I have attended a number of events organised by Pubs of Ulster, and I believe that we should support the UK-wide Cut Tourism VAT campaign. Northern Ireland

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is home to some 10 breweries, and my constituency of Strangford is home to 63 pubs that support 672 jobs, 138 of which are for 16 to 24-year-olds, whom we should be encouraging. We have the attractions, restaurants, bars and locations, and it is now time to ensure that we can offer even more by asking the Minister genuinely and sincerely to consider reducing VAT.

3.39 pm

Shabana Mahmood (Birmingham, Ladywood) (Lab): It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate the hon. Member for Ceredigion (Mr Williams) on securing this debate and on his work to highlight the issue. We have heard some excellent and important contributions that have reminded us of the importance of tourism to UK plc, and the case has been passionately made for reducing VAT below the standard rate of 20% on services supplied to tourists, in order to improve the sector’s international competitiveness.

As we have heard, member states’ discretion to set lower rates on goods and services is limited by European VAT law, but there is a special dispensation for a lower rate on certain supplies associated with tourism, specifically including hotel accommodation, certain restaurant services and some types of admission charge, including charges for entry to amusement parks. Some member states have made use of that dispensation to charge lower rates, including the Republic of Ireland, which introduced a lower rate of 9% in July 2011. We heard a bit more about that from some hon. Members in their contributions.

The campaign is long-running. This is the second debate on the topic in which I have taken part; the previous one took place almost exactly a year ago, ahead of last year’s Budget, and was secured by the hon. Member for South Down (Ms Ritchie), the hon. Member for Brighton, Pavilion (Caroline Lucas) and the hon. Member for Strangford (Jim Shannon), from whom we have just heard.

The hon. Member for Ceredigion made a powerful opening speech focused partly on his constituency and the impact that a VAT reduction could have on the Welsh economy. He also made the point about a potential link between a VAT cut and economic growth. I take slight issue with his assertion that the Labour Opposition have not been robust in our approach to this matter; we have been robust, but unfortunately the answer that we have arrived at is similar to the Government’s rather than being the answer that he and others hoped for. Those hoping for a different answer from us and the Government include members of our own party; I acknowledge the role of Labour Back-Bench Members in the campaign, including that of my hon. Friend the Member for—is it Ynys Môn?

Albert Owen (Ynys Môn) (Lab) indicated assent.

Shabana Mahmood: I thank my hon. Friend. I hate to get people’s constituency names wrong, so I am glad to have got it right on this occasion. He made the point that it is Welsh tourism week, and Welsh Members of Parliament from various parties have been well represented in this debate. I recognise his long history of campaigning on this issue, and particularly his focus on the number of jobs and the amount of economic growth that such a

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change could create in his constituency and the Welsh economy as a whole. I fully expect him to continue lobbying Labour colleagues and a future Labour Treasury on the issue, as he has done alongside others throughout this Parliament, but I am afraid that I will disappoint him and other hon. Members throughout the House once again by not making a commitment that the next Labour Government will reduce VAT for the tourism sector in the way that they envisage.

Jim Shannon: If the shadow Minister is giving us a blanket no, can she give us an assurance that whatever happens after 7 May, if Labour is in power, it will consider it? If the Government applied to Europe, they could get a reduction. At least if we knew that it would happen, a move would be made. Let us see what happens.

Shabana Mahmood: I am grateful to the hon. Gentleman for that intervention. I was just about to develop a point about the evidence presented by hon. Members in this debate, and how we will react to it if we form the next Labour Government and Treasury.

I start by recognising that cutting VAT is a significant monetary challenge. The Opposition are clear that we will put no unfunded promises in our manifesto, the basis on which we will seek election from the public in the coming weeks, and we will not borrow any more money for day-to-day spending. We note the evidence presented by hon. Members in this debate from notable academics who have considered the issue in detail. It has been cited in support of the argument by the Cut Tourism VAT campaign. From opposition, I am not in a position to assess that evidence in the same way that the Treasury can, as it has access to data sets that we do not, but I note the Minister’s answers to hon. Members in written parliamentary answers and oral answers during departmental question time in the House. He has said, on the basis of analysis undertaken by the Treasury, that a VAT cut for the sector would not produce sufficient economic growth to outweigh the consequent revenue shortfall. It would be helpful if in summing up, the Minister put more of that evidence on the record, if the position is the same as before.

Mark Durkan (Foyle) (SDLP): I apologise for coming late; I was involved in the debate in the main Chamber. The hon. Lady says that the Opposition are unable to examine the figures, but during this Parliament the Opposition have posited that an overall decrease in VAT would encourage consumer spending on all sorts of important consumer goods. Does she not accept that there is evidence to suggest that the measure would at least help trap the multiplier in a more targeted way in areas that depend on the tourism economy?

Shabana Mahmood: The hon. Gentleman will know that in the early part of this Parliament, we proposed an alternative package to the Government as an immediate measure to stimulate the economy. It envisaged a temporary VAT cut, which at the time could have made a difference across the whole economy and might have meant being in a different position today. I note, though, that the previous Labour Government, when lobbied on the issue, felt that targeting the cut in the way then envisaged would not necessarily have produced the effects anticipated by hon. Members.

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That is why it would be helpful to hear more from the Minister about current Treasury thinking and analysis of the available evidence. An incoming Labour Treasury would certainly want to consider all that evidence and see the analysis at first hand. In particular, we would want to understand the relationship between different measures that could be taken, including a potential VAT tax cut compared with, for example—the Government have also cited this in defence of their position—the employment allowance, a £2,000 rebate on employer national insurance contributions introduced by the Government earlier in this Parliament. I would also want to be convinced that we would achieve as close to 100% pass-through of such a big change if we were to start considering seriously the case for making it.

However, we return to the fact that if we cut VAT in that way, the most recent Office for National Statistics data from 2012 suggest an annual cost to the Exchequer of £11 billion to £12 billion. Those sums would have to be found elsewhere, and we as an incoming Labour Government would not be in a position to make that choice. So I cannot commit to a VAT cut of the nature called for by the campaign, although I can of course commit, if I become a Treasury Minister after the election in May, to assessing the analysis and all available evidence. I will also work with colleagues in the Department for Business, Innovation and Skills and the Department for Culture, Media and Sport to examine what else can be done to assist the tourism sector and ensure that it plays its full part in encouraging sustained and balanced economic growth. I am sure that the Cut Tourism VAT campaign will continue to make its case in full heart in the life of the next Parliament; it is certainly made up of doughty parliamentary campaigners. I look forward to engaging with them in much the same way that I know the Minister has engaged with them thus far in this Parliament.

Tourism is a hugely important sector to the UK. It is our fourth largest service industry; it employs 9.6% of the UK work force, or 3.1 million people; it generates 9% of the UK’s entire GDP; and in 2013 it contributed £127 billion to the economy. So, it is in everybody’s interests to ensure that the sector grows, thrives and continues to provide the jobs necessary for UK plc.

As I highlighted in our debate on tourism last year, there are other policy levers that can be pulled, without the cost implications that a VAT cut on tourism would entail, which would still be of real benefit to the sector. One of the most effective of those levers could be around immigration policy, particularly given the complexity around fees, visa applications and the monitoring required to make sure that people do not overstay their visa. The Government have made particular changes with respect to some countries, such as China. However, it is the case that other countries are deemed to be a high risk for potential overstaying but whose genuine visitors are often locked out. I see that in my own constituency with visitors who want to come from the Indian subcontinent, but the immigration officials almost take a first view that those people are more likely to overstay than not. Often, that is not the case. People want to come to the UK to see the land that their forefathers left their countries of origin for, and they wish to come and celebrate family events such as weddings. They will spend money here, and their British citizen relatives

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will spend money showing them a good time and showing them what Britain is all about. We should assist that process and not hold it back.

Therefore, although I cannot agree for the cut that has been called for, I commend the work of the Cut Tourism VAT campaign and the work of its supporters in the House. We will continue to work closely with the tourism sector and we look forward to hearing more from the campaigners in the future.

John Pugh: I hope the hon. Lady will indulge me. She says that she does not agree to the cut, but would she agree to the concept of having independent research commissioned by the Treasury? Has she any fundamental objection to that, which would be a lesser commitment?

Shabana Mahmood: I am grateful for that intervention. I do not have a fundamental objection, in principle, to that idea, but I am not in a position to commit to a formal review of some kind. Nevertheless, as I have said, if I was in the Treasury I would happily look at any additional evidence and at the Treasury’s analysis of the data at first hand, rather than hearing it from the Minister.

3.52 pm

The Financial Secretary to the Treasury (Mr David Gauke): It is a great pleasure to serve under your chairmanship this afternoon, Ms Dorries, and to respond to this debate. This is not the first time that I have had the privilege to respond to such a debate. I start by congratulating the hon. Member for Ceredigion (Mr Williams) on securing this debate, and for giving hon. Members an opportunity to discuss this important issue. I also congratulate him on the manner in which he set out his case. His constituency is well-known for being one of the most beautiful in Wales, and indeed in the entire country. I make that point with a degree of concern because I appreciate that, having made it about his constituency, there is a very strong case to make it for many of the other constituencies that are represented here in Westminster Hall today.

Let me reassure the hon. Gentleman and indeed other hon. Members that the Government value the importance of the tourism sector, not only in the hon. Gentleman’s constituency but across the United Kingdom. I will say more about that later, but Ministers from both the Treasury and the Department for Culture, Media and Sport have been working closely with the industry to increase both in-bound and domestic tourism.

On the specific issue of VAT, I should briefly explain that VAT is, of course, governed by EU law and that reliefs from VAT are therefore strictly limited. However, EU VAT law allows member states to implement certain reduced rates of VAT, which are listed in annex 3 of the VAT directive, at the discretion of individual member states. Three of these reliefs are of particular interest today: first, accommodation provided in hotels and similar establishments, including the provision of holiday accommodation and the letting of places on camping or caravan sites; secondly, restaurant and catering services, excluding alcoholic drinks; and, thirdly, admission to leisure attractions, including shows, theatres, amusement parks, concerts, museums, and similar cultural events and facilities.

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I know that the hon. Gentleman is aware that a number of other member states have chosen to implement a reduced rate of VAT on tourism and related activity. However, this Government are yet to find any conclusive evidence of a causal link between VAT rates and tourism activity. Comparisons with other countries tend not to take into account the significant VAT reliefs that the UK already provides for cultural attractions and public transport, nor the other tourist taxes that other member states choose to levy.

Mr Mike Hancock: I am very interested in the statement the Minister has just made that there is no conclusive evidence to support the argument that a cut in VAT would generate more activity. So, what is the evidence that he is using to say that there would be no improvement, and who produced it?

Mr Gauke: I will say a little about that. For example, the case has been made that in the Republic of Ireland there has been an increase in the number of tourists in recent years, since there was a reduction of VAT on the tourism sector there. However, we have seen a very similar increase in the number of tourists in the United Kingdom. So, we should not jump to the conclusion that there is necessarily a causal link.

David Simpson: Earlier, I raised the issue of the distortion of VAT payments between certain golf clubs—the disparity between the proprietary clubs and the member-run clubs. Surely that disparity should not exist. If it is a golf club, it is a golf club, and there should be a level playing field. Golf clubs create tourism, food and accommodation.

Mr Gauke: The hon. Gentleman leads me to a different debate on the VAT treatment of golf clubs, which I am sure he will understand is a matter of some complexity and indeed of some litigation, too. So, Ms Dorries, I hope you will forgive me, but I will not be too diverted by the particular point that he has put on the record.

In the UK, we apply a zero rate of VAT to food, newspapers and books, and passenger transport. The UK also refunds VAT incurred by many world-famous museums and galleries, making them free to visit for all. In addition to the sector-specific reliefs, the UK’s VAT registration threshold is the highest in the EU, meaning that much tourist accommodation and many attractions do not have to charge any VAT to their customers.

As I have said, Ministers from both the Treasury and DCMS have discussed the Cut Tourism VAT campaign, and recently I have both met and engaged in correspondence with campaigners. VAT raises more than £100 billion a year, which has been critical in enabling us to manage the UK economy through tough economic times, and the latest figures from the Office for National Statistics suggest that reducing the rate of VAT to 5% for catering services, such as the supply of meals, snacks and drinks sold by restaurants, pubs, cafés and canteens, would cost the Exchequer £10 billion per year. Similarly, a cut in VAT to 5% for accommodation would have an estimated cost of around £2 billion a year to the Exchequer. I do not have to remind hon. Members that those costs would have to be met either by increasing other taxes,

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which may well have an adverse effect on growth and jobs elsewhere in the economy, or by increasing borrowing. That would risk raising interest rates, which would undermine our hard-won recovery and would have an adverse impact on families and small businesses.

Albert Owen: The Minister made the comparison with the Republic of Ireland, saying that we have had a comparable increase in the number of people visiting this country. Does he have any comparable figures from the Republic of Ireland that show the boost to the tourism sector there, and if so, is he taking them into account when he talks about the extra revenue that has come into the Irish Exchequer?

Mr Gauke: The point that I am making is that the number of tourists in both countries has increased at largely the same rate, at a time when one of them has reduced VAT and the other has not. Of course, these matters can be somewhat complex and there are many factors to consider, and when it comes to tourism matters, and particularly matters affecting in-bound tourists, we should not forget the importance of the exchange rate. It is very significant and, of course, recently the exchange rate has gone in different directions.

Jim Shannon: Will the Minister give way?

Mr Gauke: I am conscious that, although we have a little bit of time left because of the earlier Division, I should make progress. However, I will give way to the hon. Gentleman.

Jim Shannon: If the Minister wants a comparison, he should compare the Republic of Ireland and Northern Ireland. Clearly, the number of visitors to the Republic of Ireland has grown enormously above the number visiting Northern Ireland. That is a clear example of the advantage of a reduced VAT rate. We could all take advantage of that if it happened across the whole of the United Kingdom, and particularly in Northern Ireland.

Mr Gauke: As I say, a comparison of the Republic of Ireland with the UK as a whole suggests that there is not a big difference. Indeed, I understand that there has been a pretty positive increase in the number of tourists to Northern Ireland specifically in recent years.

All hon. Members will be aware that this Government’s priority is to tackle our budget deficit decisively but fairly and to restore confidence in our economy. The Government have concluded that a VAT cut would not produce sufficient economic growth to outweigh the revenue shortfall. I have not seen any new conclusive evidence that has led me to revisit that conclusion. So at present the Government have no plans to introduce a VAT cut for this sector.

I reassure hon. Members that the Government recognise the importance of the tourism industry and we remain committed to a wide range of other measures to support the sector. For example, to date we have invested more than £129 million through VisitBritain and VisitEngland, to market great British holiday destinations at home and abroad. This has already leveraged significant private sector investment of more than £84 million. We have announced a £10 million tourism in the north fund in the next financial year. We have announced £2 million

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in the next financial year, to help promote our cities and regions overseas as part of the GREAT campaign, through VisitEngland.

The tourist industry has benefited from other policies introduced by this Government. I thank my hon. Friend the Member for Aberconwy (Guto Bebb) for making this point. For example, capping business rates and doubling business rates relief benefits the retail and hospitality sector by a considerable sum. Those sectors have benefited from the introduction of the employment allowance and will benefit from the abolition of employer's national insurance contributions for under-21s and for apprentices under 25.

John Pugh: I hope that this intervention will help. The Minister is saying clearly to the industry and to hon. Members that he has seen no conclusive evidence. If that is not to be a fob-off, should not he sketch out what conclusive evidence would look like to the Treasury? What is the Treasury actually looking for in evidence that would convince it that this case was valid? If he cannot say that, it will simply look like a stalling move.

Mr Gauke: A considerable amount of evidence has been produced. The essence of the case is that we would want to see evidence suggesting that the benefits to the economy outweigh the costs. The costs to the Exchequer are, as I have outlined, considerable. The Cut Tourism VAT campaign acknowledges in the numbers that it has produced—I can go into a little bit more detail on issues that we have with its methodology—that there would be an immediate shortfall. Its argument is that, over time, much if not all of that shortfall would be recovered. However, that immediate shortfall has to be dealt with. There is not the opportunity for us to say, “We can borrow extra billions of pounds to fund this, in the hope that that money will be recovered in future years.” If we undertook such a measure, we would need to replace that shortfall with additional taxes or reduced spending, and that in itself would have an impact upon the economy.

The actions we have taken in support of VisitBritain and VisitEngland and the tax reforms that I outlined, are delivering positive results for the UK tourist sector. Provisional figures for 2014 show that the UK welcomed 6% more visitors than in 2013: a total of 34.8 million. In total, UK tourist spend is also up by 3%, which is a total of some £21.73 billion. Provisional figures for tourism in Wales for 2014—the hon. Member for Ceredigion will be interested—show that more people are holidaying in Wales than ever before, with Wales now accounting for over 12% of holidays in Great Britain, leading to an increase on holiday spend in Wales. I am certain that, on top of the increase in numbers, all the successful events that the UK hosts year on year will only serve to make more people aware of the UK’s desirability as a tourist location.

Wherever we can, the Government will of course continue to invest in tourism and provide support for tourism across the UK. Although the hon. Gentleman, and other hon. Members who spoke in this debate, may be disappointed with my answer on VAT, I hope he and other hon. Members will be reassured that we support the sector; that, wherever we can, we will continue to support it; and that we are confident that both inbound and domestic tourism numbers will continue to rise.

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Survivors of Child Abuse

4.6 pm

John Mann (Bassetlaw) (Lab): It gives me no pleasure to open a debate on the lack of support for child abuse survivors. The issue is predominant in the media at the moment; there is almost a frenzy of activity going on, with media and public interest in the issue of prominent people and child abuse.

One of the great dilemmas for anyone provided with information by people out there is understanding the context of what was going on. The context is worth spelling out a little bit, because it affects understanding of how those who survived childhood exploitation and abuse were treated at the time. One of the dilemmas regarding the involvement of Members of Parliament, politicians and other prominent people is that there is a fine line to be drawn between MPs in the past who were secretly homosexual, those who were secretly homosexual and paying for sex with teenage boys, although it used to be illegal for men to have sex under 21, and those who were doing so with younger children. Of course, if MPs—or anyone else—are paying for sex with teenage boys, they probably do not ask, “Are you 18, 19, 14 or 15?” Part of the problem of exposing the past is precisely that. Who are the real perpetrators?

There is a separate side to this that is equally difficult. The vast majority of adults who come to me having been abused as children raised issues with the authorities as small children, but were treated as being the problem, as we saw rather graphically recently in Rotherham. Rotherham is no different from anywhere else—no different from Nottingham or Bassetlaw, which in turn is no different from the rest of the country.

For example, I have spoken to someone who, aged 11, was fostered out with nine other children and alleges multiple abuse, including rape, of these young children, some of whom were younger than him. He was forced into slavery—forced to work, in a workplace that I can identify in my constituency, from age 11 to 15, for nothing, the money going to his foster parents. The head teacher of his school wrote—I have seen the letters—saying that he did not want the child in the school, and claims in the attendance records that he was there when he was not. He was working for nothing in a foundry—a foundry!—aged 11, 12 and 13. He came forward for the first time to see me, his MP. Why me? I do not know, but he did. He has not been to anyone else. He is going to the police. He will go public, I am quite certain. The media will get a phenomenal story on what was going on. More victims will emerge, I know, because I have already done my own investigations. It was not a one-off; this was going on for years.

I have to tell my constituent that in a court case last week, it was ruled that children in foster care cannot make a civil claim against a local authority, because the local authority has no liability. I look at what local authorities across the country are doing, and I see documents about liability insurance and liability. They do not have a problem with kids in foster care, because the courts just ruled that there is no liability, but hang on a minute: what support is there for my constituents who were put into slavery aged 11 and abused? My constituent’s sisters and brothers were abused, too.

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What support is there now for a constituent of mine who was raped repeatedly as a child in different care homes and foster homes? She made multiple allegations that take in different police forces and Crown prosecutors across the country. She spent three days in hospital under sedation, after giving her statement to the police and reliving the trauma, to try to get one of the prosecutions off the ground, and we are dealing with councils that are worried about insurance liability and are writing papers on that as their priority. That is what is fundamentally not understood.

I could give a list of MPs past and present suspected of involvement in child abuse. Most of the names would be accurate, although they would not all be, and that is why I am not going to do it. It would hinder the police. I spoke to the police minutes before coming in here about whether it would be helpful to do that. They are neutral, but my judgment is: let the police follow the evidence. One way or another, the names will get out. I want the people out in a court of law, being prosecuted and imprisoned. That is the appropriate thing. Critically, what I want from this debate is a system that supports these adults. The woman who was repeatedly raped and was sedated going into hospital after giving a statement—can you imagine what it is like, reliving the trauma in detail to give a statement so that a prosecution can be considered?

Heather Wheeler (South Derbyshire) (Con): I congratulate the hon. Gentleman on securing the debate this afternoon. It is a pleasure to serve under your chairmanship, Mrs Dorries. The hon. Gentleman is getting to the nub of the problem. It is not just about the huge courage the victims have to have to come forward; the system needs to support them afterwards. My constituent, Jo, was repeatedly raped at 15. She has suffered because there are inadequacies with the Crown Prosecution Service and the Parole Board, and her perpetrator is back out on the streets. He had five life sentences. Will the hon. Gentleman expand on his issues with how the system has been letting people down, such as my constituent, Jo?

John Mann: It has been letting down the hon. Lady’s constituents and mine alike. Three girls were repeatedly raped from age 5 onwards. There is no case to answer, because their statements taken at the time, when they were young kids, do not add up. The Crown Prosecution Service said, “Oh, there is nothing we can do. We will not win in court.” What support is there for them? I will tell you what support there is: me. That is who they come to. I will give them support, but what I need from the state and national and local government is properly resourced mental health services that do not, as they did to my constituent, send people away—she needed to be sedated for three days, having made a statement about the multiple rape and other violence—and say, “Come back in a month’s time.” That happened in Nottinghamshire this year to one of the victims. Mental health services are totally disjointed when it comes to support.

I am dealing with children’s social services, but some of these adults are in their 50s or 60s. They will not be going to children’s social services, so where is the support from adult social services? There is no system in place

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that gives them that. I have constituents who have been hung out to dry by the police and given no support. They were not even referred to the support agencies, having come and said, “We were raped as children.” What on earth is going on when we have no support systems in place?

Jim Shannon (Strangford) (DUP): The hon. Gentleman is making a very powerful case on behalf of victims of child abuse. In Northern Ireland in the past year, 50 offenders have been arrested and questioned in relation to sexual abuse. Does he feel that the first thing that survivors of child abuse want to see is the culprits arrested, investigated and referred to the courts for sentencing? Do resources need to be made available for that to happen?

John Mann: The survivors want justice, and the only way they will get that is by being believed and by perpetrators being prosecuted. The Crown Prosecution Service cannot cope with the volume. It has hardly any cases compared with the cases that will go to it. For the Crown Prosecution Service in the east midlands, we are talking about a manifold increase just from the cases I am bringing. How on earth do we expect such places as Rotherham to deal with the numbers? The expertise to take the cases forward is there, but the resource is not. What is being said is, “We will put it on the long drift for years and years.” That is what has happened with the police. They are not even getting to some of the people who should be questioned as potential perpetrators, because they do not have the resource to do that.

I am not criticising Government spending; what they spend on this, that and the other is a separate debate. It is important that we all get our heads around what is needed. We are not talking about the Government announcing another £100 million or £200 million here or there; we are talking about a far bigger resource than that. In my constituency, I am personally dealing with 25 victims—25 survivors of child abuse. That is so far. There are loads and loads more out there, just in my constituency.

The Crown Prosecution Service and the police cannot handle the prosecutions, the mental health services cannot handle the support services for the victims and social services cannot handle virtually anything to do with them. They do not have the resource. If we are to get on top of this huge legacy, we need to define what I put to the Minister as a Roll-Royce service. What does that mean? A standard needs to be put in place so that when someone comes forward, there is a benchmark that defines what they are entitled to. It is an entitlement. This man was forced into slavery and went to the police, and the police and the social workers returned him and his sisters to the abusers not once, not twice, not three times, but more. He did the right thing, and he is entitled to a Rolls-Royce service. That can come in different forms. What is his major demand? One-to-one literacy lessons, because he finds it a bit hard to get on, being unable to read and write because he was not in school because he was forced to work in a foundry by some predatory paedophile abuser who was the foster carer over him—and that is what they were. Literacy is the most important thing for him.

There is no system in place that says, “You will get this. You are entitled to this.” What is he meant to do—go to the civil courts, as so many thousands have

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already done? That is not a sensible approach, given that lawyers will not even share information, and are telling people in Nottinghamshire not to come to me, the media or anyone else. They say, “Stick with us, we’ll get you a little bit of money.” How much is a life worth in Nottinghamshire? Eight grand a settlement. It is not good enough, and it is not going to be good enough in future.

Whether under this Government or the next Government, whoever is in power in the next Parliament, whoever the Minister is, from whichever party, I need to see defined an immediately available Rolls-Royce service. Whatever resource is needed, we will have to find it. This is not about me getting up and having a go at the Government; it is about Parliament taking responsibility. This is about saying that a huge amount of the available resources needs to be given and broken down into different areas.

I have been contacted by constituents and many others from all over the country who have survived abuse. They want prosecutions to proceed. They want the police to be able to investigate. They want mental health and other NHS facilities and services to be available. They want support from adult social services. They need that, and they need it as they come forward.

There is one final thing that they need. The Government have made their decisions about the independent panel and Goddard. We can learn a lot from abroad. They do this stuff better in Scandinavia and New Zealand. We should be stealing all their best practice for how we deal with things. Whoever is the Minister, and whoever sits on the Select Committees and all the rest, should get out there, steal their good ideas, bring them back and implement them here. But survivors need their own forum. They have called for a national institute for people abused in childhood. They need that, because then they can provide some of the support and guidance, and they can contribute to the definition of a Rolls-Royce service.

I cannot be dealing with more people attempting suicide, having come to me because the support services are not there. I do not give a damn which heads are going to roll. If those support services are not there, I will get rid of the people at the top, because it is not good enough for my constituents, who are no different from people anywhere else.

I need from the Government a clear undertaking that the resources and expertise will be there. If someone has survived this trauma and lived with it all their life, they have a right to and an expectation of support when they bravely come forward. That is what we as a society and we as a Parliament are going to have to give them. That is why this debate is not only timely, but critical. We need action within months, not years.

4.24 pm

The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson): I thank the hon. Member for Bassetlaw (John Mann) for leading such an important and timely debate about the support available for those who have suffered child sexual abuse. The first thing that any victim wants is honesty. People in authority must take reports seriously and confront abuse wherever it occurs. As the hon. Gentleman said, victims have not only a right to be believed, but a right not to be treated

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as the problem. That is why we have been determined to tackle the issues of both historical and current child sex abuse.

For too long, people in positions of power have swept concerns about child abuse under the carpet, failing to act even in the face of clear evidence. That cannot be allowed to carry on; we have to act. The Home Secretary has said that what we have seen so far is likely to be the tip of the iceberg. The hon. Gentleman’s speech has reaffirmed the fact that there is still much for us to understand and learn. We must consider how we can ensure that victims of abuse are given the support that they rightly deserve. That is why the Home Office set up an inquiry under the leadership of Justice Lowell Goddard to investigate the shocking claims that we have heard and are still hearing about child sexual abuse by those in positions of power in the past. We are now finally seeing police forces throughout the country showing the will and determination to tackle child sexual exploitation wherever it occurs, be it in Oxfordshire, Rotherham, Derby, Rochdale, or elsewhere, as the hon. Gentleman said.

We have already announced that we will consult on a new criminal offence of wilful neglect for teachers, councillors and social workers who fail to act on evidence of child abuse, and the Prime Minister has upgraded child sexual exploitation to a national threat, creating a duty on police forces to co-operate across force boundaries.

John Mann: Does the Minister agree that it would be helpful to establish a central database of children in care who have gone missing?

Mr Timpson: We have already improved the data, not only on children in care who are missing, but on absence. Rather than being only on those who have disappeared for more than 24 hours, the data—whether from the local authority or the police—now cover every single case of a child who has gone missing from care, irrespective of the type of placement. That is important because we know that those children are particularly vulnerable to exploitation, especially those in residential care, which is why we have undertaken such wide-ranging reforms to improve risk assessments for children’s homes, to improve the quality of care in those homes, and to ensure that the decision makers—particularly those who place children out of area—are much more robustly accountable for their decisions than they have been in the past.

The hon. Gentleman is correct to say that listening to survivors of child sexual abuse is not enough on its own. They need support, often well into adult life. The psychological effects of childhood abuse can be absolutely devastating—from depression and anxiety to eating disorders, self-harm, alcohol and drug addiction, and severely disrupted learning that can hamper them for life. On the latter, the hon. Gentleman gave the example of a constituent who came to him for help and wanted one-to-one literacy lessons. That is a good example of the wide-ranging consequences of something that has been left untouched and not properly considered as part of his constituent’s rehabilitation.

John Mann: So where will my constituent get that support?

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Mr Timpson: I will come on to the various strands of support that are either in existence but need to improve, or that the Government have announced to try to ensure that we better support people who find themselves in that situation. The truth is that long-term specialist intervention may be required to rebuild self-esteem and resilience, as well as to tackle serious psychological ill health.

The hon. Gentleman will not want me to quote a succession of numbers at him relating to the money that has been made available to support victims of child sexual abuse, but it is right to recognise that a fund has been established for 2014-15 and 2015-16. We are working with the support of organisations that are reporting an increase in referrals prompted by the independent inquiry into child sexual abuse.

I have also listened with interest to the hon. Gentleman’s call today for a national institute for survivors of child abuse. I undertake to take up the proposal with all other relevant Ministers, including the Home Secretary, because despite the fact that the independent inquiry is up and running, it is important that we still take time to consider what other support we might be able to offer to give us confidence that we are addressing the issues that many survivors are raising. We have already announced the establishment of a new centre of expertise, which will help to develop and deliver better approaches to tackling child sexual abuse, spreading the best practice that the hon. Gentleman spoke about from as far afield as New Zealand and Scandinavia. We can also learn from the many professionals who are out there but need the capacity to deliver services more widely. Part of that has to be how victim support is built into that body of expertise.

Survivors have rightly been instrumental in the setting up of the statutory independent inquiry into child sexual abuse. Both Justice Goddard and the Home Secretary are clear that they must also have a strong voice in the work of the inquiry. Justice Goddard will write to survivors and their representatives shortly to set out her intention to create a survivors and victims consultative panel, and to seek their views on how that will work and who should be on it. The panel will have a specific role and function within the inquiry. The inquiry’s terms of reference state that it must:

“Consider the experience of survivors of child sexual abuse; providing opportunities for them to bear witness to the Inquiry, having regard to the need to provide appropriate support in doing so”.

Rightly, it is for the inquiry to consider the most appropriate way to take things forward, but survivors have to be a key part of its remit.

What cannot be disputed is that now and at any point in history safeguarding children—the action that we take to promote the welfare of children and to protect them from harm—is everyone’s business. Everyone whose work brings them into contact with children and families, from the school receptionist, the police and health practitioners to the social workers, will have an important role to play in spotting and rooting out abuse and then supporting those young people, and sometimes adults, to come to terms to with what has happened to them and in how to deal with their future.

John Mann: I thank the Minister for his positive remarks. Whoever is elected at the next election, does he agree that it would be highly sensible for the 650 individual

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MPs to be given proper training in how to handle people who might come to see them in the near future? That training need is clearly not being met at the moment and all of us could benefit from it. It could be hugely significant to individual lives.

Mr Timpson: I hesitate slightly because I come from a legal background in the family courts, but I can see the benefit to me of having had the opportunity to familiarise myself with many of the challenges and consequences for not only the victims of child sexual abuse, but the wider family. I have found that experience invaluable in trying to understand the wider needs for addressing the problems that society is now facing up to. I will not write the book of MPs’ training, but from my perspective as a constituency MP—like many colleagues—the background and experience that I have been able to draw from has been important in empathising with and understanding the significance of the many whom I have encountered in my surgeries and casework. It would be helpful for many other colleagues to have the opportunity to understand better the types of issues that they will undoubtedly come across in future.

Effective safeguarding of children can be achieved only by putting children at the centre of the system and by every individual and agency playing their full part. Failure to do that has been shown starkly in the reports from Rotherham and Oxfordshire, which have revealed a need for a co-ordinated response to protect children from child sexual exploitation and sexual abuse. That requires a system in which professionals work together to identify emerging problems and goes right through to supporting children who are in need or on a child protection plan.

No single professional can ever have a full picture of a child’s needs and circumstances. If children and families are to receive the right help at the right time, everyone who comes into contact with them has a role to play in identifying concerns, sharing information and taking prompt action. Where that happens, children are better protected. We will therefore shortly publish a revised version of the “What to do if you’re worried a child is being abused” advice, which has a stronger focus on ensuring that professionals are aware of the signs of abuse and neglect and what action they need to take in response. We will also publish revised guidance on information sharing to set out the key principles for how to do that effectively.

Once a child’s need has been identified, getting help quickly is important to stop needs escalating. However, the quality of the intervention will determine how children can be helped to overcome their abuse. Targeted help is required to meet individual needs—as highlighted by Alexis Jay’s report into the failings in Rotherham, a child who has experienced sexual abuse will almost inevitably require long-term specialist intervention. Help will range from basic support to rebuild self-esteem and resilience, to interventions that tackle serious psychological and mental ill health.

Effective and timely support for victims of child sexual abuse is a matter of national importance. That is why the Government are doing more than ever to help victims of rape and sexual violence through the female rape support fund, which has funded 86 rape support centres to provide independent, specialist support to victims of recent and historical rape and sexual violence.

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In December last year we announced an immediate uplift of £7 million in non-statutory sector support to victims and survivors through the existing female rape support centres and two funds available to organisations supporting victims in areas where there is high prevalence of child sexual abuse and exploitation. Importantly, we have set up the first fund dedicated to help male victims of rape and sexual abuse.

We are also working with professional health organisations such as NHS England on where efforts should be focused to train staff on trauma-informed approaches to care in mental health services. As the hon. Gentleman knows, the Government report on the work of the children and young people’s mental health taskforce was published earlier today. It sets out a clear national ambition to support and inform the delivery of a local offer of services to all children and young people.

We also announced £80 million to help to cut waiting times in adult mental health services. The hon. Gentleman made the important point that it is not until they are adults that the child sexual abuse of many of the victims or survivors comes to the notice of the authorities. That is far too late, but it does not mean that we give up. We continue to strain every sinew to ensure that those survivors get the help that they need, whether through the health service, social care or other agencies.

We need to be better—this is what the taskforce is trying to ensure—at ensuring that all those who should have an interest do have an interest in working closely together to provide the package of support that we know when done effectively can have transformative results. Clearly, child sexual abuse is something that never leaves people who are victims of it. I have worked with many children and, in particular if abuse takes place in a family environment, it has been hard for them ever to come to terms with it.

As the hon. Gentleman said, not only as a Government, but as a society we need to recognise that child sexual abuse is something that we all must take seriously. We must all play our part to ensure that it is not simply swept under the carpet, as has happened in the past. It must be put centre stage, thus addressing a national issue that we must never hide. We should be clear about tackling it head on. If we do not do so, we are only storing up more problems for the future, and more strain and pressures on services that are working hard to support the victims of child sexual abuse. For whoever is in government after 8 May, it will no doubt be a high priority to demonstrate that everyone in society should set out our stall in support of those—in particular the most vulnerable—who have, through no fault of their own, been victims of child sexual abuse.

Another important element is to give professionals not only the tools and skills, but the confidence to know that they can spot child sexual abuse and go to their senior management and others in authority knowing that they will be supported. In Rotherham and other cases, that has not happened, which has meant that too many children were let down and too many adults are living with their horrific past. It is incumbent on all of us to turn that situation around. I welcome the hon. Gentleman’s contribution to the debate.

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Premier Motor Auctions

4.40 pm

Austin Mitchell (Great Grimsby) (Lab): The tale I want to tell today is an everyday story of business folk who have been robbed of their company by big banks acting in collusion with one of the big four accountancy houses—two sets of robbers, both too big to be touched by the machinery of regulation that we have. It is a story that is told several times in the Tomlinson report; those stories relate mainly to the Royal Bank of Scotland, whereas this story relates to Lloyds bank.

By analysing the process of company theft by banks and big accountancy houses working in collusion, I have discerned four stages. First, they introduce a Trojan horse to the company. Whoever it is, the Trojan horse then buddies up to the company and finds its vulnerabilities, while presenting a nice image and offering advice. Naturally, if that Trojan horse is a representative of one of the big four accountancy houses, they will be trusted, because we can trust the big four, can we not? They are big institutions of great repute that are worthy of trust. The third stage is that the Trojan horse insists on restructuring the company’s finances to put the bank in control. In the fourth and last stage, the company is put into administration for the bank to take for its own or to sell on to whoever is interested.

That is the technique and the four stages that were applied to Premier Motor Auctions, a Leeds-based auction firm that was profitable and well run. Lloyds bank itself described it as profitable and as a business of significant value. The company had an overdraft with Lloyds of £1.75 million. The Trojan horse was Irving Warnett of PricewaterhouseCoopers, who was put into Premier Motor Auctions, and welcomed by the company, as a non-executive director. As he put it, he was there as a “critical friend” to advise on how to run the business. Warnett went on to create a £2 million black hole in the company’s accounts by insisting—wrongly, as it turns out—that it had to have a separate account for its business with the Driver and Vehicle Licensing Agency, business that was in itself profitable. Legally that was not true, but the company went and created a separate account, which in turn required the overdraft to be increased from £1.75 million to £3.75 million.

At that point, the bank used its power to take control of the company. At the same time, it transferred the account to the Lloyds business support unit, which charged a higher interest rate and a £250,000 arrangement fee for its services to the company. Having created the black hole and transferred the account, the bank immediately instructed Keith Elliott, the chief executive and owner of Premier Motor Auctions, to sell the company “vigorously and robustly” via an administration that was to be handled by PwC.

As anyone sensible would, Elliott fought back. He got a rescue deal from a venture capital firm called Endless, which described the company as an “excellent firm” enjoying record sales. Lloyds scuppered the deal with Endless. It demanded 50% of the new deal. The manager of the Lloyds business support unit in Leeds said, “This is our attempt to crystallise the position and do an Endless/Lloyds deal without Keith Elliott.”

Not to be beaten—he is a resilient man and who can blame him for fighting to retain control of a company he built up?—Keith Elliott did another deal, with Scottish

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Motor Auctions, which would have secured the £2 million by which the overdraft had to be reduced to stop the administration. Someone—we do not know who, but it was either someone from Lloyds or PwC’s man, Irving Warnett—scuppered that deal in 24 hours. Lloyds has given me a long explanation, which I am inclined to accept, and which says that it was not someone from Lloyds, so the finger points at Irving Warnett and PwC. The deal was scuppered and Premier Motor Auctions was put into administration. In charge of the administration was Ian Green, the head of PricewaterhouseCoopers’ business recovery service and the boss of Irving Warnett, the man who had been put into the company in the first place and who was the architect of the whole financial arrangement.

Lloyds therefore got an equity interest in a company that Lloyds Development Capital had wanted to take over for some time. Through the administration, it took over a company that was making an annual profit—and still is—of £2.7 million. As for PwC’s share of the deal, it of course got a much higher fee for the administration than it would have from the simple transfer.

To put it bluntly and accurately, that is theft. That company was stolen. I have raised the issue in Parliament before, and Keith Elliott and I have raised it with various bodies. Elliott raised it at the Lloyds annual general meeting, and wrote to every director and partner of PwC, until eventually he was told to stop contacting the firm because he was becoming a nuisance.

After that, we went to the regulators. Regulators are surely there to protect companies and those who run them from theft and from having their company stolen from under their feet—what are they there for if not to offer that protection? Every one of them turned out to be a broken reed. Both Elliott and I appealed separately to the Institute of Chartered Accountants, which is the regulator for PricewaterhouseCoopers. It refused to investigate, because the case was “not a disciplinary matter”. I hope hon. Members have noted that point: theft is not a disciplinary matter, so if one of the big four accountancy houses colludes in the theft of a company, it cannot be disciplined—it is not a disciplinary matter. I do not know what it is; perhaps it is business acumen, but apparently it is not theft or a disciplinary matter. That was the response from the ICA. Elliott and I both wrote to protest against the decision, and it wrote back to say it would not answer any further correspondence on the matter. We were becoming a nuisance—as we should have been.

We then went to the Financial Reporting Council—the regulator of regulators. It too refused to investigate, saying that it was “not in the public interest” to do so. In other words, theft does not matter and is not in the public interest; or perhaps—I do not know whether this was what it was saying—theft is in the public interest but investigating it is not in its view. That is obvious balls. It is rubbish, and should never have been allowed.

When PricewaterhouseCoopers refused to answer my questions, the then Minister in the Department for Business, Innovation and Skills, the right hon. Member for Cardiff Central (Jenny Willott), kindly wrote to PwC—I am grateful to her for doing so—to say that it should answer MPs’ legitimate questions. That is absolutely right and I am grateful to the Department for that. PwC

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told the

Yorkshire Post,

which inquired about how that had gone, that it had written to the Minister, who had no further questions to ask.

The Yorkshire Post then discovered, through a Freedom of Information Act request, that the Department had not received a letter from PwC. I do not know whether that was a lie commensurate with the lie it told the Public Accounts Committee when it said that it was not selling tax evasion schemes, but it certainly was not true. It escaped from the Minister’s requests.

Ian Powell, a senior partner at PricewaterhouseCoopers, wrote to me:

“I am satisfied that PwC acted properly.”

When someone is judge and jury in their own case, it is easy to develop satisfaction that their company acted properly. So that was a nice reply, saying “something off” to me.

Mr Warnett had been retired by that time—I do not know why—and PwC has refused to allow him to be interviewed about his part in the matter, either by me or the new liquidators. He will not answer questions and PwC will not answer questions. In particular, it will not answer questions on the crucial issue of what Irving Warnett did to increase the debt, whether that was right—the lawyers say that it was not—and what he did to scupper the Scottish Motor Auctions deal, which would have saved Premier Motor Auctions from going into administration.

After being sent lots of letters, PwC gave me some answers in a final letter on 14 November. Those answers turned out not to be correct, but it says that it has answered. Instead of answering the questions, a woman from PwC wrote to me—Margaret Cole is her name, and she describes herself as general counsel to PwC—and told me, kindly:

“It is apparent from your latest letter that you believe that Parliament has a role in resolving disputes such as this. I do not agree with this”.

That is what she said. She continued:

“The courts are the ultimate and appropriate forum.”

In other words, she is saying, “Don’t go whimpering to Parliament if your company is robbed, thieved or if PricewaterhouseCoopers colludes with a bank to take it. Don’t go whimpering to Parliament—it’s got no power. Don’t go to the regulators, because they’ve got no power. Go to the courts, and face PricewaterhouseCoopers’s enormous army of highly paid lawyers. Drive yourself into bankruptcy by embarking on legal action against these big battalions.” That is to a man who has lost his company and his money. That is incredible advice and it is unbelievable that PwC should have the impertinence to say to a Member of Parliament, “Parliament’s not the forum; it’s the courts. And we’re bound to win in the courts because we’ve got weight, scale, big lawyers and clever arguments.”

That letter makes it clear that the little guy is very vulnerable in such situations and that he has no means of redress. It is clear that the big four and the banks are too big to take on, break up or deal with. Their power is overwhelming. It has increased and it must be diminished. They must not be able to crush the small guy on a whim in their determination to take on a profitable company.

Instead of chaps regulating chaps, we need effective regulation, just as they have in the United States, to stop such theft. If we do not get that, a threat will hang over

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all small and medium-sized enterprises that are in financial difficulties or have to turn to the banks for overdraft facilities. They will be crippled, robbed and possibly stolen by those powerful predators.

The big four and the banks are the new barons, with enormous power, and the citizen has little power. I am glad to say that Keith Elliott is still fighting back, now not only against the dirty deal imposed on him, but for all the small and medium-sized companies threatened by that kind of brutal takeover by financial institutions.

The power of these big institutions—the banks and accountancy houses—is far too great and must be diminished, but that can be done only by regulation and by making them accountable: by redressing the balance that weighs so heavily against the ordinary Joe. That is Parliament’s job and I hope that the Minister will tell us how the Government will address that imbalance and provide some means of redress for small companies and their directors who face such a situation. I am fighting on behalf of not only Premier Motor Auctions and Keith Elliott, but all companies threatened with that kind of financial takeover by big institutions.

4.56 pm

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson): It is a great pleasure to serve under your chairmanship, Ms Dorries. I congratulate the hon. Member for Great Grimsby (Austin Mitchell) on securing the debate. I recall, as he mentioned, that we debated this subject in November 2013. The fact that he has returned to it for discussion today is testament to his tenacity and willingness to pursue the matter raised by his constituent, Mr Elliott, who he feels passionately has suffered a real injustice.

In our discussion almost 18 months ago, I set out that I shared and had some sympathy with many of the concerns raised. A wide range of people have expressed concerns about some aspects of insolvency regulation, which is why we have taken steps to make changes. I set out, which remains the case today, that I did not have powers to intervene in this case. Of course, the changes we are making will not be retrospective, but I hope to be able to set out the package of reforms that we have been able and continue to bring forward to strengthen the insolvency regime, which together are a bold step forward. I hope that the hon. Gentleman will be reassured by that.

I appreciate that that does not help in this specific case, which is covered by the systems that applied at the time. I know that the conflict of interest issues have been considered by the court, who dismissed that application. The ICAEW reviewed the complaint and concluded that there were no such issues. The Insolvency Service then considered the ICAEW’s handling of the complaint and did not find fault, so in terms of the different routes available in this specific circumstance, it was hard to see how the redress the hon. Gentleman ultimately seeks would be possible. However, in terms of the wider regime going forward, we are determined to improve the situation for companies that might find themselves in similar situations.

I appreciate that that will be frustrating, not least for the hon. Gentleman’s constituent, but he has been able to set out his concerns about the case and the behaviour of the different organisations involved in handling it

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powerfully. If I may give my view, which is perhaps different from that given by those organisations, I think it is absolutely the place of parliamentarians to represent their constituents’ views, raise issues of concern and put those firmly on the record in Parliament when they believe that an injustice has been done. I do not think it is for other organisations, frankly, to tell MPs whether this is an issue that they should or should not pursue on their constituents’ behalf.

On that note, although we are from different parties, I would like to recognise that the hon. Gentleman has a reputation for being a great defender of his constituents, with ever-forthright comments about whatever issue of the day he is concerned about. Although this may not be his last contribution in this House—I hope it is not—it may well be one of the last, and Parliament will certainly be losing a character when he steps down from his constituency in a short while.

I will turn to what we are specifically doing to strengthen insolvency regulation shortly, but first, let me say that we have an open mind on whether to take further steps. The ethics code requires administrators to satisfy themselves that the board is happy with the appointment and to consider any threats to their independence. We are reviewing that in conjunction with the regulators and seeing whether it is sufficiently robust, so that is one area in which there could be further movement, depending on the outcome.

Austin Mitchell: Will the Minister tell us what is happening about the Tomlinson report, which is a review of a series of very similar cases to this one, but concerning RBS? That demands action, too.

Jo Swinson: Great minds think alike, because that was going to be my very next point. In 2014, the Financial Conduct Authority announced that it had appointed firms to conduct an independent skilled persons report to examine RBS’s treatment of business customers in financial difficulty and consider the allegations that were set out in the report by Lawrence Tomlinson, which were about poor practice that he had evidence of. Once the FCA skilled persons report has been published, which we expect to happen this summer, we will carefully consider whether any issues need to be taken into account in terms of insolvency legislation—including the regulation of insolvency practitioners—that have not been addressed by the reforms in progress. It may be that those issues are already addressed by our package of reforms, but if further issues are raised, we will keep an open mind about taking further steps.

I turn to measures that we are already taking on strengthening insolvency practitioner regulation. The Small Business, Enterprise and Employment Bill, which is currently before the House, contains measures to strengthen the regulatory regime for insolvency practitioners. The introduction of regulatory objectives will make sure that insolvency regulators have a framework within which to carry out their activities. That is intended to make sure that a consistent approach is applied and to give a reference point for discussions between regulators, insolvency practitioners and the Insolvency Service. The objectives set out in the Bill will ensure that the regulators have a system of regulating insolvency practitioners that gives fair treatment and consistent outcomes for people affected by their acts or omissions.

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Regulators will have to encourage an independent and competitive insolvency profession, whose members deliver high-quality services at a fair and reasonable cost, with transparency and integrity. They must seek to maximise returns to creditors and be prompt in making those returns, and the public interest must be protected and promoted during the insolvency process.

Another measure could have been relevant in this case, had the provisions been in place at the time; I am referring to the power to allow the Secretary of State to apply to the court for a direct sanctions order against an insolvency practitioner, when that is in the public interest. The sanctions could be a range of measures, including revoking authorisation and a financial contribution to creditors. I said when we previously discussed this issue that there was literally no power for Ministers to intervene, but the new regulation addresses that. We anticipate that, because this is a strong power, it would be used sparingly. It would need to be used when there was clear public interest and evidence of serious breaches of law or standards by insolvency practitioners, and when swift action was necessary. None the less, that gap, where previously there was no power, is being filled and there will be a power. Combined with other measures in the Bill, that should hopefully address the perception that the current disciplinary procedures for insolvency practitioners are not always effective in delivering fair and prompt outcomes for those affected.

The sanction powers and the regulatory objectives will hopefully make sure that we have a clear, transparent system that can hold people who do not deliver to account. Those changes, along with work that the Insolvency Service is doing with both the profession and the regulators to enhance the regime, should improve trust and confidence without the need for further intervention. However, if that set of measures is not sufficient and there is still a lack of trust and confidence in the system, we have the back-stop power in the Bill to establish a single insolvency regulator. That is if we do not see the anticipated improvement and confidence in the regime.

Many people express surprise that there are eight different regulators that authorise insolvency practitioners. I confess that before becoming the Minister responsible for insolvency, I was not aware of that. I had heard of some of the bodies, but was not fully aware of the degree of complexity. I well understand the view that that diversity does not necessarily help matters. I can see the potential benefits, including choice, but that fragmented regulatory landscape can lead to problems of inconsistency and complexity.

We were working, even before introducing the powers in the Bill, to deliver more consistency. A common sanctions framework has been agreed and a single gateway for complaints set up. That should ensure that, whichever body regulates a particular practitioner, the complaints process and the outcomes will be consistent across the profession.

I will turn briefly to the improvements made in relation to pre-packs, which have been a concern of many hon. Members. The Government commissioned Teresa Graham to conduct an independent review in 2013, and her recommendations were published in June 2014. The report concluded that pre-packs were an important and valuable part of the insolvency landscape— indeed, I think it was intended and hoped that a pre-pack

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would be the solution in this case, even though there was not a successful outcome—but that there was a lack of transparency and confidence, particularly where a sale was to a connected party.

The review recommended a voluntary package of reforms, which my officials have been working with stakeholders to implement. The reforms include setting up a pool of experienced business people to scrutinise a planned pre-pack sale to a connected party and a strengthened professional standard for pre-packs, which will require more information on the valuation and marketing of businesses to be provided to creditors. We are working to put that in place. The review also recommended that we should take a back-stop power for use if the voluntary reforms were not successful, and we have done that in the Bill. Those reforms are in place, and we hope that they will be successful, but if not, we have additional powers in the Bill. Sometimes additional powers can also act as an incentive for all those involved to ensure that the voluntary regime delivers the outcomes needed.

There has been significant concern about the fees that insolvency practitioners charge. Earlier this month, I announced new legislation affecting how IPs charge fees. In the future, they will be required to give clear information on their fees and expenses before asking creditors to approve them. Where fees are based on time costs, creditors will need to agree an estimate of the likely fees. If the insolvency practitioner’s fee then exceeds the approved limit, they will need to seek further approval before being able to draw any additional amounts. Basically, the estimate acts as a cap on fees. Those measures deal with the concerns that many creditors had about a blank cheque in effect being written for the administrators, and have been welcomed by the profession and creditor bodies.

I have mentioned some of the other things that are already being taken forward, such as the review of the ethics code and the new complaints gateway, which will bring some consistency to the issue. People are becoming more aware of the complaints gateway. Last year, nearly 1,000 complaints were dealt with via that single complaints gateway. That is a sign that there is a degree of success from the changes that we are making.

I hope that the hon. Member for Great Grimsby will recognise that the Government have listened and continue to listen to the comments that he and others make about the problems in parts of the insolvency regime, which generally is very highly regarded. We need to remember that we have one of the best regimes in the world. Our insolvency profession is highly skilled and undertakes difficult work in challenging circumstances, saving many businesses and thousands of jobs each year. However, we must always strive to improve it. That is why we are undertaking these reforms. They will mean that in the coming months we will have an improved insolvency regime, including a better regulatory regime that will inspire greater confidence that insolvency practitioners and their regulators are working in a way that strikes the right balance between parties affected by insolvency. I hope that cases such as the one—

Nadine Dorries (in the Chair): Order.

5.10 pm

Sitting adjourned without Question put (Standing Order No. 10(13)).