lorraine
Fuller, Richard
Gale, Sir Roger
Garnier, Sir Edward
Garnier, Mark
Gauke, Mr David
George, Andrew
Gibb, Mr Nick
Gilbert, Stephen
Gillan, rh Mrs Cheryl
Glen, John
Goodwill, Mr Robert
Graham, Richard
Grant, Mrs Helen
Grayling, rh Chris
Grieve, rh Mr Dominic
Griffiths, Andrew
Gyimah, Mr Sam
Halfon, Robert
Hames, Duncan
Hammond, rh Mr Philip
Hammond, Stephen
Hancock, Matthew
Hancock, Mr Mike
Hands, Greg
Harper, Mr Mark
Harrington, Richard
Harris, Rebecca
Hart, Simon
Harvey, Sir Nick
Haselhurst, rh Sir Alan
Hayes, rh Mr John
Heald, Oliver
Heath, Mr David
Heaton-Harris, Chris
Hemming, John
Henderson, Gordon
Herbert, rh Nick
Hinds, Damian
Hoban, Mr Mark
Hollingbery, George
Hollobone, Mr Philip
Holloway, Mr Adam
Hopkins, Kris
Howarth, Sir Gerald
Howell, John
Hughes, rh Simon
Hunt, rh Mr Jeremy
Hurd, Mr Nick
Jackson, Mr Stewart
Johnson, Joseph
Jones, Andrew
Jones, Mr Marcus
Kawczynski, Daniel
Kelly, Chris
Kirby, Simon
Knight, rh Mr Greg
Kwarteng, Kwasi
Laing, Mrs Eleanor
Lamb, Norman
Lancaster, Mark
Latham, Pauline
Laws, rh Mr David
Leadsom, Andrea
Lee, Jessica
Lee, Dr Phillip
Leech, Mr John
Letwin, rh Mr Oliver
Lewis, Brandon
Lewis, Dr Julian
Liddell-Grainger, Mr Ian
Lidington, rh Mr David
Lilley, rh Mr Peter
Lloyd, Stephen
Loughton, Tim
Luff, Peter
Lumley, Karen
Macleod, Mary
May, rh Mrs Theresa
Maynard, Paul
McCartney, Karl
McIntosh, Miss Anne
McPartland, Stephen
McVey, Esther
Menzies, Mark
Metcalfe, Stephen
Miller, rh Maria
Mills, Nigel
Milton, Anne
Moore, rh Michael
Mordaunt, Penny
Morgan, Nicky
Morris, Anne Marie
Morris, James
Mosley, Stephen
Mowat, David
Mulholland, Greg
Mundell, rh David
Munt, Tessa
Murray, Sheryll
Murrison, Dr Andrew
Newmark, Mr Brooks
Newton, Sarah
Nokes, Caroline
Norman, Jesse
Nuttall, Mr David
Offord, Dr Matthew
Ollerenshaw, Eric
Opperman, Guy
Ottaway, Richard
Paice, rh Sir James
Parish, Neil
Patel, Priti
Paterson, rh Mr Owen
Pawsey, Mark
Penning, Mike
Penrose, John
Percy, Andrew
Phillips, Stephen
Pincher, Christopher
Poulter, Dr Daniel
Prisk, Mr Mark
Pritchard, Mark
Pugh, John
Raab, Mr Dominic
Randall, rh Mr John
Reckless, Mark
Redwood, rh Mr John
Rees-Mogg, Jacob
Reevell, Simon
Reid, Mr Alan
Rogerson, Dan
Rosindell, Andrew
Rudd, Amber
Ruffley, Mr David
Russell, Sir Bob
Rutley, David
Sanders, Mr Adrian
Scott, Mr Lee
Selous, Andrew
Shelbrooke, Alec
Simmonds, Mark
Simpson, Mr Keith
Skidmore, Chris
Smith, Miss Chloe
Smith, Henry
Smith, Sir Robert
Soames, rh Nicholas
Spelman, rh Mrs Caroline
Spencer, Mr Mark
Stephenson, Andrew
Stevenson, John
Stewart, Bob
Stewart, Iain
Stewart, Rory
Streeter, Mr Gary
Stride, Mel
Stunell, rh Sir Andrew
Sturdy, Julian
Swales, Ian
Swayne, rh Mr Desmond
Swinson, Jo
Swire, rh Mr Hugo
Syms, Mr Robert
Teather, Sarah
Thurso, John
Timpson, Mr Edward
Tomlinson, Justin
Truss, Elizabeth
Turner, Mr Andrew
Tyrie, Mr Andrew
Uppal, Paul
Vara, Mr Shailesh
Vickers, Martin
Walker, Mr Charles
Walker, Mr Robin
Ward, Mr David
Weatherley, Mike
Webb, Steve
Wharton, James
Wheeler, Heather
White, Chris
Whittaker, Craig
Wiggin, Bill
Williams, Mr Mark
Williams, Stephen
Williamson, Gavin
Willott, Jenny
Wilson, Mr Rob
Wollaston, Dr Sarah
Wright, Simon
Young, rh Sir George
Zahawi, Nadhim
Tellers for the Ayes:
Mark Hunter
and
Mr David Evennett
NOES
Abbott, Ms Diane
Abrahams, Debbie
Ainsworth, rh Mr Bob
Alexander, rh Mr Douglas
Ali, Rushanara
Allen, Mr Graham
Anderson, Mr David
Ashworth, Jonathan
Austin, Ian
Bailey, Mr Adrian
Bain, Mr William
Balls, rh Ed
Banks, Gordon
Barron, rh Mr Kevin
Beckett, rh Margaret
Begg, Dame Anne
Benn, rh Hilary
Berger, Luciana
Betts, Mr Clive
Blackman-Woods, Roberta
Blears, rh Hazel
Blenkinsop, Tom
Blomfield, Paul
Blunkett, rh Mr David
Bradshaw, rh Mr Ben
Brennan, Kevin
Brown, rh Mr Nicholas
Brown, Mr Russell
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Byrne, rh Mr Liam
Campbell, Mr Alan
Campbell, Mr Gregory
Campbell, Mr Ronnie
Caton, Martin
Champion, Sarah
Chapman, Jenny
Clark, Katy
Clarke, rh Mr Tom
Coaker, Vernon
Coffey, Ann
Connarty, Michael
Cooper, Rosie
Cooper, rh Yvette
Corbyn, Jeremy
Crausby, Mr David
Creagh, Mary
Creasy, Stella
Cryer, John
Cunningham, Alex
Cunningham, Mr Jim
Cunningham, Sir Tony
Curran, Margaret
Dakin, Nic
Darling, rh Mr Alistair
David, Wayne
Davidson, Mr Ian
Davies, Geraint
De Piero, Gloria
Denham, rh Mr John
Dobson, rh Frank
Docherty, Thomas
Donaldson, rh Mr Jeffrey M.
Donohoe, Mr Brian H.
Doran, Mr Frank
Doughty, Stephen
Dowd, Jim
Doyle, Gemma
Dromey, Jack
Dugher, Michael
Durkan, Mark
Eagle, Ms Angela
Eagle, Maria
Edwards, Jonathan
Ellman, Mrs Louise
Engel, Natascha
Esterson, Bill
Evans, Chris
Farrelly, Paul
Field, rh Mr Frank
Fitzpatrick, Jim
Flello, Robert
Flint, rh Caroline
Flynn, Paul
Fovargue, Yvonne
Francis, Dr Hywel
Gapes, Mike
Gardiner, Barry
Gilmore, Sheila
Glass, Pat
Glindon, Mrs Mary
Godsiff, Mr Roger
Goggins, rh Paul
Goodman, Helen
Green, Kate
Greenwood, Lilian
Griffith, Nia
Gwynne, Andrew
Hain, rh Mr Peter
Hamilton, Fabian
Hanson, rh Mr David
Harman, rh Ms Harriet
Harris, Mr Tom
Havard, Mr Dai
Healey, rh John
Hepburn, Mr Stephen
Hermon, Lady
Hodgson, Mrs Sharon
Hoey, Kate
Hopkins, Kelvin
Howarth, rh Mr George
Hunt, Tristram
Irranca-Davies, Huw
Jackson, Glenda
Jamieson, Cathy
Jarvis, Dan
Johnson, rh Alan
Jones, Graham
Jones, Helen
Jones, Mr Kevan
Kaufman, rh Sir Gerald
Keeley, Barbara
Kendall, Liz
Khan, rh Sadiq
Lavery, Ian
Leslie, Chris
Lewell-Buck, Mrs Emma
Lewis, Mr Ivan
Long, Naomi
Love, Mr Andrew
Lucas, Caroline
Lucas, Ian
Mahmood, Shabana
Mann, John
Marsden, Mr Gordon
McCabe, Steve
McCann, Mr Michael
McCarthy, Kerry
McClymont, Gregg
McDonagh, Siobhain
McFadden, rh Mr Pat
McGovern, Alison
McGovern, Jim
McGuire, rh Mrs Anne
McKechin, Ann
McKenzie, Mr Iain
McKinnell, Catherine
Meacher, rh Mr Michael
Mearns, Ian
Miller, Andrew
Morden, Jessica
Morrice, Graeme
(Livingston)
Morris, Grahame M.
(Easington)
Mudie, Mr George
Munn, Meg
Murphy, rh Mr Jim
Murray, Ian
Nandy, Lisa
Nash, Pamela
O'Donnell, Fiona
Onwurah, Chi
Osborne, Sandra
Pearce, Teresa
Perkins, Toby
Phillipson, Bridget
Pound, Stephen
Raynsford, rh Mr Nick
Reed, Mr Jamie
Reed, Mr Steve
Reynolds, Emma
Reynolds, Jonathan
Riordan, Mrs Linda
Ritchie, Ms Margaret
Robertson, John
Robinson, Mr Geoffrey
Rotheram, Steve
Roy, Mr Frank
Roy, Lindsay
Ruddock, rh Dame Joan
Sarwar, Anas
Sawford, Andy
Seabeck, Alison
Sharma, Mr Virendra
Sheridan, Jim
Shuker, Gavin
Simpson, David
Skinner, Mr Dennis
Slaughter, Mr Andy
Smith, rh Mr Andrew
Smith, Nick
Smith, Owen
Spellar, rh Mr John
Stuart, Ms Gisela
Sutcliffe, Mr Gerry
Tami, Mark
Thornberry, Emily
Timms, rh Stephen
Trickett, Jon
Turner, Karl
Twigg, Derek
Twigg, Stephen
Umunna, Mr Chuka
Vaz, Valerie
Watts, Mr Dave
Whitehead, Dr Alan
Wilson, Phil
Winnick, Mr David
Winterton, rh Ms Rosie
Wood, Mike
Woodcock, John
Woodward, rh Mr Shaun
Wright, David
Wright, Mr Iain
Tellers for the Noes:
Heidi Alexander
and
Susan Elan Jones
Question accordingly agreed to.
8 July 2013 : Column 144
8 July 2013 : Column 145
8 July 2013 : Column 146
8 July 2013 : Column 147
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Immigration
That the draft Immigration (Leave to Enter and Remain) (Amendment) Order 2013, which was laid before this House on 3 June, be approved.—(Nicky Morgan.)
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Financial Services and Markets
That the draft Alternative Investment Fund Managers Regulations 2013, which were laid before this House on 10 June, be approved.—(Nicky Morgan.)
The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 10 July (Standing Order No. 41A).
Northern Ireland Grand Committee
(1) the matter of peace and progress in Northern Ireland: next steps in building a prosperous and united community be referred to the Northern Ireland Grand Committee;
(2) the Committee shall meet in Northern Ireland on Monday 9 September at half-past two o’clock; and
(a) the Committee shall take questions under Standing Order No. 110 (Northern Ireland Grand Committee (questions for oral answer)), and shall then consider the matter referred to it under paragraph (1) above.
(b) the Chair shall interrupt proceedings not later than two and a half hours after the commencement of proceedings on the matter referred to the Committee; and
(c) at the conclusion of those proceedings, a motion for the adjournment of the Committee may be made by a Minister of the Crown, pursuant to paragraph (5) of Standing Order No. 116 (Northern Ireland Grand Committee (sittings)).—(Nicky Morgan.)
8 July 2013 : Column 148
Care Services (Bradford)
Motion made, and Question proposed, That this House do now adjourn.—(Nicky Morgan.)
10.2 pm
Mr David Ward (Bradford East) (LD): The very first time that a son or daughter is asked by one of their parents, “And who exactly are you?”, is a chilling and frightening experience. It is a question of good days and bad days. In most cases there will be many good days—many fun days. It is not the end of the world, but it is very much the end of a world that the son or daughter knew. My hon. Friend the Minister is more conversant with the figures than I am, but they are startling for us as a nation. Some 800,000 people suffer from dementia. We are told that the figure will increase to 1 million in the next 10 years or so. The Alzheimer’s Society believes that the cost to us as nation of supporting those people is £23 billion, and that is with only half of those who have dementia being diagnosed with it.
However, I am here to tell a good story, about the work going on in Bradford. I would not be forgiven by Cathy Henwood, the dementia-friendly communities co-ordinator in the Alzheimer’s Society, if I did not point out that we were doing dementia-friendly work in Bradford before the Prime Minister’s challenge, which I will return to later. The dementia measures taken in Bradford have been well supported by the council. Stage one of the work included the recruitment of a small pilot group of organisations, such as the gurdwara, the Church of England, the community centre, a local branch of Lloyds TSB, a pharmacy and others. They were asked to review their organisations and write action plans. A checklist was produced by the Alzheimer’s Society to help them do that. That list was developed with people who had dementia and those who cared for people with dementia.
The second stage of the work is where my patch of Idle, where I live, came in. It is a village—yes, I was an Idle councillor for 26 years. The Alzheimer’s Society developed a community-based approach to supporting people with dementia which started in Idle and Thackley. The area happens to have three Liberal Democrat councillors, I am pleased to say, and they were determined to put together supportive structures for those with dementia in their ward development plans. Councillor Jeanette Sunderland leads the Lib Dem group. She and her colleagues Councillors Griffiths and Reid, working with the Alzheimer’s Society, held a community meeting on a bleak and snowy day in January—we do have some bleak and snowy days in Bradford in January. It was nearly cancelled but it went ahead despite the weather, and 40 participants turned up and 14 people signed up and agreed to stay involved. That meeting was partly for awareness raising, with a speaker who had dementia, and with information about the effects of dementia and how to help, and it was also partly a consultation, with discussion about what is good about living in Idle and what would be problematic for people with memory problems—what could be changed, and so forth.
A number of subsequent meetings have been held, as was a support group meeting, with both carers and those with dementia, at a volunteer event. All was going well. As of April, with some funding from the Joseph Rowntree Foundation and Bradford council, this work
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was looking to expand out of one ward out of the 30 in Bradford to work with 20 communities in total over a two-year period.
There was an announcement in the Telegraph and Argus about the Bradford District Dementia Action Alliance, which had brought together lots of groups and organisations, including the Yorkshire police, the Bradford royal infirmary and St Luke’s hospital, Bradford university and Bradford college. They have now been granted early adopter status for the dementia-friendly community recognition programme.
This is all really good news, added to which I believe it is important to congratulate the coalition Government on the focus they have placed on this, for example with the Prime Minister’s welcome launch of the dementia challenge. So far, so good, then.
The background to this at the national level is as follows. There is a £2.68 billion reduction in adult social care funding either so far or through to March 2014, and locally a 16% reduction over the last two years in adult and community service budgets, which amounts to £23 million in Bradford. A joint survey by Age UK and the College of Social Work found that 94% of people witnessed a squeeze on budgets for care services in the past three years, and 81% said they were seeing negative impacts on social care.
The Minister will, I am sure, refer to the Government funding that has recently been made available. That is focused on the crucial integration of health and social care, but integration can happen at any level of support, of course. Eligibility is the gateway to support; it provides the level at which a person can access support. As the Minister well knows, Bradford’s council is consulting on changing the criteria in Bradford, and that consultation will run until 4 August. I am pleased to say that on 15 July the former care Minister, my right hon. Friend the Member for Sutton and Cheam (Paul Burstow), will be coming to Bradford to launch the Bradford Cares campaign, which is supported by Scope. It is running a national campaign, but we will run a local version of it, in which we will seek to persuade the people of Bradford to support our campaign against the council’s proposed changes. We feel it is particularly relevant to those with dementia because, as the Minister knows, people with dementia are often physically able. With a little help and support, they are quite capable of looking after themselves.
When I was a councillor chairing the area committee we looked at the issues affecting elderly people and we assumed that they would relate to benefits, housing, adaptations and so on. It became evident that the crucial issue facing many elderly people was isolation, the impact of which, as we know, can lead to a deterioration in a person’s condition, particularly if they have dementia. Early intervention, not integrated intervention, is the key. This is about providing moderate care not only because it is relatively inexpensive, but because we know that investing in this form of support can save up to 130%.
If Bradford council’s decision goes through, it could well affect 2,000 people. We believe that if the council is doing this on the basis of concern about cost, it is very much a false economy, as it will cost the council more in the long term. I fear that despite the great strides that will be made by finally having integrated care systems, a change in eligibility thresholds will mean that hundreds
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of thousands of people will still not get the key early and preventive care about which I know the Minister cares passionately. They will not receive the care that they so desperately need and that is why it is so important to consider the eligibility criteria. As the Alzheimer’s Society has highlighted,
“setting the eligibility threshold at substantial will fail to make the shift to a system of prevention whereby people get the support they need to cope at home and avoid unplanned admissions to hospital and residential care.”
My Liberal Democrat colleagues on Bradford council have put down a motion for debate tomorrow, applauding the work that is going on in Bradford, particularly the Bradford District Dementia Action Alliance. We have had some cross-party coalition work on dealing with dementia, and I urge all Bradford councillors to support that motion, with the goal of making Bradford a dementia-friendly district by 2015. The dictionary definition of “to care” is to
“take thought for, provide for, look after, take care of”.
We must take care, and we must not care less.
I look forward in particular to the Minister’s response on integration. I know he sees it as a great opportunity, but my concern is that unless it operates at an appropriate level we will not only lose the savings that are possible through preventive work but see a deterioration in many people’s conditions and a growing cost. We are still at an early stage in the development of the health and wellbeing boards, and change is also happening in the national health service as a whole. These are risky days for many people, and although the additional funding to support integration must be welcomed, we must ensure that it is at the appropriate level.
10.15 pm
The Minister of State, Department of Health (Norman Lamb): I congratulate my hon. Friend the Member for Bradford East (Mr Ward) on securing the debate and on all the work he has done both in Bradford and to bring the stories from Bradford to a national forum. He has done more than anyone to highlight the importance of care services and working with the community to improve services for people. Indeed, the extraordinary consultation exercise he undertook following the White Paper last year was an exemplar of how to engage with the local community. The extent to which people felt able to comment and give their views and ideas was commendable.
I also congratulate the Bradford District Dementia Action Alliance on its work. My hon. Friend made the point that Cathy Henwood from the Alzheimer’s Society had identified Bradford as developing the concept of dementia-friendly communities before the Prime Minister’s dementia challenge, but I am pleased that he acknowledged that the Government have done a lot to highlight the importance of improving dementia care. The Prime Minister’s dementia challenge highlighted three strands: improving health and care services; creating dementia-friendly communities, which is exactly what is happening in Bradford; and a much greater focus on research so that we can find cures, understand better how to prevent some types of dementia, such as vascular dementia, and understand through research how best to care for people with dementia. The Government are more than doubling the amount spent on research, which is a good thing in itself.
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The work about which my hon. Friend spoke started in the ward of Thackley—
Norman Lamb: Idle and Thackley—those wonderful names. Local councillors got the community involved and that is exactly what needs to happen. When we talk about how to meet the extraordinary challenges of the future, with an ageing community, there must ultimately be collaboration between statutory services and the community. Bradford appears to be showing the way in which that can be done and I stress that it requires the integration of services and care shaped around the needs of the individual with preventive care to stop the deterioration in their condition.
My hon. Friend will be aware of the need for the care and support system to change as local authorities face challenges resulting from an ageing population. That is why the coalition Government have decided to reform the system of care and support. He talked about the situation in Bradford and I understand that more than 71,000 people there are aged 65 and over, about 14% of its total population. Bradford’s joint strategic needs assessment for 2012 predicts that by 2033—not that far off—the number of local people over 90 will increase from 2,800 to 8,700, an increase of more than 200%. We all face an extraordinary challenge.
As we debate access to care and support services, I am aware that City of Bradford metropolitan district council sets its eligibility criteria at moderate. The report that my hon. Friend published earlier in the year indicated that 97% of people who replied to his survey welcomed setting the eligibility criteria at that level. Bradford council now proposes to change its band to substantial, because of pressures on its budget, and that would affect about 25% of people who currently receive care and support. I completely understand that the Bradford Cares campaign wishes to ensure that services are maintained at the existing level.
The care and support White Paper, which was published in July 2012, is an important and fundamental step towards addressing the challenges of an ageing society. Our reforms will focus more attention on people’s well-being—that is at the centre of everything that the Care Bill tries to achieve—and independence throughout their lives, rather than waiting for people to reach crisis point. They will also put people in control by giving them a far greater say about their care and support, as well as by ensuring that services are designed around what people actually want and by putting their priorities and preferences above and beyond the needs of the institution. My hon. Friend will be aware that the Care Bill, which has been widely welcomed, will be a single, modern statute for care and support. It will make legislation clearer and fairer, and it will be built around people not processes, and individuals not institutions.
As the Government’s White Paper made clear, our vision is a modern care and support system that promotes people’s well-being by enabling them to prevent and postpone the need for care and support, and puts them in control of their lives so that they may pursue opportunities, including education and employment, and realise their potential. Assessments will remain an
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integral part of the system, but rather than acting primarily as a gateway to the adult receiving care and support—or not, if they fail the assessment—the future system will place much more emphasis on the role of the assessment process in supporting people to identify their needs, to understand the options available, to plan for meeting care needs and caring responsibilities, and to reduce or delay needs, when possible.
Any adult who appears to the local authority to have care and support needs, whatever the level of need, has the right to an assessment. That right will cover carers, so this is an extension of their existing rights. The low threshold for entitlement to an assessment will mean that authorities will have earlier contact with far more people with low-level needs.
Mr Ward: May I say how much I welcome the policy on the assessment of carers? Many carers who visit my constituency office are on the verge of needing care themselves because of the stress that they are under. It is the failure to identify their personal needs and the support that they require that puts them in such a stressful position.
Norman Lamb: My hon. Friend is absolutely right. The Care Bill’s provisions on carers represent an enormously welcome advance. In a sense, they will give carers the same entitlements to assessment and then support, if that is deemed necessary, as the people for whom they care.
The “Fair access to care services” framework was introduced in 2003. It aimed to provide a fairer and more transparent system for the allocation of social care services. The assessment and eligibility framework was reproduced in the “Putting People First” guidance that was published in 2010. The current assessment and eligibility framework is graded into four bands: critical; substantial, which is the case for most local authorities; moderate, which applies to Bradford and some 15 other authorities; and low, which covers only two or three councils. Local authorities can choose which band they wish to set for their local criteria, and Bradford has the legal power to change its eligibility criteria, as long as it consults its local community.
People continue to tell us, however, that the process for determining who is eligible for care and support is confusing and unfair. Decisions are not transparent and there is variation across the country, and the end result is that people can be left without the support that they need. The existing assessment and eligibility framework is therefore not working effectively, and that is widely recognised. That is why we are introducing a national minimum threshold for eligibility through the Care Bill. The Bill will set out the eligibility criteria—the point at which local authorities must meet an adult’s care and support needs, or a carer’s support needs. Local authorities will remain able to meet lower needs locally, if they choose to do so.
On 28 June, we published a set of draft regulations that set out the national eligibility criteria. These are intended to describe an equivalent level to the “substantial” level used by the vast majority of councils. We have committed to providing funding that will maintain the same level of services when authorities move to the new system in April 2015. This is the beginning of engagement with stakeholders before we formally consult on the
8 July 2013 : Column 153
regulations next spring. I assure my hon. Friend that the setting of the threshold is about establishing a minimum standard, not taking away councils’ discretion to go further. Of course, the more preventive care that can be given, the better, because that improves well-being and ultimately reduces the cost to the system, which is exactly the point that he made.
Under the current spending review, local authorities should be able to protect access to care, but we know that not all the money that was earmarked for care services has been spent in that way. Ultimately, spending on social care is a matter for local people in local authorities, and councils such as Bradford have to make tough decisions. However, we cannot improve care and support simply by throwing ever more money into the system; on the contrary, we need to work in more innovative and effective ways, exactly as is happening in Bradford, where there is really impressive work on dementia-friendly communities. That is exactly the sort of collaboration that we need to encourage.
Local authorities across the country have already been redesigning services to find more efficient ways of working. For example, many local authorities are concentrating on better integration between health and care services, improving co-operation and reducing duplication. That means better use of money, and improved care.
My hon. Friend referred to this year’s spending review settlement. It includes a £3.8 billion pooled health and social care budget to make sure that everyone gets a proper, joined-up service, and the care that they need from whoever is best placed to deliver, whether that is the NHS or the local authority. The £3.8 billion fund, shared between the NHS and local authorities, will deliver integrated services more efficiently for older people and, crucially, disabled people. It covers ensuring that health and social care work together to improve outcomes for local people, through better sharing of information, so that people need explain their problems only once; intervening early, so that older and disabled people can stay healthy and independent at home, avoiding unnecessary hospital admissions and reducing visits to accident and emergency departments; and delivering care that is centred on the individual, rather than on what the system wants to provide. Examples include NHS and social care staff working together to provide seven-day working, and better data-sharing to ensure that people can leave hospital as soon as they are ready.
The Care Bill includes a duty to provide preventive services; that is exactly the sort of thing that my hon. Friend is advocating for Bradford. That new duty on local authorities is seen by many people as potentially transformative. The White Paper sets out our ambition for health care and support to be organised around the needs of the service user, rather than focusing on organisations and services. We want a reformed system, in which organisations work together to give individuals
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real control and choice over the care that they receive. Good practice already exists, and we need to learn from and build on that.
I understand that Bradford’s clinical commissioning groups are working with Bradford council to deliver a three-year integration programme, which will cover all the services that help to support people so that they can remain at home, stay in their community, and regain and retain their health, well-being and independence. We want to encourage and support local experimentation, to allow areas to provide integrated care at scale and pace. We are working to support local initiatives and to identify what needs to happen to drive change at the national level. We want to learn what works well and how to overcome barriers, and to pass those lessons on to others.
On 14 May, the national partners in health care and support, including the Department, published a document entitled “Integrated Care and Support: Our Shared Commitment”, which sets out 10 commitments that the national partners have made to enable and encourage change to scale and pace, as well as expectations on local areas in return. The national partners have invited the most ambitious areas to apply to become pioneers and act as exemplars to address local barriers and support the rapid dissemination, promotion and uptake of lessons across the country. The national partners will provide the pioneer sites with dedicated central support to help them to break down barriers to delivering integrated care and support.
It is really exciting that the coalition is acting to end that long, historical divide between health and care services and, indeed, between mental and physical health services. The potential for integrated care, with a focus on prevention, and collaboration between the statutory services provided by the national health service and the local authority and the community, exactly as is happening in Bradford, can provide the early intervention that my hon. Friend discussed, and it can address isolation. He mentioned that pernicious problem. Many people live on their own, and often lead lonely lives and, as he said, both their mental and physical health deteriorates. If we can get the community to support the statutory services, providing companionship and friendship, and giving people a better life, the combination with a much more joined-up service from the statutory services can achieve the breakthrough that he described in his community.
I conclude by applauding the impressive community work in Bradford, which began in one local community, but which has the potential to spread to 20 other local communities. That is exactly what should be done, and with the support of the Care Bill, we can make that a reality, not only in Bradford but across the country.