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2.55 pm

Richard Benyon (Newbury) (Con): It is a pleasure to serve under your chairmanship, Mr Weir. I start by referring hon. Members to my entry in the Register of Members’ Financial Interests and by saying how glad I am to see the Minister in his place; I look forward to his addressing some of the points we are raising in this important debate. I pay great tribute to my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) on securing this debate on an issue that is of great importance to so many of our constituents.

It is for the Minister to answer on behalf of the Government, but the Government have made changes that devolve responsibility for much of these matters away from this place, away from the hands of Ministers and away from Government to police and crime commissioners. I confess to having been relatively agnostic about the creation of those posts when they were first mooted, but the more I look into it, the more I see what they are achieving, particularly in my area. I see the value of electoral accountability on such issues. If police and crime commissioners want to be re-elected by the large number of people who live in rural areas, they will have to address precisely the issues that my hon. Friend raised, if they are not doing so already.

I am pleased to say that Anthony Stansfeld, the police and crime commissioner in the Thames Valley, has made rural crime one of his top three priorities. I am also pleased that police and crime commissioners all across the country, working together on a number of issues, are developing a rural crime initiative. That surely is very welcome and a credit to them working across parties—of course, many of them are of no party at all—and making sure that they are joining up and sharing best practice and tackling rural crime.

My hon. Friend made a good speech, setting out precisely what rural crime is. He made the very good point that it does not accord with the quaint and slightly bucolic view that some might have—through some of our writers, painters and through other forms of culture—about historical areas of rural crime, such as how poaching may have happened for the pot in past years. This is a very serious area of criminality: it is often about the widespread stealing of plant and machinery; it can be about people trafficking; firearms can be involved; and there are many cases in which intimidation is used, not only of the victims or potential victims of crime, but to make people commit crimes. There is increasing evidence in the Traveller community that some people who are not willing participants in criminal activity are more or less forced, by a very few people in that community and elsewhere, into committing acts that they would not otherwise carry out.

It is also important that we understand that crimes that take place in towns are very often carried out by people who do not live in those towns and who travel a long way away from them, or that crimes committed in the countryside are carried out by people who live in towns. We should not assume that this is an isolated issue, or a niche area of criminality that we can deal with on its own. It has to be seen in the context of crime across the piece.

I mentioned Anthony Stansfeld, the police and crime commissioner for the Thames Valley. I have been looking closely at how he, by making rural crime one of his top

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three priorities in the highly complex area of the Thames Valley, where there are many other pressures on his resources, has approached tackling it.

Little things can make a big difference. The first thing is ensuring that a police officer turns up and responds to every single incident. It sounds strange to say that police officers did not do that in the past, but there was a way of reporting rural crime that often made it seem much more trivial than it actually was. The term “theft from unoccupied premises” immediately makes one think of an allotment shed perhaps when in fact it could be, as my hon. Friend mentioned, a farmer’s store, with large amounts of ammonium nitrate, large pieces of machinery or livestock. Ensuring that we define rural crime is therefore very important.

There is very good news about rural crime. In my area, it has dropped by 20% in one year. That is through a clear reporting system, lots of very good work by police forces and the priority being given to rural crime by the leadership, both at chief constable level and at police and crime commissioner level. If everything else I say is forgotten, this is the really important point, and I am sure that it is one with which the Minister would agree. This is not just about the police tackling the problem; it is about all of us who live in rural areas playing our part. I think that educating landowners, farmers and rural managers about crime and what they can do is very important.

I am particularly interested in the CESAR system—the construction and agricultural equipment security and registration system—which puts transponders and indelible marking on large pieces of machinery or high-value pieces of equipment and ensures, for all the equipment that a farmer buys, whether it is a new pick-up, a large piece of machinery or just a chainsaw, that the serial numbers are gathered and recorded at the start of his ownership of that equipment and stored so that they can be traced. That is important because, as my hon. Friend relayed, there can be cases in which large amounts of equipment are found and the issue is not just returning the equipment to the person to whom it belonged before it was stolen, but establishing a pattern of criminality that can lead to convictions. What we know about many aspects of rural crime is that a very few people are committing a lot of crimes, and if we can feel their collars, crime rates plummet. That has been proved to be effective in my area.

Another way in which we can all play our part is by joining schemes such as the countryside alert system, which 10,000 people are now part of in the Thames Valley. Under that system, we can use technology to help to beat the criminal by keeping people informed about suspicious activity and crimes that are being committed. It is about instantly being able to mobilise a large number of people to be aware of a problem that may be occurring in their area.

I want to touch on the issues of animal welfare that my hon. Friend also mentioned. We should be under no illusions about the fact that many of the activities relating to the theft or killing of wild animals in the context of rural crime are really unpleasant stuff. No one should be under any illusions that there is anything attractive about that activity at all. Gangs of people have caused havoc at times in parts of my constituency by coursing deer. It affects farmers and landowners such as Kirsten Loyd, who informed me of recurring

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problems on several nights running that involved 4x4s driving on to land, gates being smashed and deer being pulled down by running dogs and often just left. In some cases, they had to be humanely dispatched as a result. On my own property, I have found people coursing hares, from 4x4s, with long dogs, and when they kill the hare, they just drive round it in circles, wrecking the crops and leaving the carcase of the animal. These are not nice people, and if they are challenged, it is very often by one person, and that person is at severe risk of assault. Indeed, we have had circumstances in which firearms have been used in a threatening way.

There is also some good news, however. My hon. Friend talked about the difficulty of getting a fine imposed that means anything—that is a true reflection of the damage, fear and uncertainty that these crimes are causing among rural people, but also of the on-costs from the effects of these crimes. I sometimes have to rack my brains to think of really good things to say about the last Government, but here is one. They passed section 59 of the Police Reform Act 2002, which has given the police an invaluable tool in dealing with crimes that would otherwise attract a relatively cursory sentence. It allows them to seize a vehicle that has been used in connection with a crime. The vehicle can then be crushed or sold, but will not be returned to the perpetrator of the crime. It has had an enormous effect in allowing police to tackle some of the criminality in rural areas. I commend that legislation and hope that it is being used properly by police forces up and down the country.

My then neighbouring MP, just across the Thames in Oxford, Boris Johnson, and I, just after I had got elected, both identified a problem of dog theft. Sometimes when we raised it, people would smile or slightly roll their eyes as if that was not a big thing. It is a horrible crime. It deprives people of what are sometimes very valuable—they are certainly valuable to them—companions and working dogs. It particularly involves working dogs—sheepdogs, gundogs and so on—and it continues to be a problem. Dealing with it requires intelligence gathering, an understanding of how important the issue is to our constituents and a coherent approach, right across police forces; it cannot be governed just by the boundaries of the particular area. I am so impressed by the work that has been carried out by many people and organisations that encourage people to have their pets microchipped. There are all sorts of other methods that we can also use to take the battle to the criminal and reduce the risk of these very unpleasant crimes.

In conclusion, we can all play our part. I agree with my hon. Friend: the most depressing thing that we hear as MPs is people saying, “Well, there’s no point in my reporting this.” If people do not report crimes, however trivial—even if it has not been established that a crime has been committed, but there is a suspicion of a crime—we cannot then complain if the police say, “Well, we have no reports of serious criminality in that area. Therefore, we are putting our resources where we know that crimes are being committed.” Everyone has to report crimes.

There are small things that can be done. One might consider putting CCTV in farm buildings where there has been a persistent problem. We need to ensure that we put in the right quality of CCTV, so that it can be

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used as evidence to secure a conviction. People can spend a lot of money on anti-crime measures that are no good when we look at the product at the end of the day.

Much rural crime, as I have said, is down to a few—sometimes a very few—people who stalk the countryside prepared to steal anything that is not nailed down. They take advantage of the fact that many fewer people are working in the countryside and of the isolation of business premises and some of the places where high-value goods are stored. We need to ensure that rural crime is a priority at policing level, that we continue to offer support through our position in Parliament and the Government, and that we recognise the importance of this issue to our constituents. There can be a sense of siege if this activity is happening night after night in their areas. Only through a combined, partnership effort and this issue being a priority of elected politicians can we ensure that the problem of rural crime ceases to prey on the minds of people who live in rural communities.

3.9 pm

Huw Irranca-Davies (Ogmore) (Lab): It is a real pleasure to serve under your stewardship again, Mr Weir. I congratulate the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) on securing the debate and on his wide-ranging contribution, stretching across the panoply of issues that cover rural crime. It is sometimes difficult to establish exactly what is rural crime, but I think the essence of it is that it is non-urban crime. There are some similarities between urban and rural crime—theft of oil, for example, often takes place in the heart of my urban communities, but it is a significant issue in rural areas—but there are some special areas of concern in rural communities. The hon. Gentleman covered a wide range of them, and I commend him for doing so.

Livestock rustling is a concerning and fascinating area. As I mentioned in my intervention, the fact that 60,000 sheep disappear is of great concern and has a significant effect on those who make their livelihood from the husbandry of livestock, but of equal concern is the question of where they are disappearing to. Where are they washing up within the food chain? How are they entering the food chain where there is no traceability whatsoever? That is a real issue. I hope that the Minister, in discussions with his colleagues in the Department for Environment, Food and Rural Affairs, will address how we clamp down on that further without imposing additional burdens on the farming community. We have to make sure that when animals present at abattoirs and meat processors, they can be identified and traced back to the farm and the landowner.

The hon. Gentleman drew attention to metal theft, another crime that affects urban areas but is of significant concern in sparsely populated rural areas. Many criminals, including perpetrators of quite serious organised crime, see rural areas as an easier target because they offer an opportunity to get away with criminality without the prying eyes of CCTV on every street corner.

The hon. Gentleman also mentioned fly-tipping, a long-running issue that has costs and is associated with criminality. It is not an incidental occurrence involving hard-pressed people; the perpetrators are criminals who are trying to get away with not paying their dues towards

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landfill by simply dumping in the countryside. Ultimately, landowners and local authorities pick up the cost for collecting and disposing of such waste, so we must constantly push forward with measures to tackle the problem.

Simon Hart (Carmarthen West and South Pembrokeshire) (Con): I am interested in the shadow Minister’s view on whether the increased use of technology in urban and suburban areas is driving the practice out. Has the technology got so good in urban and suburban areas that the problem is simply being spread over a wider rural area?

Huw Irranca-Davies: The hon. Gentleman makes a good point. Increased tightening up in urban areas displaces criminal activity. Curiously, that brings me to another issue raised by the hon. Gentleman where there has been displacement of activity, namely fly-grazing. At a well attended debate in this Chamber about six months ago, hon. Members from England and Wales discussed the matter. When we talk about fly-grazing, we are not talking about the individual pony or horse that we occasionally see on an estate, tethered by a rope to a peg in the ground, where we worry about the animal welfare considerations and wonder why the animal is there. Neither are we talking about some within the Traveller community who have a culture of keeping the odd horse and parking it somewhere temporarily. There is serious criminality behind fly-grazing, as we know in Wales, which is why, as I am sure the Minister is aware, the Welsh Government recently worked with local authorities to change the law in Wales.

The change in the law in Wales was designed to deal with the massive incidence of fly-grazing, in which hundreds of animals were being parked on environmentally sensitive areas, or in which landowners would find that their fences were demolished and animals appeared on their land. In such cases, the local authority would have to go through all the bureaucracy involved in seizing the animals, many of which were in very bad condition, and absorb the cost of looking after them. If no owner came forward to claim ownership of the animals, the local authority would be obliged to auction them off at a knock-down price after giving them a full veterinary overhaul and making sure that they were all okay; only to find that, lo and behold—what a surprise—the owner, although never declaring themselves as such, would turn up and buy the lot of them, and a couple of weeks later they would appear in another farmer’s field or in another area of environmental sensitivity.

The Labour Welsh Government have changed the law in Wales, but one direct outcome of the change has been to displace that activity; it has moved elsewhere. Let us be frank about this: it is serious, organised, large-scale criminal activity. We are not talking about the odd individual; the police have identified family concerns involved in such activity. Instead of just going over the border, the problem is starting to wash up in English counties such as Hampshire. It seems to have been quite well planned. What conversations has the Minister had with ministerial colleagues in DEFRA on the matter? Is he minded to consider a change in the law to ensure that such criminal activity is not displaced across the border into England, and that local authorities have the tools to deal with the problem, should it wash up on their borders?

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The hon. Member for Sittingbourne and Sheppey raised the need for better collaboration to tackle serious and organised crime, and I agree entirely. Interestingly, there are good examples of predominantly urban police forces deploying their resources to assist predominantly rural areas. In my own area, South Wales police provides significant financial support, resources and expertise to deal with serious and organised crime in Dyfed-Powys, for example, which covers the largest rural area in Wales. We must ensure that police forces collaborate to deal with such issues.

The hon. Gentleman covered so many things in his speech that he did not have time to tackle one of the biggest areas of serious crime—illegitimate gangmaster activity. In a neighbouring constituency to the hon. Gentleman’s, within the past year a large group of Lithuanian workers were seized, found living in the most appalling portakabin-style accommodation. They were not being paid the minimum wage, deductions were being made from their pay left, right and centre, and they were being kept in the most appalling conditions by an illegal, illegitimate gangmaster. The Gangmasters Licensing Authority was a great innovation after the Morecambe bay tragedy. This shows that there the GLA is still needed, and I say to those present of all parties that it must still be adequately resourced so that it can be effective—lean, mean, efficient and nasty in dealing with illegitimate gangmasters. The people who suffer most from that aspect of what is predominantly rural crime are the legitimate operators—the food producers and farmers—who are undercut by those criminals. Gangmasters and trafficking are often linked to other serious crime such as drugs or money laundering, so they must be tackled.

The hon. Member for Newbury (Richard Benyon) has a great deal of experience as a former DEFRA Minister and a landowner. He mentioned the role of our new police and crime commissioners in influencing priorities on rural crime. There are good examples of best practice, and we must ensure that it is spread out to others so that they can choose whether to implement it in their own areas. We could argue that the old police authorities, if they had been so minded, always had the opportunity to deploy a rural focus on certain aspects of crime. Some PCCs have stood up and said publicly that they will focus on certain aspects of crime. As the hon. Gentleman rightly said, we all need to play a part, and because of the nature of the challenges in rural areas, landowners, farmers, neighbourhood watch, farm watch and farm contractors must come together to tackle the problem.

I was glad that the hon. Gentleman mentioned the section 59 reforms on the seizure, confiscation and destruction of vehicles, because it saves me from having to do so. The reform is a welcome innovation, because it hits those involved in such crime, hard and rapidly. My hon. Friend the Member for Clwyd South (Susan Elan Jones) made an intervention, which I will return to in a moment, following on from her recent excellent debate.

I would welcome the Minister’s response on whether he is minded to consider extending the fly-grazing enabling powers to local authorities in England. That would be a huge step forward. Why not do it? It would not impose costs on local authorities in England, but would save them money. At the moment there are huge costs to them for looking after the animals and getting them

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veterinary treatment, and for the enormous bureaucracy and delay before an owner suddenly pops up to take them off their hands at a knock-down price.

I wonder whether the Minister has recently met DEFRA Ministers to discuss the numbers of police and PCSOs in rural areas. Has he had any representations from those Ministers about the possible effect of those numbers on matters that have been referred to this afternoon, such as hare coursing, wildlife crime, the massive increase in fuel theft from rural homes as well as businesses, livestock rustling, fly-grazing, and organised crime in relation to heavy plant, farm equipment and agricultural machinery? If he has not met Ministers, does he plan to do so soon?

There is a contentious issue that we need to deal with. We have mentioned that police and crime commissioners have flexibility and public accountability in determining priorities for their areas. Setting aside for a moment the controversy about whether badger culling should be part of an overall TB eradication strategy, a fascinating aspect of recent discussions is the fact that there have been significant policing costs, but we are left to guess what they are. However, that involves a direct input; there is a displaced cost—a cost-benefit issue.

What is the effect on other aspects of policing of being forced to put significant amounts of restricted policing money from a finite resource into the policing of badger culls? The Minister shakes his head; I shall continue with the point. Those other policing issues include fly-grazing, hare coursing, the theft of oil from farm businesses, and poaching. At the moment, our best estimate, based on statements—or semi-statements—in the public domain by chief constables or police and crime commissioners is that the cost over nine weeks in Somerset was £740,000, and it was just short of £2 million over the extended duration in Gloucestershire.

Simon Hart: In mentioning that he was not talking about whether there should be a badger cull, the shadow Minister made his point obliquely; but does he agree that the entire cost of policing the badger culls was for policing illegal harassment and activity by animal rights organisations? Should not that be the focus of our attention, and does not it support the point made by my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) that if anything contributes to rural disillusionment it is the fact that rural people stand back and watch those things unfolding, while very little happens to deal with them? Perhaps there is now a good opportunity to deal with illegal harassment by animal rights activists, rather than to make an oblique point about the cull.

Huw Irranca-Davies: My point about the cull is far from oblique, because I am focusing on the costs. Today is not the time to rehearse again the debate about whether the tool of culling is integral to the eradication of bovine TB. The costs issue is paramount: there is a real cost-benefit analysis to be done. If the figures that I have given, such as the £2 million spent in Gloucester, are correct, that will raise an issue. I hope that the Minister will tell us whether the figure is correct or in the right ballpark—perhaps he will say it is nothing like it and is way above the right figure. I agree that intimidation,

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bullying and harassment cannot be tolerated, but I hope that it is accepted that there is a role for legitimate protest in any sphere. There are regularly people protesting outside Parliament.

No one should condone illegitimate threats or intimidation from whatever angle they come, but my point is that if £2 million was spent in Gloucester, and if we are to continue the cull this summer in the reasonable expectation that those costs will continue, we cannot deny that that will mean a displacement of police activity, short of the Minister telling us he has found another £2 million to defray the costs. He may say so, and that would be fine—but let us hear it. At the moment we have no clarity about costs. I agree with all the points that have been made about stretched resources in rural areas, and if they are stretched even further in Gloucester and Somerset we should be honest with the public about the impact.

Simon Hart: I take the shadow Minister’s point, but does he concede that there would be no cost to legitimate, lawful, peaceful protest? The only cost is for dealing with illegal elements. Legitimate protest comes at zero cost.

Huw Irranca-Davies: Absolutely—theoretically the hon. Gentleman is right. In practice, we have seen the reality; immense policing costs are absorbed so that the culls can happen. That is my point—not debating the culls but asking the Minister directly what the costs were, and what they will be. It is right for the electorate in the affected areas to know that. The Government said that police and crime commissioners would bring transparency, and with such transparency the electorate could debate the priorities in their area. Alternatively, it would be possible to go cap in hand to the Minister to say, “Give us some more money, because this has taken a fair bit out of our area.”

A positive and constructive part of the debate has concerned collaboration. I welcome the establishment of the national rural crime network, which has brought together many partners across the UK, including at the last count 18 police and crime commissioners—with more, I understand, to come. That has happened with the assistance of, among others, the Rural Services Network—to which we should pay tribute—with the purpose of increasing collaboration and sharing best practice on rural crime, in the face of continuing acknowledged budgetary pressures.

Collaborative work on rural crime is also being done in Wales, and that includes the rural crime mapping scheme which my hon. Friend the Member for Clwyd South mentioned today and discussed at length in a previous debate. It is an excellent initiative, in which rural crime is electronically mapped and is highly visible to all partners, making it possible to identify and share information about what is happening and what to watch out for. I applaud my hon. Friend for raising awareness of that.

I was recently in Suffolk where a dedicated team of special constables has been established, focusing on particular aspects of crime on farms and in rural communities. There is some flexibility to determine local priorities and collaboration. Established schemes such as country watch, farm watch, horse watch and so on, go from success to success—so there is good practice.

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These are difficult times for policing, because of stretched budgets, but collaboration is one way forward. I would welcome the Minister’s response to my queries—particularly about his collaboration with DEFRA Ministers.

3.29 pm

The Minister for Policing, Criminal Justice and Victims (Damian Green): It is always a pleasure to serve under your chairmanship, Mr Weir. I join other hon. Members in congratulating my near constituency neighbour, my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson), on securing the debate. His entirely reasonable final point was to request reassurance that the Government are aware of and sympathetic to people who fear rural crime. I can give him that assurance, not least because his constituency, as he described it, quite closely resembles mine—that is, it is mostly urban but has a huge rural area. I suspect that what he hears from farmers and others who live in villages in his constituency is exactly the same as what I hear.

Huw Irranca-Davies: Will the Minister give way?

Damian Green: I have barely started, but yes, of course.

Huw Irranca-Davies: I thank the Minister for giving way so early. I forgot to ask about something, but I am sure that he can give me some clarification. The issue of liaison with Ministers from the Department for Environment, Food and Rural Affairs is interesting. I understood that a DEFRA Minister was originally going to respond to this debate. I am sure that there is a good reason why that is no longer the case and why the Minister, who is very capable, is present instead. Nevertheless, will he explain? A DEFRA Minister would be able to respond on issues such as hare coursing, wildlife crime and so on. Having said that, I am sure that the Minister will be an able replacement.

Damian Green: The hon. Gentleman will observe that when discussing rural crime we can take either the first or the second word to decide which Department is responsible. The subject falls neatly between the two, and I will happily discuss with DEFRA Ministers the points raised today. I will also discuss his specific point about fly-grazing with Ministers from the Department for Communities and Local Government. He is correct to say that such issues inevitably fall between Departments, but one of the joys of government is ensuring that, just because something may affect more than one Department, it does not fall down a hole between two Departments.

I would like to put the debate into some kind of perspective. I was grateful to hear my hon. Friend the Member for Sittingbourne and Sheppey say that he accepted the context in which police funding is now operating. He was right to do so. When we came into office in May 2010, we inherited the largest peacetime deficit in history. Borrowing increased to unprecedented levels under the previous Government, without due consideration for the long-term economic health of the country. We are proud of the progress we have made in addressing this most fundamental of issues.

Borrowing as a percentage of GDP is down by a third, our economy is growing and unemployment is falling. However, we cannot rest there, because although

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we have made strong inroads into arresting the deficit, more must be done. My right hon. Friend the Chancellor of the Exchequer announced earlier this year that further cuts will be required into the next Parliament. That will mean that difficult decisions will have to be made, and we should not shy away from that.

Despite all that, we have pushed to secure the best possible deal for the police and protected them again for 2014-15, this time from the further cuts to departmental budgets announced in December’s autumn statement. Central Government funding for the police will be reduced by 3.3% in cash terms in 2014-15, while overall funding will be reduced by even less, once the future police precept is factored in. We have also protected funding for counter-terrorism policing, owing to the ongoing threat of terrorism. By way of comparison with that 3.3%, the remaining Home Office budget will be cut by 7% in cash terms in 2014-15.

That was the overall context. I now turn specifically to Kent, because many of the points made by my hon. Friend the Member for Sittingbourne and Sheppey were about God’s own county. I know that the funding settlement is challenging, but it is manageable. Her Majesty’s inspectorate of constabulary has made it clear that the proportion of officers on the front line is increasing, and we are supporting the police through a range of activities to help them to respond to the challenge and ultimately emerge stronger. I appreciate that funding reductions have meant that all forces have had to consider where savings need to be made in terms of officers and staff numbers, but, ultimately, decisions on the size and composition of the police work force are for the individual chief officers and police and crime commissioners.

Of course, Kent has particular rural policing challenges and the crime sets are different from those in other parts of the country. However, the police allocation formula, which distributes the majority of funding to the police, takes account of local circumstances to address the specific needs faced by rural forces. The point about specific needs has been made several times during the debate, and I am happy to assure the House that the formula is designed to recognise the extra difficulties caused by sparsity.

I also recognise the importance of ensuring that we update the formula to reflect the needs of modern policing. That is why the Government are currently conducting a fundamental review of how funding is allocated among police force areas. It will focus on the current police allocation formula and the process of damping, as well as looking at the funding landscape as a whole. Determining how funding should be allocated to the police in future is a complex and important matter that will require careful consideration and take time. It will not be completed before 2016, but the first phase of the work, an internal analytical review, is already under way. Obviously, we will consult the full range of partners at an appropriate point in the development of that work.

I should emphasise that how the money is spent by the forces and police and crime commissioners is at least as important as the amount that they have to spend. PCCs are key; my hon. Friend the Member for Sittingbourne and Sheppey expressed his view about Kent PCC’s priorities in fighting rural crime.

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Obviously, we can also do things at the national level to help the police to deal with rural crime. One of them is the police innovation fund, which is worth up to £50 million a year and represents a new step to incentivise innovation and collaboration, as mentioned by the hon. Member for Ogmore (Huw Irranca-Davies). I agree with him that it is an important way for forces, perhaps those in rural areas in particular, to become more efficient. The fund will also incentivise digitisation to drive efficiencies and improve policing over the long term.

There is already a £20 million precursor fund, which received 115 bids covering a wide range of activity. Indeed, Kent and Essex police were successful in a joint bid, showing that collaboration is alive and well in Kent. They will receive £440,000 from the precursor innovation fund to support their joint visual media evidence and investigation programme. That will allow video evidence to be captured at, for example, a public order event such as illegal hare coursing. That could quickly be made available to investigators and analysed using a range of innovative software techniques, enabling officers to focus in on offenders and increase the chance of successful prosecutions. I am well aware of the point, made by several Members, that thinking that a crime will lead to a successful prosecution is important. As I said, there is a £50 million fund for 2014-15, and I urge forces that feel they have a particular issue with rural crime to put together some good bids to the fund.

Against the background of the fund and the debate more widely, it is important to remember that crime is falling and police reforms are working. Overall crime has fallen under this Government by more than 10%, according to the crime survey for England and Wales, and that is mirrored by the fall in police-recorded crime. Nevertheless, I accept the fact that we must keep pace with the way crime, including rural crime, is changing.

The point has been made that much of what is regarded almost as traditional rural crime is now actually run by organised criminal gangs, and people must be reassured that the Government are treating it as such. The need to combat organised criminal gangs is precisely why we have set up the National Crime Agency, which allows us, for the first time, to tackle the growing threat of serious and organised criminality. It has been in full operation since October, and is already making inroads into criminal gangs. Some of the people who will benefit from that are those living in rural areas who are suffering from the effects of organised criminality in their neighbourhoods.

I turn to crime in rural areas specifically, rather than the general crime statistics. DEFRA’s statistical digest, based on data from police-recorded crime, shows that the average rates of all crime types for rural local authority areas are lower than for urban local authority areas. I think that that is intuitively what people would expect. The percentage decrease in crime over the past six years in rural areas is roughly on a par with the reduction rate in urban areas. The notion that urban crime is coming down because it is being displaced to rural areas, and therefore rural crime is going up, is simply wrong. Crime is going down in both areas, although I take the point about the potential for displacement.

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Although crime rates in rural areas tend to be relatively low, rural communities should be able to know what crime looks like in their area and to hold someone to account for doing something about it. I echo the point made by both my hon. Friend the Member for Newbury (Richard Benyon) and the hon. Member for Ogmore: people need to report crime. It is in their own interests not to say, “It is not worth reporting it.” Inevitably, police chiefs will concentrate their resources on where they think they will have the most effect in fighting crime. If crime is not reported, an area may well appear more peaceful than its residents think it is.

As I said, people need someone to hold to account for doing something about crime, which is precisely why we have shifted power to local communities through locally elected police and crime commissioners. I am grateful that, since they have come into operation, my hon. Friend the Member for Newbury has been converted to the virtue of having that local accountability mechanism. I know that he has seen benefits for his constituents in the initiatives put forward by the police and crime commissioner for the Thames valley, Anthony Stansfeld. I also agree with my hon. Friend’s remarks about target hardening in rural areas for particular types of crime, often committed against farmers who have valuable machinery on their premises. We need to do exactly that.

Huw Irranca-Davies: Rather than talking about the overall levels of reported crime, hon. Members were saying that specific crimes, such as the theft of fuel oil, metals or plant and machinery, are easily displaced to rural areas. Will the Minister tell us whether he has any figures to say that those crimes are not increasing? Certainly, the National Farmers Union, the Country Land and Business Association and others will say that they are increasing significantly—to the extent that fuel theft went up by 166% in one year. That is disproportionately within rural areas.

Damian Green: The figures I was citing from the DEFRA digest were, of course, aggregate figures. Within those figures, individual crime types go up for a number of reasons—not just in rural areas, but generally. Sometimes, the crime rate goes up because it is being better reported, as people think that it is worth doing something about it.

Perhaps now is a convenient time to deal with metal theft, as that is one of the points that the hon. Gentleman asked about. We recognise that it has a huge impact on communities, which is why we have taken a number of actions. We have increased the financial penalties and banned cash payments. We have supported targeted enforcement through the Government-funded national metal theft task force, which has led to a fall in metal theft. The Scrap Metal Dealers Act 2013 further tightened the net around rogue dealers who flout rules. The task force is funded until September 2014. We have spent £5 million supporting it to give sufficient time for the reforms to become well established.

The statistics show that there has been a decline in metal theft in each quarter of 2012-13. There was a 40% fall between April-June 2012 and January-March 2013. I hope that the hon. Gentleman and others can take that as some reassurance that effective action can lead to falls in crimes that are often concentrated in rural areas.

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Another important point is greater information and transparency. We have the police and crime commissioners who hold the forces to account, but the public need to be able, in an informed way, to hold PCCs to account and decide whether to re-elect them. That is why we are providing more local information about crime and what the police have done in response to it. That information is regularly updated on police.uk, the national crime and policing web portal, which provides the public, including those who live in rural communities, with local information about crime and antisocial behaviour. On police.uk, the information is presented clearly and concisely, allowing the public to access it in a useful way.

Hon. Members on both sides have made the point that some PCCs have prioritised rural crime, which is, of course, evidence of the point made by my hon. Friend the Member for Newbury—that having elected local officials means that they have to reflect what local people want. If they are representing an area with a significant rural population, it would be sensible for them to reflect that, and several of them have. For example, in north Wales the PCC has put in place a rural crime plan, which focuses on engaging with the rural community and addressing their concerns, including theft of equipment and livestock from rural areas. The force is providing a presence at farmers’ markets, and a rural crime team has been created.

As has already been mentioned, the PCC in Suffolk has introduced a dedicated team of special constables, which seems to be the sort of innovative response that we would all welcome. Similarly, we have already heard about the PCC in the Thames valley and the introduction of the Country Watch messaging system, which I am glad to hear from my hon. Friend is proving effective.

A lot is happening at the local level, but a lot is also happening at the national level. We have the UK national wildlife crime unit, a police unit that assists in the prevention and detection of wildlife crime by obtaining and disseminating intelligence from a wide range of organisations. It directly assists law enforcement agencies in investigating wildlife crime. Some of its priorities relate to international crime and the enforcement of the convention on international trade in endangered species, but other priorities are some of the things that we have been discussing today—including poaching, which is one of the specific priorities of the unit.

The unit is jointly funded; this goes back to the point that I made to the hon. Member for Ogmore at the start. The Home Office provides some funding for the NWCU and will continue to throughout the period of the spending settlement. DEFRA provides the same amount of funding for the unit over the next two years.

Richard Benyon: My message to the Minister is: long may both Departments continue to do so. Some of the crimes that a police constable comes across in the course of his work may be unusual. To have that centre of knowledge to whom he can go, who will say to him, “Yes, you can prosecute this person under this piece of legislation in this way” is absolutely invaluable. Also, it is what the unit does through the partnership against wildlife crime that is of such value to the whole wider aspect.

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Damian Green: I am grateful to my hon. Friend for that tribute to the unit, of which I know he has much experience. As I said, it is an example of a particular problem not being allowed to fall between Departments. We have two Departments here working to support the unit.

As has also been mentioned, at the national level a rural crime network has been set up to tackle countryside crime. So far, it has been endorsed by 18 police and crime commissioners. It is good to see PCCs in rural areas coming together in that way. The idea originated with the Rural Services Network, a not-for-profit organisation that represents a diverse range of rural service providers in the public, private and voluntary sectors.

The PCCs have convened a good group—not just the network itself, but Farmers Weekly, the national community safety network, an online crime reporting system called Facewatch, the CLA and other rural stakeholders. One of the best things the network does is to ensure that best practice is shared, so that things can be co-ordinated and sustained effectively. The network wants to provide an online resource for the police, community safety practitioners and others precisely to share information, training and development, access to case studies and so on.

Altogether, the network is one of the more exciting developments, which will enable things to happen at a national level, although it is absolutely locally based and based on real world experiences. All those involved will be able to learn from one another and to work collaboratively on new ideas and solutions that will benefit local people.

There is clearly a lot that can be done with technology. I am delighted to see that the hon. Member for Clwyd South (Susan Elan Jones) has come to this debate. She will remember that on 5 March I paid tribute to her constituents who have gathered information to provide the digital map that, as she explained earlier, is helping North Wales police to tackle rural crime in their local area. Her presence in Westminster Hall today allows me to pay that tribute once again. It is a good initiative and I am glad that the information is available; it can be accessed through a tablet, which will help the police get to grips with situations in real time. Again, that is an example of how something developed as a good idea at a local level can become a piece of best practice that is spread and can have a national effect.

Before I conclude, I will mention a group of people who have not been mentioned much—police community support officers. PCSOs play a huge part in effective neighbourhood policing. They provide a highly visible presence within communities and an invaluable link between the police and the communities they serve, with their focus on understanding and identifying local priorities over a long period, as well as on solving local problems, solving low-level crime and engaging with the community.

We need only to look at those aspects of the core PCSO work to see how relevant they are to rural communities. My hon. Friend the Member for Sittingbourne and Sheppey said that people want more visible policing. It is inevitable that in sparsely populated areas people are less likely to see a police officer than if they are in an urban area; common sense would suggest that. Precisely because they have a smaller area to cover and they will not be hauled off somewhere else for

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response duties, and because they are often in post in a particular area for longer than police officers, PCSOs can develop that network of relationships in a rural area that not only does good things by itself but helps to promote confidence among people that there is somebody they can go to whom they know and who represents the forces of law and order.

Huw Irranca-Davies: Will the Minister give way?

Damian Green: I was about to talk to the hon. Gentleman about badger culls, but I will give way first.

Huw Irranca-Davies: I welcome the warm praise that the Minister has just given PCSOs. Back in the year dot, I sat on the long 13-week Committee that brought PCSOs into existence and I see now the massive change in the Minister’s party: it originally opposed PCSOs, but now supports them. That is hugely welcome, because PCSOs are a great asset.

In the seven minutes remaining—it is great when we have lots of time for a Minister to respond to a debate—can the Minister give us some of the details about the cost of the badger culls? Also, has he considered the extension of the fly-grazing legislation to England?

Damian Green: I shall repeat what I said earlier—perhaps I was not clear enough before—but I will happily take away the point about fly-grazing and I will discuss it with DEFRA Ministers. The hon. Gentleman will accept that this issue clearly requires input from a range of Departments, and I am happy to seek that input. Let me take this opportunity to deal with a number of issues; I will tease the hon. Gentleman by coming to the issue of badger culls last.

The hon. Gentleman asked about the process to stop stolen animals from entering the food chain. On 1 April, DEFRA launched the animal reporting and movement service, a new digital system to record and trace sheep movements. It gives farmers the option to report electronically. All markets and abattoirs are connected to the system, so anybody who has suspicions now has an easy and painless way to report them.

On the issue of badger culls, the policing costs are £2.3 million in Gloucestershire, £446,000 in West Mercia and £739,000 in Avon and Somerset. Those are indicative costs. We are yet to receive the report from Her Majesty’s inspectorate of constabulary that reviews the resources deployed in respect of the badger culls; that report will obviously give the final figure. I should add that DEFRA has agreed to pay all the additional policing costs.

I hope that that answers the hon. Gentleman’s question.

Huw Irranca-Davies: I thank the Minister for that response; it is great to have it accurately now on the record. Can he tell us whether those costs are for the year just gone, and does he have the costs for the year ahead? Based on the Government’s decision last week, the two culls in Gloucester and Somerset will continue for the year ahead. Does he have an estimated figure for the costs in the year ahead?

Damian Green: I do not, for the very good reason that we cannot possibly know what the policing requirements will be. The hon. Gentleman had an instructive exchange with my hon. Friend the Member for Carmarthen West

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and South Pembrokeshire (Simon Hart) about the difference between peaceful protest, which we all recognise is acceptable, and illegal protest and obstruction. Clearly, the amount of extra policing cost is intimately related to the amount of illegality that may go on, so assessing costs in the future would simply be guesswork. I do not think it would be sensible for me to do that. However, those are the costs.

Huw Irranca-Davies: Is the Minister telling me that even though these costs are being met from DEFRA’s budget, DEFRA has made no estimate within its budget allocations for policing in the future? Surely not.

Damian Green: I am sure that DEFRA Ministers and officials are doing all that is necessary. I am just saying that it would be foolish if the hon. Gentleman tried to tie me down to detailed figures now, because until we make an assessment of the likely level of criminality it is impossible to make an assessment of the likely amount of police activity. I am sure that he recognises that.

In general, I hope that I have been able to reassure my hon. Friend the Member for Sittingbourne and Sheppey and others that, first, the Government attach huge importance to issues relating to policing crime in rural areas and that, in particular, we have taken a number of actions at national level that we can see are having beneficial effects. On top of that, the introduction of PCCs has meant that a new raft of innovative ideas are being introduced all over the country, and therefore being shared all over the country, in ways that will further benefit people who live in rural communities and who have as much right as people who live in urban areas to expect a decent police presence, decent policing and decent anti-crime activities.

What we see from all this activity is that the PCCs and the forces are bringing innovative ideas into reality, and they are creating modern forces that can meet, in particular, the ever-changing demands of modern policing. When people think of modern crime, they tend to think of online crime, fraud and so on, but the debate has been instructive in pointing out that the crimes that people who live in rural areas are facing are also changing. Consequently the police response and the response of the wider public need to change too, in aspects such as target-hardening. The point that fighting crime is, in a sense, the responsibility of all citizens—although we give specific powers to the police, PCSOs and other crimefighters to lead the charge—is a good one. We all have responsibilities.

I return to the first point made about the funding settlement. Of course that creates challenges for PCCs and forces, but those who are prepared to innovate, collaborate, transform their forces and use new technology to drive efficiencies will find that it is possible not only to beat their budgets but to police more effectively than before. I absolutely believe that that is as true in rural areas as it is anywhere else. There are many ways in which rural policing is improving and can continue to improve, so the fact that, as the crime survey shows, our streets are safer than ever—[Interruption.]

Mr Mike Weir (in the Chair): Order. There is a Division in the House. Is the Minister about to finish?

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Damian Green: I am. I was about to say that those in rural areas will be as well treated as those in urban areas.

Mr Weir: Order. We will suspend for the Division. If there is one vote, we will return at 4.15 pm. If there are two votes, we will return at 4.25 pm. If both the hon. Member for Forest of Dean (Mr Harper) and the Financial Secretary to the Treasury are here for the next debate before then, we can start earlier.

3.59 pm

Sitting suspended for Divisions in the House.

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Income Distribution and Taxation

4.23 pm

Mr Mark Harper (Forest of Dean) (Con): I am pleased to serve under your chairmanship, Mr Weir, and to welcome my hon. Friend the Member for Loughborough (Nicky Morgan), who is having a double personality day. She started as Economic Secretary and ended as Financial Secretary. I congratulate her on her well-deserved promotion, and I am very pleased that she is still able to respond to this debate. I wrote to her earlier today to congratulate her on her innovative way of avoiding responding to my debate, but she is stuck with me for the next 29 minutes or so.

I secured the debate because, although I touched on the matter briefly in my short contribution to the Budget debate, it was, as you know, Mr Weir, time limited, and I did not have a chance to make all the points I wanted. In the debate running up to the Budget, there was a lot of discussion about “middle-income taxpayers” and what that meant. I want to set out what I think the Government’s priority should be and congratulate them on landing the income tax cuts in the right place on the income scale.

In the run-up to the Budget, a number of newspaper articles—there was one in The Guardian—referred to middle-income earners being dragged into the 40p tax bracket, but that is not a sensible use of “middle income”. Even the Leader of the Opposition used the phrase, saying that

“if you are in the middle, paying 40p, you should be pleased to pay more”.—[Official Report, 19 March 2014; Vol. 577, c. 797.]

He was referring to what he said was someone else’s argument.

In the Labour party’s list of 24 so-called Tory tax rises, four of them are changes to the higher rate threshold. It seemed slightly odd for the Labour party to complain about ensuring that those on higher incomes paid their fair share in dealing with the deficit. While I am touching on that list, it is interesting to note that the spare room subsidy, which is a housing benefit issue—the Opposition insist on calling it a tax—was not on it. That was a very good demonstration of the fact that even they accept in their heart of hearts that it is not really a tax, even though they keep trying to call it that.

That was an aside, but the point I wanted to make about 40p taxpayers is that I am not saying that they are rich; they are not. Equally, they are not in the middle. Looking at the 2013-14 tax year, someone would pay 40p tax only if they had £32,010 of taxable income, which is on top of a £9,440 personal allowance. They would have to earn a gross income of £41,450 to pay that tax rate. In 2011-12—the most recent year for which the detail is available—the income distribution figures show that a higher rate taxpayer is in the top 14% of income earners. For that year, the median income was £20,300. Some helpful projections have been done using the Office for Budget Responsibility’s economic and fiscal outlook. They show that the median income was £21,000 in 2012-13 and £22,200 in 2013-14. That is only just more than half the income someone would have to earn to pay the 40p tax rate.

If I look at the level of income in my not untypical constituency—these figures are for 2011-12, the latest ones available that are broken down by parliamentary

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constituency—the mean income of all taxpayers is £24,300, and the median income is only £18,800. If the overall national figures have gone up by some 10% since 2011-12, we can use that assumption with the constituency figures, but that would take the median figure to only a little over £20,000. That figure is for total income. If we look at how that is split between the self-employed, the employed and pensioners, the figures present a different picture. However, it is clear that the median taxpayer is not earning anything like enough to pay the 40% tax rate; they are paying basic rate tax. That is why I thought the Chancellor’s Budget judgment was right.

I even looked at parliamentary constituencies that people would generally accept as having a higher than average number of people earning good incomes. A piece of data that is available from the Office for National Statistics shows that even in constituencies with a high level of mean income—Kensington, Cities of London and Westminster and Chelsea and Fulham—the numbers are clearly driven by a small number of well-remunerated people. The median income in those constituencies is: £37,900 in Cities of London and Westminster; £36,200 in Kensington, and £34,300 in Chelsea and Fulham. Even in those constituencies, the median taxpayer is not paying anything close to 40% tax.

The focus should be on delivering tax cuts for the lower paid and those on more modest incomes and that is what the Chancellor did in his Budget. He made it clear that the personal allowance was going to rise in this current tax year, which has just begun, to £10,000 and next year it rises to £10,500, which will lift more than 3 million of the lowest paid out of income tax altogether. He also confirmed, rightly, that the higher rate threshold will rise a little bit as well, for the first time in this Parliament, which means that everyone on incomes up to £100,000 will benefit from some tax cut, but obviously the main benefit is for those on a lower rate.

The list of tax rises that the Labour party put out referred to the higher rate income tax threshold cuts earlier in this Parliament, which were equitable and made to ensure that those significant rises in the personal allowance did not disproportionately benefit higher rate taxpayers. Of course, if the personal allowance is increased and the higher rate threshold is not changed, someone on 40% tax has income moved out of that band into the basic rate band and gets a bigger benefit than someone on basic rate tax. That would be wrong. The judgments that we made earlier in this Parliament, when we had to make difficult financial decisions, to share the pain and have the burden on those with the broadest shoulders, were right. I am pleased that the Chancellor confirmed that.

By virtue of increasing the allowance, the Chancellor was able to show that, looking at this Government’s tax arrangements, compared with the previous Government’s policy, everybody earning up to £100,000 is better off. They have all had a tax cut, but the tax cuts are more focused and bigger for those on lower earnings.

Mr Andrew Smith (Oxford East) (Lab): I congratulate the hon. Gentleman on securing this debate on an important issue. I resisted intervening on the bedroom tax and so on because I wanted to make this point. Does he share my concern, notwithstanding what he

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said about raising the allowance, that the impact of the tapers on people in receipt of universal credit will be such that, for somebody just above the tax threshold, the rate of withdrawal on both a first and second earner in a family will be as high as 76%? Is there not a danger that that gives people a perverse incentive to work fewer rather than more hours, because they do not reckon that they are being rewarded for the extra hours, or to do undeclared work?

Mr Harper: The right hon. Gentleman is right to drawn attention to the tapers and the withdrawal of benefits as people earn income—of course, they are high—but this issue was raised during the Budget debates. However, the fact is that, under universal credit, the withdrawal rates and the tapering arrangements mean that there is a smaller rate of withdrawal of benefit than under the existing levels of benefit. I am sure the Minister will correct me if I am wrong; this is not an area that I have studied in detail. The issue the right hon. Gentleman raises is important, but it is always a challenge to deal with the withdrawal of income-related benefits and to be careful that the effective marginal rate for people is such that it is always worth their while working. Ideally, we want to get that marginal rate as low as possible, but it is expensive to drive it down to a low level. My understanding is that, under universal credit, those withdrawal rates of benefit are lower and therefore more encouraging of people to work, either more hours or in the first place, than under the existing combinations of income-related benefits.

Mr Smith: My understanding is that the rates are higher for people working more hours, for 35 hours or more. The hon. Gentleman is right in that the rates are lower for people working fewer hours. That is my worry—the perverse incentive for people to work less.

Mr Harper: If I am picking that up correctly, the right hon. Gentleman is saying that at lower levels of earning, or for people who work fewer hours, the effect of universal credit is—

Mr Smith: I should correct that. It is not that the rate is lower; it is that people will be better off working fewer hours, as compared with the position under tax credits, whereas those who are working 35 hours or more will be slightly worse off under universal credit than they would have been under tax credits. The withdrawal rate is 76%, just above the tax threshold, under universal credit.

Mr Harper: I cannot answer the right hon. Gentleman’s detailed question, because I have not studied the matter, but the other thing that he needs to do—I am not sure whether he has incorporated this into his judgment—is look at the interaction of the tax changes that we have made with the benefit system. Over this Parliament, there will be a significant increase in the personal allowance from what it was in 2010-11 when we came to power, and what it will be when this Parliament finishes, from something in the order of £6,000 or £6,500 to £10,500. A lot of people on lower incomes, such as those on the minimum wage, are moved out of the taxation system altogether. Previously, people could be on a relatively modest income and paying tax, but at the same time getting various income-related benefits.

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I think that I have set that out carefully, but if I have not, the Minister will do so in her response. Otherwise, because the debate is not about universal credit and she might not have all those facts at her fingertips, I am sure she is happy to write and to set it out in detail later. I am, however, grateful for the point made by the right hon. Gentleman.

Mr Jim Cunningham (Coventry South) (Lab): I will be quick, as the hon. Gentleman does not have much time. I thank him for giving way, but when the present Government came to power basically someone did not start paying tax until just over £6,000. I do not have the exact figures with me, but if we take into account, for example, 6% inflation over the past four years, the value of the £10,000 threshold that has been introduced drops by £1,200. In other words, had the £6,000 been pushed up for inflation over the past four years, we might arrive at a different value for the benefits to be got out of £10,000 before paying tax.

Mr Harper: The hon. Gentleman makes half a sensible point. He is right that the personal allowance would have gone up because of indexation in line with inflation—the statutory provision, unless the Chancellor decides not, in which case he has to set out why—but by only a relatively modest amount. The difference between what it would have gone up to had we simply indexed it and the great increase to £10,500 next year is a significant policy change and has made a real difference to people on lower incomes, many of whom will have been taken out of tax completely.

Finally, to look at the impact in my own constituency, under the tax changes this April a further 381 people are taken out of tax altogether, but 37,223 people benefit from the rise in the personal allowance. If we take the figures for the whole of the Parliament, 4,334 of my constituents will have been taken out of paying income tax entirely by the significant changes in the personal allowance. That significant benefit incentivises people, particularly at the lower end of the income spectrum, to work, and it is why there are several thousand more people in my constituency in work now than there were in 2010, when this Government were elected.

In the environment we are in, where we have a limited amount of money and we cannot cut taxes for everybody, we should focus our help on those who are lower paid and who are genuinely on middle incomes, which, as I said, are incomes of about £20,000, and not numbers beginning with threes or fours. In my constituency, I can see that that is where the benefit should be focused. It should be a priority both for this Government and for our party to make sure that we are delivering benefit to as many people as possible. I am pleased to say that the message I took from the Budget, after listening to the Chancellor’s speech very carefully, was that that was where he has aimed our tax changes.

I agree with the right hon. Member for Oxford East (Mr Smith) about the focus. The welfare changes that we are making, with the benefit cap and the changes to universal credit, which I think, overall, have increased the incentives for people to work, are the right messages. The very simple one is that work should always pay and that we are trying to use our changes to the tax system to benefit the many hard-working families who are

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trying to do the right thing, but who are finding things difficult—although with the improving economic news, they will see rises in their incomes above the rate of inflation, therefore making them better off in real terms. Those are the people we should focus on and I am pleased that, in my judgment, that is exactly where the Chancellor aimed his Budget. That is why I was very pleased, in my short speech in the Budget debate, to commend it to the House, and why I am very pleased to support the Finance Bill.

4.42 pm

The Financial Secretary to the Treasury (Nicky Morgan): It is an honour to serve under your chairmanship, Mr Weir. May I congratulate my hon. Friend the Member for Forest of Dean (Mr Harper) both on securing the debate and on presenting his case so eloquently? I was also in the House when he spoke in the Budget debate, which I think was his first debate as a Back Bencher for a while. He spoke incredibly eloquently then and it is a pleasure to hear him again today on the same subject. I am delighted to be answering the debate, regardless of the title that I happen to hold in the Treasury. I have to get used to a new one as of this afternoon, and it is a pleasure to be here speaking on this important topic.

As my hon. Friend said, the message that the Government wanted to go out from the Budget was that we are on the side of hard-working people and that work should always pay. As I shall come on to show, the other message is that this Government very firmly believe that people should keep as much of their own money as possible, so that they spend it in the best way for themselves and for their families in order to provide security for their families—rather than the Government telling them how they should spend it.

In the time available to me this afternoon, I would like to speak about the impact that the Government have made on getting more people into work, and then about the impact of the personal allowance and the other steps we have taken and how they help those at the bottom of the income scale. Finally, I want to speak about the percentage of the tax burden taken on by those at the top of the income scale, which I think my hon. Friend also mentioned.

Before I do so, it is worth making hon. Members aware that the latest available statistics show that in 2011-12, UK income inequality was the lowest since 1986. As the Office for National Statistics noted, that was partly due to earnings falling more for those at the top of the income distribution than for those at the bottom, but it was also magnified by the changes that this Government have overseen, particularly in the tax and benefit system.

Of course, one of the best ways in which a Government can reduce inequality is by tackling unemployment, which will increase incomes for those at the bottom end of the scale. We have seen clear evidence that the labour market has continued to strengthen this year. Record numbers of people are in work. Employment increased by 396,000 over 2013 and was 574,000 above its pre-recession peak in the final quarter of last year.

Wage inequality for all employees is also reducing. In 2013, the 90:10 ratio, a common measure of inequality, showed that wages at the top were 3.9 times higher than wages at the bottom, a smaller difference than in any year of the previous Government.

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This Government are by no means complacent and we continue to introduce reforms that will support employment and wages. From last Sunday, both businesses and charities have been able to claim the employment allowance to reduce employer national insurance contributions by up to £2,000 a year. From next April, national insurance contributions will be abolished for all under 21-year-olds who earn up to £813 a week. Those measures will make it easier to take on new employees, particularly young employees, and will therefore help get even more people into work. When we have got people into work, it is important that they keep as much of their money as possible, and the Government believe that raising the personal allowance is the most effective way to support those on low and middle incomes and to reduce inequality.

As all hon. Members will be aware, last month’s Budget announced that the personal allowance will increase to £10,500 in 12 months. This month, it increased to £10,000. That means that by next April, a person on median earnings will pay more than £800 less income tax per year than in 2010-11, and will be more than £570 better off than under the previous Government’s plans. It will also lift another 288,000 low earners out of income tax altogether, increasing the total number taken out of tax by our personal allowance increases to over 3.2 million.

It is worth noting that in addition to the personal allowance, those earning the October 2014 national minimum wage and working full time will have seen their income tax bill fall by more than two thirds since 2010-11, and someone working 31 hours a week on the national minimum wage will not pay income tax at all.

The Budget also helped people to save. As well as getting more people into work and allowing them to keep more of their income, we want to provide further support for the lowest earners by abolishing the 10% starting rate of tax on savings and extending the 0% rate to the first £5,000 above the personal allowance. That measure is expected to help 1.5 million people with

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low earnings and some savings, meaning that everyone with a total income of less than £15,500 will not have to pay any tax at all on their savings income.

I turn to the share of taxes and benefits within income distribution. As well as lowering the tax contribution of the poorest, it is worth noting that the Government have increased the percentage of tax paid by the wealthy. My hon. Friend mentioned that in his speech. This year, the top 1% of income tax payers will pay more than 28% of income tax revenue, so overall the wealthiest will pay more in tax in this Parliament than under the previous Government’s plans. If any hon. Members dispute that, I point them to the Treasury’s distributional analysis, which is published alongside the Budget, and was praised by no less than the Treasury Committee as an outstanding document, which clearly shows that the richest 20% of households continue to make the greatest contribution towards reducing the deficit. Before this Government took action to reduce the deficit, the richest 20% contributed around three and a half times as much in tax as they received from public spending. That has now increased to around four times as much.

I am conscious of time, and the following debate, which has been delayed because of Divisions, so I will conclude by saying that while repairing the broken economy we inherited, this Government have managed to oversee the development of a fairer tax and benefits system in which everyone contributes to reducing the deficit, and those with the most make the largest contribution.

In 2015-16, the net contribution from the richest 20% of households towards reducing the deficit will be larger than the contribution of the remaining 80% of households. Employment is increasing, taxes for the lowest-paid are decreasing and, as the International Monetary Fund forecasts confirmed yesterday, our economy is recovering. That is good news on all fronts, and I am sure it will be welcomed by all hon. Members present.

I thank my hon. Friend for organising such an important debate and for allowing me to make these points this afternoon.

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Work Capability Assessment

4.49 pm

Sheila Gilmore (Edinburgh East) (Lab): It is a pleasure to serve under your chairmanship, Mr Weir. My debate this afternoon is about an aspect of employment and support allowance. Since March 2012, I have managed to secure four debates on different aspects of employment and support allowance and the work capability assessment that underpins it. This is the fifth. Last week, I led a wide-ranging debate on the migration of incapacity benefit claimants on to employment and support allowance, but today I want to focus on something much more limited—the statistics that the Government publish on the number of decisions to refuse employment and support allowance that are subsequently successfully challenged. Before I do so, it might be useful to set out the journey of a typical ESA claimant, both before and after recent changes, to put this issue in context.

The claim process will generally start with a telephone call to Jobcentre Plus. Cases are passed to the Department for Work and Pensions contractor—currently Atos—which sends claimants a form to fill in. It is known as the ESA50 form. After that is returned, Atos can call in a claimant for a face-to-face assessment or submit advice to the Department on the basis of the evidence already available. The decision is made not by the contractor, but by someone in the DWP called a decision maker, who will either award the claimant ESA or declare them fit for work.

The claimant may think that the decision is wrong, either because it is a fit-for-work decision and they feel that they are not fit for work, or because of the group in which they have been placed. Even if they secure the benefit, they can be placed in one of two groups: the work-related activity group or the support group. They have different levels of conditionality and different financial implications, so that is another issue that people obviously have concerns about.

Up until October 2013, people in the situation that I have described had two options: they could lodge a written appeal to Her Majesty’s Courts and Tribunals Service or ask the decision maker to reconsider the original decision. Since October, however, a claimant who objects to the decision on their case has to go through reconsideration first. Only if the decision maker upholds the original decision is the appeal route available. That change, referred to as mandatory reconsideration, was one of the provisions of the Welfare Reform Act 2012. For the purposes of today’s debate, I want to distinguish very clearly between what we might describe as the formal appeals to judges and the informal appeals to DWP civil servants who deal with mandatory reconsideration.

The Minister will no doubt be aware that one of my central concerns about ESA has been and is that too many sick and disabled people are wrongly being assessed as fit for work. In making that argument, I regularly refer to the quarterly statistical bulletin that the DWP prepares. It is called “Employment and Support Allowance: outcomes of Work Capability Assessments”, and two tables in it are of particular use to those of us who are monitoring and watching what is happening. Table 1a professes to set out the number of new claimants—people who are claiming ESA for the first time, not those who have previously been on incapacity benefit—who are

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either declared fit for work or awarded ESA immediately after the completion of an initial work capability assessment. Table 3 sets out the number of new claimants who appeal fit-for-work decisions and, of those decisions, how many are upheld or overturned.

In the most recent bulletin, published on 27 March, the two tables told us that between the introduction of ESA in October 2008 and December 2012, 1.89 million new claimants were assessed and 949,000 were declared fit for work. Of those—the fit-for-work group—339,700 appealed the decision and 125,600 were successful and were awarded ESA as the outcome of the appeal. In percentage terms, 36% of fit-for-work decisions were appealed and 13% of fit-for-work decisions were successfully appealed. Of the appeals that were made, 37% were successful. Eventually, we reach a figure of 7% of all decisions being successfully appealed. There appear to be signs that where people are represented at appeals, a higher proportion of appellants are successful.

The key point that I am trying to make is that I and many others had long assumed that the data in table 3 included both informal appeals to civil servants—those were always available, even before mandatory reconsideration—and formal appeals to judges. If that were the case, we would be able to work out an overall overturn rate and form a view on the effectiveness of the initial work capability assessment process. If that was felt not to be performing as well as it might, we would be able to support the case for improvements. In September last year, Nick Dilworth, a welfare rights specialist, contacted me to suggest that that might not be the case. He suggested that table 1a—the first table, which appears to be about decisions as they were first made—took account of the outcomes of applicants’ requests for reconsideration, or in other words their informal appeals. He suggested that table 3 looked only at appeals to tribunals, which is the formal stage of the process.

I raised that issue in a letter to the hon. Member for Fareham (Mr Hoban), who was then the Minister responsible for ESA, on 27 September 2013. The reply I received, dated 2 November 2013, from the Minister of State, Department for Work and Pensions, the right hon. Member for Wirral West (Esther McVey), suggested that I was correct and that table 1a included decisions on which there had been a reconsideration and an individual had been awarded the benefit. Table 1a is the initial decision as made by the DWP decision maker on the strength of the recommendation from Atos. Table 3 is only formal appeals.

I subsequently wrote to the UK Statistics Authority on 20 December 2013, and I received a reply from the chair, Sir Andrew Dilnot, on 21 February this year. He said:

“We have concluded that the title of Table 1a in the quarterly statistical release Employment and Support Allowance: outcomes of Work Capability Assessments, Great Britain is potentially misleading, as you suggest.”

As a result, we now know that table 1a does not give an accurate picture of the number of people declared fit for work and awarded ESA immediately after the initial work capability assessment, and table 3 does not include all forms of appeal.

Why is that important, and what might it not be showing? To use a simplified hypothetical example, imagine that 100 people claimed ESA, of which 50 were

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awarded benefit and 50 were declared fit for work. If we were subsequently told that 25 of those who had been declared fit for work successfully appealed their decision, we could say that the assessment process was getting one in four of the decisions wrong. If we then found out that of the 50 who had initially been awarded ESA, 25 got the benefit only after an informal appeal or mandatory reassessment, we would have to say that the assessment process was, in fact, getting one in two decisions wrong. Its level of performance would be significantly worse than we had previously thought. I use those figures for the purpose of debate, and I am not suggesting that the performance of the WCA is that bad in reality.

The fact is that without statistics on the number of successful reconsiderations, we simply do not know. That is particularly pertinent given that statistical bulletins published recently suggest that the number of successful appeals has fallen significantly in recent years. In 2009 there were 41,000 successful appeals, in 2010 there were 37,000 and in 2011 there were 28,900. In 2012, apparently, there were only 7,400, although the dates mean that at that stage, many of the processes might not have been completed. That may reflect improvements to the WCA, which mean that fewer people are incorrectly assessed as fit for work. The Government regularly claim to have implemented all the recommendations of the four independent reviews, although I would take issue with that if I had longer.

The Minister might well want to portray the drop as a positive consequence, but it could reflect delays in the claim process. The statistics identify how many people who started a claim in a particular year subsequently lodged an appeal and received a decision. It is not inconceivable that someone applying for ESA in late 2012 could still be awaiting the outcome of an appeal when the statistics are compiled.

The other possibility is that the drop in appeal numbers could suggest that the WCA process is still producing as many incorrect decisions as it was before, but that those are being addressed through requests for reconsideration. However, because there are no separate statistics published on reconsiderations, we just do not know. It is becoming much more of an issue than it was when a reconsideration was optional, rather than mandatory. People have to go through mandatory reconsideration if they want to contest the decision, which increases the number of reconsiderations and could skew the statistics even more. It might look as if the WCA is performing better than it actually is.

Why are overturned decisions a problem? If people eventually get the benefit they are entitled to, is there a problem? I think there are several problems. First, it is distressing for someone to be found fit for work when they know that they are not. It opens up the prospect of having to claim jobseeker’s allowance, under which claimants face the prospect of being sanctioned if they do not apply for a certain amount of jobs every week. Claimants are increasingly expected to spend a fixed number of hours looking for jobs and to take reasonable offers. While that might be appropriate for someone who is genuinely fit for work, it is understandable that someone who is not would be worried about having to put themselves through the process. Ministers have said on several occasions that staff should amend the conditionality that people are subject to if they have

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requested reconsideration of an ESA refusal, but in a number of cases that message does not seem to have found its way to Jobcentre Plus offices. The Work and Pensions Committee, of which I am a member, has already received some written and oral evidence from witnesses suggesting that that is the case. They are encountering people found fit for work and going through the mandatory reconsideration process who have gone to the jobcentre to claim JSA because they no longer get ESA. They have been told that they are not fit, so cannot claim JSA. That is still happening.

Secondly, the distress resulting from the process could lead to deterioration in people’s mental health. Claimants with pre-existing mental health conditions and those who apply without them become stressed during the process. There is a risk that people who might have successfully overturned their fit-for-work decision simply give up at some point in the process. I have met a number of constituents with mental health issues who end up in that position, often in the context of their asking about access to a food bank or what they will do when they cannot get any benefit. While no system will ever be perfect, there should be a legitimate expectation that the decision is right first time. Everyone says that that is what they want, and there is no lack of suggestions on how it could be achieved. I have raised some in previous Adjournment debates, and I know that colleagues have, too. I am sure that the Minister will be interested to look at the information that has come to the Select Committee in written submissions to the current inquiry. They contain many suggested improvements.

Now that we have mandatory reconsideration and a lot more people going through the process, it is important that the Minister considers a change to how statistics are reported, and specifically to the WCA outcomes bulletin. First—this is a simple change—Sir Andrew Dilnot suggests in his letter of 21 February that table 1a should be relabelled to make it clear that it already accounts for reconsiderations. Specifically, he said:

“The Authority will review compliance with this request as part of following up on our recent statutory assessment of these statistics, and this will therefore inform in part our consequent decision as to whether to confirm the designation of this set of statistics as ‘National Statistics’.”

I hope that the Minister will simply say that he will be doing that; he has had Sir Andrew’s letter for nearly two months.

That simply labels things better, so people understand better what they are reading. Over and above that, I would submit that the format of the bulletin should be revised, so that the first table excludes not just appeals but reconsiderations, and simply sets out the number of people declared fit for work and awarded ESA immediately after the completion of the initial work capability assessment.

Effectively, there would be three tables: one for the people who are found fit for work initially, or initial decisions; one for reconsiderations; and one for formal appeals. What exactly is happening would be clear, and it would enable people to tell how each part of the process works. I am sure that the Department will have management information from which such tables could be constructed.

In conclusion, until the changes are made, the crucial statistical bulletin will continue to present informal appeals as being part of the initial process when that

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is not the case. The bulletin could understate the total number of overturns and overstate the effectiveness of and improvement in the WCA. Only once those changes have been made and we have separate figures for the outcomes of the initial process, the informal appeals and the formal appeals will we be able to produce an overall overturn rate and paint a more robust picture of the work capability assessment.

Now is a particularly important time for doing that and getting it right. The provider who has been providing such tests on behalf of and making recommendations to the DWP since the outset will be changing in, potentially, less than a year. Now is when the Department will be going out to procure a new provider for the tests. Hopefully, a new provider will be more successful in many aspects, one of which obviously is getting it right first time. A change to how the statistics are presented would assist the Department, the Select Committee, Parliament generally, members of the public who are interested in the matter and all the campaigning groups, who want to see a better system, in judging whether that has been achieved. That, in itself, will not change the system, but it will provide us with the data from which we can make those judgments.

5.7 pm

The Minister of State, Department for Work and Pensions (Mike Penning): As usual, it is a pleasure to serve under your chairmanship this afternoon, Mr Weir. I congratulate the hon. Member for Edinburgh East (Sheila Gilmore) on securing this short debate.

I have looked extensively at some of the correspondence that the hon. Lady has had with Sir Andrew Dilnot, who runs the UK Statistics Authority. She had let me see a copy of her speech—she has stuck rigidly to the letter of it—so that I could do some research. I was slightly surprised, as I believe that Sir Andrew has answered, in his letters to her, many of the questions that she raised today. However, I will try to elaborate on that a bit.

Mandatory reconsiderations were brought in for reasons that I think we would all agree with: to ensure that we get the decisions right before we go down the enormously costly and lengthy route of tribunals and appeals—costly to the taxpayer and to the individual. A mandatory reconsideration can produce the right decision earlier.

We have debated at length as to how we can get a shorter distance, so that we can get the right decision through. Tribunals and appeals are enormously stressful for claimants, and sometimes the length of time is unnecessary. If we can get the decision appraised before it goes down the tribunal route, which we are doing with mandatory reconsiderations, we can save a lot of time, and it would be unnecessary to go through the tribunal. It still leaves an opportunity for the individual, should they wish, to go through the appeals and tribunal process, but if we can get the decision right, there will be no need to do so, which I am sure is what we would all like to see.

The issue about reconsideration of the statistics, which is the main thrust of the hon. Lady’s speech, was something that I thought Sir Andrew Dilnot’s letters to her, copies of which I have seen, have extensively answered, particularly the one of 21 February 2014. She quoted extensively from the letter, but some other quotes from that letter are relevant. He stated,

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“since the publication of the statistics is up to 10 months behind the application reference point, we expect it to take some time for the effects of such procedural changes to flow through into the published statistics.”

He went on to say that departmental statisticians

“will consider your request for more detailed presentations of the statistics”.

That is exactly what the letter said. He went on to look at that.

The hon. Lady will know, as will the Chair of the Work and Pensions Committee, who is in the Chamber, that it is not possible for a Minister to instruct his departmental statisticians to do statistics in a certain way. We can look at something—that is exactly what we are doing—but I cannot instruct the statisticians to produce statistics in the way that the hon. Lady has asked. I think there is some merit in what she is asking to be done, but it will be for Sir Andrew Dilnot and his team and my statisticians to work together on that. I know that the hon. Lady corresponds extensively with Sir Andrew Dilnot and I am sure that he will confirm what I have said.

It is important that the statistics are right; all hon. Members would want that. The rationale behind mandatory reconsideration was to get the whole thing right. Sir Andrew Dilnot stated in his letter of 21 February that it was too early to have the sort of statistics that the hon. Lady mentioned. I am more than happy—and I have—in the light of the letters that I have seen, and in the light of the hon. Lady’s requests in correspondence with Sir Andrew Dilnot, and his comments, to ask my statisticians to look at this to see whether what she has asked for is possible. But I stress again that, as a Minister of the Crown, I cannot instruct statisticians in my Department to do what she asked. It was for them to make sure that we have a robust situation, but I can imagine the controversy that there would be in the House if a Minister was speaking in the House and it became public knowledge that statisticians had been instructed by a Minister to do things in a certain way.

Sheila Gilmore: I can understand why it would be a matter of concern if a Minister told statisticians not to record something, but surely a Minister will have a view about the form of statistics and the kind of information to be published; and presumably, these are bits of management information which are there anyway.

Mike Penning: Certainly, Ministers have a view on lots of things, but there is a difference between having a view and instructing departmental statisticians to do their statistics in a certain way. I have asked whether I have the powers to do so, should I wish to do so, and I understand, having received advice, that I do not. It is for my statisticians to work on producing statistics on mandatory reconsideration in a way that is as informative as possible, working with the UK Statistics Authority.

Regarding the clarification of that point, and with regard to the very narrow title of this afternoon’s debate, I honestly thought that Sir Andrew Dilnot had answered the questions that the hon. Lady has asked in this debate, which is why I reiterate that I was slightly surprised that we had the debate. The hon. Lady knows that my door is always open. We could have openly discussed this matter, if she had had anything to clarify. I know that Sir Andrew Dilnot’s officials are listening to this debate and want to work with her.

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At the moment the information is not ready. It is not in the format that she is asking for. As soon as it is ready it will be published. It may not be in the perfect format that the hon. Lady is looking for. I have asked for this matter to be reviewed, and Sir Andrew Dilnot is doing the same thing, and I look forward to the response. However, I cannot instruct the statisticians to do so and I would not do so.

Sheila Gilmore: I was not suggesting that a lot of the data would already be there, but we are expecting far more such decisions to be taken. It is important to start planning for that, as I am sure the Minister would agree.

Mike Penning: That is exactly what the statisticians are planning for. Actually, with mandatory reconsideration we were trying to see whether we could get the decisions

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right before they went to appeal. It is early days yet—it is a bit like the early days with the personal independence payment, which we were discussing only this morning, where the early data reveal that the number of cases going to appeal is a lot less than expected. It does appear that the mandatory reconsideration work is working, but when the statistics come forward that will be for everybody to know.

I know that those in Sir Andrew Dilnot’s office are listening to this debate and I am sure that they will correspond with the hon. Lady on the points that I have raised in the debate and on points raised by her as well.

Question put and agreed to.

5.15 pm

Sitting adjourned.