Westminster Hall Sitting of 10 June 2003

Preamble
[MR. FRANK COOK in the Chair]

Mineworkers Pension Scheme
Motion made, and Question proposed, That the sitting be now adjourned.—[Charlotte Atkins.]
9.30 am
Anne Picking: Thank you, Mr. Deputy Speaker. I remember that my first opportunity to speak in an Adjournment debate was in this Chamber under your chairmanship, and I called you by the wrong title; I shall make sure not to do that today.
I am pleased to have secured this long overdue debate on the miners pension surplus. I do not profess to be an expert on the intricacies and technicalities of the pension scheme, nor do I want to get sidetracked into a number-crunching exercise, which is a job for actuaries and a pastime for those anoraks who enjoy playing with calculators. I shall deliberately avoid quoting laborious statistics, because we must focus on the merit and morality of the case—a case that I feel is indisputable. I accept that the Government are acting lawfully in taking up to 50 per cent. of profits generated by the mineworkers pension scheme. I know that my hon. Friend the Minister feels quite passionately about it. However, I do not accept—and I hope that he does not accept—that the Government are acting in good faith or in the best interests of the scheme members.
I accept also that, after suffering the decimation of their industry and the near destruction of their communities by the Tories in the 1980s and 1990s, the miners' fear for their pensions was understandable. The deal struck in 1994 between the pension trustees and the Tory Government was probably the best that could be achieved at the time, but I do not accept that it is still the best deal. It has turned out to be costly for the miners, but very lucrative for the Government, who have siphoned off billions of pounds from the scheme—I am sure that Dick Turpin would be proud of them. That money could and should have been used to enhance the pensions, not to shore up other services. That anyone other than miners and their beneficiaries should benefit from those pension contributions is immoral. The modest risk of underwriting the pension scheme does not justify the massive amount of money that the Government are taking. It is a bit like paying to insure a Ferrari when one rides a moped.
I realise that tens of thousands of redundant miners were exploited by private sector pension companies who descended on them like a plague of locusts. I realise also that, since the election of the Labour Government in 1997, the Treasury's take from the surpluses has been reduced. I applaud the fact that millions of pounds have been redirected into mining communities via regeneration programs and compensation packages. The Government also honoured their pledge to those who were badly advised by private financial advisers to opt out of the miners scheme by allowing them to opt back in. That is all very laudable, but 273,000 retired
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miners and their dependents still rely on benefits from the scheme. Those men and women are not living on a king's ransom—they require the money in order to make ends meet—and those benefits were not handed over by benevolent employers or generous Governments, but were conceded only after hard-fought struggles for terms and conditions in the 1960s and 1970s. Many other workers, including MPs, take their terms and conditions for granted, but the mining unions engaged in their struggle not to fill Treasury coffers but to secure financial support and dignity for their members in retirement.
It is worth noting that miners' leaders had to argue hard to convince their members that the significant payments that they were making from low wages were a price worth paying. By being sensible and prudent and recognising that hard decisions had to be taken, they acted responsibly and opted for stability and security in retirement. Does that sound familiar? It is the same mantra that the Government chant now: "Be sensible and responsible. Save and make provision for your old age, for the state cannot ensure your standard of living in retirement." That call rings very hollow to those men and women when they see their pension fund being plundered in this way.
The scheme is now closed, and we know how many claims will be made in future, so it is a disgrace that anyone should deny these people the best deal possible. We all know that a downturn in world stock markets has affected most, but not all, pension funds and that the security of a Government guarantee has given the scheme some flexibility and security. However, even in these turbulent and troubled times for equity investment funds, the miners pension scheme has never needed to call on the Government to invoke the guarantee. Current estimates and calculations suggest that this may be a standstill year for increases to miners' pensions, with adjustments applied only for the retail prices index. The scheme is in good hands. It is robust and healthy and has a stable future. The trustees and advisers have the luxury of not having to look over their shoulder at how a company is performing, or at what dividends should be paid to shareholders. They are concerned only about securing the integrity of the scheme and maximising the amount of money that can be paid out to members in bonuses and pensions. That—not viewing the miners' money as some sort of cash cow for the Treasury—should also be the Government's guiding principle.
I see no difficulty in or barrier to the trustees and the Government coming together in common purpose to reach a fairer deal for all concerned. I understand that independent analysis has already done most of the spadework: it has indicated that a 50 per cent. take of surpluses to guarantee the scheme is excessive and that about 15 per cent. is closer to the going rate for the job. It is worth remembering, however, that this is the very same case that the Government conceded in January 2002, when they agreed to explore with the trustees how the 1994 guarantee arrangements might be altered in the interest of the members. I acknowledge that the unfortunate and ill advised legal action taken by the National Association of Colliery Overmen, Deputies, and Shotfirers, South Wales, against the Department of Trade and Industry prevented the talks from going ahead, but NACODS has now withdrawn that legal

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action, so I hope the Minister will agree that there is now no impediment to the talks starting. However, indications are that the Government have moved the goalposts and are now pulling back from their previous commitment to examine the 1994 guarantee arrangements. That is wrong. Nothing should be ruled in or out at this stage.
The only thing underpinning any negotiations should be a fair and better deal for miners that secures the scheme for as long as required and maximises pensions and benefits to its members. I seek two assurances from the Minister who, I hasten to mention, was very keen to respond to the debate, for which I am grateful. First, will he without any preconditions enter into talks with representatives of the mineworkers pension scheme to explore how the 1994 guarantee arrangements can be altered in members' interests? Secondly, will he ensure that any future arrangements that the Government may put in place to protect the interests of pension fund members do not exclude members of closed schemes such as the mineworkers pension scheme?
I shall conclude my remarks shortly, because so many colleagues want to contribute to the debate, but before I do so, I must admit to a vested interest in this subject. My father and other members of my family will gain from any increases in miners' pensions. Like thousands of my constituents, they are proud people who never asked for or expected handouts from anyone, but they were prepared to fight long and hard—for most of their working lives, as it turned out—for what was deservedly and justly theirs. They knew that they had never been properly paid for the work that they undertook, and even now they feel that they have not been justly compensated for the injury and disease that blight the lives of many of them. What really rankles with them, however, is that they have been short-changed and that their money has, in effect, been stolen from them.
What makes the situation even worse is the fact that a Labour Government have chosen to carry on with this legalised but grossly immoral raid on the funds. The Government have taken about £400 million a year at the same time as some miners are being paid a pension of less than a fiver a week. As hon. Members know, there are taxi drivers in London who would look down their noses at a fiver tip, never mind a fiver pension. I therefore say to my hon. Friend the Minister that it is time to stop patronising these proud people and to give them back their money.
Several hon. Members rose—
Mr. Deputy Speaker: I remind hon. Members that it is the normal custom to start the first of the three Front-Bench winding-up speeches 30 minutes before the end of the debate, which means that other hon. Members have only until 10.30 to make their speeches. I see that nine hon. Members are seeking to catch my eye, so I counsel everyone to be brief and pertinent in their comments and to be circumspect about accepting, and indeed making, interventions.
9.41 am
Hywel Williams: I congratulate the hon. Member for East Lothian (Anne Picking) on securing the debate. Many hon. Members have pressed to have
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this issue debated, including my hon. Friend the Member for East Carmarthen and Dinefwr (Adam Price), who would have been here had he not been in Committee.
As we know, and as I am sure we will hear this morning, the Government are claiming billions of pounds from the pension fund surplus as their own. Plaid Cymru and the Scottish National party believe that that is wrong and that the money is not the Government's. A substantial part of it should go towards improving benefits for former miners and their families, many of whom make do with low incomes. The miner's pension is not some extra benefit—it is not like a Treasury windfall. Some former miners, particularly those of the older generation, are in real need. The Government acknowledge that fact, as evidenced by the very welcome but modest bonuses targeted at that group.
Now that the stock market is down—it may be only for the short term—the Government are saying to miners, "We are the guarantors, but you will largely pay for any deficit before we touch our share." As Bleddyn Hancock of NACODS succinctly put it,
"Blair and Brown are plundering our tomorrows to prop up New Labour's today".
It is a cruel irony that compensation payments for emphysema and chronic bronchitis had to be dragged out of the Government in the courts when we have a ready means of defraying the cost in the form of the miners' own money.
The 50:50 split is lawful, but it is historically unfair given the low level of risk that the Government have carried and the potential for further improving the benefits paid particularly to miners on the lowest incomes. As we know, the asset liability study says that the proper proportion should be 85:15.
The Minister for Energy and Construction (Mr. Brian Wilson): I am interested in the hon. Gentleman's reference to NACODS South Wales. The vast majority of people who deal with respiratory and vibration white finger claims deeply regret that it undertook its legal action, given the resulting complexity and the fact that claims cannot be dealt with as part of a scheme. Everyone present will regret the stunt that NACODS South Wales performed in going to judicial review, because it has put discussions on hold for the past year or more. As the hon. Gentleman seems to agree with the general thrust of the remarks made by my hon. Friend the Member for East Lothian (Anne Picking), will he join her in condemning the sect known as NACODS South Wales for having undertaken its legal action?
Hywel Williams: As the hon. Member for East Lothian said, the action has now been withdrawn. The real issue is access to the moneys in the surplus. Whatever the technical arguments about the surplus—
Mr. Wilson: Will the hon. Gentleman give way?
Hywel Williams: No, I will not give way. I have been asked to be circumspect about interventions, and I certainly think that I should be, given that other hon. Members are waiting to speak.

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Notwithstanding the technical arguments about the surplus, the Government have a debt of honour. There is money available that could give retired miners and their families a better life. There is money that could revitalise coalfield communities. Money is being withheld—in the name of prudence, we are told, and because the surplus is the proper recompense to the Government for acting as a guarantor. It is being withheld as the Government's reward for carrying the risk, but it is not the Government who have carried the risks of the mining industry. The miners and their families carried the risks during the years of their employment, and they continue to carry those risks during the years of their retirement. They risked their lives to win the coal; they risked their health to win the coal; they risked early widowhood to win the coal; they risked a later life devoted to caring for men struck down by dust, emphysema, and chronic bronchitis. They risked a later life disabled by vibration white finger and all the other hidden and not-so-hidden health inequalities of life in mining communities.
Miners and their families risked all that to win the coal, and they are now beset by unemployment, hidden unemployment, make-work schemes, out-migration and mass ill health. They faced all those risks, and now they are at risk of losing what should rightfully be theirs if justice has a home in this House. The Government's risk is nothing compared to those risks carried for so long by the miners, their families and their communities. The least that they deserve is for officials to lift their noses from their ledgers and honour the debt. The miners should benefit from the surplus, not the Government; not the players of the stock markets; not the prosperous men who praised and patronised the miners, then damned them when they went on strike. The new Labour Government should recognise their debt to the miners; they should renegotiate the proportion taken now. The Government should do their duty, and it will be to their eternal shame if they do not.
9.47 am
Diana Organ: I thank my hon. Friend the Member for East Lothian for securing the debate, which has already been timetabled a couple of times. We wished to have the debate because it raises an issue of concern to many of us from mining or old mining constituencies. I wish to use the opportunity to raise again with the Minister cases that I raised with him in September and November 2002.
The Labour Government have given compensation to miners for ill health, for vibration white finger, and for respiratory diseases. The Government have given millions of pounds to those affected, and they were right to do so. The Government also examined miners pension schemes and on 17 January 2002 announced that compensation would be given to members of the miners pension scheme who had a small—in fact, paltry—pension. Compensation of between £200 and £2,000 was given to those ex-miners. The Treasury allocated a fund of £90 million for that scheme, to be used between 2002 and June 2003. The package was aimed at helping those members on the lowest pensions who left British Coal before or shortly after 1975. It was expected that about 66,000 members would benefit from that funding.
In the Forest of Dean, which once had a coalfield, 57 ex-miners have benefited from the compensation, to the tune of £75,000. As recent records of parliamentary
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questions have shown, £57,000 has been allocated only on the basis of those who have been identified by Paymaster as being eligible for compensation. The problem lies with the criteria that are set down in order to receive compensation. Miners had to have five years of retained benefits from 3 April 1961. Service before that date was not counted for the award because it was thought that most members had taken a refund of contribution with respect to that service, although service before 1961 is counted in the cases of those who chose not to exercise that option and get the contributory refund. Individuals also had to be in receipt of a low pension, or entitled to one, when they reached normal retirement age, that was not more than £5 a week after five years or £10 a week after 10 or more years' service. As my hon. Friend the Member for East Lothian pointed out, that is not a big pension. Many people would describe that as loose change in their pocket.
I come now to the case of the 11 ex-miners in the Forest of Dean, which I have previously brought to the Minister's attention. The last deep coal pit in the Forest of Dean, which was Northern United, shut on 24 December 1965. Some 215 men were working there at that point, and when the scheme was announced, men were contacted to see whether they were eligible. As I said, 57 men in the Forest of Dean have received £75,000, but 11 men were not contacted. They visited me to ask why they were not receiving compensation while their neighbours and brothers were. I campaigned in the press to find out whether any more miners were not receiving compensation and then wrote to the Minister.
I found out that because the miners were made redundant in December 1965 or January 1966, they did not meet the five years' service criteria. They counted as having four years and nine months' service, even although some had service of nineteen years prior to that date. Paymaster, the agent for the Department of Trade and Industry, said that all of the miners had received contributions for their prior service. The miners may be old, but their memories are good, and they question that. They say that British Coal kept poor records that were often lost and sometimes burned. They do not believe that they received any compensation, and they are challenging Paymaster's records.
The miners have four years and nine months in the scheme, but they do not qualify. In a parliamentary answer, I was told that changing the criteria to four years and six months in the scheme would cost an extra £8 million to £10 million. However, of the £90 million that has been put aside for the compensation, I understand from recent parliamentary answers that only £60 million has so far been allocated to the miners. As we are coming to the end of the compensation scheme, we could use the £30 million surplus to reward the members of the scheme who do not quite meet the five years' service criteria.
At present, these old men are receiving between 58p and 65p extra in their pension. That is appalling, and I challenge anyone to think that that is proper compensation for the contribution that they made while they were miners. In the final months of the scheme, will the Minister take up their case and others like it? There cannot be more than a few thousand who would qualify, because we know that it is difficult to trace the men.

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We should do something for those whom we can trace and who are in hardship. We could alter the qualifying criteria to service of four years and nine or six months so that the few miners who are left receive some compensation from a Labour Government who have so far been generous in the compensation for ill health. We have tried to be right in compensation on pensions, so we should not be mean with the few miners that we can trace, especially as the Treasury has allocated money for the scheme that has not been used.
9.53 am
Mr. Roger Williams: I too congratulate the hon. Member for East Lothian (Anne Picking) on securing this debate, which is of great interest to my constituency as an old mining community. Mining no longer creates employment or generates wealth, but the community still suffers from the ravages of opencast mining, and there are historical effects in terms of poor health and a poor education system. The effects of mining continue for a long time.
I welcome the amount of money that has been invested in regeneration schemes, but it is not just the community but individuals who suffer the effects of mining. I am dealing with a number of miners' compensation claims for ill health, and they often tell me that their great sadness is that they may pass away before those claims are resolved. Their concern is that their widows and dependants should have a secure and enjoyable retirement and be taken care of as well. The pensions issue adds to the concern for those people.
Although I do not think that anyone here will query whether the Government are acting legally, the question is whether they are taking the best moral stance that they can with the resources that have been put into the miners pension fund by the miners themselves. Those were the miners' contributions. They made huge sacrifices while bringing up families and working underground.
Mention has been made of the scheme whereby miners who were on the flat-rate scheme before 1975 are given improved benefits. We all welcome that, but by gosh they are on very low pensions. One thing that astounded me when I became involved with these issues was that the pension that the average miner received from the fund was relatively small. Although such pensions make a big contribution to the quality of life that miners enjoy and give them added security in old age, they are not huge pensions by any means. I hope that the Government can look again at the actuarial advice that is being received; it should be updated regularly.
I shall really make only one point. The scheme is closed, and when it comes to an end and there are no liabilities for it to meet, it will be difficult to explain to the miners' families, as it will then be, that a large sum of money—greater than was prudent—was left in the scheme, because that money could have been used to ensure that miners and their widows had a reasonably secure and enjoyable retirement.
9.56 am
David Hamilton: I congratulate my good and hon. Friend the Member for East Lothian (Anne Picking) on bringing this extremely important
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issue to the Chamber. I am just trying to think whether I have ever tipped a taxi driver a fiver. I cannot think that I would have done that, unless I was really drunk and a long distance was involved.
I want to bring a personal perspective to the debate. Many parties are involved: central and local government, Members of Parliament who represent the remaining miners in many areas, the unions and the board members, who administer the pension scheme and over whose activities there is a big question mark. Major companies have benefited from the miners scheme over many years. One example involves the St. James's centre in Edinburgh. I have always tried to work out how Edinburgh is part of a mining area, but millions of pounds have been invested there. In the same way, if we look at infrastructure throughout the United Kingdom, we find that it has received major investment from the miners pension scheme.
Finally, there is the most important group—the men and women who contributed to the scheme. I started in the mines in 1965. I went down the pit on my 16th birthday—24 October 1966. At that time, we paid pennies to the pension fund. Indeed, it was not until 1975 that we started to pay about 6 per cent. It was only with great difficulty that the unions were able to convince our men, many of whose wages were extremely low, that it was in their best interests to pay that extremely high superannuation percentage. I believe that, at that time, my wages were about £14 a week, and I had a wife and two kids then. The pension contribution was a daunting figure for a young man at that time.
My hon. Friend the Member for East Lothian has said that we are now being asked by the Government to go into dual pensions because we must prepare ourselves for the future. If that is the case, the issue is coming back. I recall the two national strikes in the 1970s, following which we asked to pay contributions for the many weeks that we had been on strike. Many members did that over time.
I mentioned the massive investments in major infrastructure proposals, many of which are not in mining areas. Major investments were also made abroad. I seem to remember that substantial amounts of money were invested in South Africa, yet the miners at that time were at the forefront of the anti-apartheid movement. However, we could not argue that our representatives opposed the investments, and we were told that the money had to go there because the law required us to get the best return on our investment. I remember long, drawn-out arguments about that. The union was told that we could only challenge the legality and that we had to accept the situation. I think that we went to court and were beaten.
I am well aware of the Minister's personal commitment to assisting the mining industry. Vibration white finger and chronic bronchitis and emphysema are the two big issues at present. I must point out, as I have done on a number of other occasions, that the Labour party was the first party in government to recognise those industrial injuries. However, that does not mean that the miners should pay for their own compensation, which is effectively what is happening. I note that my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) tabled early-day motion 744, which referred to £3.5 billion being taken from the

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miners scheme surplus. It is important to recognise that there are ongoing campaigns on many issues to right wrongs that have been around for many years.
I want to make one observation. There are two sides to the argument about the miners pension scheme and the British Coal staff superannuation scheme. The people whom Plaid Cymru represented earlier are at the top end of that pension scheme, and their argument was about the maximum amount of the pension—there is a ceiling on that. There are people in the superannuation scheme, including NACODS management and white-collar workers, with an upper limit beyond which their pension cannot rise.
The National Audit Office reports that, since members' benefits cannot be enhanced beyond the limit set by the Inland Revenue rules, the schemes particular to BCSSS may be increasingly constrained in later years, which will affect further benefit improvements and future surpluses. That may increase the residual surpluses that are potentially available to the Government. In fact, that means that more money is being taken out—that is what that argument is about.
As I said, however, there are two sides to the argument. People on the bottom of the scale are not receiving enough money, while others are limited by the amount of pension that they can receive. I am particularly concerned by one part of the Audit Commission's assessment, which is that any residual surplus will eventually be available to the Government when the schemes are wound up. I hope that that will not be the case, and that when the schemes are wound up money will still be ploughed into the system for miners and their families.
Yesterday, I picked up from the Library a report called, "The Miners pension scheme surplus". It has headings about the arrangements at the time of privatisation, payments for surpluses, the Coalfield Communities Campaign report, which details the lack of investment in the coalfield areas, and the Government's response, which is in three parts: sacked miners, low pensions and the review of the guaranteed arrangements, and the progress of that review. One part of the report which people might expect me to raise in discussions with the Minister is that relating to victimised miners. That has been a long-running issue, and I hope that money will come out of the miners pension fund for the more than 300 miners who were wrongly dismissed during the unfortunate dispute in 1983–84. That would provide a remedy with which to go forward.
My hon. Friend the Member for Forest of Dean (Diana Organ) mentioned her area. I accept her point, but we were paying only pennies into pensions at that time, and that is where the problem lies. Thousands of miners in Scotland are also affected, so I would appreciate it if the Minister reviewed the wider issue of people who were missed out because of the dates involved. Not all those people are old—some left the industry at a relatively young age. The industry had a fluid work force, and thousands of people did not finish their working life in mining but worked in mining for 10, 15 or 20 years before moving to other jobs.
I look forward to the Minister's response. I congratulate the Government on some of the work that has been done, but a wrong must be righted.
10.4 am
Mr. John Grogan: It gives me great pleasure to take part in this debate. I, too, congratulate my hon. Friend the Member for East Lothian (Anne Picking) on presenting the case with such passion and commitment, which have been reflected in the rest of the debate. I could give a few figures, but I shall not in case my hon. Friend accuses me of being an anorak. Instead, I shall make three brief points.
First, the Coalfields Community Campaign has been mentioned only once. It is worth recording that it has campaigned on this issue for nearly a decade, and it has made a big contribution by briefing MPs who represent mining constituencies and allowing them to explore the issue.
My hon. Friend was right when she said that it is immoral for anybody other than miners and their dependants to benefit from their pension contributions. Those of us who argue for change must be clear about what we are arguing for. There has been a tendency not only to argue for justice for those who contribute to pension funds but to imply that the miners' contributions should be used to revitalise coalfield communities. People who contribute to the mineworkers pension scheme and the British Coal staff superannuation scheme feel that as much money as possible from their contributions should go towards their benefits. They do not like the idea of their pension fund money being used as a revitalisation tool for coalfield or any other communities.
The amount of money that should go towards coalfield regeneration is a separate matter from the distribution of the miners pension fund surpluses. That has been reflected latterly in the Coalfield Communities Campaign literature. It is an important change, because miners, their families and former contributors feel strongly that the money is for miners and their families and should not be used to revitalise the communities. The Government have a good record in funding work such as that of the Coalfields Regeneration Trust.
Secondly, it is important not to throw the baby out with the bathwater. The guarantee is important to miners and their families and to pensioners, and it needs to be maintained. We should look back to privatisation, when the trustees of the two pension schemes
"reached agreement with Her Majesty's Government whereby the Schemes were given HMG solvency guarantees that ensured that pension entitlements at privatisation would rise at least in line with inflation, and will never fall in cash terms regardless of investment performance."
That is a guarantee worth having. I agree with all my hon. Friends that its terms favour the Government, but it must be maintained. It is the ambition of the trustees of the two pension schemes to extend that guarantee from the core pension to some of the additional benefits that the Government have agreed to. With falling stock markets and all the things that have happened to other pension schemes, we must not lose that guarantee to give inflationary increases and never to let pensions fall in cash terms.
My hon. Friend the Member for East Lothian and I urge the Minister to review the split with greater urgency. I acknowledge that the legal action has delayed some of the discussions. A year ago the Government announced that while both the Department and the

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trustees continued to stand by the 50:50 sharing arrangements, they recognised that circumstances had changed since 1994, and agreed to explore options for reflecting the revisions to the 1994 arrangements. Since then, it has been suggested that the MPS and BCSSS make an annual payment to secure the guarantee, and do something other than split the surpluses 50:50. Such things need to be considered. Given that, after many years of complaints the Government have recognised that it is worth having discussions, those should take place urgently.
My third and final point concerns an anomaly that affects areas that still have working mines. At the time of privatisation, members of the BCSSS—the pit deputies—were guaranteed a pension at 50 if they were made redundant. The members of the MPS were not given that guarantee. That has created much resentment in the remaining coalfields.
As the remaining mines close—Selby is due to close next year so it is an immediate issue, but others will close in 10 to 20 years—MPS members will not get a full pension at 50 if they are made redundant, but the pit deputies who work alongside them will. That is a source of resentment and I have discussed with the Minister how the matter could be dealt with. The actuarial estimate is that it would cost £99 million to give MPS members the same rights as BCSSS members, which is perhaps one use of the surpluses. The Government could arrange that through British Coal, which still exists.
There was a contractual redundancy arrangement between British Coal and the two sets of trustees at the time of privatisation. I am not sure who at present is the chairman of British Coal; perhaps it is one of the gentlemen at the margins of the debate. It is usually handed round between different civil servants in the Department. There is also a mechanism to deal with British Coal's remaining liabilities, which could be used to put things right and give MPS members the same rights as BCSSS members.
We have heard tales today about people who have worked in the mines for a long time; at the age of 50, anyone who has been a miner for 30 or 35 years is ready for retirement. Indeed, in some European countries, miners are offered retirement at 50. I urge the Minister to make discussions on the split a priority in the next 12 months.
10.11 am
Rachel Squire: I pay tribute to the efforts of my hon. Friend the Member for East Lothian (Anne Picking) to secure this important debate, and I congratulate her on her excellent contribution to it.
My hon. Friend the Member for Selby (Mr. Grogan) spoke about an earlier retirement age for MPS members and current miners as a way of using the funds. My constituents in Dunfermline and west Fife, especially former miners, regularly raise the issue with me. They may have different views on how the surplus could best be spent, but they are unanimous in believing that less should go to the Treasury and more should come to miners, pensioners and their families in coalfield communities.
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Like many of my constituents, I recognise the importance of the Government's guarantee on the benefits payable by the MPS and the BCSSS. In common with my hon. Friend the Member for Forest of Dean (Diana Organ), I welcomed the Government's decision last year to use some of their share of the surplus to pay one-off lump sums to pensioners on low incomes from the MPS, at a cost of £90 million. I support what my hon. Friend said about the injustice still suffered by many of the poorest pensioners in the MPS scheme, and I listened with interest when she said that the allocated surplus had not yet all been used.
Current market conditions mean that this is not the best time to persuade the Government to reduce their share of the surplus, as the Minister indicated in March. However, this welcome debate gives Members representing coalfield communities an opportunity to put down markers for future action. I will concentrate on the call to look not only at the MPS and the BPSSS but at the schemes that replaced them in 1994. The industry-wide pension scheme is relevant to those who stayed in the industry after 1994 and did their utmost to secure a future for the industry.
The industry is shrinking and so are the employer contributions to those pension funds. The Minister knows that Longannet, the last deep mine in Scotland, finally closed last year, despite all the efforts to keep it open. The company, Deep Mining Scotland, went into liquidation. To my knowledge, Scottish Coal, the parent company, is in deficit with its pension contributions. That is of great concern to me, to the National Union of Mineworkers Scotland and to current and future pensioners, because people's pension entitlement is being put at risk, and because the closure of other coalfields is in the offing.
I therefore call on the DTI and the Treasury to consider the whole picture of current pension provision for miners who have already retired or who are looking to retire in the near future. I ask them to consider underwriting the guarantee, perhaps through a standstill for the IWPS, and to agree to look again at the issue of the miners pension fund surpluses. I urge them to take account of the conviction of my constituents and many thousands of others that a greater share should be given to the men, women and their families who worked so hard and endured so much, and who deserve a decent retirement income.
10.16 am
Mr. Michael Clapham: I add my congratulations to my hon. Friend the Member for East Lothian (Anne Picking) on securing the debate. It is particularly important to my area of south Yorkshire, which has a large population of former miners.
Before I make my two main points, I should declare an interest. I am a member of the MPS and the sponsor of early-day motion 744, which was tabled on 13 February 2003. I also work closely with the Coalfield Communities Campaign.
My first point relates to the guarantee and my second to the historical surpluses. In 1994, I was a member of the Committee that examined the coal industry privatisation Bill. I recall that there were robust exchanges about the MPS and about the Coal Industry

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Social Welfare Organisation. I realise that at the time the trustees of the MPS had to be guided by the actuarial evidence, and on the basis of that evidence they accepted the guarantee and the 50:50 split. However, I believe that the actuaries who gave the advice were overcautious, and that the split should have been different when the guarantee was introduced. As a result of the asset liability study, it has been suggested that that split should be reviewed downwards, perhaps to 15 per cent., so that there is a 15:85 split, with 85 per cent. of the surplus left in the scheme, and the Government taking 15 per cent. I believe that that is a much fairer split, and I hope that the Minister will consider it.
I know that the Minister has a great feeling for mining communities. I worked with him on the monitoring group that examined the compensation paid to miners, and I know that he endeavours to ensure that compensation payments are made speedily. He looks with compassion at some of the cases that come forward and I believe that he will consider the issue objectively. I hope that, given the asset liability study, he can be persuaded to move towards a 15:85 split.
However, that still leaves us with the historical liability. Historical surpluses are estimated by the CCC to stand at somewhere in the region of £3.5 billion. The Government could take that sum from the reserve fund, but I ask that they reconsider their position. In 1998, I wrote to the Treasury about the repatriation of the funds to the scheme, but the response suggested that the funds could not be repatriated. The CCC argued that if the moneys could not be repatriated, they should go to mining communities. There has been a change of view since then. I would say to the Minister that giving back the surplus of £3.5 billion to the miners would not be repatriation—they paid into the scheme and would be justified in receiving it. It would be in the nature of an amended payment for an over-cautious assessment by the actuaries in 1994. I hope that the Minister will take that on board, and that the £3.5 billion will be left in the scheme.
The Minister will be aware that the principal sum in the scheme has fallen considerably as a result of changes in the stock market. I understand that during the past two years it has fallen from roughly £14.5 billion to about £9.4 billion. However, over the same period the number of beneficiaries has fallen considerably. When the scheme was first introduced in 1994, it had about 380,000 beneficiaries. That number has been declining at about 1,000 a month, so there are now fewer beneficiaries and a considerable amount of money available to pay them a decent pension. It has already been made clear that, according to CCC research, the average pension is about £38 per week
First, I ask the Minister to accept that there should be a downward review of the Government take, along the lines of the asset liability study recommendation of a 15:85 split. Secondly, given that the average pension is small, he should consider treating the £3.5 billion not as repatriation but as an amended payment to the scheme.
Mr. Deputy Speaker: I would like to record my commendation and sincere thanks to all hon. Members participating in the debate for the positive and constructive way in which they responded to my opening appeal. I am sure that all Front Bench speakers, even though they may disagree on the detail, agree that
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the subject has been well covered without exposing the full range of problems with which we are faced. I am highly pleased.
10.23 am
Paul Holmes: I add my congratulations to those already expressed to the hon. Member for East Lothian (Anne Picking) on securing this important and much delayed—and, in recent weeks, much rearranged—debate. It is important to some thousands of my constituents in Chesterfield, because the north Derbyshire coalfield no longer has working pits. The last pits were closed wholesale by the Conservative Government in the 1990s, which had a devastating effect not only on employment in the area, which still remains below the national average, but on the social infrastructure.
I was fortunate to be taken down Markham pit by Chesterfield miners a year before its closure. Even if they make only one visit, as I did, all those who experience the awful conditions in which miners had to work know what a debt we owe former mineworkers. That is all the more reason why we should not treat them shabbily in terms of pensions. One of the biggest workloads that I have to deal with in my weekly surgeries—matched only by Child Support Agency cases—is to do with compensation and pensions for miners.
At the risk of being considered an anorak, I will sum up some of the figures involved. We have heard some of them already. The 1994 guarantee for miners' pensions to members of the MPS and the BCSSS was that the Government would take 50 per cent. of all surpluses, but would guarantee the pension scheme in return. Currently, some £5 billion is due to the Treasury: it has already taken £1.5 billion, and £3.5 billion remains in the funds. At the current rate, the Treasury is taking almost £400 million a year in surpluses.
The Minister may well argue that the scheme is already very good and very generous, and the pension is guaranteed. As we debated on the Floor of the House only last week, many pensioners would give their right arm to be in a pension scheme that was guaranteed. Last week, we heard about some of my constituents from Chesterfield Cylinders who, after paying into their company pension scheme for 40 years lives to provide for their retirement, discovered in 2001 that as a result of failures in their scheme, they were to receive as little as 30 per cent. or even less of what they had saved. In 2002, the same thing happened to workers at Dema Glass in my constituency, and in recent weeks, Coalite Products Ltd has gone into receivership, and several more of my constituents are encountering the same problem. Hon. Members gave many other examples of that problem hitting firms throughout the country—Allied Steel and Wire in Cardiff is one example.
There was a well publicised protest march on Sunday. After a lifetime of saving, workers in companies throughout the country are receiving only 30 or 40 per cent., or even less, of what they believed they were saving for in their retirement. I am sure that they would envy the sort of guaranteed scheme that the Government are providing for mineworkers. However, I question any argument that the Minister might advance that the Government are acting as a responsible pensions provider in guaranteeing the MPS, and that therefore

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the Treasury is justified in plundering the very large fund surpluses to the tune of a massive £5 billion. As we already heard, the independent asset and liability study found that a more realistic price for the guarantee should be about 15 per cent. of the surpluses, not the 50 per cent. that the Treasury is taking. The remaining 85 per cent. should be returned to the mineworker pensioners.
As the hon. Member for East Lothian explained, the Government acted as a responsible pensions provider by allowing back into the Government scheme miners who had been misled by pensions mis-selling into transferring out of the miners' scheme into inferior private funds, but again I reject that as an argument for justifying the Treasury taking £5 billion of surpluses from the scheme. All the Government are doing in the two cases that we discussed is acting as a responsible pensions provider. They should expect all pensions providers to do the same.
We have heard much about the mis-selling of pensions in debates in the House. Mineworkers were especially prone to such mis-selling when sharks from some of the private sector pension schemes persuaded them to opt out of a very good scheme into much inferior ones. That also happened to many teachers 10 or more years ago. The Government must tackle such mis-selling if their current policy of encouraging workers to opt into private pension schemes to provide for their old age is not to be fatally undermined. That is a key issue, albeit not in today's debate.
The Government should renegotiate with the trustees, bearing in mind the independent asset and liability study that suggests a split of 85 per cent. and 15 per cent. That would improve miners' pensions. Several hon. Members—some favourably, but one with a note of caution—touched on what else should be done with the surpluses, however big they are in the end. We heard about the need to revitalise coalfield communities in a debate on the subject only a few days ago. Coalfield communities tended to be focused on single or dual industries—coal mines and the engineering works linked to them—as in the Chesterfield and north Derbyshire area. When the mines were closed wholesale, that had an enormous knock-on effect on the support industries in the engineering sector, and most coalfield communities, including Chesterfield, still tend to have above average levels of unemployment.
The Government have some good regeneration schemes, but there is still a crying need for capital investment into former coalfield communities to reinvigorate their economies and allow them to move into new areas and away from the dual industry culture of mining and engineering. One example of that investment is infrastructure, not so much in terms of roads, although many key roads need to be moved from old coalfields into population centres and industrial estates, but in terms of a simple measure such as broadband access. If we want to introduce the benefits of broadband and the new information technologies industries into former coal mining communities, we need to introduce broadband. There are some successful examples of that in Chesterfield.
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It was always said that the infrastructure of coal mining areas was locked up in the deep pits underground. Once the pits are closed, flooded and filled in, that infrastructure is gone. The extra Government investment that is needed to provide new infrastructure will obviously cost money. Even if the Government reduce the surpluses that they take from the miners' pension fund to benefit pensioners, remaining surpluses should be directed into extra regeneration funds for deprived coalfield community areas.
Finally, will the Minister comment on the £90 million made available by the DTI to pay lump sums to those on low pensions? I understand that, until recently, only £57 million of that £90 million had been allocated.
10.31 am
Mr. Henry Bellingham: I will be brief because we obviously want to hear from the Minister. A lot of technical points have been raised, and many Members have a deep interest in the subject. I congratulate the hon. Member for East Lothian (Anne Picking) on securing the debate and on the great knowledge and passion that she showed in her speech. It has been an excellent short debate, with an impressive range of expertise and experience in evidence.
I was in the House in 1994 when the new arrangements were agreed. I was particularly interested to hear what the hon. Member for Barnsley, West and Penistone (Mr. Clapham) had to say, as he was on the Standing Committee that considered the legislation. On Second Reading, there was a feeling on both sides of the House that the arrangements were fair to everyone, and several hon. Members said that having a guarantee in place was an immensely valuable aspect of the new scheme.
Mr. Clapham: In hindsight, does the hon. Gentleman agree that the 50:50 split agreed in 1994 was overcautious?
Mr. Bellingham: Yes. The evidence bears that out, but given the possibility of difficult markets in the future, no one could have anticipated how strong the stock market would be, how well the fund would do or how the historical surpluses would build up. I did not sit on the Committee or speak in the Second Reading debate, but I listened to some of it and remember the then Minister listening to the argument on the 50:50 split and concluding that caution was needed. However, he said that future Governments could always re-examine the point. I have a few suggestions on how the current Government could be more flexible and go some of the way towards meeting the hon. Gentleman's demands.
The point that was made about the huge historical surplus of £3.5 billion is important. Will the Minister say how much extra income would be brought in and what impact it would have on the average pension if that money was repatriated to the scheme? That would seem a logical step to take.
There has been a lot of talk about the need for flexibility. The Government profit substantially from the split, although they have, of course, put several schemes in place, and extra money has gone into coalfield communities. As the hon. Member for East Lothian (Anne Picking) noted, that money is welcome,

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although some miners and their families want it in their pockets and see a big difference between the money that goes to them, which has been saved for, and the money that goes towards helping the wider community. In addition, the Opposition congratulate the Government on what they have done to enable miners who opted out into private schemes to opt back in, and we welcome some of the other schemes that they have put in place. None the less, there needs to be as much flexibility as possible, given the amount of money that is around.
The hon. Member for Forest of Dean (Diana Organ) clearly and succinctly noted that a small number of miners in her constituency are still arguing about one anomaly. It is extraordinary that those men, who are obviously very old now, are losing out because of a bureaucratic rule. Given that only £60 million of the £90 million made available to top up very small pensions has been spent, such problems could easily be solved. In the case of the hon. Lady's constituents, that would cost very little. Will the Minister say what the cost would be?
The hon. Member for Selby (Mr. Grogan) explained that MPS members were disadvantaged vis-à-vis BCSSS members. That is obviously a substantial anomaly that will affect those working at the remaining large pits in the event of their being closed. Given that the Government are awash with money from the surplus that they are making, they could easily find the resources to deal with the problem. Perhaps the Minister can comment on that. If the Government show real flexibility in dealing with such anomalies, there will be less concern about how the scheme is being administered.
As several hon. Members have said, the scheme is finite. As the number of beneficiaries declines, the guarantee should become more solid, despite the fact that the size of the fund has decreased because of falling markets. The smaller the number of beneficiaries, the more solid the guarantee and the more secure the Government can be in the knowledge that they will never be called on to back it up. There must therefore be an argument for the Government to be a little more generous, as many hon. Members want them to be.
In the 1997 Budget, the Government took £5 billion extra from pension funds as a result of the removal of advance corporation tax relief. We have calculated that that costs the miners pension fund more than £30 million a year, and the cumulative total is now £180 million, which is a substantial amount. The Government should therefore consider changing the split by roughly 10 per cent., which is not a great deal. Perhaps the Minister could explain to colleagues in the Treasury that they have secured £5 billion a year from pension funds. The amount that they are getting from the mineworkers pension fund is only £30 million a year, although perhaps the Minister can say whether my figures are correct. I am sure that his officials have the exact figure, which may be slightly higher. None the less, we are still talking about a combined figure of £180 million.
One message that comes from this debate is that the Government should look urgently at addressing all the points that have been made. They should consider allowing much more flexibility. Instead of a change in the split, they could acknowledge their take resulting
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from the 1997 changes to pension fund taxation and ensure that money goes back into the hands of the families who need it so badly.
When the scheme comes to an end, the Government will have a very large surplus. Are they simply going to pocket that money, or will part of it go to the communities? Would it not be better to look at the state of the guarantee that the Government have given and the likelihood of that guarantee ever being called in? In the next five to 10 years, many families will be even more in need of help and of cash. There must be other ways to ensure that extra money from what we know will be a very substantial sum—relative to the number of potential beneficiaries—will benefit those in need. Particular consideration should be given to widows and families of miners who have given so much over the years and received so little. I hope that the Minister will answer all the points raised by hon. Members.
10.41 am
The Minister for Energy and Construction (Mr. Brian Wilson): I add my congratulations to my hon. Friend the Member for East Lothian (Anne Picking) on securing the debate. The number and quality of contributions have illustrated the knowledge about the subject and the concerns that it gives rise to. As some of the more sophisticated contributions to the debate have recognised, the issue is rather more complicated than a simple 50:50 split, with the Government cast as plunderers.
My hon. Friend the Member for Dunfermline, West (Rachel Squire) said that she often had constituents come to her to muse over what should be done with the surplus. At present, that would be a very brief conversation because there are no surpluses, only very substantial deficits. That is the other side of the coin, on which my hon. Friends have been understandably less anxious to concentrate.
I welcome the debate, which has raised many interesting issues to explore. Everything that has been said will be looked at very carefully, including contributions from the Opposition parties. It is an ironic time for the debate to take place, because at almost any other time since 1994 the case would have been more one-sided. At present, however, the guarantee is working very strongly to the advantage of members of the pension scheme. As the Liberal spokesman, the hon. Member for Chesterfield (Paul Holmes), pointed out, all around us there is confusion and dismay about the security of pension funds, but the miners have a guarantee, for which they have paid through the 50:50 arrangement.
Before I embark on my formal text, I will deal with the point about an 85:15 split. Even three years ago, that was at the far end of the scale of estimates. Much has changed in the stock market and other investments in the course of those three years. The 85:15 proposal is off the radar screen in current circumstances.
The Opposition spokesman, the hon. Member for North-West Norfolk (Mr. Bellingham), made the most magnanimous proposal towards the miners ever to come from a Tory spokesman. He suggested giving them £3.5 billion—a distribution of alms from the munificent Tories. The £3.5 billion does not have to be distributed because that figure is already reducing very substantially owing to the circumstances that I have described.

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I will respond as part of a general debate about the pension fund arrangements. We can all use the debate as a helpful starting point. What is really important is to get back into the discussions with the trustees of the fund, which were rudely interrupted by the sect that calls itself NACODS South Wales. If ever there was an example of why politically motivated people should not use the interests of trade union members as a front for their political ambitions, it was the action of those people, including what they did over the respiratory disease and VWF schemes. Never has an organisation with so few members caused so much mischief to so many. If the hon. Member for Caernarfon (Hywel Williams) wants to take that message back to his party colleague in south Wales, he is welcome to do so.
The current pension arrangements in the coal sector were put in place at the time of privatisation of the industry in 1994. This is where the contribution of my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) is useful. The figure was not plucked from the air, even by a Government of the political hue of the time; it was based on actuarial advice.
I come from a slightly different historical perspective, because I remember serving on the Committee that considered what became the Railways Act 1993, when the Tories proposed something much more outrageous than they did in the context of the coal industry. In fact, if I remember rightly, what we pleaded for and eventually secured in the Railways Bill was a deal comparable to what was done in the coal industry, rather than the much more extreme formula that the Tories proposed.
There was a different perspective on the matter in 1994, and even if the figure was based on small-c conservative actuarial advice, it was based on actuarial advice, to which everyone had to sign up. In return for a safeguard, the trustees freely entered into an arrangement whereby any future valuation surplus would be split 50:50 between beneficiaries and Government. In providing that guarantee to the two schemes, the Government accepted a pretty massive contingent pension liability, which has been valued at £16 billion. The other side of the coin was that, even if there was no return on investment or there was a deficit in the scheme, as at present, miners' pensions, as at privatisation, would always rise in line with inflation and would never fall in cash terms.
No one has mentioned today that that guarantee has not only been met but comfortably exceeded since 1994. The current arrangements have yielded bonus increases on guaranteed benefits totalling about 30 per cent. since 1994, which is a significant increase in such a relatively short time. Those bonus increases are separate from, and additional to, the inflation-linked increases that are applied to pensions each year to maintain their real values. By any objective analysis of what has happened, the guarantee has worked effectively for members of the scheme. I understand all the concerns about where the other 50 per cent. went, but it should be acknowledged that if the guarantee had not been in place, it would not have been possible for the trustees to make the high-risk, high-return investments that have led to the bonuses being paid.
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I return to my original point: the situation is much more complex and much less one-sided than some caricatures of how the Government have acted might suggest. Recent events in the financial world have further vindicated the conclusion that the decision taken in 1994 to give the two British Coal pension schemes Government guarantees represented a good deal for the scheme members.
At the same time—I return to the point about getting back into discussions with the trustees—I certainly agree that it is sensible to recognise that there have been changes since 1994. Indeed, it was for that reason that the trustees of the two schemes and I announced in January 2002 a wish to review how those changes might best be reflected in revisions to the 1994 arrangements, subject to ensuring an equitable sharing of risks and rewards and that any revisions were sufficiently robust to operate satisfactorily in a wide variety of conditions.
Mr. Clapham: The Minister may be aware that the administrators of the pension scheme and two trustees visited three weeks ago and informed us that they would be meeting, as NACODS South Wales had withdrawn the application for judicial review. Will the hon. Gentleman be the primary Minister who will meet the trustees to consider the future?
Mr. Wilson: I imagine that as Minister for Energy and Construction I would be the appropriate Minister to meet the trustees.
Mr. Clapham: Will there be a Treasury Minister as well?
Mr. Wilson: We could go arm in arm to meet them. I will meet the trustees when I am asked to do so. They understand the interrelationship with the Treasury; it would make sense for the trustees to talk to both Departments.
As I said, everything that has happened in recent years has underlined the benefits of the scheme, but there have been changes since 1994. We want to return to the discussions, which, as my hon. Friend said, were so rudely interrupted. We agreed to have further discussions with the trustees to consider different methods of paying for the guarantee and to explore the scope to extend the guarantee to cover the bonuses already awarded to members that the current arrangements have generated. It was necessary to put the discussions on hold while the Government responded to a judicial review instigated by NACODS South Wales. I am pleased that it has been formally withdrawn and we will resume our discussions with the trustees.
In the meantime the Government and the trustees have agreed a package of improvements that offer real benefits to the schemes' members. They include making clear the rules on standstill—the total pension payable is protected in cash terms if the schemes go into deficit—which will apply to all members, including those not yet in receipt of their pension. We have agreed to the schemes purchasing guaranteed benefits on an ad hoc basis to purchase early retirement benefits. We have also agreed to discuss extending the lifetime of the investment reserve beyond the 25 years agreed in 1994.

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That is both an asset within each fund to generate future returns for pensioners and the first line of Government funding in times of deficit.
As part of the 1994 arrangements, a secondary guarantee was given, referred to as standstill. That arrangement ensures that total pensions—guaranteed benefits plus bonus—will never fall in cash terms even if there are not enough assets in the bonus augmentation fund to cover its liabilities. I understand that the trustees of the schemes may be able to protect members from the full effect of standstill if the deficit is not too large following the next valuation.
Several hon. Members referred to the low pension scheme. I find it astonishing that pension schemes of any worth in the mining industry date only from the 1970s. Before that, pensions were pitiful and derisory. It is stunning how badly people were treated. With that in mind, in January 2002 I announced the scheme for one-off lump sum payments to members of the mineworkers' pension scheme on the lowest pensions. That scheme has been a great success; to date almost £60 million has been paid to about 44,000 members. The figure is £60 million out of £90 million because many people have still to be traced before we can respond to their claims. We are actively searching for the addresses of members who are eligible under the schemes.
My hon. Friend the Member for Forest of Dean (Diana Organ) has again written to me and I am willing to consider what she says. However, if six months is knocked off the criterion it will include not only the 11 people in the Forest of Dean constituency to whom I would love to write a cheque but others throughout the country who are in the same position. If the line is changed, somebody else will be just on the other side of it. It is not simply a matter of changing the threshold from five years to four years six months, but I promise to evaluate the proposal and to respond to my hon. Friend as sympathetically as possible.
Diana Organ: The Minister rightly says that £60 million has been spent and that Paymaster and the Department are trying hard to trace the members who are eligible under the current criterion. Can he reassure me that when the endeavour to trace as many as possible of the eligible miners has been completed, he will look at what is left from the £90 million that has been set aside? The answer to my parliamentary question was that it would cost £8 million to £10 million to change the criterion to four years five months. If that much money was left, would he consider changing the criteria to include my 11 members from the Forest of Dean?
Mr. Wilson: I will do better than that. I undertake to consider the matters concurrently rather than consecutively, and to respond to my hon. Friend. I do not guarantee what the answer will be, but I promise to consider those points.
I wish to make a broader point relating to what my hon. Friend the Member for Midlothian (David Hamilton) said about the miners paying for their own
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compensation scheme. I vigorously refute that allegation. The issues are separate, and there is no read-across from them. I have made a plausible case. We can disagree about the balance of the split of the pension fund, but nobody disagrees that there is a quid pro quo: the guarantee in return for the 50 per cent. that is paid. That is absolutely separate from the ethical and political responsibility of Government to deal with health claims and other issues. There is no comparison between the figures that we are talking about and the pension fund—
Mr. Deputy Speaker: Order. I point out to the House that it is my responsibility to hear clearly what is said and to follow it in every detail. It might help if remarks were addressed toward me rather than away from me.
Mr. Wilson: I apologise, Mr. Deputy Speaker. This is a difficult place in which to observe both courtesies at the same time.
I reiterate my point strenuously: I am proud of what we have done about the legacy issues in the coal industry in the past year or two. None of the payments has been made out of the pension fund.
David Hamilton: I was referring to the impression that is being created in many people's eyes that, on the one hand, they receive compensation to which they are entitled, but on the other, the Government have taken money. I recognise the distinctions that have been made, but they are part of the explanation of a wider issue, as is the matter of Coal Industry Social Welfare Organisation, on which the Minister is also working hard.
Mr. Wilson: I accept that the perception might exist, but all of us have a responsibility to rebut it rather than to reinforce it. My hon. Friend referred to both the dismissed miners issue and to CISWO. I am pleased to say, on the dismissed miner issue, that the letters have started to go out. That is real progress and I shall write to hon. Members later today with more details. It is another piece of unfinished business that has been dealt with. Equally, I undertook in the Adjournment debate in March to look again at the current year's funding of CISWO. My hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) is to have a meeting with the Treasury; I do not think that he will be disappointed with the outcome.
We have dealt with the legacy issues on their merits, according to what is right and to our political and ethical responsibility towards the coalfield communities, not as any kind of read-across from the pension issue. We have had a good debate and I promise that the issues will be considered carefully. I want to get back into discussions with the trustees of the miners pension funds. All that has been said will be taken on board. It is also worth recognising that the guarantee has been delivered in circumstances in which miners would otherwise face much more uncertainty about the fate of their pensions, as do many other people.

National Institute for Medical Research
11 am
Mr. Andrew Dismore: I would like to bring to the attention of the Chamber a matter that is of great concern to all of us interested in biomedical research in the United Kingdom: the future of the National Institute for Medical Research. My constituency is home to this world-renowned institute, which is based at Mill Hill in north London. It is run by the Medical Research Council and is the largest of its institutes. The NIMR is a major employer in my constituency, with more than 700 staff, many of whom live in Hendon. I am not a scientist—my highest achievement was grade five in O-level physics many years ago—but I do not need to be one to recognise that the NIMR has a most distinguished scientific history. It has produced no fewer than five Nobel prize winners, and many discoveries of fundamental importance.
Research at the NIMR addresses many key areas of medical research. The institute has an outstanding international reputation, and the quality of its research has been repeatedly recognised, not only by the MRC, but by the scientific community worldwide. NIMR discoveries have been wide-ranging, and include breakthroughs in infectious diseases, genetics and neuroscience. Its scientists have made important discoveries about the atomic structures of biological molecules and about how we develop from embryos to adults.
The size of the NIMR and the range of its research encourage experts from many different disciplines to work together. Its staff include scientists trained in mathematics, physics and chemistry, as well as in biology and medicine. Scientific equipment is very expensive, and at the NIMR, all the experimental facilities are shared, promoting cost-effective and efficient use of those resources. Current research at the institute, led by its distinguished director, Sir John Skehel, is an excellent example of how modern biomedical research is evolving to meet the challenges of 21st-century medical needs.
Internationally, the NIMR's research has an important impact on problems in the developing world. The institute is a key centre for research into major infectious diseases such as AIDS, malaria and tuberculosis. It contributed to the successful international project to crack the malaria genome. The World Health Organisation's influenza centre at the NIMR provides international surveillance for new influenza viruses, enabling us to update our vaccines each year. The influenza virus was, in fact, discovered at Mill Hill, and the NIMR continues to be a world leader in its research on influenza.
The work carried out at the institute has great clinical importance. One example of that is the important link between the NIMR and London's Great Ormond Street hospital. NIMR scientists collaborate with their clinical colleagues to improve the diagnosis and treatment of child heart and digestive diseases, as well as growth and development problems in children. Other programmes at the institute, such as the development of new methods for the early detection of cervical cancers and of other infectious organisms in the community, have broader implications for the NHS.
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One of the institute's great strengths is its close professional and geographical connections with the major teaching hospitals in London, which enable collaborative work to be carried out efficiently and cost effectively. Those connections would be put at risk if the NIMR were to move.
Sir Sydney Chapman: I congratulate the hon. Gentleman on securing this important debate. Does he agree that it is vital for the NIMR to remain at Mill Hill because it is in a purpose-built building and a strategic geographical position? As he said, it is essential that it has access to the great teaching hospitals in London and to the specialist consultants who tend to congregate in the capital.
Mr. Dismore: I am grateful to the hon. Gentleman for his support. That is the point that I am trying to make, and I am pleased that my campaign to preserve the NIMR at Mill Hill has cross-party backing.
Dr. Rudi Vis: I agree with the comments that have just been made. I understand that there was a peer review of the NIMR, which it passed wonderfully well, and that the review concluded that the institute should not be fragmented. Will my hon. Friend comment on that?
Mr. Dismore: I am grateful to my hon. Friend for his remarks, and I shall return to that issue later in my remarks.
I believe, Mr. Deputy Speaker, that you, too, will share the great excitement at the NIMR about the fundamental breakthroughs in nerve repair made by its neuroscientists, which may soon be translated into the first effective treatment for spinal nerve damage. The impact of that British research on the thousands of patients worldwide who suffer crippling spinal injuries is of course potentially life changing.
Those examples illustrate the strength and practical relevance of NIMR research. State-of-the-art facilities, easy interactions between scientists of many disciplines and nationalities, and the enthusiasm to collaborate with clinical colleagues are the key factors in the drive for the success of the institute at Mill Hill. Why, then, is the future of that British success story under threat?
In April, the MRC published a forward investment strategy document for its institutes. That recognised the high quality of NIMR science, but stated that the case for keeping the institute at Mill Hill was "not compelling". The draft proposal was outside the normal five-year peer review, which last assessed the NIMR in 2000, when it received an excellent report.
The document recommended moving the NIMR away from London, to the Addenbrooke's hospital site in Cambridge in 2010. It also proposed downsizing the institute to about half its present number. To achieve that, the MRC would seek additional Government money for a new building in Cambridge, which at today's prices would cost about £80 million. However, the paper made no estimate of the staff costs of a move to Cambridge, nor of the cost of redundancies.
News of that proposed move astonished NIMR staff. There had been no previous consultations with the institute, and no evidence was presented to support such

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a radical proposal. It came completely out of the blue. The building at Mill Hill has at least 30 years' life left in it, and the 47-acre site is ideal for future expansion. Were the move to go ahead, it would disrupt many of the long-established and highly productive academic and clinical contacts in London to which I have referred. Downsizing on the scale proposed would inevitably reduce the scope of the research that the NIMR could carry out. The suspicion is that the idea is to cash in on a valuable site in north London. I hope that the Minister will immediately dismiss that notion.
The MRC invited comments from NIMR staff and many other stakeholders. The result was strong support for maintaining the institute's present size and location, and there was powerful and widespread criticism of the way in which the MRC had gone about the process. From my discussions with the staff, I know that few are prepared to move. The NIMR is not only a building but a talented work force of scientists and support staff; such a move would not be of the institution itself.
With the announcement of a plan to move to a smaller institute of unknown composition seven years before such a move could occur, the future of all the staff at Mill Hill has been destabilised. It is no surprise that scientists at the NIMR were immediately inundated with job offers, many from the United States. The loss of that pool of UK talent would be extremely damaging to the MRC biomedical science base. The Association of University Teachers has told me of ongoing uncertainty and about the impact on recruitment and retention. MRC management failed properly to consult NIMR staff or to take account of their views before publishing strategies that would directly affect their future.
The PCS pointed out to me that most of its members at the NIMR are women—a point that I raised in my parliamentary question to the Minister for Women last week. Most of them are in clinical or administrative roles, and the least well paid are in the most easily dispensable positions. The union's experience suggests that they will be the first employees to lose their jobs in a relocation, yet the director told me that their skills are a vital part of the NIMR team. Most PCS members are the main earners in their households, so the relocation would have a devastating impact on those constituents, and on the community in Hendon. Similar views were expressed by the AUT. All members have strong local ties to Mill Hill, and relocation to Cambridge would be out of the question.
I am sure, Mr. Deputy Speaker, that you will have read the Science and Technology Committee's critical report on the MRC and the Government's recent response. Those documents raise serious concerns about the MRC's record of communication with its research community. As well as needing to improve financial management and planning, the MRC must mend its ways when dealing with such important issues as the future of its major research institutes, and it must operate in a more open and transparent manner. The MRC has failed to communicate with the NIMR, and it is to be hoped that Professor Colin Blakemore, the MRC's chief executive designate, will pay urgent attention to that.
The MRC's latest proposal for the institute is to set up a new expert taskforce to consider its future direction, but this time with some NIMR representation. I welcome that move, but I ask why yet another
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committee is needed when the case against the move to Cambridge is so strong. Nevertheless, I hope that the new committee's remit will allow it quickly to secure the NIMR's future as the national centre for biomedical research.
An early decision is essential—a year has been set aside for the committee's work, which is too long if the NIMR is not to suffer a brain drain that will affect science throughout the country. Speed is necessary since the whole affair has led to strained relations between senior and other staff throughout the NIMR and the MRC management, and it has already captured the attention of the media through critical press coverage. That can only be damaging in the longer term, so it is essential that the problem be remedied as soon as possible.
We cannot and must not jeopardise the exciting future of biomedical research that is one of the UK's strongest assets. We have a well-trained, highly skilled and imaginative scientific community, and we are living in a time of major medical advance. In the 21st century, we are already seeing the merging of molecular, biological and clinical sciences. The decoding of the human genome, the unravelling of the structure of key biological molecules and the promises of stem cell technology will revolutionise medicine in the coming century. It is important to ensure that such discoveries are harnessed effectively for society's benefit. The MRC will need to play a crucial role in that by helping the NIMR to stay at its present location.
The research horizon is expanding at an unprecedented rate, and we will inevitably be faced with requests for ever mere investment in the fundamental sciences. We need to maintain Britain's leadership in the crucial field of biomedical science, not only for the future health of our community but because enormous economic benefits will flow for the nation.
If the Government are asked to respond to those challenges for increased investment, they have a right to expect open and effective management of the resources. Managers need to remember, however, that it is the scientists and the support staff who are our most precious resource. It is their talent and dedication that, if properly supported, will lead to new discoveries and, equally important, inspire the next generation of scientists. The MRC has a good record in training young scientists, nowhere better than at the NIMR, with its close contacts with the London academic institutions, principally University college London. The NIMR will have an equally important role in expanding interactions with clinical departments. London offers a uniquely rich mix of clinical research, and the NIMR already has an excellent track record in that field which the proposed move would threaten.
The MRC must play a vital role in securing its share of new investment to capitalise on those opportunities. Its aim should be to encourage and develop the excellent biomedical science that it funds throughout the UK. On its current site in Mill Hill, the NIMR offers exceptional opportunities for inward investment from the MRC, as well as from other academic, industrial and clinical partners. I therefore urge the Minister to encourage the MRC to recognise the value of developing its inward investment at the NIMR, which is uniquely well placed to take advantage of the unparalleled academic and clinical links that London offers, and to end the

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uncertainty with an early announcement from the taskforce to secure the NIMR's future at its present Mill Hill home and enable it to continue its vital, world-class research without further disruption.
11.13 am
The Minister for Energy and Construction (Mr. Brian Wilson): I congratulate my hon. Friend the Member for Hendon (Mr. Dismore) on obtaining this Adjournment debate on a matter that is of widespread interest and concern. As I am sure he is aware, ministerial responsibility in the Department of Trade and Industry rests with Lord Sainsbury, but I welcome this opportunity to speak in a debate on a topic of such importance for UK medical research. I will contribute on a strictly factual basis. Let me point out that no decision has yet been taken regarding the future of the Medical Research Council's National Institute for Medical Research.
This debate is particularly timely in view of the recent report by the Select Committee on Science and Technology on the work of the MRC and the Government's response, which was published last week. The MRC is at present developing a long-term strategy for its major capital investments during the next 10 to 15 years at four sites: Harwell, Mill Hill, Hammersmith and Cambridge. The MRC will continue to invest in other UK sites, but key decisions are required at those four sites in the next few years. The Office of Science and Technology requires that all research councils produce long-term capital investment plans for their institutes for the next spending review, and the outcome of the MRC's investment strategy will feed into that.
It is normal procedure for the MRC to review units and institutes towards the end of the director's term so that it can reconfirm or reshape its remit. That approach is appropriate and ensures that all research investment is refreshed and remains internationally competitive in line with developing needs.
Dr. Vis: I hear what the Minister says, and the MRC has written to me in those terms. However, is it efficient for units and institutes to be reviewed when the director resigns or retires? Depending on the directorships, that may take place after five, 10 or 15 years. It does not seem to make much sense for a review to take place just because the director is retiring.
Mr. Wilson: My hon. Friend makes a reasonable point. I am not aware of the organisation's cycle of directorships or what guarantee of regular intervals the process provides, but I admit that it seems an unusual formula for determining when reviews should take place. I am told that there are quinquennial reviews, but I am happy to come back to hon. Members to say whether that is coincidental with or driven by changes of directorship. What I have just read suggests that it is coincidental, but if correction to that is needed, I will provide it.
The NIMR at Mill Hill is included in the review because the term of office of the current director, Sir John Skehel, ends in 2006—that brings us back to the previous point. In addition, several senior scientific staff
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retire around that time. In October 2002, the MRC announced the establishment of a council subcommittee to develop its forward investment strategy for the four sites and an overarching policy framework for nurturing and sustaining optimal research environments that will inform major investment appraisal in the future. The MRC informed its unit and institute directors and other stakeholders of the terms of reference and membership of the sub-group. The directors at the four sites were consulted during the six months taken to discuss and publish the draft strategy, so they have had the opportunity to comment on the overarching policy framework and submit comments relating to their individual institutes, in person and in writing, in the course of the sub-committee's deliberations.
The draft strategy was released as a consultation document on 4 April 2003, with a deadline for comment of 19 May that was later extended to 26 May. It was made widely available by the MRC to NIMR staff, trade unions, academics and other researchers including the directors of other MRC-funded units, local MPs and other stakeholders. The results of the consultation were discussed by the MRC sub-committee and its council when they met on 29 May. The overall policy framework and the forward strategy for three of the four centres of investment—Hammersmith, Harwell and Cambridge—have been broadly well received. Most of the comment during the consultation had focused on the specific proposals for the NIMR.
In summary, the sub-committee's proposals for the NIMR were, first, that there was likely to be a strong strategic case in the longer term for retaining investment in the areas of science currently based at the NIMR and that a worldwide search should begin in 2004 for a new director to replace Sir John Skehel. Secondly, the sub-committee found that the NIMR at its present location may be too isolated from clinical and other academic units to compete and remain as attractive to scientists in the longer term as it has been in the past. It proposed Addenbrooke's hospital in Cambridge as having much to offer as a new location for the new NIMR.
The proposal for relocation has provoked extensive criticism, which was reflected today and during the consultation. I am sure that the expert taskforce will consider the matter in great detail. The MRC took seriously the comments that it received and recently announced as a next step that it would now accelerate further development of strong scientific vision for the NIMR by establishing that expert taskforce. The taskforce will consider and consult on a broader set of options for the size and location of the NIMR, including options suggested during the consultation period.
The MRC will announce the membership of the taskforce in the near future. It will include council members, independent scientists from the United Kingdom and abroad, and senior scientists currently working at the NIMR. The establishment of the taskforce emphasizes the MRC's commitment to continued stakeholder consultation and to considering all the options for the future of the NIMR. The taskforce will aim to submit an interim report by the end of the year and a final report by next June.
The NIMR is MRC's oldest and largest research institute. It has an annual budget from the public purse of £27 million a year. The current building is more than

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60 years old. It is a matter of record that the NIMR has an illustrious scientific reputation, with alumni now in leadership positions all over the world.
Sir Sydney Chapman: The Minister is right that the building was constructed in the late 1930s, but it turned out to be a perfectly designed building for the NIMR. Its size and the ability to move rooms within its shell are still relevant today. As one who qualified as an architect, I must say that it is one of the most perfect buildings for the uses to which it is put. For that and many other reasons, it would be criminal not to continue with the NIMR at Mill Hill.
Mr. Wilson: The hon. Gentleman makes his point extremely well as an architect and as an advocate. My position is based purely on fact. I am happy to make it clear that when I say that the building is 60 years old, I do not say so pejoratively. It is appropriate that the hon. Gentleman has added his own rider to that.
Much of the NIMR's current research portfolio, notably in infectious diseases, immunology and stem-cell biology, is highly relevant to Department of Health priorities and to the MRC's published 10-year vision for medical research. The aim of the MRC's current review is to ensure that the NIMR can flourish and remain competitive as a world-class medical research environment well into the 21st century. Whatever the outcome of the deliberations of the expert taskforce, high-quality medical research will continue to be funded in optimal environments as part of the new NIMR or elsewhere.
The future of the NIMR is an issue for the MRC to resolve. The Haldane principle under which all research councils are managed requires that Governments do not prescribe to individual research councils the detail of how they should distribute resources between competing priorities. That is their responsibility, advised by researchers and research users on the MRC and its boards. It is therefore for the MRC to decide its long-term strategy, including for the future of the NIMR. However, the Office of Science and Technology has been kept closely informed of developments: given the scale of investment in the NIMR, the OST has taken a particular interest in the process being followed by the MRC. The OST is content that due process is being followed and that the scientific community and other stakeholders have had, and will continue to have, the opportunity to consult on and influence the outcome of that strategy development.
In March, the Select Committee on Science and Technology published its report into the work of the MRC. Only last week, the Government published their response. I do not have time to discuss everything that was said. However, I want to make a couple of points that may be relevant to the debate. Most important is the fact that the review of the NIMR and the wider forward investment strategy are not connected to the Select Committee report.
As I said, it is standard practice for the MRC to review units and institutes towards the end of the director's term. The review of MRC-funded units and
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institutes, whether quinquennial or at the end of a director's term, is important in ensuring that the excellence of the UK science base is maintained and developed, and that developments meet the needs of the nation and make the best use of public funds. It takes many years to bring to fruition developments in medical research that will improve health care and result in other benefits. As the chief source for Government funding of medical research, the MRC has a particular role to play in taking the longer-term view.
In conclusion, the Government accept that decisions about funding and delivering research that will ultimately benefit human health require fine judgement on the part of the MRC council.
Mr. Dismore: I get the impression that my hon. Friend is drawing his remarks to a close, so let me put to him again a point that I made in my speech. Given the value of the site, there is concern that the ulterior motive may be to maximise the proceeds of the sale for other purposes. Will he confirm that the value of the site is not a factor in the deliberations and will not feature in the decision-making process?
Mr. Wilson: I have had absolutely no indication to suggest that the value of the site is a factor in the deliberations. I am happy to seek further information and to write to my hon. Friend to reinforce that point. I certainly do not want to mislead him or the House on the issue. I will write to him about it.
As I said, certain decisions require fine judgment on the part of the MRC. Judgements that are made, for example, as part of the development of the MRC's forward investment strategy rightly attract questions and criticism, and the Government welcome informed debate on such issues.
It is important that my hon. Friend the Member for Hendon has initiated this debate. The cross-party representations have been interesting and have doubtless reassured him. I notice that my hon. Friend the Member for Cambridge (Mrs. Campbell) has made an appearance, although I am not sure whether she shares the views that have been expressed. That aside, the debate has given me an opportunity publicly to reassure stakeholders that a decision has not been made about the future of the NIMR. I have no doubt that everyone involved in the process will take note of today's contributions.
Serious consideration has been given to all the comments sent to the MRC during the recent consultation period, and alternative suggestions on the future of the NIMR will be passed to the taskforce. Further comments will be actively sought during the next phase of the consultation, which will be under the auspices of the MRC's expert taskforce.
I hope that that is a reasonable précis of the factual position. This has been a classic Adjournment debate in that it has allowed issues of public importance to be given the airing that they deserve.
11.28 am
Sitting suspended until Two o'clock.

Children's Health and Social Services
2 pm
Mr. Andrew Lansley: I am very grateful for the opportunity to debate this important subject this afternoon. Some Members present have participated in previous debates on the subject and it will not have escaped their notice that I have already raised the issue several times, most notably in last year's debate on the Kennedy report on the Bristol royal infirmary inquiry, in a subsequent debate in the Chamber on maternity and child health services, and in questions in response to Lord Laming's report on the Victoria Climbié inquiry. This debate provides me with slightly longer than those debates afforded to set out some of my views on how we are developing children's services, and to ask the Government questions about how the various initiatives will fit together nationally and work, with particular reference to my constituency by way of illustration.
It may be helpful to begin by setting out the context. We should not forget the good news on children's health: infant mortality rates have been reduced and the incidence of sudden infant death syndrome is about a quarter of that 20 years ago. Children are healthier than ever and deaths arising from some common viral infections have been much reduced through immunisation programmes, but—there is always a but—we still have far to go.
United Kingdom infant mortality rates are still the second worst in the European Union. We have continuing childhood morbidity due to cancer and to injuries, especially in the home and on roads. There is a rising prevalence of diseases such as asthma, which is now the most common chronic disease. There are also major inequalities in children's health care: some 750,000 children live in poor housing, and poorer children are 10 times more likely than others to die from severe head injuries and 15 times more likely to die in a house fire.
Despite health promotion strategies, we are seeing a worrying incidence of some factors that will lead to substantial illness and disease in later life. An example that is the subject of attention is obesity among children, which is an increasing problem. In a speech in January, Professor Aynsley-Green described it as a pandemic that could lead to a dramatic increase in disease in future years if unconstrained.
The British Medical Association is reportedly proposing today that fatty foods be taxed by doubling the VAT on them. I confess that that strikes me as an ill-judged response to the problem, as it would be likely to have severely regressive effects on the income of poorer families. However, I will not dwell on that proposal.
As a consequence not least of obesity, there is a rising incidence of type 2 diabetes. Despite anti-smoking strategies, many young people continue to smoke, especially in their teenage years. Binge drinking is getting worse, and there are attendant diseases. There are also diseases attendant on drug taking and a rising prevalence of mental illness among adolescents and the young.
There are still problems in the system, such as shortages in paediatric specialities, a shortage of specialised nursing staff, gaps in the public health and
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preventative strategies due to lack of resources, and—the substance of most of my argument—the lack of a coherent, child-focused and accountable service for children, which has been much sought after for many years.
The historical context of my remarks will be familiar to those who participated in the report on the Bristol royal infirmary inquiry. Indeed, over the years, there have been many reports on the provision of children's health services. At page 416, the Kenney report states that
"it is a remarkable feature of children's healthcare services that, over a period of 40 years, successive independent reports have made the same or similar recommendations."
At page 417, it says:
"Remarkably, some would say scandalously, despite the consistency of these recommendations over such a long period of time, there has been an equally consistent failure fully to implement these fundamental principles, a failure which continues to this day."
Professor Kennedy referred to the 1959 Platt report, the 1976 Court report, the 1991 Department of Health guidance, the 1993 Audit Commission report and Health Committee reports on children's health services before the 1997 election. Since the election, we have had a range of further reports, which are giving rise to a renewed focus on how we deliver children's services. That is what I shall focus on.
Those reports are consistent in stating that we need a child-centred approach. They say that we have to understand the family context for supporting children in their health needs and that we have to take a holistic view of children's needs, which is not to allow the hospital or other agencies to see children's needs only in the institutional context, but to consider the whole child in the child's context. They say also that we need greater community-led services, because hospitalisation has to be the exception for children, not the rule.
Requirements for specialisation and expertise were reflected in the six principles listed in the Audit Commission's 1993 report. They are child and family-centred care, specialist skilled staff, separate facilities, effective treatments, appropriate hospitalisation and strategic commissioning.
Miss Julie Kirkbride: I congratulate my hon. Friend on securing this debate. Sadly, I cannot be here for all of it, because of Select Committee commitments. I wonder whether the list might include a particular focus on foster children and children who are adopted. I know from my constituency work that their needs are much greater. It not just that social service provision is inadequate. For example, I know of foster carers looking after two children whose parents had died and who were traumatised by being split up. The foster carers cannot get a bigger house to accommodate both children, but they are clearly doing good for society and for the children. Should such issues form a separate plank in that list?
Mr. Lansley: I am grateful to my hon. Friend. I recently secured a debate here on the film industry—a subject in which I am interested and one that, if I understand her correctly, she will be pursuing this afternoon.

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My hon. Friend makes a good point. I had the privilege of joining a number of foster carers who visited Parliament a few weeks ago, during foster care week, to discuss the provision of services and what support is needed. It is not that children need additional care in the wake of the Adoption and Children Act 2002; their needs should be seen in the wider context. For instance, my recollection is that about 30 per cent. of children in foster care do not get the appropriate immunisations. [Interruption.]If I am wrong, the Minister of State, Department of Health, the hon. Member for Redditch (Jacqui Smith) will correct me.
We need to be sure that children in foster care and those looked after by local authorities are looked after in the wider context. It is not enough simply to get a good placement with foster parents. The foster parents need support and vulnerable children—those at risk even more so—need the connections with other agencies that would help to achieve the holistic view of children's needs. That reminds me of my first opportunity to discuss the issue in the House. I think that the Minister and I were members of the same Select Committee, where we considered children who were looked after by local authorities.
The Minister of State, Department of Health (Jacqui Smith)indicated dissent.
Mr. Lansley: Perhaps not. I am trying to remember the dim and distant days of 1997 and 1998. However, that experience provided the base for my intentions in children's policy.
As I was saying, the Kennedy report picked up on the Audit Commission principles, saying at page 419 that
"had the principles set out in the DoH's 1991 guidelines and the Audit Commission's report been implemented in Bristol, a good number of the shortcomings in care would have been addressed much earlier."
The problem is that there has been a persistent failure to implement those reports in the national health service. We must all admit that, in practice under successive Governments and over many years, children's services have been seen as a Cinderella service in the NHS and that the specialism or institution has tended to focus on care rather than the children. Children's services have been the add-on, rather than the focus of specialist services, and children have been regarded as small versions of adults, with smaller beds, smaller portions of food and smaller doses of medicines that were licensed and intended for adults. That needs to change.
2.11 pm
Sitting suspended for a Division in the House.
2.19 pm
On resuming—
Mr. Lansley: I was suggesting that the Kennedy report is illustrative of previous reports on children's health care services. It is certainly not alone in commenting on the fact that the intentions behind children's services were not reflected in the quality of provision. For example, Lord Laming's report on the tragic murder of Victoria Climbié is also characterised
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by the understanding that institutions and agencies chronically failed to provide the standard of care expected of them. Similarly, individuals in those services failed to adhere to the good practice expected of them.
Neither the Bristol royal infirmary case nor that of Victoria Climbié can be described as resulting from a failure to provide the necessary resources. In both, the available resources were broadly equivalent to those elsewhere. Good practice was being achieved in other parts of the country, but practice in those two cases was poor. I shall return to that issue, but we must recognise the fact that, to a large extent, we are discussing organisation, good practice and co-ordination, not resources.
Let me summarise the issues that I hope to address. The first is why we have failed to implement the recommendations in the range of reports on children's health and how we ensure that that does not happen with the latest reports by Kennedy, Laming and others. Issue No. 1 is therefore about a commitment and sustained follow-up to the Kennedy report.
Issue No. 2 relates to implementing reports in practice. How do we create a reformed structure for children's services—one that is child centred and focused on children's needs? How do we ensure that high standards of care are integral to its functions? How can we make such a structure managerially focused and accountable for its priorities and the quality of its practice?
The context for all that—the material from which I am working and the developments that I have in mind—includes the Kennedy report and the Government's response to it; the First module of the national service framework, which was published in April; the reconfiguration of acute hospital services for children; Lord Laming's report on the Victoria Climbié inquiry; the establishment of children's trusts and, as a tangent to that, the Health and Social Care (Community Health and Standards) Bill; and the prospective content of the Government's Green Paper on children at risk.
The Government accepted the bulk of the Kennedy report's recommendations, but the Minister will recall that several were not accepted. The decision on them was deferred and 17 months have passed. I am talking particularly about recommendation 167 and recommendations 172 to 176, which deal with setting standards for children's health care services. I also have in mind recommendations 177 to 183, which deal with planning the future of children's health services.
Some of those recommendations have been acted on, and we now have the national clinical directive for children. In that respect, I had the privilege of meeting Professor Aynsley-Green last year to discuss the work of the children's taskforce and the preparation of the national service framework. We have the first module of that framework, which indicates the character and standard of the work that is expected. As things stand, however, the framework's 10-year timetable—standards have to be met in 10 years—does not make clear what should be happening at intermediate points. What is the timetable during those 10 years? How are individual institutions to interpret what standards are expected of them at intermediate points? I am not clear, for example, what specifically is asked of health service bodies in the next three years under the improvement,

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expansion and reform programme, and what precisely is to be included in the performance indicators that will form part of the performance assessment.
The national service framework, as published so far, does not appear to set out a programme to establish those standards, starting from where we are now, but it gives an aspirational picture. Other national service frameworks—the Minister is perhaps more familiar with those than I am—such as that relating to older people and strokes set specific deadlines by which key elements of the standards should be achieved and indicative timetables for achieving those standards. At the moment, that does not appear to be the case with this national service framework, and I believe that such indicators should be included.
Recommendation 174 of the Kennedy report distinguishes between obligatory and aspirational standards—between the minimum standards that must be achieved to ensure quality of care and those that might be achieved over time with the changes that will take place in health service bodies, leading to a high quality of care. I understand that that distinction is connected to recommendation 183, which concerns the validation and revalidation of acute hospital services, and which the Government did not accept.
As I understood the explanation given to me by Ministers last year, that recommendation was not accepted because it was thought preferable to continue with such services and improve them, rather than lose them to the NHS because they had failed to be revalidated. However, that does not mean that there should not be a clear indication in the national service framework of the minimum standards that are expected. Through such minimum standards, performance indicators can be set which, if not met, will give rise to special measures and the intervention of the Commission for Health Improvement.
Recommendations 178, 179 and 181 concern the configuration of acute hospital services, which is not included in the national service framework. As I understood it last year, the intention was that the acute hospital services module would be published and that the configuration issues arising from it would follow. However, that seems not to be the case. Issues arising from the national service framework need that configuration guidance to be produced very quickly. The throughput of cases, the competence of staff and the assurance that staff dealing with children have the expertise as well as the specialist skills necessary to ensure a quality outcome are at the heart of the Bristol royal infirmary report.
If quality is to be assured in children's services through the national service framework, we need to know what will be recommended in terms of throughput of cases for particular specialisms and, as a consequence, the extent to which there should be a concentration of services in particular acute hospital environments. That example shows how children's services have not developed according to a focused, discrete understanding of children's medical needs.
A greater understanding of the need to integrate hospital and community care is also needed. For example, in what is proposed, I have not yet seen any
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guidance on the relationship between community paediatrics and acute hospital care. There are examples throughout the UK of community paediatrics services operating out of the acute sector, but in the national service framework it is not clear to what extent that is considered desirable. If children are hospitalised, there is a particular need for high-dependency care beds and paediatric intensive care units. Of course, the Government have been supporting that need with additional resources. There is a framework for that. However, we must identify the framework for the transfer of cases and referrals to hospitals that provide high-dependency care or paediatric intensive care. We do not yet know how far that will go.
Across the country, we see that the number of referrals due to constraints on local district general hospitals that undertake paediatric work is increasing all the time. There are examples across the country of hospitals not undertaking surgery that requires general anaesthetics for children under the age of two. That can lead to the referral of a significant additional number of cases to centres that offer high-dependency care or paediatric intensive care.
Those consequences flow from decisions that are continually being made in the NHS, which result in substantial increases in demand for work at certain centres. For example, Addenbrooke's hospital in my constituency has experienced a 13 per cent. per annum increase in its paediatric activity and a 10 per cent. per annum increase in its paediatric intensive care work load. Staff at that hospital do not know to what extent the national specialist services definition sets, which are a reference to the throughput of cases for particular specialisms, will increase the number of referrals to them for a range of other treatments.
The requirement for adolescent specialisation and capacity is going to add yet further increases in demand, particularly for specialist care. All that points to a need, in response to the Kennedy report, to know what the configuration of acute hospital services is going to look like. Recommendation 178 of the report states:
"Children's acute hospital services should ideally be located in a children's hospital which should be physically as close as possible to an acute general hospital. This should be the preferred model for the future."
Will the Government accept that recommendation? Will the reconfiguration of acute services follow swiftly on the first module of the national service framework? Will the resources necessary to create a new configuration of services be provided through a specific capital allocation from the Government, such as that which has accompanied information technology or the NHS Modernisation Agency programme?
Alternatively, should the funds be ring-fenced for a managed clinical network for children's services, as has been the case with the cancer network? How will the plans for foundation hospitals and a new independent regulator provide for the substantial change in services that will be consequent on reconfiguring services for children, particularly in respect of the integration of services between children's hospitals and community services? As the relevant Bill is in Committee upstairs, I cannot expand on that relationship, but it would be an obvious one in the context of how foundation hospital trusts connect with other NHS bodies effectively. That

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will become a distinct organisational feature in the NHS. Those questions relate specifically to the Kennedy report.
I would like to widen the debate. The Kennedy report, the Laming report and Professor Aynsley-Green, head of the children's national service framework, are all asking the same question: who is in charge? Structures of standards are increasingly being put in place. There will be a structure of local networks through children's trusts, although we will find out only over time how those children's trusts are designed in particular localities. I hope that, as a consequence of that, we will have a structure of accountability—managerial accountability on one hand and democratic accountability on the other. That matter requires further discussion. We will also have a structure of audit and inspection.
Where is the leadership in all this? Each of us, in our daily lives, thinks about our children. I certainly think about mine, and they are my top priority. In a curious sense, each of us knows that individually, but when the Government and institutions deal with such issues collectively, they cease to be top priorities. We must ensure that they are. How do we make that happen?
Mr. Mark Francois: On precisely the point about who is in charge, I have in my constituency a number of parents whose children appear to be suffering from autism spectrum disorders—Asperger syndrome springs to mind. Such parents and children have terrible problems in that they are often batted from pillar to post between health service trusts, social services departments and the county council's education department. Nobody ever seems to be willing to grasp the nettle and accept full responsibility. I mention that as a classic example of the "who is in charge?" problem coming sharply into focus. Has my hon. Friend any comment on that?
Mr. Lansley: I am grateful to my hon. Friend for illustrating the problem. We are trying to address it so that we know who is in charge and, more to the point, so that the person responsible can take action that flows. Lord Laming's report on the Victoria Climbié inquiry pointed towards the necessity for such integration—agencies and professional groups should be able to work together, and we must escape from service silos. Once we have done so, we must find a mechanism through which we do not merely state that as an aspiration but deliver in each locality through an organisational structure. Professor Aynsley-Green and the children's taskforce might consider a managed children's network. That could be reflected in the structure of children's trusts.
Mr. Hilton Dawson: The hon. Member for Rayleigh (Mr. Francois) has provided an excellent example. Surely the response to the acute problem that he identified cannot be merely structural. He suggested an absence of values and a failure of individual professionals to take responsibility for the child.
Mr. Lansley: The hon. Gentleman is right, and Lord Laming's report reflects that dichotomy. I have been talking to the assistant director responsible for children's services in Cambridgeshire about the
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implementation of the recommendations and the review of good practice. Justifiably, his attitude is that he is being asked to look carefully to see whether he does the things that he has always done. There is some chagrin—I put it no more strongly than that—over the costs and implications of trying to deal with the report's recommendations in places where there is already good practice. However, we accept the necessity of responding to the report.
The issue is as the hon. Gentleman has said: should we seek an institutional structural response to what is essentially a failure of professions and organisations to do their jobs effectively within the current structure? The answer is that we must ensure that professions understand what best practice is and are sufficiently held accountable to deliver it. At the same time, we must recognise that the structural problems that have persisted for years give rise to problems, such as those illustrated by my hen. Friend the Member for Rayleigh (Mr Francois), far more often than would be the case if there were simply a failure of individuals in an otherwise well-functioning organisation. Private business, in considering the process of building quality into an organisation, generally recognises that it involves combining structures and processes with individuals who have training, expertise and commitment. Those things have to travel together, and that is what we seek here.
That brings me back to children's trusts and their objectives. Lord Laming's report says:
"The single most important change must be the drawing of a clear line of accountability from top to bottom, without doubt or ambiguity about who is responsible at every level for the well being of vulnerable children."
That is the proposition he was pursuing. Children's trusts need to be understood in this context as ways in which localities can devise a structure that meets that objective. Localities are variable, however. I think that we are approaching the point at which Ministers have an opportunity to tell us a bit more about what the pilot areas look like, because they have, if I understand the timetable correctly, received a range of submissions on pilot areas. I assume that they are about to tell us where those pilot areas are and what they look like. Perhaps this Minister will say more about that today.
It is important that children's trusts should, among other things, reflect certain principles. I declare a non-pecuniary interest as a vice-president of the Local Government Association. The LGA, in promoting the model entitled "Serving Children Well", has, with its partners, reflected principles that should apply to children's trusts. Local authorities, as they are democratically accountable, are the best local means of creating partnerships to deliver the services. They can combine democratic and managerial accountability. Education is a universal service that forms part of the responsibility of local government, and it might therefore be the best lead service with which others might be connected. I subscribe to that quite heartily, because it is undesirable for children's trusts to be led from a service that is designed solely around the needs of vulnerable children or children at risk. Children's trusts, if they are to grow in a locality, should be understood to be a universal service and should be initially located in, or driven from, a universal service.

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The attributes of children's trusts should be multi-agency working; rationalised processes for information and assessment; unified work force development plans; and community involvement in setting priorities and assessing services from the family and the children's perspective.
Other issues relating to the establishment of children's trusts have not yet been thoroughly dealt with, following on from the Laming report. For example, there is the risk that service silos may be turned into professional silos inside an institution that provides an umbrella to several professions. We need to ensure that we do not just provide institutional cover that allows the same failings between organisations and professions to continue. We must not create an institution that lacks transparency between commissioning on one hand and provision on the other, because we have made gains over years past and understood that those two must be distinguished. We must not create an institution that closes ranks to defend some collective line to take on local issues when they arise. It must be much more open to external scrutiny, inspection and intervention than agencies have been up to now.
In that context, although I will not go on about it, I have been persuaded for some time that the role of the children's rights director is too limited and not sufficiently independent. A children's rights commissioner would still have a valuable role to play in relation to the external scrutiny of such an organisation.
This debate is not about Cambridgeshire or my constituency interests, although many issues that I am discussing arise in my constituency. It is primarily about the national policy framework. I shall finish with a range of questions, which are as yet unanswered. I say that because of my experience of discussing the matter with hospitals, social services, local authorities, primary care trusts and others in my constituency, and of talking to them about how we should move forward on the development of those services locally, taking account of all the national policy initiatives. Those questions must be answered pretty quickly if we are to put good-quality structures in place rapidly in my constituency and in Cambridgeshire as a whole.
First, what is the timetable for implementing the children's national service framework and its standards? What will be the mechanism for delivering targeted funding to secure the delivery of the children's NSF? When, and with what objective, will guidance on the reconfiguration of acute hospital services for children be published? How will the Government move from early pilots in 2004 to a wider roll-out of children's trusts in 2005, and with what additional guidance? Will the timing not be incredibly tight in terms of trying to offer any guidance based on an evaluation of the pilots before a trust starts in 2005? Will children's trusts be required to focus on children at risk, or will they be understood from the outset, as I confess I would prefer, as a framework for the co-ordination of universal and targeted services for children?
How will the provision for children's trusts mesh with the establishment of NHS foundation trusts? Addenbrooke's hospital in my constituency is one of the 29 initially approved potential NHS foundation trusts.
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Will the framework of children's trusts and the Government's forthcoming Green Paper be flexible enough to permit the development of models based on the "Serving Children Well" approach that has already been developed between agencies? Will the framework be flexible enough to enable the partners in Cambridgeshire to come together to define our vision and timetable for the creation of focused services for children? That should include the establishment of a children's hospital at Addenbrooke's that will then serve Cambridgeshire and the wider region.
Will we be able to articulate the plans in a way that will engage the public's interest and commitment? I freely confess that I could not now explain to the public at large what the new shape of children's services in Cambridgeshire will be five or 10 years from now. I would like to be able to do that and to know the answers to the questions.
We need to work together on the answers so that perhaps within a year or two, or possibly in 2005, a children's trust can be established in Cambridgeshire, which I can talk to people about in the wider context of a children's hospital at Addenbrooke's. I would also like to be able to talk about how that is going to relate to children's services in the county as a whole and how things will develop during the next five or 10 years. I cannot do that yet, and being unable to do so makes it difficult to engage the public's support and commitment.
Will the Government help us to escape from the paralysis of analysis, all the reports that are produced but not acted on, not knowing who is in charge and the failure to do the job that is required? We must escape from all that so that we can deliver, not only by way of a structure but in reality, high-quality services for children that are genuinely co-ordinated across the range of organisations, and genuinely focused primarily on the interests of children and how they need the services to be provided.
Several hon. Members rose—
Mr. Deputy Speaker (Mr. Frank Cook): Order. We are carrying eight minutes of injury time. As we normally begin the first of the three winding-up speeches 30 minutes before termination, as it stands and if there are no Divisions, we must commence the first winding-up speech at 8 minutes past 3 o'clock. That means that we have 21 minutes left for those others who wish to contribute, so I hope that Members will bear that fact in mind when making their contributions and when accepting or making interventions.
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Mr. Hilton Dawson: I congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on securing this timely debate and, most of all, on coming up with such an important and relevant subject. I also congratulate him on the way in which he introduced the debate and linked health and social care. I strongly believe that, in any context, we should resist talking about health on its own; we should always ally and integrate health with social care. I agree with everything that the hon. Gentleman said about his concerns over the fragmentation of services.

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I am pleased that Professor A1 Aynsley-Green has agreed to come to Lancaster in September to help a group of children, young people, parents, professionals and others, including me, to answer the question of what life is like for children in Lancaster. We are trying to approach the issue holistically and from a child's point of view. We are trying to integrate services such as health, social care, education and youth justice—all those who have any involvement with children—in that discussion.
It is profoundly important that we concentrate our attention on children's services. We parents have a tremendous commitment to our own children; we recognise that children are the most powerless and vulnerable people in society. They have no vote and often no voice but they are the future of our society, so we must emphasise services and support to help them to grow and develop.
I was delighted with the hon. Gentleman's emphasis on the Kennedy report, which was a seminal contribution to the development of children's services. Kennedy said that some of his sections on children were written in anger, which is an appropriate emotion to have about services for children. As the hon. Gentleman said, those services have too often been subjugated to the needs of adults, and they show a lack of concern for the most vulnerable, who need quality care. Fragmented services, which are not properly led and in which individuals fail to take responsibility, have little to do with effective partnerships. For the reasons that we have already heard, we should approach the development and improvement of children's services with passion and a determination to get them right at national and local level.
The debate is timely because the Laming report was published during the development of the national service framework for children. We await the Green Paper on children at risk, which I hope will lead to a service based on children's rights and their participation, a children's commissioner and an effective system of independent representation and complaint for children, not just in Wales, Northern Ireland and Scotland but in England.
The Government have made enormous strides in developments for children, the most important of which is the attack on poverty that is at the heart of so much health inequality. They have introduced profoundly important legislation, much of it related to children in care, such as the Children (Leaving Care) Act 2000 and the Adoption and Children Act 2002. Those are built on the principles of the Children Act 1989, a remarkably good Act—probably the only one—introduced by the Conservative Government.
We should listen to the responses to the draft review of children and family proceedings carried out by the National Society for the Prevention of Cruelty to Children. The review stressed that 12 years after the implementation of the Children Act, its principles—
Tim Loughton: Fourteen years.
Mr. Dawson: No, it was implemented in 1991.
The Act has proved its worth, but we should learn about some of its limitations. It was never resourced properly, and local authorities were allowed to develop
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their own concepts of children in need, which equated much more with their available resources than with any broader definition or assessment of the needs of children in their community. The Act did not cover the whole range of children's services, so many children were left out. I refer in particular to children in the youth justice system, although a recent important judgment said that children in prison are subject to the Children Act.
We have an important opportunity. Huge resources are being invested in public services, and some good legislation has been passed. We have a Government who are prepared, as they say in their 10-year NHS plan, to shift the balance of power and take a fundamental approach to the reorganisation of services. I want several children's centres and trusts in my constituency, and considering all that I said earlier about individual responsibility and values, restructuring will be necessary to bring together the key services for children. I hope that the Government will build on developments that have been piloted, and extend the work throughout the country.
We have a huge problem with children's services. They have already been referred to as a Cinderella service, and it is essential that we attract more people into work with children. We have seen good progress with the new three-year social work training course and the efforts of many local authorities to attract staff who in the past would not have felt able to take on such work. There is more investment in day care, foster care and the all-round integration and development of global services for children.
There is a great deal more to do, however, and we can do no better than to return to the words of the previous Secretary of State for Health, my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), and ask everyone who works in children's services or their policy development whether the services would be good enough for their own child. Each individual who works with children should apply that measure every day of their working lives.
I appreciate that there is not much time and that other hon. Members want to speak, so I shall end by saying that we have a profoundly important opportunity to take a radical step forward in the modernisation and development of children's services. We could easily fail at this point because there are great challenges and institutional barriers to overcome, but with a passionate commitment from central Government and by energising and supporting a work force who, if given their head, could do an excellent job, we can make the radical changes that are needed.
Mr. Deputy Speaker:I remind hon. Members that we have no more than nine casual debating minutes left.
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Dr. Ashok Kumar: I have quite a lot to get through in nine minutes. First, I congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on securing the debate. I know that he has a long-standing interest in child care and children's welfare, and it is a great credit to him that he could secure this debate. I agree with the spirit of everything that he said about the grave issues arising from the Victoria Climbié case and the other issues that he highlighted.

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I want to draw the Minister's attention to issues relating to young children and care assistants in my area, and to highlight emerging issues in mental health. Most people generally accept that an unfortunate side effect of the pressure of modern society is the amount of mental stress suffered by young people. I understand from a pamphlet produced by YoungMinds that it believes that 10 per cent. of young children can be
"overwhelmed by misery, anger or fear."
It says that 10.4 per cent. of all children between five and 15 have some sort of mental disorder, including eating disorders, emotional disorders and hyperactivity. Significantly, higher rates of mental illness were observed in areas of economic disadvantage. I say with some confidence that my area of Teesside, which covers parts of the boroughs of Middlesbrough, Redcar and Cleveland will have a particular problem with mental health, given the social demography of my constituency. I am pleased that the Government have recognised that. In Teesside, following Government guidelines, a proper multi-agency child and adolescent mental health service has been set up by all the agencies working in the field.
The Government have said that such a service must function fully and provide a comprehensive service dedicated to early intervention by 2006. I am glad that the programme is now under way in my constituency. In the borough of Redcar and Cleveland and, to an extent, in the borough of Middlesbrough, the service has identified services for looked-after children—children in the care system—as the top priority in a mental health strategy for youngsters.
Maurice Bates, the director of social services in Redcar and Cleveland, tells me that funding is steadily coming on stream for the service. For 2003–04, the grant will be some £136,000—an increase of £86,000 from the previous year. An additional £45,000 has been granted from the local primary care trust to match that. The cash must meet the number of young people identified as needing intervention from the service. Last year, the Redcar and Cleveland locality team dealt with 151 new referrals on top of its existing case load.
We can see where the pressures are when we examine the case load of youngsters in the care system. In Redcar and Cleveland, which is a relatively small social services authority, some 160 young people are in the care system at any one time. As I said, many of them have complex mental health needs, and a specialist model of care has been devised, with a correspondingly high work load. During 2002–03, some 156 clinical contacts were made involving new case referrals, consultations with social workers and medical professionals, and, most importantly, sessions with individual children and young people.
The team undertaking the work is doing a sterling job under very trying and emotional circumstances. However, it identifies several issues that must be highlighted. My constituency lies in Redcar and Cleveland, which is a very dispersed and rural area with a large number of small towns and villages. Access issues are therefore very important. However, the existing specialist children's service team is based—by necessity—in Middlesbrough, the nearest big town. There is a good argument—in cultural, geographical
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and community terms—that the team is too distant really to benefit and help those young people at an extremely critical period in their lives.
There are always problems involved with running services that are both cross-boundary and cross-organisational. A business case is being made to the Langbaurgh primary care trust board to secure resources to set up a specialist base in the east Cleveland area, which is the rural part of the constituency. While that is a matter in the first instance for the professional and non-executive members of the board, I hope that the Minister will take note of the proposal.
There is also a growing issue concerning the emergence of a cohort of young people within the local care system who are displaying very challenging behaviour patterns. Those young people need specialist help that simply is not available across Teesside. I am told that the local social services departments have to make arrangements with specialist national facilities for the young people's care and treatment. The issue is simply one of cost. A small social services department has to operate on a tight cost rein, and the same applies to local facilities provided by a PCT or a local hospital trust. Those bodies must take decisions—made in the best interests of the young person—to locate them with a national facility, but at great cost. That cost impacts directly on resources that could be used for other young people for whom those organisations have a care responsibility.
I am not making any direct plea to the Government. I merely ask that such circumstances, which are becoming ever more common, are taken into account when determining the resource support made available to professionals working on the ground. I have great admiration for the professionals working for both our local social services and our health services in a challenging and complex field. They tell me that they are grateful to the Government for the increased support that they are getting and for the fact that the Government are encouraging cross-cutting collaborative work of a high standard, and have slashed bureaucracy in achieving that. However, I feel that it is at times like this—and in debates like this—that the voice of the people working at the grass roots deserves to be heard, and the issues that are of concern to them voiced. Time is running out. I am referring to a group of people who, if they are allowed to do their job properly with adequate resources and backing, can help young people to make a success of their lives.
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Mr. Paul Marsden: I, too, congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on securing the debate. I pay tribute to his dedication over several years to children's health and welfare. I also pay tribute to other hon. Members for the part that they have played. As a parent, I know all too well what it is like to experience that heart-stopping moment when one thinks that there may he a problem with one's own child. As a father of two, I appreciate that we can count ourselves lucky in this country. We must not forget that today, like every other day, 30,000 children around the world will die because of the want of basic inoculations and lack of food.

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Having said that, there are all sorts of issues to be raised about the direction of Government policy. The first place to start is the United Nations convention on the rights of the child. It sets out the basic rights of any child anywhere, with the aim of ensuring that no child be deprived of access to health care services. It sets out measures that should be taken to diminish infant and child mortality, to ensure the provision of necessary medical assistance to combat disease and malnutrition and to secure good child nutrition. Importantly, article 24 refers to developing preventative health care. That is what it should be about, prevention is always better than cure.
The Government deserve credit. They have moved along the agenda for children's health in leaps and bounds with the success of the sure start programme, and the national service framework for children is promising. I had hoped that it would embrace the Kennedy report and the report on little Victoria. Clearly, an enormous breakdown in services occurred in that tragic case. However, the national service framework's principle of putting children at the centre of their care and building services around them is paramount.
The Government have published the children and young people's unit document "Aim High: Stay Real". It is worthy in its aims. Typically, it is rather heavy, but nevertheless it should be looked at. I support what it is trying to put across: the importance of listening to young people and children. That is made clear on page 47. The children's focus group said that children wanted to have more sport in school, and that they wanted
"Nice and healthy school dinners".
It seems that, in the 25 years since I last tasted one of those, they have not improved much. I would have some sympathy with a Government who tried to enhance them.
The report also makes clear what parents want. They have stated that they want "ongoing medical check-ups" and the analysis of children's dental records, as well as more advice on nutrition. Health is one of the six outcomes in the document, and one of its key aspects is the problem of obesity and nutrition. One child in four, depending on how one counts, is obese—a fourfold increase since 1984—and one child in five eats no fruit. I do not think that we should force people to sign bits of paper in the form of a GP contract. However, we are on the verge of an epidemic. By 2020, if the estimates are correct, some 10 million people in this country will face diabetes because of obesity. I do not only knock corporations that do wrong—such as Cadbury's, which was offering to give away sports equipment by encouraging children to eat more chocolate, flying in the face of the good, healthy eating messages that the Government are trying to put out—I praise those that help, such as Tesco, which is promoting five-a-day portions of fruit and vegetables.
I look forward to seeing the Food Standards Agency's review of food promotion in July. Ultimately, we should be getting children more involved in exercise. While I welcome what the Government have done with an extra £1 billion of funding for physical education and school sport over the next three years, it is rather tame to set a target for 2006 of 75 per cent. of schoolchildren undertaking a minimum of two hours' PE a week. Faced
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with a possible epidemic of obesity, surely we should be aiming slightly higher than that? Over the past nine years, £2 billion has gone into Government-funded school sports promotion, but that has resulted in a mere 0.3 per cent. rise in participation.
Another issue is mental health. One child in 10 suffers from mental health problems, resulting in very high suicide rates among young males compared with those in the wider community. Those young males usually come from the social underclass. They are disadvantaged and living in poverty, although many of the root causes are to be found in childhood.
There has been an explosion of sexually transmitted infection over the past six years by 34 per cent. There has also been an increase in drug and alcohol abuse. About 11 per cent. of schoolchildren are experimenting with drugs and half of all 15-year-old boys admit that they drink alcohol regularly, and that is without mentioning the effects of smoking.
With regard to child protection, I welcome the Laming report and congratulate the Government on taking quick and decisive action on it. Nevertheless, the report was a damning indictment of what had gone before. The findings show that it is important to find ways of getting all the organisations—health, housing, education, social services, the voluntary sector and the police—that come across children every day to improve their co-operation. The jury may be out on children's trusts—I believe that the principle is right, and I appreciate that the Government have now introduced a great deal more flexibility into the concept, but there is still some confusion about how that can be applied.
Vulnerable children need the most help. I welcome the fact that we have a children's commissioner of sorts, but I hope that that role becomes truly independent and not subsumed into another position. I also want the increased investment to reach the front-line services. For example, the Government's own figures show that, since 1997, there has been a 20 per cent. decrease in the number of neonatal cots, which means that the money is not reaching the areas that it should.
The hon. Member for South Thanet (Dr. Ladyman), who chairs the all-party group on autism, said that more research into autism was needed. The Government commissioned a report from the Medical Research Council into the state of current knowledge, and awarded it £2.5 million to do the extra work. It is therefore a disappointment to see that the MRC has as yet been unable to identify studies to meet those criteria, and that so far not a penny has been spent. Sometimes we are overwhelmed with a deluge of targets and paperwork, which prevent the services from being carried out on the ground.
I welcome much of what the Government have done and give them credit for it, but much more must be done, and there are some worrying trends in children's health that must be tackled now, as otherwise we will reap their effects in the years to come.
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Tim Loughton: I, too, congratulate my hon. Friend the Member for South Cambridgeshire (Mr. Lansley). He has a great track record in standing up for children's issues, and speaks with great knowledge of the Kennedy report and children's trusts.

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Although those contributing to the debate have been limited in number, there have been some good contributions. As usual, the hon. Member for Lancaster and Wyre (Mr. Dawson) spoke with the benefit of experience. He praised the last Conservative Government for their introduction of the Children Act 1989, but in characteristic form then blew it by blaming the same Government for everything that went wrong with regard to children after that. He then became characteristically greedy in saying that he wanted a range of facilities for children in his constituency, including children's centres and children's trusts. The hon. Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) also made some excellent points.
Children's health is an enormous subject, to which 90 minutes of debate, with or without interruptions, cannot do justice. We could have had a debate entirely on adolescent mental health, as the hon. Member for Shrewsbury and Atcham (Mr. Marsden) mentioned. We could also have discussed the high incidence of perinatal deaths and the shortage of midwives—I will not go into the subject of birthing positions, which is of particular interest to me and the Minister—and attachment theory, and the importance of early -years development in shaping the character of children in difficult years later on. We are admitting three times more zero to four-year-olds to hospital than we were 30 years ago, and we have a chronic shortage of specialists in adolescent mental health. Even though children are supposed to be healthier than ever, as my hon. Friend the Member for South Cambridgeshire pointed out, some 30 per cent. of looked-after children have not been immunised against basic diseases, and a two-year-old in London may wait for up to two and a half years to get speech and language therapy—a wait that can lead to other health and social complications.
We could have debated the problems with drugs or the growing number of disabled children who are not being properly catered for. The figures for obesity among young children do not quite show what the hon. Member for Shrewsbury and Atcham said—that one in four children are obese—but that one in four obese children are already showing signs of diabetes. There are still enormous implications, and there will be a ticking time-bomb effect on the health of those young adults as they grow up. We need far more preventative steps and interventions by school nurses, and GPs must be given the time to spend on proper nutritional conversations with and education of young children.
The fact that some 20,000 children in Britain have life-limiting conditions could have been debated. That number is growing because children are living longer with those conditions, including cystic fibrosis, Rett's syndrome and Batten's disease, but we have only 250 beds to provide specialist hospice care for such children, and hospices get less than 7 per cent. of their funding from the state. The number of children infected with sexually transmitted diseases is growing alarmingly. There is a shortage of foster carers, and I hope that the Minister will support my Bill on the registration of private foster carers when she has the chance to do so in a few weeks.
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All those issues could have taken individual debates, and they all appeared at the Conservative summit on children's health that we held in January as part of our exercise to consult on and raise the profile of children's health issues. For too long, children's health has had a raw deal in this country, particularly if the child cannot be shoehorned into the infant or young adult categories. Lucy Thorpe, the policy director of the National Society for the Prevention of Cruelty to Children, said:
"Children are one quarter of the population and for too long their health needs, from a child-centred perspective, have come a poor second to those of adults."
As my hon. Friend the Member for South Cambridgeshire rightly said, children have been too often the add-on rather than the focus of health care. Will the Minister comment on the progress of the children's national service framework? It has been delayed, and the last indication from the children's tsar was that we would have the full Monty in December. Are we still on course for that, and what updates will there be in the coming months?
A common feature of all the problems is the need for a joined-up approach. All hon. Members have recognised that and mentioned linking up the agencies and bodies that touch on children and their welfare. That is why, like my hon. Friend the Member for South Cambridgeshire, I welcome the "A New Vision for Children's Services" partnership between the Local Government Association, the Association of Directors of Social Services and the NHS Confederation. Its work to establish closer partnerships and produce models of the interaction among schools, early-years development, sure start, child protection services, youth offending teams, looked-after children and children and adolescent mental health services is especially important.
As that partnership has pointed out, it is essential to ensure that the new arrangements focus on a vision to improve children's lives rather than just starting from the development of yet more new structures and organisations. What consideration has the Minister given to its proposals for common assessment processes to prevent children from undergoing numerous assessments with their families, a universal child indicator to ensure that vulnerable children are not lost to the system and a new statutory duty for agencies to safeguard and promote the well-being of children, and a supporting duty to form partnerships to this end?
What does the Minister think about the proposal that local authorities should be identified as the statutorily accountable bodies for the partnerships established under the new duty, that each local authority and partner agency should name a lead member and senior officer for children who will be ultimately accountable for child protection—a children's champion, as the partnership puts it—and that there should be new powers for co-operation and scrutiny to ensure a joined-up approach that is transparent and accountable to local communities? We concur with those sentiments and look forward to practical proposals from the consultation exercise. We will be interested to know how sympathetic the Minister will be to them.
Much health and special needs care is relatively good for well children who can negotiate the system, and reasonably good at dealing with children in severe need,

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but there are big gaps in the system for the many vulnerable children in between, who often have complex problems that are not easily pigeonholed.
Joined-up thinking is essential in respect of child protection, as was sharply demonstrated by Lord Laming's report on Victoria Climbié. We therefore set great store by the forthcoming Green Paper on children at risk. The Secretary of State promised that it would be available in the spring when he responded to the Climbié report on 28 January. There is some confusion about which Department is leading on the matter; it seems to be under the aegis of the Chief Secretary to the Treasury, but we do not know whether it is predominantly a Health, Home Office or Education and Skills matter. Perhaps the Minister will clarify the position.
Will the Minister give us an update on the ramifications of the Climbié report? It is 133 days since it was published and the Secretary of State responded to it, and three years and three months after Victoria Climbié's death in the most tragic circumstances. Child abuse and child harm still occur all too often: every week at least one child dies as a result of an adult's cruelty; a quarter of all rape victims are children; and most abuse is committed by someone the child knows and trusts. I could go on—it is a catalogue of despair that hon. Members know only too well.
In response to the Climbié report, the Secretary of State said:
"Sound legislative policy and guidance is, frankly, useless unless we can be sure that it is implemented effectively and consistently."—[Official Report, 28 January 2003; Vol. 398. c. 738.]
What resources are being allocated to implement the report's recommendations? How many new social workers are coming through the system? There is a drastic shortage of skilled professionals to provide the new services that need to be put in place. The Home Secretary and the Health Secretary pledged to ask the inspectorates responsible for health, police and social services to undertake further joint monitoring of local services in north London to provide independent assurance that standards are improving. What is happening in that respect?
The Secretary of State was supposed to write to the chief executives of local health services and local authorities emphasising their duties towards vulnerable children, which should be reflected in their budget decisions. He also offered to oversee a review of training needs. What is the current position? The plethora of out-of-date, confused guidance was supposed to have been swept aside by now. Has that been done? When will there be a report on the pilot study of the first generation of children's trusts? Will child protection remain at the heart of those trusts?
People are becoming increasingly impatient for answers to their questions. On 28 January, we were promised a response in three months' time. The Green Paper was supposed to be a panacea for all the problems, and we urgently need an update on the position before the summer recess. Under the Children Act 1989, children must be at the centre of policy considerations on health and social care, and we must ensure that they are. I hope that the Minister will answer my questions and assure the House that action is being taken, which will help to allay some of my fears.
3.28 pm
The Minister of State, Department of Health (Jacqui Smith): I echo what hon. Members said about the high quality of the debate, and I congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on securing it. A wide range of issues have been raised and, without exception, contributions have been intelligent. [Interruption.] Yes, without exception. I shall try to cover as many issues as possible in the short time available.
Healthy children have a better chance of becoming healthy adults; much adult disease and many emotional and psychological difficulties have their roots in childhood. Much is good about the services provided by the NHS and local authorities to support children, young people and their families, and the work force are dedicated to them. Lives are being saved, diseases previously believed to be incurable are now being treated effectively and children are being protected. There are new opportunities for disabled children, those in public care and those with mental health problems. However, we need to do far more. The effect of inequalities and poverty on the lives and health of children must be tackled.
As hon. Members said, we need services that are more child and family focused. Despite the high quality of many children's services and the dedication of staff, we need that focus, and high standards, throughout health and social care services. That is why we appointed Professor Aynsley- Green as the national clinical director for children, and it is a tribute to his work in raising the profile of children's health services that he has been mentioned so frequently today. It is also why we published the hospital standard on 10 April as part of developing the national service framework. As the hon. Member for South Cambridgeshire suggested, that is a major part of our response to the Kennedy inquiry, which highlighted the need for services to be more child centred. It also reflects some of the concerns expressed in the Climbié report about the need for children to be safeguarded in and by hospitals.
The new standard covers the design and delivery of hospital services for children and the safety and quality of care. It will help to ensure that children are cared for in hospital settings that adequately reflect the needs of their age group. In response to a point made by the hon. Member for Shrewsbury and Atcham (Mr. Marsden), I can tell the Chamber that we also announced in April £17 million of investment in intensive care. Following recommendations made in the Kennedy inquiry, hospitals will now expected to appoint a children's champion at board level to ensure that standards are being met. That is one of the ways in which we can achieve the necessary change. In line with recommendations made in the Laming inquiry, no child should be discharged from hospital without a care plan.
The new standards also mean that NHS hospitals should consider introducing facilities for young children that are separate from those provided for adults, as well as designated play areas for young children, privacy for adolescents, education support so that children do not fall behind, special menus that encourage children to enjoy their meals, regular security reviews, specialist training for staff dealing with children, and play specialists who help children to cope with the distress of being in hospital.

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Understandably, the hon. Member for South Cambridgeshire pressed us about the delivery of the NSF and about the new standard in particular. We are now, rightly, operating in a different context that is about shifting the balance of power to a local level at which some of the national targets and milestones, although appropriate for delivering previous national service frameworks, may not be appropriate for this one.
What are the levers for ensuring that such change will happen? I am pleased with what ray hon. Friend the Member for Lancaster and Wyre (Mr. Dawson) said about the approach being taken in Lancaster to examining children's services and children's experience of them. That will be important locally, as will clear definitions of local outcomes, local information on children and their services to identify gaps, and local strategic planning. However, we will also provide support for commissioning services and integrating them appropriately.
We have made it clear that the targets applicable to the next three years in the planning and priorities framework include targets on child and adolescent mental health services, which my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) mentioned, services for vulnerable children, screening, work on inequalities, substance abuse, early booking for maternity services, as well as general improvements in their overall capacity and in access to them, and resourcing the delivery over the next three years of those plans.
The National Institute for Clinical Excellence will have an important role in developing guidelines that have been commissioned for particular interventions. We also, of course, need to develop better child-centred inspection. We need to work with the new inspectorates, the Commission for Healthcare Audit and Inspection and the Commission for Social Care Inspection, to ensure that the standards are reflected in the inspection regimes and that tools are developed to monitor progress. In the end, however, it is for each locality, according to its own baseline position and priorities, to decide the speed at which work towards meeting the standards will be done and which standards and improvements will be made at which time. The needs in Cambridgeshire are not the same as those in Lancaster, and it is right that those different needs are reflected, given the national standards made clear in the hospital standard and the increased investment to help to deliver them.
I turn now to the points that the hon. Member for South Cambridgeshire made about configuration. Although there is more work to be done, I disagree that
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there is not a clear idea of the direction in which hospital services should go. In publishing "Keeping the NHS Local—A New Direction of Travel", we made clear the principles on which local configuration issues should be addressed. We will carry out further work, for example, on modelling some of the difficult issues involved in configuring children's services, particularly those relating to paediatrics, and maternity and obstetrics, which the hon. Gentleman mentioned. That work will show some of the models that enable us to make the best use of increasing numbers of staff in the system, and ensure that, whereas previously we may have thought that specialisation and large hospitals were the only way to deliver services safely, we can provide those services near the people who need them.
As the hon. Gentleman said, we will encourage the development of clinical networks. The hospital standard sets out what is expected of tertiary services. Alongside, for example, the £70 million investment in neonatal intensive care, we are asking local areas to develop those networks. That is the hospital standard; the NSF also covers a range of other areas. This has been an extremely complex task, and a large number of stakeholders have been involved.
To respond to the question asked by the hon. Member for East Worthing and Shoreham (Tim Loughton) about timing, we are looking at publishing the NSF in 2004, but to ensure that the direction of travel was clear, we published the "Emerging Findings" consultation document at the same time as the hospital standard. That allows local discussions to be informed by the principles of the work that has already been done, which will help to ensure that progress continues.
Several hon. Members mentioned children's trusts. One of Laming's starkest conclusions related to the inability of organisations to work together. Children's trusts are intended to tackle the lack of co-ordination of the services delivered to children. Local authorities have responded to that opportunity extremely well. Nearly a third have applied to create a new trust with their health partners. The majority are commissioning services for 0 to 19-year-olds, although they are often focused on vulnerable children.
I agree with my hon. Friend the Member for Lancaster and Wyre that structural change alone cannot deliver what we want. That is why the fundamental building blocks of children's trusts and of our services must be shared objectives, common assessments, the sharing of information between professionals and direct accountability. Working with those building blocks, we can change practice. I expect the first tranche to be announced in the next month or so—
Mr. Deputy Speaker:Order. We must now turn our attention to the next topic for consideration this afternoon.

NHS Hospitals
3.38 pm
Dr. Richard Taylor: I like the intimacy of Westminster Hall and the almost one-to-one contact with a Minister. I am grateful to this Minister for coming, because she engages with the debate and takes on board the concerns that are raised. The other reason why I enjoy debates in this Chamber is that I can sit right in the middle, so I am not obviously an Opposition Member or a Government Member. I hope that I can make some helpful suggestions and comments, because my feelings about the NHS are exactly the same as the Minister's, and I desperately want it to succeed in all parts.
My main message in talking about the assessment of quality is that patients are often the best judges of quality, but they are not sufficiently used. I must also point out the dearth of assessment of clinical outcomes. I shall approach the matter in three ways: first, briefly, by looking at past ways of attempting to measure quality; secondly, by considering the current attempts; and, thirdly, with some hopes for and comments on the future.
The first of the past methods was the assessment of the number of complaints made. That was obviously useful, but pretty crude. Community health councils, as the Minister knows very well, were valuable, with their visits, tours of inspection and reports. The charter mark institution was invaluable, because a hospital that applied for a charter mark got it only if everybody involved—including the patients—was consulted.
Possibly the most important measure of quality that was, and still is, used, and which I think is perhaps overlooked, is the inspections of hospitals by the royal colleges for the purpose of accreditation for the training of junior doctors. Included in those reviews is a random selection of case notes for examination. I remember that when the royal colleges visited hospitals where I worked, one had no clue which case notes would be picked out of a trolley. The case notes are absolutely crucial in assessing quality of care, and The Times has recently drawn attention to how important case notes are for litigation purposes. However, if one looked at case notes in one's own hospital for a patient under another consultant, one could see, for example, that nothing was written up for a whole fortnight, in which case one did not know what had happened to the patient during that period. The quality of note-taking and keeping is crucial.
Out of the current attempts, the star ratings have received a lot of flak recently. That flak is, I am afraid, deserved. The system includes the nine key targets, which decide the star rating of a given hospital. On the other issues that are so important, such as the clinical focus, the patient focus, and the capacity and capability focus, the relevant document says glibly that they are taken into account by a balanced scorecard approach. I have yet to find someone who can really explain what that is.
I do not want the Minister to waste time on that now, however, because whatever it means it does not have any effect. The ranges under clinical focus demonstrate that: three star trusts, for instance, score between 37.5 and 80 per cent., whereas no star trusts score between 42.5 and
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82 per cent., so if anything their range is slightly better. In the in-patient survey, three star trusts score between 30 and 100 per cent., whereas no star trusts score between only 23 and 80 per cent. Again, there is only a bit of difference. In relation to staff opinion and data quality, all grades of hospital range through all the possible scores, from the lowest to the highest.
I welcome the better base for criticism of the star rating system which the Audit Commission proposed just last week in its paper, "Achieving the NHS Plan". That paper is based on the work of independent, locally-based district auditors, who are examining every trust. I have great respect for that scheme because my local district auditor is one of the very few people who have picked up on the truth about some of the problems faced by my constituents. The Audit Commission sums up the matter in these words:
"There is a statistically significant relationship between performance and managerial adequacy. The number of DH stars awarded is only weakly related to either."
That is in tremendous contrast to "Raising Standards", the Department of Health book published in May 2003, which states:
"The system of star ratings gives a clear and transparent measure of performance, giving everyone information on the relative strengths and weaknesses of local NHS organisations."
Coupled with my rather amateur observations, the Audit Commission raises real concerns that those other factors—clinical focus, the in-patient survey, data quality and staff opinion—are largely disregarded in favour of targets that lend themselves to manipulation.
I was rather surprised by the Secretary of State's comments on star ratings to the Health Committee during the foundation trust inquiry. He said:
"Whether or not the star ratings are right, wrong or indifferent does not really matter."
He went on to explain that, as everyone knows, some hospitals are good, a few are bad and most need to improve. However, we are now in the business of selecting trusts for foundation status, and star ratings matter a lot because they are the only way of selecting hospitals.
The findings of the 22 acute trusts that have been selected show in-patient survey results that go across the whole range, as do those for data quality and staff opinion surveys, so at least one of the trusts going for foundation status has almost the lowest patient opinion survey results of any trust. Casting doubt, as I do, on the value of the star as a mode of selection for foundation trusts goes against paragraph 55 of "Raising Standards", which states:
"Foundation Trusts that achieve NHS Foundation Status will have a proven track record in management and delivery of high quality services to patients."
I move on to Dr. Foster's "Good Hospital Guide". The most recent edition was heralded on the cover by an eminent surgeon, who said that it was the most authoritative insight into hospital quality. Is it? I do not think that it has yet reached that stage. One has only to examine the quality measures that Dr. Foster uses. Ten of them are for available services, five of the remaining 10 reflect a degree of quality of care and the last five reflect only the potential for quality of care. Those factors do not affect the quality or the outcome. For example, if a hospital offers treatment for lung cancer it

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is half way there; it can achieve the highest standard by having a multi-disciplinary treatment team. That says nothing about the outcome or even the quality of treatment.
The doubt cast on Dr. Foster was accentuated for me when a hospital that I know well was one of seven short-listed for the hospital of the year award. Following a visit to the hospital, the president of the Royal College of Surgeons wrote that
"The situation is bad and the staff have innumerable problems"—
problems that he proceeded to enumerate.
I will not say much about the Commission for Health Improvement because it does not have much longer to run, and I am concerned that the clinical governance reviews may restrict too tightly what it can do.
I have just a few minutes left, and I wish to make some constructive comments and suggestions for the future—nothing particularly original, simply some matters that should be stressed. First, the new Commission for Healthcare Audit and Inspection, or CHAI, has the tremendous responsibility of making the quality measures work. I hope that the commission will bear in mind the work that district auditors are doing. The Audit Commission recommended the following:
"CHAI should in consultation with the DH, consider what use could be made of auditor's assessments to help ensure that their revision of the trust 'star' system produces an accurate way of categorising trusts."
I would hate to see the expertise of the district auditors lost.
Secondly, I would like to see the Royal College of Physicians inspections of hospitals included in the process because they collect a vast amount of incredibly useful information. Thirdly, patient involvement must be increased, made more open and taken into account as part of the star ratings. I am still perplexed about why the 2002 in-patient survey was never published. Even if it does not show the facts that the Government hoped it might, a Government with a huge majority can surely be brave enough to face criticisms openly. It is an inescapable fact that the Government are improving some aspects of the NHS.
Fourthly, the Commission for Patient and Public Involvement in Health—with its primary care trust patient forums—is crucial in helping to ensure that the voice of the patient is heard. Lastly, I understand that Dr. Foster and others are working on measures of clinical outcome, which are exactly what the NHS so desperately needs.
3.52 pm
The Parliamentary Under-Secretary of State for Health (Ms Hazel Blears): I am delighted to be here today to engage actively with some of the points raised by the hon. Member for Wyre Forest (Dr. Taylor). This is an important issue, and it is important for patients to have access to information about how their local health care organisations are performing. I remind the hon. Gentleman that this Government have, for the first time, ensured that patients have access to information about the performance of the NHS. Following its inception, there were no means for people to make an objective
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assessment of how well, or how badly, the NHS was doing locally. I accept entirely that the situation is not perfect, but we have made some dramatic strides in the last few years.
The hon. Gentleman will be extremely familiar with the context in which we are now working in the NHS. After decades of under-investment we now have record amounts of extra resources going into the system. We must ensure that we get the best value out of that investment. I am sure that the hon. Gentleman shares that aim. That is why we need to reform the system, redesign services and examine all the work being done in clinical areas. A key driver for that reform is better information for patients. If patients have power and knowledge, they can help to exert pressure on the NHS by making legitimate demands to drive up performance. Patients can be our allies in the process.
We already have the star ratings system. Those ratings were first issued to all non-specialist acute trusts in September 2001. They were extended in July 2002 to specialist trusts and ambulance trusts, while mental health trusts received an indicative rating. Primary care trusts will receive their first NHS performance rating this summer, which will assess their performance for 2002–03. The process is ongoing.
3.54 pm
Sitting suspended for a Division in the House.
4.7 pm
On resuming—
Ms Blears: I want to say a little about the role of the Commission for Health Improvement and the new Commission for Healthcare Audit and Inspection. CHI is the independent regulator of NHS performance. It has taken over responsibility for publishing the performance ratings from this year which, subject to parliamentary approval, will be transferred to CHAI. For the past two years, CHI has played an important role in driving forward the modernisation of the NHS and in improving standards. It has carried out more than 280 reviews and produced 10 reports on serious service failures. It now has a very good body of expertise in the field.
Having acknowledged CHI's achievements, I think that it is also fair to say that the fragmentation between CHI, the Audit Commission and the National Care Standards Commission has led to unnecessary bureaucracy that has placed a burden of multiple inspection on the NHS. It is right to try to find a way through that to minimise the confusion. We are therefore setting up the new, tough and independent health care inspectorate, CHAI, which will bring together the work of CHI, the value for money work of the Audit Commission and the independent health care work of the NCSC.
The hon. Gentleman makes an important point about the role of local district auditors in monitoring performance on the front line. Last week, I read the Audit Commission's report. The information gathered in the process of producing the report has been extremely useful at local level for chief executives and trust boards. It has enabled them to see how they can

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introduce changes that will help them to raise standards. I certainly agree that we should continue to provide such local information in the new system that we set up.
The new commission will be an even more powerful driver on the quality agenda. It will be an authoritative, independent judge of the quality and efficiency of health care. It will be a driving force for continuous improvement, and it will reassure patients and the public that national standards of quality and service have been met wherever care is provided, whether in the NHS or the private sector. As we move towards a situation in which we have a plurality of providers in the NHS, the not-for-profit sector and the private sector, it will be vital to make sure that people can rely on the same standards of service wherever they are.
The hon. Gentleman has criticised the star rating system. The process is always subject to improvement. We do not pretend that it is perfect, but it has improved vastly. Each year, the indicators are refined and become more sophisticated. The hon. Gentleman outlined the key targets on which trusts are subject to a pass or fail assessment. Those include the three focus areas: clinical focus, patient focus, and capacity and capability. In the clinical focus for acute trusts there are 10 indicators, which include deaths within 30 days of a heart bypass operation, deaths within 30 days of selected surgical procedures and emergency readmission to hospital following discharge—a genuine attempt to assess the quality of care and to determine whether the patient had to be readmitted because something went wrong.
The indicators also include infection control procedures, which are important for patients because of MRSA and other illnesses in hospital, and thrombolysis treatment time. That is another clinical indicator because there is overwhelming evidence that if people receive that treatment within the golden hour, we will save lives. I therefore dispute any claim that all the indicators in the star rating system are non-clinical.
The hon. Gentleman has asked about the balanced scorecard. I shall not go into the technicalities, but I have discussed the matter with my local chief executive, who has found the totality of assessment of his organisation incredibly helpful when talking to staff and clinical managers, and when considering strengths and weaknesses on a wider canvass than merely the top key targets. As well as being important for the public and patients, the balanced scorecard is an incredibly useful tool for managers and clinicians in raising standards locally.
Dr. Taylor: I did not mean to imply that the clinical focus was not there—it obviously is, and it is very valuable. I meant that it was probably not taken sufficiently into account by the balanced scorecard approach.
Ms Blears: It is a matter of getting the balance right. CHAI is continuing to refine the available information.
The hon. Gentleman made the important point that patients are often the best judge of quality in the NHS. This Government have introduced patient surveys, which are translating into the star rating system through the patient focus of the indicators. We have often said that the NHS should be judged by those who use it and the taxpayers who fund it. It is right to introduce the citizen and consumer focus into the NHS, and we are, increasingly, endeavouring to do so.
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The hon. Gentleman made some interesting suggestions about how we might further refine the process of gathering information about how well the service is doing, including the use of information gathered by the royal colleges when they consider the accreditation of organisations. I shall feed that back through the system to find out whether it is a feasible means of gathering further information. He also stressed the importance of ensuring that the Commission for Public and Patient Involvement in Health, in developing its protocols for patient involvement, be kept in close contact with the development of quality indicators. I agree that that is fundamental if we are to get a genuine patient view about the performance of our organisations.
Let me say a little about how the performance rating system will affect the primary care trusts, because we are venturing into a new area. The approach to PCTs has to be different from that to acute and specialist trusts, because PCTs do not simply provide services. Their performance will therefore be assessed in three areas. The first is services that they themselves provide, which is an established route. The second is access to quality services, because PCTs have a commissioning role, and being able to assess their robustness as commissioning organisations is key. The third area, to which I, as Minister with responsibility for public health, will have particular regard, is the improvement of the health of the community.
PCTs will, like other organisations, be assessed on how they look after the wider public health interests of the population that they serve. I hope that the hon. Gentleman will acknowledge that the system of measuring achievement and standards in the NHS is becoming more sensitive to the new reconfigured NHS that we have been creating, so it ought to give us a good view of its performance.
On assessment against the key targets, the star rating system gives three stars to trusts that perform at the highest level, two star to trusts that perform well overall but have some room for improvement, one star to trusts where there is some cause for concern, and zero stars to trusts that are identified as having the poorest performance. The hon. Gentleman was concerned that the trusts that are eligible for consideration for NHS foundation trust status have some weaknesses in their systems, and the Audit Commission report identified three out of the four trusts which may have some weaknesses. However, I assure the hon. Gentleman that the application process for foundation trust status is not only about having three stars. The Secretary of State must also approve the application, and there will be a robust process to look at the organisation as a whole. It is not just a matter of having three stars and automatically gaining that status, although I recognise the hon. Gentleman's concerns.
It is also important to point out that, although the Audit Commission report includes some concerns about the number of targets, it also recognises that there have been significant improvements in the NHS as a result of the targets that have been used. Targets are in disrepute at the moment, but it is acknowledged in the NHS that without the drive for he system to change we would not have seen dramatic reductions in waiting times or service redesign, so I want to put in a little word for targets. One of the keys to targets is getting local

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ownership of them, so that everyone in the NHS wants to see changes and to make progress on behalf of their patients, and in those cases targets are appropriate.
The hon. Gentleman also said that there was sometimes a disparity between the star rating system and some of the Dr. Foster assessments published in The Sunday Times. We are always happy to co-operate with Dr. Foster and other independent reviews. The NHS collects the information to which those organisations have access, and we try to ensure consistency of data; however, the surveys that Dr. Foster carries out will, perhaps inevitably, not be as extensive as some of the national surveys.
There will also be differences between surveys. For example, Dr. Foster's measurement of mortality rates is, I think, based on deaths that occur in hospital, whereas the star rating system also measures deaths that occur within 30 days of discharge, which is a different and more complex measure. We also try to take into account the skill mix and the case mix so that we have a more robust measure. It is therefore perhaps not surprising that there are some variations between the Dr. Foster assessments and the central NHS assessments, although we are always pleased to co-operate as far as we can; in helping to raise standards it is important that patients have access to the widest range of information possible.
I hope that the hon. Gentleman agrees that the Government have been open, transparent and straightforward, and that we have shown a real commitment to ensuring that the information is in the public domain. The service is not perfect, and I would not for one moment pretend that it is, but we have made significant progress in ensuring that the public have access to information about the service that they use, depend on and pay for. The hen. Gentleman is a champion of citizens' rights and I hope that he agrees that the Government have demonstrated a commitment to putting the patient at the centre and to ensuring that services are driven by the patient's requirements and needs as much as by any other factor.
Mr. Deputy Speaker: It may assist the House if I remind all present that we are playing with up to 21 minutes injury time at the moment, so the next debate must conclude by 4.51 pm.

Contract Workers
4.19 pm
Colin Burgon: I thank the Speaker for allowing me to raise an important subject this afternoon. At the beginning of this month, our Government were one of four who sided with business interests against the EU directive intended to give equal pay and basic employment rights to temporary agency workers. The Department of Trade and Industry objected to the EU temporary agency workers directive, which gives equality of treatment to workers in that category, on the grounds that it believes that there should be a 12-month qualifying period for such rights. In other words, temporary agency workers should get the same rights as their permanent counterparts doing the same job only when they have been in the job for 12 months.
Many Labour MPs will find that approach disappointing, to say the least. It certainly conflicts with the Government's positive record on the minimum wage, which has helped to lift 1.5 million workers off poverty wages; the introduction of the trade union right of recognition, which the trade unions themselves acknowledged as key legislation; the introduction of the working families tax credit, which has helped 1.3 million people to secure an income that is on average £40 a week more than that under the family credit system; and the introduction of the new deal, which has helped to get about 1 million people back into work and secured the lowest unemployment rate for 30 years. Particularly positive has been the impact that we have made on longterm youth unemployment, getting 380,000 young people into work.
From my perspective, it should be a logical step to support the EU temporary agency workers directive as a measure that will give greater security to those in work by giving decent pay and conditions to a significant number of working people. However, that view was not shared by the DTI, because it argued in its submission to Europe:
"The Government remains concerned that the Directive risks decreasing the attractiveness of agency workers to user companies, which might reduce the number of jobs available. It is necessary that the Directive is suitably flexible to accommodate UK practices."
4.21 pm
Sitting suspended for a Division in the House.
4.28 pm
On resuming—
Colin Burgon: My response to the DTI's approach is the view of no less a figure than Polly Toynbee, a journalist for The Guardian, who said:
"It is shocking that a Labour Government has sabotaged equal pay for people doing equal work."
She even went on to describe the DTI's foiling of the EU Directive as "real wickedness".
I know the view that many in Government have of The Guardian and its outlook, and can quote a less contentious critique emanating from Brendan Barber, the TUC General Secretary, who said:

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"The government has sided with business interests to 'scupper' the prospect of agency workers getting equal pay and basic rights in the foreseeable future. It is bad for business and unjust for agency workers to be denied protection from sub-standard treatment."
I hope that those words will resonate with many Labour Members and with many people in the world of work.
What is the scale of the issue that we are discussing? Statistics show that in autumn 2002, 1.6 million employees said that they were temporary workers. That amounts to 6.3 per cent. of all employees in Britain. Of those 1.6 million, nearly 300,000 said that their temporary work was undertaken for agencies. I want to focus on that group today.
Agency temps are heavily concentrated in three sectors: banking, finance, business services, which take about 31 per cent.; the public administration of health and education services, which take about 22 per cent.; and manufacturing, which takes about 20 per cent. Those figures may be the statistics, but what is the daily reality for many of the agency workers? I shall illustrate it by setting out the employment conditions that one of my constituents recently described to me. I will call him Mike as I do not want to give his real name for an obvious reason: he would fear for his job if his real name was known.
Mike works for a well-known chain retail outlet. There are both permanent workers and temporary agency workers in his workplace, but the only permanent workers are those who were taken on a long time ago before a trend developed in the firm, as in many others, to take on temporary agency workers. Since he started working at the store six months ago, only temporary agency workers have been employed. No permanent employees have been taken on. The motivation behind the company's strategy is clear. To put it bluntly and straightforwardly, temporary agency workers are much less expensive and far easier to dispose of.
Let us consider Mike's terms of employment in more detail. Unlike that of the permanent employees, Mike's weekly and holiday pay are subject to a set of perverse deductions. The permanent workers have established holiday pay entitlements, but the holiday pay of temporary workers, who are doing exactly the same job, is calculated on the average daily pay for the last 12 weeks. However, days for which temporary workers are not paid are included in that average. Those days include bank holidays, days absent without pay—for instance, when the store instructs the temporary workers that there is no work that day—and days off sick. On top of that, overtime payments, which could increase the daily rate on which the calculations are made, are not counted.
A painful accident at work meant that Mike had a week off, supported by a doctor's note, for which, unlike the permanent staff, he was not entitled to pay. The week off sick therefore reduced his holiday pay by £45. On another occasion, Mike was feeling ill on a Friday at work but persevered and struggled through the clay. With only an hour of the working week left, he decided that since he was now suffering from diarrhoea and having to pause frequently to dash to the toilet, he would go home ill. He was told that if he took the last hour of the week off sick he would lose his whole week's bonus pay—a deduction of £29.40. That bonus was
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initially portrayed as a pay rise to which a temporary agency worker was automatically entitled after four weeks of service. In reality, however, it can be paid or withheld at the company's discretion.
The store has other methods of clawing back money from the temporary worker's pay packet. When Mike started his job, he was told that employees needed special safety foot wear at work. The footwear was provided but, to the employees' disgust, they found that £19 had been deducted from their pay packets. Job security is crucial for all workers. For Mike, it is only a pipe dream. From day to day and from week to week, temporary employees do not know whether they will still have a job the following morning. No notice is required to end these workers' contract of employment.
Mike had a job when I started my speech a few minutes ago, but there is no guarantee that he will still have that job when I conclude my remarks. In his six months at the store, Mike has seen many temporary employees like himself laid off. He also recounts how many of his colleagues are laid off and then taken on again soon afterwards when there is more work available, in order to cut company costs. He admits that the agency he works for is not as bad as some of the appalling cowboy agencies that he has experienced and others about which he has heard. In Mike's words, as a temporary agency worker:
"I have no job security or rights."
A committed trade unionist in previous employment, Mike regards unions as being of little use in his current job. A union's role is to defend and assert employment rights, but in Mike's situation as a temporary agency worker he has so few rights that there is virtually nothing to defend. Some shop floor trade unionists even look at agency workers as a threat to the terms and conditions that they have won for their members. There are contradictions running through the entire story.
What I have described is the day-to-day reality faced by hundreds of thousands of agency workers across the country. Certain interests boast of their flexible work force. "Flexible", according to Mike, is just a code for no job security or rights, just as in new business speak "downsizing" means redundancies and "outsourcing" is another way of saying privatisation. However, whatever the language used by companies like the one in question, it cannot mask the depressing reality that is the lot of the temporary agency worker.
In Leeds, my home city, we have been having a debate—carried out principally through the columns of the Yorkshire Evening Post—about our two-speed economy. Much of our great city is doing exceptionally well, but significant pockets of it are in danger of being left behind. One of the factors that contribute to that state of affairs is that many citizens are engaged in contract or agency work. In that group it is the young, males over 50—so I had better watch out—and women who predominate. It is clear that they are in danger of being locked into a cycle of low-paid unskilled work with little or no training, or access to it.
Phil Hope: I congratulate my hon. Friend on securing the debate, and making a powerful case. He and the Minister will be aware that for the last six years I have made known my concerns about the issues that he has described—low-paid, low-skilled work, and

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particularly the plight of young people in the labour market. Does he agree that temporary agency work can not only be subject to the kind of abuse that he has described, but can mean that young people do not get the chance to enter modern apprenticeships or the new deal? They just go into the black hole of temporary work, never to emerge; never to get on to the ladder of opportunity that this Government have provided for so many other young people. Agency working is having that impact. Would my hon. Friend support an extension of employment rights, to young people in particular, and stricter regulation of the cowboy agencies that he mentioned earlier, so that we can bring genuine opportunity and equality to the young in low-paid and low-skilled jobs in our communities?
Colin Burgon: I thank my hon. Friend for that intervention. I fully agree with him I pay tribute to the work that he has done. One of the key pieces of work that I examined was a study that he carried out in his constituency. That study is a model of constituency activism by a Member of Parliament.
A Labour Government should not ignore these working people, and we have to ask ourselves whether the position of agency workers has been helped in any way by the Government's failure to sign up to the EU directive. The answer would have to be that they have not been helped one jot. In arguing that there should be a 12-month qualifying period before agency workers receive equal treatment, the Government would have, in the words of Ms Toynbee, rendered the directive "a nonsense". Many workers are only on three or six-month contracts in the first place and few temporary workers remain with the same employer for the 12 months necessary for them to qualify for equal rights under the Government's proposal.
Mike told me of a fellow employee who had worked for agencies for six years, but never for a 12-month stretch in a single workplace. If the EU directive were shaped as the Government wish, in practice that employee would never have rights equal to that of a permanent employee—whether he worked for the agency for six or 60 years. I fear that such an emasculated EU directive would be far worse than Ms Toynbee's mere "nonsense". Indeed, such a directive, hampered by the kind of qualifying period for which the Government lobbied so hard, could be used irresponsibly by business to avoid giving employees decent pay and protections. Are we to trust that all businesses will be benevolent and refuse the temptation to save money by getting rid of temporary staff before the 12-month period is up and replacing them with new staff on the same derisory terms and conditions?
The Government's approach to the EU temporary agency workers directive is a deliberate and overt rejection of the employment rights of temporary employees. In terms of pay and conditions, it would also create the risk of worsening job security for many employees. It is easy to see how such a system could be used irresponsibly by business to avoid giving employees decent pay and protection.
Like others in the Chamber, am proud to be a Labour MP under a Labour Government under whom an economic strategy moulded by the Chancellor to
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achieve opportunity and prosperity for all has given rise to the lowest unemployment that we have experienced for nearly 30 years. It is a great contrast to the dark years of Thatcherism, when unemployment exceeded 3 million. We often forget that, but we must continue to remind people. The Conservatives said that it was a price worth paying, but those of us who represent constituents whose lives, and those of their families, were thrown on the scrap heap in the cause of economic dogma know that the misery caused by unemployment is never a price worth paying.
However, even now that full employment is a real and achievable goal thanks to the Government's economic management and ideals of social justice, we must remember what kind of employment people should be entitled to. They are entitled to more than a job with "no security and no rights", as Mike so accurately described, and more than a job whose pay and working conditions seem to have been lifted off the pages of "The Ragged Trousered Philanthropists"—sordid 19th century employment practices embedded in the 21st century.
I want to put a few points to the Minister. I have high regard for him, although I should point out that I am not after a job, temporary or otherwise. First, as anyone can open an agency in the UK, a large number of small outfits open and close every year. The UK has no licensing requirement or requirement to join a professional body that could enforce a code of best practice. Only half of eligible agencies join the main industry-wide body, the Recruitment and Employment Confederation. Will the Minister consider legislation to cover employment agencies, and does he agree with the TUC that the lack of employment protection for the agency workers in the UK is allowing some cowboy agencies to exploit vulnerable workers and undercut agencies that offer decent pay and protection? Does he also agree that the UK economy and work force need fewer agencies that share quality practice underpinned by legal minimums?
Secondly, when the issue of protection for agency workers surfaces again, as it surely will, will the Government place much greater weight on the submissions of the TUC and its affiliated unions? Will they also look at how they can help the unions to organise among that group of workers? I hope that the Minister will agree that the group of workers that we are discussing today get little in the way of favours; the minimum that a Labour Government should bring to their lives is fairness.
4.43 pm
The Minister for Employment Relations, Industry and the Regions (Alan Johnson): I congratulate my hon. Friend the Member for Elmet (Colin Burgon). Without turning this into a mutual admiration society, I praise him for his interest in these issues. This is an important debate and I am pleased to take part in it.
The terminology is important. I shall speak about employment businesses, because that is the strict legal term that applies to agencies and employers that we are discussing. I want to say a little about what we do to protect agency workers, which is important to place on record, before we come to the important points that my hon. Friend raised, including on the proposed European directive.

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There are several estimates of the number of agency workers in this country. My hon. Friend referred to a labour force survey figure of 300,000, and the Recruitment and Employment Confederation says that there are more than 1 million. Our estimate, from important work done by the Department, which has been associated with agency workers for the past 30 years, is that there are about 600,000 agency workers. The number is considerable, and it covers a variety of skilled and unskilled occupations. My hon. Friend the Member for Corby (Phil Hope), who has taken an interest in the issue for many years, will know the diversity involved. That figure includes warehouse operatives and managers, doctors and nurses, porters and IT specialists, young girls going into modelling, people in the acting profession, caretakers and college lecturers. The sector is diverse.
Agency workers have access to core employment rights and statutory social security benefits. Since coming to office, the Government have sought to ensure that all workers receive minimum standards on pay and conditions. Since 1997, we have significantly improved protections for agency workers. The national minimum wage and the right to four weeks' paid holiday apply to agency workers. The so-called rights for whistleblowers in the Public Disclosure Act 1998 apply to agency workers. Agency workers also have the right to be accompanied at disciplinary and grievance hearings, introduced under the Employment Relations Act 1999, and part-time agency workers have the right not to be treated less favourably than similar full-time agency workers.
Agency workers already have the same protection as other workers and employees under existing sex, race and disability discrimination legislation. Our employment status review is also relevant, but we have found that many groups of workers do not realise what rights they have. The Department of Trade and Industry and Government agencies have the job of ensuring that they do.
Since 1976——nearly 30 years ago—a special regulatory regime has been in place to protect agency workers and hirers, and to regulate the operation of the private recruitment industry. That provides specific protections for agency workers in the triangular relationship between worker, employment business and hirer. For example, employment businesses must pay workers on time, regardless of whether they have been paid by the client. Agency workers must not be restricted from taking up direct employment with the hirer, and they must be given written statements on their work and pay rates. Employment businesses cannot charge their workers fees for finding them work.
That legislation is backed up by an inspection regime. The DTI's employment agency standards inspectorate is responsible for enforcing the provisions of employment agencies legislation. The DTI also runs a helpline to which agency workers can report concerns or complaints about the operation of an employment business, and from which they can seek advice on their rights and the protections offered to them under the law. The inspectorate investigates all relevant complaints about employment businesses, and inspectors visit them to ensure that they are complying with the law. When appropriate, the inspectorate will prosecute employment businesses in the magistrates court.
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My hon. Friend the Member for Elmet asked whether we could reintroduce a licensing system. It was discarded a while back because it was not effective—people thought that once they were on a list of approved agencies, they could do whatever they liked. However, when we got rid of that system, we introduced a power that allowed the DTI inspectorate to prohibit persons or companies from running an employment agency for 10 years. That is an important measure, although it was seen at the time as draconian. My Department regularly receives letters of thanks—they are pinned up on our office walls—from agency workers who have been helped by our inspectors. That is a little commented on but important part of the DTI's work.
We are reviewing the domestic protections for agency workers, and we have been looking to update the rules on the conduct of employment businesses to make them simpler and to ensure that they reflect modern arrangements. We have also been considering controversial issues such as temp-to-perm fees, and health service agency staff whose health and safety protection was due lo be given by the person for whom they are caring rather than by the agency—an anomaly that we intend to address. We have considered a swathe of issues over the past few years, and I hope that we will be making announcements on them fairly soon.
Agency workers are one of the groups that we are examining as part or the review of employment status. Since last year, we have been looking at the coverage of rights provided through employment relations law. Last July, we published a discussion document to establish whether there were any problems with the current arrangements. We also held a series of round-table discussions to examine the issues in different sectors. Later this year, we intend to publish a document summarising the responses to our discussion document and setting out the way forward.
The problems experienced by my hon. Friend's constituent with regard to job security and not being given adequate notice will not be addressed by the European directive, but could be addressed as part of the employment status review. That issue has been raised with us several times.
The employment status of agency workers is not straightforward. The fact that somebody is an agency worker does not tell us automatically whether they are an employee, with access to a full range of employment rights. As we proceeded with the review, we found that it was even more complex than we thought at the beginning, but we felt that it was worth carrying it out to establish the rights of various groups, including agency workers. We are considering how to improve clarity, and how workers and employment businesses could be given better information on their rights and responsibilities.
Having discussed those issues, I turn to the European directive. The Government have introduced many rights—the right to be accompanied to hearings, the right for part-time workers to be paid the same as full-time workers and protection for workers on fixed-term contracts. In the latter case, we were accused of gold-plating to provide pensions as part of that protection, because the directive did not allow it. How have we turned from Mother Theresa into Vlad the Impaler on the issue of agency workers? Why would we do that? Why would we, to quote Polly Toynbee, engage in such

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"wickedness". I have written to my good friend Ms Toynbee privately about the matter, because that is a misrepresentation not just of the DTI's position but of that of the Government.
I shall outline our position. The social partners in Europe examined three groups of atypical workers—part-time workers, fixed-term workers and agency staff. The social partners in Europe—employers and unions—agreed to a way forward on fixed-term and part-time workers, and we were happy to implement that in UK law. Indeed, we went further than the law required to cover pensions and other issues.
The social partners could not reach agreement on the question of agency workers, however, and, unusually, the Commission decided to take the matter forward anyway. Countries well known for their protection of workers' rights, such as Denmark, Germany and the Republic of Ireland, adopted the same position as the UK. Why are we all concerned about the issue?
There was an obvious relationship between fixed-term and part-time workers in that they worked for an employer, and we could insist that that employer give them the same terms and conditions as staff on permanent contracts. The agency workers, however, have a triangular relationship. They are paid not by the company that has hired them, but by the agency. In many sectors—health and education, for example—agency workers are paid much more than permanent staff, although in others they are paid less. In the secretarial sector, pay in relation to permanent staff is patchy.
Although we in the UK do not claim to have more employment agency workers than anywhere else in Europe—France and the Netherlands have more—we do not have sectoral pay rates, nor sectoral pay bargaining, as in some other European Union countries. If someone is a secretary in France, wherever they are placed by an agency, they will receive roughly the same pay.
In most other European countries, the big five agencies employ the majority of agency staff. In France, they employ about 85 per cent. of such staff, whereas in the UK the figure is only about 9 or 10 per cent. The remainder are employed by 17,000 small and medium-sized enterprises. We are not anti-SME, but that is the situation that our market is in—SMEs would find it very difficult if they needed somebody quickly. The TUC's own research, published last week, shows that companies make such requests not to cut costs but to
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cover work. They want to move quickly: 57 per cent. of companies would be deterred if there were any bureaucracy involved, such as having to pin down the exact terms and conditions of the person being replaced, because the directive says that they are to be treated as if they were being recruited directly off the street. That would introduce so much bureaucracy, both for the agency and for the employer, that 38 per cent. of companies would cover through overtime, although we are trying to cut down the long-hours culture in this country, and 17 per cent. would not cover the work at all.
Given what my hon. Friend rightly said about our success at getting young people back into work—the Secretary of State wrote to Brendan Barber a couple of days ago about the problems with the TUC figures—it is undeniable that for people in any industry who have been out of work for a long time in a place such as my hon. Friend's constituency, the employment agency provides a good rung on the ladder and an important first step back into the workplace.
Under the Lisbon process, we are committed to creating 20 million new jobs in Europe by 2010. In the UK, we have already met our target: over 70 per cent. of people who could be employed are at work. We have been tremendously successful, although we are worried about jeopardising that success story.
We proposed that agency workers should qualify for the same terms and conditions as permanent employees after a qualifying period. During negotiations in Luxembourg, we moved from 12 months, as did Denmark, Ireland and Germany. Curiously, there are derogations in the directive for people who categorise us as being against vulnerable workers. There are two: if someone works permanently for an agency—most of our agency staff do not do that; they sign up with two or three different ones—they can be paid less than permanent staff for ever more. That is a derogation that many countries operate. The second derogation also allows workers to be paid less. Ours is the only one that insists that a worker enjoy the same terms and conditions after a qualifying period.
I hope that I have shown that our action is not due to hostility towards a vulnerable group of workers. The employment status review—our review of the existing regulations—suggests that we are not and I assure my hon. Friend that this is an important debate. We are not Vlad the Impaler. We are back to being Mother Theresa, and I hope to convince my hon. Friend of that over the coming months.
Question put and agreed to
Adjourned accordingly at three minutes to Five o'clock