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Commons Chamber

Volume 453: debated on Monday 27 November 2006

House of Commons

Monday 27 November 2006

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Work and Pensions

The Secretary of State was asked—

City Strategies

Our city strategy is a more flexible and locally delivered approach to welfare reform. The House will be delighted to learn that Nottingham is one of the pathfinders on the city strategy, and that it, along with other areas of the country, is developing delivery plans, which should be submitted to the Department for Work and Pensions by 29 December.

Nottingham was very pleased to have a city strategy on welfare to work, but a number of issues still need examination. Will my hon. Friend consider the question of the reward levels in cases where city strategies meet Government targets to get people off welfare and into work? He talks about flexibility, so will he consider the future of the 16-hour rule, which is a matter of some concern? If we had such flexibility, we could get a number of other people off welfare and back into work.

My hon. Friend speaks with great authority on this and many other issues. He chairs the One Nottingham organisation. I believe that he has shared with the House his view, and the analysis is such, that Nottingham is the sixth richest local authority area in one respect, but the seventh poorest in another. There are enormous challenges still to be overcome in Nottingham and elsewhere.

On the targets and rewards, of course we are discussing with my hon. Friend and others the exact way to continue to fund success in Nottingham. We will look at the most flexible way to ensure that people who are out of work have the opportunity to train, get back into the labour force and contribute both to their own family and to our economy.

Income Statistics

2. What change there has been since 1997 in the number of people recorded in the Department’s survey data as having income below 40 per cent. of median income. (102897)

As a result of the measures taken by this Government, the rise in severe poverty which occurred under the previous Administration has been halted. Taking 1997-98 as a baseline, there has been no increase in the number of people having below 40 per cent. of median relative income. The number of children in such households has fallen by 100,000. By the internationally recognised measure of poverty, we have lifted 1.9 million individuals, including 700,000 children, out of poverty over the same period.

I thank the Secretary of State for his reply, but I urge him to consult his own figures, which he has disclosed to me through the Library. They show that despite record spending on social security benefits, a buoyant economy and nine and a half years of new Labour, there are 750,000 more people in severe poverty than there were a decade ago, 600,000 of whom have been put there under this Government. Will the Secretary of State now commit his Government to reducing the number of people caught in severe poverty?

We have reduced the number, as I have said. We are happy to be judged on the basis of the measures that we have taken, but we will certainly not be judged on the basis of the measures that the previous Government took. If the hon. Gentleman was being straight and honest with the House, as he always is, he would have referred to the fact that the figures that he just quoted cover the period from 1993 onwards. I do not think that he is either Toynbee or Churchill; I think this is just twaddle.

Does my right hon. Friend agree that dealing with absolute poverty, not relative poverty, is the major priority, and that it does not matter which newspaper column one reads, what really matters is having the political guts and ideology to put policies and resources in place to address this most pressing issue?

I am grateful to my hon. Friend. I agree with him, although I would add that we must deal with absolute and relative poverty. That is what we are trying to do. The proof of the pudding always comes down to one simple thing: it is all well and good to talk the talk, but one must will the ends as well as the means. For the Conservatives, including the hon. Member for Bury St. Edmunds (Mr. Ruffley), who is one of the shadow spokespeople, and the hon. Member for Tunbridge Wells (Greg Clark), who I understand is now the Tory Trot from Tunbridge Wells—

I think it worked pretty well. What does not make economic or political sense is coming to this place proposing various measures to tackle poverty while writing pamphlets calling for £50 billion-worth of tax cuts.

Since the Secretary of State seems to accept 40 per cent. of relative median income as a definition of severe poverty, will he accept that the Government should regularly measure the number of children in severe poverty, as so defined, and report on it as part of their strategy for tackling child poverty?

I would prefer to use the internationally recognised figure, which is 60 per cent. of median income. It is true that the Department publishes figures on households having below 40 per cent. of median income, but it is best to stick to the international basis so that we can get a proper comparison.

The Government have been extremely successful in making progress in tackling both relative and absolute poverty in many areas of the country, but sadly that has not been the case in London. As a consequence, one of the wards in my constituency has a staggering 83 per cent. of children growing up in workless households. In order to make further progress on the national perspective, as well as in London, will my right hon. Friend urgently review the effectiveness of measures such as tax credits, child care delivery and dealing with housing costs?

I agree with my hon. Friend. There is poverty of place, with which we are all familiar, but there is also poverty of race, which is a particular problem in many parts of inner London. We must address those issues, and I assure my hon. Friend, and all my hon. Friends, that we are considering them as a matter of urgency. The city strategy in east London and west London will help to improve delivery and focus on meeting these challenging targets. When we are ready, we will come back to the House with further measures.

Today’s report from the think-tank, Reform, indicates that the poverty trap in Britain is greater than in any other Organisation for Economic Co-operation and Development nation—a point made a year ago by the right hon. Member for Darlington (Mr. Milburn)—and that 2 million people on low incomes face effective tax rates of up to 50 per cent. when they try to go back into employment. Does the Secretary of State accept that criticism of Government policy, and what does he intend to do about it?

We have made it our policy from the beginning to ensure that work pays. Tax credits, the new deal and other measures have allowed us to take nearly 900,000 people off benefits who would otherwise have been looking for work. That has been progress in the right direction. We naturally keep all such matters under review. I know that the Lib Dems are trying to get closer to the Tories—good luck to them on that one—but I suggest to the hon. Gentleman that he does not rely too much on the data in that Reform pamphlet, as most of it is economically illiterate, as well.

Would it be right to draw from the Secretary of State’s speeches over the past few months that while there is much for Labour Members to be proud of, there is still much to do? As a Government, we have seen the creation of an additional 2 million jobs, and we have spent an additional £60 billion on welfare reform, yet the number of working-age claimants during our stewardship has only fallen from 5.6 million to 5.4 million. May I therefore encourage him to continue the debate that he has begun and to make it central to the renewal of this Government?

I agree with my right hon. Friend in this regard: the work on all these issues will never be done. What is important is to set a course, and I think that we have set the right one. We have matched rights with responsibilities, and we have been prepared to invest more in an active welfare state to help more people who want to work to have the opportunity to do so. If he is asking me whether the work is done, I say clearly not. We have not yet eliminated poverty. We need to redouble our efforts if we are to succeed in doing that, and I hope that he and others will support us when we do.

Benefits (Overpayment)

3. What steps he is taking to reduce the level of debt owing to his Department arising from overpayment of benefits. (102898)

We began the debt recovery programme in 2001 to bring increased focus on to the management and recovery of debt. Centralised debt centres were in place by 2004. Earlier this year, the new IT system became fully operational. Recovery levels for this financial year are running significantly ahead of previous years.

Yes, but with overpayments now running at nearly £1 billion a year, half of them being the result of official error, can the Minister offer the House anything more encouraging than an error taskforce staffed by 12, 10 of whom are part-timers, possibly—I know not—overpaying benefits in the rest of their time? Can he undertake firmly to the House that after a long period of beginning to analyse the problem, we may now at last have action from Ministers on tackling the overhang of debt, which is well over £1 billion, and even more importantly, on tackling the complexities of the system at source to remove the source of the errors?

As I have said to the hon. Gentleman, we are already seeing in the current financial year an accelerating rate of debt recovery as a result of the improvements that we have already made. New debt comes on to the books at about £400 million a year. There are two things to do—to reduce the level of debt coming into the system and then to improve the rate of debt recovery—both of which are already being done. To correct the hon. Gentleman on something that he said, about three quarters of the debt that is currently due is down to customer error, not official error.

Looking at the issue from the other end of the telescope, what assessment has the Minister’s Department made of individuals getting into increased personal debt as a result of delays in processing benefit payments? Increasing numbers of constituents are coming to me in desperation over that problem.

Of course, it is important at all times that we process debt as rapidly as possible. Several changes have been made in the way of benefit simplification to help to achieve that. We continually simplify forms to make processing easier, and we do more data sharing between different parts of the Department to ensure that information does not have to be given to us on repeat occasions. All those changes are making it easier for our customers to engage with the benefits system.

Overpayment of housing benefit also affects landlords and tenants. Because of the ongoing inefficiency of Waveney district council, most landlords there feel that they are losing out by having benefit clawed back. They are so fed up that they have started to put up signs in their letting offices that say “No DSS tenants”. That means that people who need accommodation in that sector are unable to get it, because of the benefit shambles caused by the local authority’s administration.

As my hon. Friend knows, housing benefit is administered by about 400 different local authorities, and there is variable performance between them. However, he should also know that we have had investment running for a number of years that has worked with local authorities to improve their processing times. The results from that investment are extremely encouraging. Average processing times have reduced sharply and the authorities with the longest processing times have made the most improvement in reducing them. I reassure my hon. Friend that I keep an eye on all the performances of local authorities, and we are in regular touch with those that still do not perform sufficiently well.

Where overpayment results from official error, not that of the claimant, I put it to the Minister that recovery of the sum overpaid as a matter of great speed and urgency should not be the top priority; rather, the focus should be on justice, equity and consideration for the hapless victim of ministerial or departmental incompetence.

I am happy to tell the hon. Gentleman that it is. If he cares to examine the rules that relate to recovery, he will see that recovery of overpaid benefit is not the top priority in recovery from those who are on any form of benefit. Indeed, housing costs and debts to fuel payment must be recovered before any overpayment of benefit. A rule that we apply throughout the process of recovering debts to the benefits system is that we shall not do so in a way that inflicts hardship on any of our customers.

Heating Allowance

4. If he will make an additional payment to those entitled to heating allowance to reflect the recent increase in energy prices. (102899)

The winter fuel payment rose from £20 in winter 1997-98 to £200 in winter 2000-01, and to £300 for those aged 80 or over in winter 2003-04. There are no plans to make an additional payment to those entitled to winter fuel payments to reflect the recent increase in energy prices.

May I ask my hon. Friend whether she is aware that National Energy Action, which is one of the partners that is being used to deliver the warm homes agenda, has said that the Government’s figures for fuel poverty levels are based on 2004 levels? NEA’s latest estimates, which are based on this year’s figures and incomes rises, show that the figure for those facing fuel poverty is near to 2.8 million. May I ask my right hon. Friend the Secretary of State to work with NEA to try to get to the truth of where we are now and report back to the House as soon as possible?

We will obviously consider the views of the energy agency that my hon. Friend has highlighted, but I should also like to ensure that the House is fully aware that between 1997 and 2005 pensioner income increased by 25 per cent. We spent £2 billion on winter fuel payments in winter 2005-06, which is only part of the agenda to tackle fuel poverty. The Warm Front scheme and similar schemes in the devolved Administrations, to which my hon. Friend alluded, are also part of our campaign to ensure that fuel poverty is eradicated in this country.

I know that the Minister cares deeply about the issue, as I do. What discussions has she had with the Minister for Energy about ensuring that any reductions in wholesale gas prices, as we have seen recently, are passed on to the customer, particularly the elderly? We know that hundreds of elderly people froze to death last year as a result of being scared to turn on their gas fires. Could the Minister have a word with the Minister for Energy to ensure that the savings are passed on?

I do not wish to challenge the hon. Gentleman’s memory of the previous winter, but our impression was different. His recollection may reflect the situation prior to 1997, when no winter fuel payment was available, and the only thing to which pensioners could look forward was a £10 Christmas bonus and paying 17.5 per cent. on fuel. At the weekend, my right hon. Friend the Chancellor of the Exchequer indicated that energy companies also have responsibilities, and while some companies have good schemes to help low-income users, others do not. I know that the Chancellor’s ambition is to reduce the cost of energy for consumers as quickly as possible to reflect decreasing energy prices on the wholesale market.

As the Minister knows, low-income families with small children also have difficulty paying fuel bills at this time. Will she consider Save the Children’s suggestion of introducing one-off winter grants for those families too?

I am aware of Save the Children’s campaign, and I spoke at our meeting with that organisation only the other evening. I refer my hon. Friend to the strong words of my right hon. Friend the Chancellor about the need for companies, too, to take responsibility and ensure that low-income users have a better deal, as I indicated to the hon. Member for The Wrekin (Mark Pritchard).

Pensioners (Means Testing)

5. How many pensioners are (a) eligible for and (b) claiming means-tested benefits in (i) Great Britain and (ii) Northamptonshire; and if he will make a statement. (102900)

It is estimated that around half of pensioners living in private households in Great Britain are eligible for means-tested benefits. Of those entitled to guarantee credit, 70 to 81 per cent. are estimated to be claiming, although 43 to 50 per cent. of those entitled to savings credit are estimated to be claiming. Since its introduction, pension credit has lifted 2 million pensioners out of absolute poverty. An estimate for Northamptonshire is not available.

It is disappointing that figures for Northamptonshire are not available, as I suspect that thousands of pensioners in the Kettering constituency are entitled to means-tested benefits but are not claiming them. While congratulating Kettering’s citizens advice bureau, welfare rights advisory service and Age Concern for doing all that they can to encourage pensioners to claim, what specific steps are the Government taking to ensure that more pensioners claim the tax credits and other benefits to which they are entitled?

The hon. Gentleman will be delighted to know that, last year, the Pension Service visited more than 1 million people, and is calling 5,000 people every week. Take-up has increased from 74 per cent. to 81 per cent. When we came to power, there were 3 million pensioners in poverty, but now there are fewer than 1 million. That may not be perfect, but it is very good progress, and it would not have happened under his party, which opposed every one of those measures.

Control of the growth of means-testing is one of the stated objectives of the Government’s pensions reform programme. The Government estimate that means-testing will fall to less than 30 per cent. by 2050 under their proposals. However, the Pensions Policy Institute, a respected independent think tank, estimates that the figure will be closer to 50 per cent? Is it wrong?

We have been working with the institute on the reforms, and will shortly put forward figures that narrow the funnel of doubt, as it is described. We have published information on our website, which everyone can look at, setting out our estimates. We are confident that those are right and that our system is more effective at modelling the impact of the state second pension, and that our reforms will result in less than a third of people being entitled to means-tested benefits compared with 70 per cent. if the current policy continued.

We shall see, but even if the Department for Work and Pensions’ figures can be substantiated, a third is still a high level of means-testing in the system. Discounting the Liberal Democrats’ fantasy proposals, we accept that there is no easy and affordable way of further reducing means-testing in the short term. Bearing in mind the Chancellor’s 1994 commitment to eliminating the massive means-testing now imposed on the elderly, will the Minister say whether the Government share our long-term aspiration to see the level of means-testing fall still further, as and when that becomes affordable in future?

It depends entirely on how the hon. Gentleman’s party proposes to do that. He is right to say that the Liberal Democrats’ policy is a fantasy, because it would put 5p on income tax. According to the 2005 figures, however, about half those receiving means-tested benefits are receiving disability benefits or carers’ premiums, which means that they can collect £160 a week in pension credit. I assume that the hon. Gentleman is not saying he would want to take that money from such vulnerable groups.

One of the groups who find the situation hardest are pensioners who own their homes and are eligible for council tax benefit. They have not previously been in the benefit system, and are concerned about giving information. The take-up of council tax benefit in that group is comparatively low. What are the Government doing to try to increase take-up of council tax benefit among pensioners on fixed incomes?

That is a very good point. We are transforming the system for claiming council tax benefit and, indeed, housing benefit. People used to have to fill up a 26-page form; now there is a three-page form which can be filled up in minutes. A survey by Age Concern of people who had claimed the benefit showed that 70 per cent. found it easy. I encourage the hon. Gentleman to work with his constituents to ensure that as many as possible claim.

Contact Centres (PAC Report)

6. When he will respond to the Public Accounts Committee report on contact centres, “Department for Work and Pensions: Delivering effective services through contact centres”, HC 1034, 2005-06; and if he will make a statement. (102901)

In line with normal procedures, the Government will respond formally to the Public Accounts Committee report on contact centres in January 2007.

In response to the Department’s efforts to save £375 million, many local offices are being closed and are being replaced by 62 call centres. As the Minister knows, the Public Accounts Committee has described the call centres as unresponsive, unreliable and frankly not working. Will he please reassure us that efficiency savings are not hitting front-line services, as they appear to be?

Since April this year, call centres have received 22 million calls. All but 0.3 per cent. were answered, and only 0.3 per cent. produced the engaged tone. A National Audit Office report showed that 86 per cent. of customers thought their calls had been dealt with in a reasonable time. Of course we can go on finding more ways of improving customer care for benefit recipients and customers, which is why in the last couple of weeks we have announced a freephone number—a single point of contact—for all working-age benefit claimants. I think that that will be welcomed by customers and citizens throughout the country.

In responding to the report on call centres, will the Minister pay particular attention to the problems currently affecting crisis loan helplines? Citizens Advice reports that in some parts of the country there are severe delays in the answering of calls, and that some people are having to make calls repeatedly over a number of days before they are answered. Given that people in need of crisis loans are among the most vulnerable in society, will the Minister ensure that steps are taken to ensure that calls are answered promptly and claims are processed as quickly as possible?

The hon. Gentleman makes a reasonable point from his temporary position on the Back Benches. It is true that on some occasions performance is unacceptable. For example, two years ago those claiming disability living allowance did not receive the support and customer care to which they were entitled. We have now increased the number of telephone lines to make it easier to help people in the position that the hon. Gentleman describes. If he finds that his constituents are not getting through to helplines despite that increase in capacity, I shall be happy to listen to further representations from him.

Many tens of thousands of people are still unable to get through to contact centres. This summer, for example, it took 25 days for a centre to call back and pay jobseeker’s allowance to a constituent of mine, causing severe hardship. Given that the Gershon process calls for no reduction in service due to efficiency gains, will the Minister commit the Department to working towards the elimination of blocked calls and ensuring that all calls are returned within a day unless a longer period is requested?

I welcome the hon. Gentleman to his new position on the Front Bench, and hope that his future questions will be a little better informed. As I said, since April our telephone lines have received 22 million calls. Of course, if his constituent is one of those who make up the 0.3 per cent. of customers who have received an engaged tone, that is unacceptable. In the public sector, we want continually to find ways to support customer service and responsiveness in the public services. We can learn from some of the innovations in the private sector. We want continually to find ways to provide a first-class service to our public sector customers, regardless of whether they are benefit recipients, benefit customers or anyone else.

Child Support Agency

7. What progress has been made on reforms to the Child Support Agency; and if he will make a statement. (102902)

In July, and in response to Sir David Henshaw’s report, I set out the broad direction of reform to the child support system. We will publish a White Paper with final proposals shortly.

What will happen to claimants who are owed thousands of pounds by non-paying ex-partners when the CSA is scrapped?

We must make sure that we crack down on people who are not paying up. We all know from examples in our constituencies that, sadly, relationships end but responsibilities must never be allowed to do so. We have invested more: we are investing more right now in the CSA to make sure that we increase the amount of historic debt that is recovered to parents with care. It is important that we do that. But the hon. Gentleman will have to wait a little longer to see our specific proposals, which will be set out in the White Paper shortly.

Looking back on the genesis of the existing CSA, there were three key reasons why it failed so abysmally: the inadequate number of staff; the focus on driving down benefit costs as a central objective; and an appallingly designed computer system, which was slow and unstable. Can the Secretary of State reassure the House that the CSA’s successor will focus on driving up income in the families concerned, that it will provide adequate numbers of people in the new CSA to manage the whole process, and that it will go nowhere near—not with a bargepole—the existing computer supplier?

We need to learn the lessons from previous attempts to get this right. We will not do our constituents or the country any favours unless we are prepared to be open and frank about where things have gone wrong. I think that we have done that, and that David Henshaw’s report gives us a proper blueprint on which we can plan for a much more successful system of child support in the future. We must make tackling child poverty its No. 1 objective; we have made that clear already. In relation to the point of the hon. Member for Wellingborough (Mr. Bone), who asked me to reveal to the House the contents of the White Paper ahead of its publication, let me reassure him and his hon. Friends that we will propose a series of much stronger and tougher enforcement powers; but I am sure that the House will understand why I cannot go into the details of that today.

As agreements will be an important part of the new system, will the Secretary of State at least tell us whether he has had discussions with the Scottish Executive as to how they will work in the Scottish legal system, and in particular whether there will be provisions for implementation of these agreements and for variation on change of circumstance?

Yes, we have had full and proper consultations with the Scottish Executive.

Over £1 million of the money that the CSA has failed to collect is owed not to the Government but directly to thousands of parents, who have suffered extreme financial hardship. As a result of that, will the Secretary of State confirm today that he will continue to pursue those payments, and that he will not at some point in the future decide to write off any of that money?

I warmly welcome the hon. Lady to her new Front-Bench responsibilities. I know that it will sound unfair if I say this, but the amount of unclaimed debt is not £1 million; it is £1 billion. We are not prepared to see all of that debt just waved away. We will do everything possible to recover as much of that money as we reasonably can, to make sure that families—the parents who are looking after the children—benefit from that maintenance.

Will the Secretary of State bear in mind that a constituent of mine in Shetland calculates that it will take 15 years for the child maintenance arrears for her child to be paid, which means that her child will be 27 before all the arrears are paid? Will he ensure that the people who are in that situation will not be the victims of a mass write-off of debt? That is the real concern that she brings to me.

With respect to the hon. Gentleman, I do not know the details of that case, and rather than repeat the answer that I gave the hon. Member for Basingstoke (Mrs. Miller), I would prefer to leave the matter there. There is a very significant amount of debt in the system that we have got to clear up as quickly as we can and, as I said, we will do whatever we can to recover as much of it as possible.

I welcome the plan in the Queen’s Speech to introduce a child support Bill. One problem with current system and the existing agency has been a lack of robustness in the assessment process. Will the Secretary of State ensure that the new Bill takes that point on board and improves the assessment phase?

Yes, we certainly will. The hon. Gentleman will have to wait until the White Paper, but we will set out in it some pretty radical, long overdue reforms of the assessment and collection process.

Is the Secretary of State aware of the problem of absent parents who own a business avoiding maintenance payments by paying themselves small salaries and using the business account to pay living expenses and give their partner a salary? Does he think that the current provisions on variations in, and diversion of, income are working well to tackle this problem, or do they need reform?

Can the Secretary of State give an assurance that one reform will be introduced? Where the parent with care has received no funds whatsoever through the Child Support Agency from the absent parent and the child then moves from one parent to the other, the parent who is owed thousands of pounds cannot set that off against the money that she then has to pay to the absent parent who defaulted. Should it not be possible for a debt to be set off against a future liability in those circumstances?

It should be possible for that to happen. The right hon. Gentleman has raised a very important issue, but I might need to refresh my memory as to what the White Paper says about it. However, he has made a very effective point.

Unemployment (Older People)

8. What recent representations he has received on help available to unemployed people over the age of 50 years. (102903)

There are 1 million more over-50s in work than a decade ago. We have received a number of representations on what more can be done, none of which advocates the abolition of the new deal 50-plus, but perhaps we are about to hear the first.

The Government have a stated aim to get more older workers back into work and the Secretary of State for Education and Skills has said that we must be more focused on employability skills. If the Government want to demonstrate any joined-up thinking on this issue––I doubt they can––could they tell me exactly what representations his Department have made to the Department for Education and Skills?

We have a joint project with the DFES and we are a playing an active role in the consideration of the Leitch review and the skills gap. As the hon. Lady’s party will be aware, the Welfare Reform Bill will play an important part in the skills agenda for the over-50s. About half those on incapacity benefit are aged over 50. An enormous amount is being done to support such people in their efforts to get into work. Indeed, in the past year there has been an increase of more than 200,000 in the number of people aged over 50 coming into the labour market.

Over 50s reported that one of the main barriers to work was the attitude of employers, who saw them as over the hill and not worth employing. Has my hon. Friend detected any change in employers’ attitude and an improved work-entry rate since the introduction of age discrimination legislation?

A variety of initiatives, including the “Age Positive” and “Be Ready” campaigns, are aimed at changing perceptions of older workers. In advance of the age discrimination legislation, there was a remarkable increase in the number of older workers staying in the labour force or returning to it, so there have been improvements. However, my hon. Friend is right that we have further to go in supporting the ever-increasing number of those aged over 50 who wish to work, in order to give them the chance to get back into the labour market.

Surely the best way to help unemployed people aged over 50 is to help them back into work. Does the Minister have any plans to visit Poland and the Czech Republic to see what lessons can be learned from their education and training systems, which have been so successful in equipping people with the skills necessary to take up jobs available in the UK economy?

I have no plans to visit Poland or any other part of the European Union in connection with the issue of over-50s in the workplace. Of course, one important part of our over-50s agenda is the new deal 50-plus, which is supporting such people and giving them the chance to get back into work. It has enabled some 160,000 job entries and job starts, but it was opposed by the Conservatives. I wonder whether they continue to oppose the new deal 50-plus, which, as I say, is an important part of our agenda and is supporting such people in getting back into work.

Although we have made some progress, my hon. Friend will realise how difficult it is to change the culture among employers. Surely we as a Government should do what we can to emphasise the benefits and qualities of the over-50s and the experience that they bring to the work force. How would he feel if he heard an organisation used the term “bed blocker” for experienced employees? Will he give an assurance that the Labour party, our organisation, will never use the term to describe our experienced Members of Parliament?

My hon. Friend is right. Some two thirds of the growth in the labour market in the past decade has been among the over-50s. That reinforces the need to support more people, especially those who are inactive and perhaps locked into a culture of benefit dependency through incapacity benefit, half of whom are over the age of 50, and emphasises why we need to continue the roll-out of pathways and seek support across the House—which we have had so far—for the Welfare Reform Bill, so that we can support those people to get back into work.

I have a simple question and I hope that my hon. Friend will be able to give me a simple and positive answer to it. I have been approached by many people over 50 whose skills have become redundant, but they have to languish in unemployment for six months or take a cheap, badly paid job that does not use their potential skills. Will the Government consider introducing a scheme that would reskill people more quickly, so that they are not out of the labour market for such a long time or forced to take low paid, unskilled work?

The reason that there is a qualifying period for the new deal 50-plus is that the vast majority of those aged over 50 find work in the first six months. The new deal is aimed at tackling and eradicating long-term unemployment in the 50-plus group and among young folk. However, we continue of course to listen to representations and will pay close attention to the report by Sandy Leitch on the future skills agenda.

Disabled People (Heating Costs)

9. What provision is made for the extra cost on fuel and heating incurred by seriously disabled people under the age of 60 years during winter. (102904)

Disability living allowance, together with the disability premiums in the income-related benefits and the disability-related additions in tax credits, already contribute towards the extra costs faced by seriously disabled people. Recipients are free to spend those payments according to their own priorities.

I wish to raise the case of Matthew Pinder, who is 21, seriously disabled and lives in my constituency. His mother often has to keep the heating on for 20 hours a day, which is very costly. Indeed, to pay for that, she has been forced to borrow from relatives. May I ask the Minister why, when it is recognised that those over 60 are especially vulnerable to the cold, it is not recognised that those under 60 with serious disabilities face the same daily struggle and, therefore, should receive the same benefits?

I do not want to go into specific details, because it is difficult to assess cases across the Floor of the House at Question Time. However, disability living allowance and the disability premiums that I mentioned do take into account the additional costs and impact of disability on an individual. They take close cognisance of an individual’s circumstances. The most severely disabled people receive an additional £7,000 a year in recognition of the extra costs they face. Some 60 per cent. of those who receive the DLA and/or attendance allowance are aged over 60 and automatically receive a winter fuel payment. The DLA is regulated out over a 52-week period to take account of those costs that occur regularly for disabled people, whereas the winter fuel allowance is an annual payment at a particular time of year to assist with the pressure of fuel costs in the winter. The two examples are not parallel.


10. If he will make a statement on the plans announced in the Queen’s Speech to reform the pension system. (102905)

A Bill will be introduced providing for long-term reform of pensions, making the state pension fairer and more generous and beginning the process of establishing a new scheme of personal accounts.

While reform of the pension system is badly needed, is it not the case that millions of women remain disadvantaged in terms of pension provision?

Age Discrimination Regulations (State Pensions)

11. What assessment he has made of the impact of the age discrimination regulations on state pensions. (102906)

I would like to thank the Minister for that answer, but I will not. The CBI’s deputy director-general, John Cridland, has said:

“employers now face an impossible challenge to implement the new rules by the end of the month.”

The regulations have already been postponed once because of a lack of timely consultation by the Department for Work and Pensions. Given that the regulations must be in force by 2 December to satisfy EU law, can the Minister tell us why the Government left it so late to put their house in order?

Of course, that is nothing to do with state pensions, which is what the hon. Gentleman’s question was about. The CBI also said that it was relieved that the Government had responded to its concerns about the previous set of regulations, which would have been an administrative nightmare. The CBI welcomed the changes that we made, and we worked closely with the CBI in making them.

Child Support Agency

16. What estimate he has made of the level of outstanding payments of child support; and if he will make a statement. (102911)

Maintenance payments outstanding have accumulated in the 13-year period since the beginning of the agency in 1993. The total maintenance payments outstanding at 31 March 2006 were £3.495 billion. The current operational improvement plan places increased emphasis on collecting debt by, for example, using private agencies and quadrupling the number of staff involved in enforcement activity.

Can the Minister say when the Secretary of State will follow up on all the actions that he promised in his statement in July, such as a further White Paper and a further consultation, and when does the Minister expect the Bill to be published? He accepts that £3 billion is outstanding; does he find that acceptable?

A debt has, of course, been accumulating since the very beginning of the agency. The level of debt is not acceptable, and that is precisely why, under the operational improvement plan, we are increasing the resources spent on chasing down that debt, and why we are quadrupling the number of staff engaged in that activity. As my right hon. Friend the Secretary of State told the hon. Member for Wellingborough (Mr. Bone), the White Paper will appear shortly.

Disabled People (Benefit Services)

17. What Government support is available through the benefits system to people with disabilities; and if he will make a statement. (102912)

Depending on their personal circumstances, disabled people have access to the full range of social security benefits, including disability living allowance and attendance allowance. In 2005-06, disability living allowance and attendance allowance provided more than £12.5 billion towards the extra disability-related costs of almost 4.2 million disabled people.

May I raise an issue affecting many of my constituents who are in part-time education? They have been told that they are ineligible for carer’s allowance because, when their coursework is taken into account, the number of hours that they spend studying is greater than 21. Will the Minister clarify whether the amount of homework done should be taken into account?

It is always difficult, when we lay down criteria for the payment of a benefit, to take into account issues such as those highlighted by my hon. Friend. I have not been asked to consider whether homework hours should be taken into account, but obviously I would be delighted to meet my hon. Friend to look into the issues that his constituents have raised with him.

On the way in which the benefits system works for people with disabilities, does the Minister agree that one of the biggest problems is the complexity of the system? Does she have any plans to simplify the process by which disabled people claim benefits?

The hon. Gentleman is right to stress that we need to make our benefit application process as friendly as possible to the individual, particularly to those claiming disability living allowance and some other disability-related benefits. We constantly review how we present our application forms and we continue to engage with stakeholders and individuals to ensure that, as well as having the right information at the right point in the process, we act in a way that is sensitive to and properly reflects the individual needs of applicants. I appreciate that there is an issue because the hon. Gentleman and I have discussed it before, so I hope that he and the House accept my reassurance that we are looking into how to simplify the benefits system. The main aim is to get the right benefit to the right person at the right time in a comprehensive and comprehensible way.

Does my hon. Friend agree that there is a vital role to be played by the voluntary sector, as well as the benefits system, in getting disabled people back to work? Will she join me in congratulating the second chance head injury support unit at Pinderfields hospital? I visited the unit recently and heard the story of a disabled man with a catastrophic head injury who had gone back to work through the permitted work scheme as a chef at the unit. He has progressed to a national vocational qualification in catering at level 2, and is now acting as a learning support mentor for other students with learning disabilities in Leeds. Does my hon. Friend agree that such schemes play a vital part in getting people off benefits and into work?

I thank my hon. Friend for highlighting the work of that voluntary organisation in her constituency, which reflects the experience of many people across the country, where voluntary organisations work in partnership with Jobcentre Plus and other agencies to deliver tremendously positive outcomes for disabled people. That is why, in our roll-out to pathways, we see a crucial role for the involvement of the voluntary sector.

Leader of the House

The Leader of the House was asked—

Back-Bench Legislative Proposals

21. What consideration has been given to improving the chances of proposals for legislation from Back-Bench Members getting time for debate. (102888)

Following the recommendations of the Modernisation Committee, the House recently approved major changes to the legislative process. Some of those changes came into effect from the beginning of the Session and others will come into effect in January, but they did not cover private Members’ Bills. The Modernisation Committee looked at aspects of private Members’ Bill procedure in a report in 2005 and recommended no changes. It considered but rejected the idea of moving private Members’ Bill time to Wednesday evenings, concluding that

“This would fundamentally change the character of the proceedings, with the intrusion of whipping into time which has so far been at the…disposal of backbenchers”.

I thank the Leader of the House for his detailed answer on the practicalities and the practice, but may I ask him about the principle? I was surprised to learn that, in each of the nine years since the Government came to power, fewer than five private Members’ Bills have gone on to the statute book each year, whereas in the previous nine years the average was 14 a year. Given that the public are keen that MPs can be themselves in this place and put forward their own ideas and not merely pass Government legislation, will he look again at whether we can go back to that system, when Members had much more chance of success in getting their proposals on to the statute book?

I shall certainly do that, because I want to see as many proposals reaching the statute book as have consensus. Bills should not be delayed or blocked for procedural and non-substantive reasons. I do not know exactly why there is such a disparity; I have certainly been encouraging ministerial colleagues to give a fair wind rather than a difficult wind to proposals for private Members’ Bills. I must add that there are a number of private Members’ Bills that hit the buffers initially, but whose ideas later find their way into substantive Government legislation.

The Leader of the House knows that one way in which Back-Bench Members can trigger legislation is by way of motions that propose particular courses of action. Will he consider ways of reinstating the process whereby Back Benchers could table substantive motions for debate on the Floor of the House?

A twin inquiry by the Modernisation Committee is about to be announced into strengthening the role of the Back Bencher and the use of non-legislative time in the House, which includes such motions. I could never quite understand why the House agreed to abandon the old process. That was a Jopling recommendation under the previous Administration. As the right hon. and learned Gentleman will recognise, it is much more difficult to reinstate such measures than to prevent them from going in the first place, but I am certainly happy to look at the matter.

As with Government legislation, not all private Members’ Bills are meritorious. Some do not command widespread support, but some do and an example is the Sustainable Communities Bill introduced by my hon. Friend the Member for Falmouth and Camborne (Julia Goldsworthy), which I understand is to be taken forward by the hon. Member for Ruislip-Northwood (Mr. Hurd). Is there any scope for using the new Public Bill Committee structure to provide an initial assessment of a Bill and to make a requisition on the Government for time for its completion, thus making it mainstream business rather than putting it into the ghetto of the Friday morning private Members’ slot?

I accept that that is certainly an idea that needs to be considered, but we could not introduce such a change without very serious study. As I have already explained, when the Modernisation Committee last considered the matter, it pointed to the disadvantages of what the hon. Gentleman describes—I would not—as a Friday morning ghetto, but also noted many advantages. One of those is that, by definition, it is not whipped, whereas if we brought private Members’ Bills to an earlier part of the week and made them subject to programme motions, they would then be whipped.

Sitting Hours

My right hon. Friend has not had any formal discussions with colleagues on that issue, but he is, as ever, open to representations.

Given that the vote to reverse one of the Cook reforms and revert to late sittings on a Tuesday night was made by previous Members of a previous Parliament, would my right hon. Friend please consider giving current Members a vote on the issue?

My hon. Friend was a member of the Modernisation Committee, which reported before the last election. Its report was voted on at that time and since then, as I have just said, my right hon. Friend the Leader of the House has received no representations on the matter, but will consider any that are made.

In endorsing the plea from the hon. Member for Stevenage (Barbara Follett), I put it to the Minister that, although the Leader of the House is Chairman of the Modernisation Committee and, in his own way, is without question a very great man indeed, he is in one sense at least something of a reactionary troglodyte in respect of his continuing support for very late hours. I therefore endorse the hon. Lady’s plea and ask for a vote sooner rather than later.

Obviously, if the Modernisation Committee revisited the issue in this Parliament, it would be open to the House to consider its recommendations and vote on them if that were thought desirable. As I say, there has been no indication of any overwhelming support to change things in this Parliament, but the hon. Member for Buckingham (John Bercow) will doubtless ensure in his own way that the Government take account of his and others’ views.

Accountability (Summer Recess)

23. What assessment he has made of the accountability of Government Departments during the summer adjournment. (102890)

The recent introduction of written questions and written ministerial statements in September appears to have been a success. It represents a significant strengthening of existing arrangements for ensuring the accountability of Departments during the summer recess and provides—contrary to the opinion of the hon. Member for Buckingham (John Bercow)—yet another example of modernisation. The House agreed in principle on 1 November that September written questions should become permanent and I will make proposals to achieve that.

Given that there are restrictions in respect of time and number on September questions, yet 730 questions were lodged by 100 Members of Parliament, does it not suggest that it was a considerably useful exercise? Will the Leader of the House consider extending the process to other recesses as well? Since Ministers continue to be Ministers and Departments continue to function during recesses, what interest is served by our not doing so?

I will consider any suggestion that is put to me and I will certainly look at whether we could extend the period for answering questions in September, but there is less scope for doing this in the Christmas and Easter recesses, which are pretty short and a large part of which are taken up by public holidays. I also point out to the House that the number of written questions has risen astonishingly over the past 10 years. Taking three Sessions of equal length—the first Session of each Parliament—there were tabled in the 1997-98 Session, 53,000 written questions; in the 2001-02 Session, 73,000; and in the 2005-06 Session, 95,000. That is about an 80 per cent. increase, and when Members on both sides of the House understandably complain about any delay in answering questions they must bear it in mind that there is a limited resource for both answering those questions and clearing them.

Although there is a general welcome for the tabling of written questions during the summer recess, there is concern that the quality of the replies given is somewhat lacking. What is the Leader of the House doing to assure the House that we will get proper, full answers at the first time of asking, so that Members are not forced to ask lots of supplementary questions?

I welcome the hon. Gentleman on his first outing on the Front Bench.

Ministers make every effort to ensure that questions are answered on time and accurately. I shall continue to make myself unpopular with my ministerial colleagues whenever matters are raised by Members on either side of the House about lapses, but I repeat that the number of questions being asked of Ministers has shot up. For example, three Members have asked 1,100 questions of a single Department—the Home Office—between them in quite a short space of time. A shadow spokesman recently tabled 140 questions in a single day. That is currently their right, but I say to the hon. Member for South Cambridgeshire (Mr. Lansley), the shadow Secretary of State for Health, that this is not a matter of sport. The House must have a sense of proportion if the system of asking written ministerial questions is to continue sensibly.

Alexander Litvinenko

To ask the Home Secretary to make a statement on the death of Alexander Litvinenko and to explain what action the Government are taking as a result.

This statement provides a factual account of the circumstances surrounding the death of Mr. Litvinenko on 23 November 2006. There is, as the House will know, an ongoing police investigation, and I know that the right hon. Gentleman appreciates that, for obvious reasons, I am limited in what I can say to ensure the integrity of any judicial process. My right hon. Friends the Foreign Secretary and Secretary of State for Health and I have co-ordinated the Government’s response on this incident.

In the late afternoon of Thursday 23 November, the police confirmed with the Health Protection Agency that a significant quantity of the radioactive isotope polonium-210 had been found in Mr. Litvinenko’s urine. The material was identified following extensive tests by forensic toxicologists. In response to this finding, the police liaised closely with experts to search for any residual radioactive material at a number of locations in London.

The police have now confirmed that traces of polonium-210 have been found at certain locations, including the Itsu sushi restaurant at 167 Piccadilly, in some areas of the Millennium hotel, Grosvenor square and at Mr. Litvinenko’s home in Muswell Hill, London. Tests are continuing at a number of locations. The police are continuing an extensive examination of CCTV footage to trace possible witnesses, to examine Mr. Litvinenko’s movements at relevant times, including when he first became ill and to identify people whom he may have met.

Following the confirmation of the presence of polonium-210, the Health Protection Agency investigated clinical areas at Barnet hospital and University College hospital. One area in the intensive care unit remains closed at University College hospital. All other areas at these hospitals are functioning as normal on the advice of the Health Protection Agency.

The Health Protection Agency has requested that anyone who was in the Itsu restaurant, Piccadilly, or who was in the Millennium hotel on 1 November to contact NHS Direct, where further advice is available. In addition, the chief medical officer, Professor Sir Liam Donaldson, issued advice to GPs and hospitals on the risks and clinical implications of exposure to polonium-210.

NHS Direct has so far received approximately 500 calls relating to this incident. A small number of people have been invited to take follow-up tests as a precaution. I emphasise that the Health Protection Agency has made clear the very precautionary nature of this invitation.

The Itsu restaurant remains closed and the Government Decontamination Service is in discussions with the owners about the clean-up process. A bar and various locations at the Millennium hotel are currently closed to the public. Ongoing work is taking place at the hotel and at Mr Litvinenko's residence.

The coroner will decide whether a post mortem will take place following advice from the Health Protection Agency. Mr Litvinenko's body is currently at a London mortuary.

The Russian ambassador was called to the Foreign Office on 24 November. He was asked to convey to the Russian authorities our expectation that they should be ready to offer all necessary co-operation to the investigation as it proceeds.

I thank the Home Secretary for that statement. I quite appreciate the limitations on what he can say.

As the Home Secretary has said, the death of Mr. Alexander Litvinenko occurred in suspicious circumstances. I assume that is why Cobra was convened last week or over the weekend. There are grounds to suspect that this was a particularly cruel, protracted and unpleasant assassination, and Mr. Litvinenko, his family and his associates all believe that he was the victim of a Russian secret service assassination attempt. It is far too soon to know the truth of that, but I would not in any event expect the Home Secretary to comment on that. However, what appears to be known, as I think the Home Secretary has confirmed, is that Mr. Litvinenko was poisoned by a dose of polonium-210, a synthetic radioactive isotope. That raises a number of issues about how such material is obtained as it is made by a sophisticated technique normally available only to Governments, about the technical sophistication involved in transporting and delivering the material undetected and, in particular, about the knowledge required to calculate the dose sufficient to kill but low enough to make detection difficult, as it was in this case.

That, in turn, means that it is incredibly important to resolve the question whether the Russian state was involved. If it was—given that a British citizen who had been given asylum and was therefore under British Government protection may have been murdered on British soil—that has enormous implications for the relationship between the United Kingdom and Russia and implications, too, for other émigrés in the United Kingdom who are opponents of the Russian Government. If the Russian state was not involved, that raises the almost equally disturbing prospect that such sophisticated capabilities are available to criminals in the United Kingdom and possibly therefore to other groups.

The House will understand that, for reasons of law, diplomacy and, indeed, other proprieties, there are limits on what the Home Secretary can say. He has already told the House that the Government have sought the co-operation of the Russian Government in pursuing these inquiries. Will he tell us the extent of that? Will that allow state employees with diplomatic immunity to be interviewed? Will it allow access to Russian citizens who may have entered or left the United Kingdom recently? Will it allow the UK police to have the right to interview other Russian citizens such as the associates of Anna Politkovskaya, the journalist who was murdered recently and who appears to have been an associate of Mr. Litvinenko? Have the Russian Government undertaken to co-operate in all such inquiries?

It has also been widely reported that traces of radioactivity have been found in three or more separate locations around London. I could not quite keep count as the Home Secretary was speaking; it think it is more than three. That is clearly a matter of concern to ordinary members of the public who may have visited one of those locations. Will he confirm what I understood him to be saying—that the three who have so far been kept in because they are showing symptoms are only possible and not likely contaminees? Will he also tell the House what action has been taken to protect the safety of the public further and, in particular, when in this process the Centre for Emergency Preparedness and Response at Porton Down was involved?

Let me go through the questions in the order that the right hon. Gentleman raised them. First, I urge caution on everyone not to get ahead of ourselves or, in particular, the police investigation. Cobra was not called because there was a suspicious death. The police’s original position, when Cobra was first called, was not a suspicious death, but an unexplained death. I put that on the record as a matter of fact. Nevertheless, it was sufficiently concerning, not least from the point of view of public health, to bring together the cross-governmental agency that deals with these issues.

Secondly, I caution everyone against assuming that the police have yet said even as much as that they believe that Mr. Litvinenko was killed. The police have been very careful in the words that they have used. They have said that they are dealing with a suspicious death and that is the basis on which they are making their investigations, but they have not ruled in or ruled out anything, and therefore it would be premature to go ahead and speculate on any particular lines of investigation, including those that may become necessary, with anyone outside the country. As far as the preliminary contacts with the Russian Government are concerned, as I explained, we have made it plain to them that, if it were required, we would expect them to give us all possible assistance. As far as I am aware, they have indicated that that would be the case.

On the premises that the right hon. Gentleman asked about, in several areas of the Millennium hotel, in the restaurant itself, in Mr. Litvinenko’s home residence and in several other premises, we have found some indications, to a greater or lesser extent, of radiation. I should explain to the House that the nature of this radiation is such that it does not travel over long distances—a few centimetres at most—and therefore there is no need for public alarm over the fact that radiation may have been found, since there is such a short distance encompassed in its effect distance, as it were.

A small number of people out of the 500 or so who have contacted NHS Direct through the appeal from the Health Protection Agency have described symptoms that have merited further investigation by tests. Obviously that figure can change from time to time as people phone in and indicate their own position or ask questions. As of this morning, the number was very small—less than five. If there were any significant increase in that number, I, or my right hon. Friend the Secretary of State for Health, would immediately bring it to the attention of the House in some form of written statement.

The Centre for Emergency Preparedness and Response is part of the HPA and I think—I stand open to correction—that it would have been involved from as early as last Thursday, or thereabouts. Again, if there is anything to indicate that that is not the precise time it was involved, I will come back to the right hon. Gentleman.

Although the Russian authorities may be completely innocent of this crime, does the Home Secretary accept that there is bound to be suspicion simply because a number of leading Russian critics have been murdered in recent times and therefore, inevitably, the finger is pointing at the Russian authorities, whether that is justified or otherwise?

My hon. Friend gives us his views and describes the situation as he sees it. It is my job not to deal with suspicions or the pointing of fingers, but to represent to the House the investigation and the conclusions that the police have reached on the basis of the evidence as they see it. People will have their own views on the nature of the Russian Government, or any other Government for that matter, but I have to tell the House what the police tell me. They tell me that they regard this as a suspicious death. They also say, very emphatically, that they have not come to any conclusions on how the death occurred and that they have not ruled anything in, or anything out. It would thus be unwise of me to go beyond that and start pointing fingers or raising suspicions.

I thank the Home Secretary for his response to the urgent question. It has been chilling and grotesque to see this man degenerate before our eyes in the midst of all these conspiracy theories, allegations and counter-allegations.

What estimate has the Home Secretary made of the number of other Russian nationals who are permanently or temporarily resident in this country and might fall under the same category as Mr. Litvinenko: those who have worked for the Russian security services in the past, or those who are outspoken critics of the present Russian Government? What contact has been made with them about the precautionary measures that they might wish to take?

I am not suggesting in any way that the FSB—the Russian security services—is involved in this case. However, it was reported over the weekend that under Russian law, the FSB has the legal power to pursue enemies of the Russian state abroad—beyond Russia. What contact has been made with the FSB about the interpretation of such a power? While it might enjoy extra-territorial powers under Russian law, such a thing would be unacceptable on British soil.

However the hon. Gentleman “caveats” his second point, the implications of what he says are clear. I thank him for the invite to follow him down that path, but I will not, precisely for the reasons that I gave earlier.

The hon. Gentleman asks about the number of Russian nationals in this country ranging from those who disagree with their Government’s policy right through to those who have an implacable opposition to it. I do not think that a precise figure can be placed on that. If the hon. Gentleman is asking whether we can give a 100 per cent. guarantee of anyone’s personal safety, of course we cannot do so. However, if anyone is in possession of any information that leads them to believe that a crime is about to be committed or is likely to be committed, or fears for their safety on rational grounds, I would urge them to get in touch with the authorities.

It might sound old-fashioned, but some Members of Parliament have an open mind about this matter and hope that the Secretary of State’s counsel about not rushing to judgment will prevail. I do not think that this is a matter for levity because people pointing a finger at the Government of the Russian Federation when there is no basis so to do are clearly doing harm to our international relations and interests.

After the collapse of the apartheid regime, an awful lot of nuclear material went missing. Is the Secretary of State confident that sufficient work has been done in London and by our security and intelligence authorities to trace the missing material, which may well be on the world market of terrorists and gangsters?

Of course, we are trying to do that to the greatest extent possible, not only as a national Government, but through international co-operation with our partners. Domestically, of course, we try to do that as well. All premises in the United Kingdom that use polonium-210 are strictly regulated by the Environment Agency. Some 130 premises might use that. That regulatory role includes protective security measures at the premises. The Environment Agency works in partnership with the police and the security services, who provide expert advice on security measures.

It is never possible to identify every potential loophole in any human organisation, but the House will want to know that there has been no recent report of the loss or theft of a polonium-210 source in England or Wales.

Is the Home Secretary aware of polonium-210 being used, either at home or elsewhere, by ingestion to cause death, let alone being used as a weapon of assassination? If he is aware of any such incidences, will he make the House aware of the details?

As of today, I am not aware of any occasion on which the substance has been so used, certainly in this country. Even looking for papers on polonium-210 was not, in the first instance, an easy job. There did not appear to be a proliferation of academic papers on the subject. I am not aware of the substance having been used for any purposes in the manner indicated by the right hon. and learned Gentleman. However, I stress that we are not yet even at the stage where the police are telling me that there is definitely a third party involved, so in answering the question I do not want in any way to imply that the police accept that this suspicious death has been caused by a particular form of action by anyone.

The Home Secretary is right to say that we should not point fingers. The sensationalist rush to judgment by some of the newspaper reporting in this case is deplorable, as is the use of British libel laws by powerful oligarchs in exile in London to stop full newspaper reporting of what they are up to. Will the Home Secretary confirm that the Prime Minister is alive to the huge national and parliamentary concern about this matter and will discuss it with Mr. Putin when they meet next week?

I have no doubt that a range of issues will be discussed, and to some extent it will depend on developments between now and then. I can confirm, as I said earlier, that the Foreign Secretary has, through her Ministers, been in touch with the Russian Government, and the ambassador was brought in on 24 November. We are of the view, as we would be with any Government with whom we have good relations, that we should be able to expect the maximum co-operation and information from that Government in the event that we need it.

The opening sentence of the Moscow Times report on the case today says that

“police combed London over the weekend for traces of the radioactive substance that killed Alexander Litvinenko as conspiracy theories swirled over the dramatic poisoning”.

The Home Secretary will be aware that conspiracy theories have the potential to damage international relations, so will he confirm that until there is a very clear indication of any third-party involvement by an individual, a state or a group, this will be treated as a straightforward, if slightly unusual, policing and health matter?

The investigation will be handled by the police with the integrity, circumspection and practical, honest work that we associate with our police service. That is why I have tried to be careful today, in fairness to our police, who are conducting this investigation. It is almost inevitable, given the details of the case, that there will be lurid headlines and much speculation, but I trust that all Members of the House will refrain from encouraging or supporting that. This is a very serious case, and we want the police to be able to conduct it without huge speculation or undue pressure on them.

My right hon. Friend has gone a long way to allay public fear about risks to other persons from the radiation that is present. Will he confirm that the best advice that he has had is that risk is limited to ingestion and that, as he said, the very close proximity that one would have to have to the emitter means that, unless it is in the skin for some considerable time, the risks are minimal?

Yes, the risk from having been exposed to this substance remains very low indeed. It can only represent a radiation hazard if it is ingested, inhaled or otherwise taken into the body—for instance, through an open wound. As I explained, the range over which the radiation would operate is small; it is in centimetres rather than metres. The risk is very small indeed, but anyone who was in the restaurant and hotel around that particular date and is worried can always call NHS Direct on 0845 4647.

The cautious nature of the Home Secretary’s statement will be widely welcomed in this House. It is far too early to form a view as to what has happened and, in particular, it is premature to assume that if this man were murdered, he was murdered at the formal instigation of the Russian state.

On the basis of the evidence in the police investigation, it is too premature to assume, first, that we know how Mr. Litvinenko met his death in exact terms and, secondly, who may have been behind it. Through the right hon. and learned Gentleman, may I say to his party’s spokesman that I very much appreciate the manner and approach of his question today and the brief discussions we have had before it? The way in which the matter has been conducted in this House is a credit to him.

I realise the constraint under which my right hon. Friend is operating in giving information to the House. However, prior to the incident, did the security services flag up to him that London was connected with the black market in radioactive materials?

We are all aware, especially in the post-cold war world, that there is a great danger of proliferation on an international scale. Domestically, we are not aware that polonium-210 has been lost or stolen from any of our establishments here, but we are aware that, internationally, all types of very dangerous material are more liable to be found on the black market than in previous decades.

Mr. Litvinenko was my constituent and a British citizen. What assurances can the Home Secretary give me that Mr. Litvinenko’s death will be investigated without fear or favour and that diplomatic sensitivities with Russia will not prevent the full, fair and free findings of that investigation?

First, may I, through the hon. Lady, express my condolences to the family of Mr. Litvinenko? I assure her that the police in this country proceed with their business and follow the evidence wherever it goes, irrespective of fear, favour or political implications.

The Home Secretary has been obviously right to steer us away from all the lurid speculation in the British media. But there has also been lurid speculation in the Russian Federation and many Russian politicians are now calling for a series of Russian citizens in the UK to be extradited swiftly, despite the fact that the British courts have decided in nearly all of those cases that those concerned would not face a fair trial. Will my right hon. Friend assure the House that the recent meeting of the Director of Public Prosecutions with his Russian counterpart does not mean that we are going to change our extradition arrangements with the Russian Federation?

I hope that my hon. Friend will accept my assurance that these decisions, either in the individual case or in our conduct of general judicial proceedings through the DPP or elsewhere, are conducted without reference to political influences bearing upon them. It is one of the prides of our judicial system that although the judiciary occasionally takes decisions that perhaps challenge Governments and Ministers, we defend its right to make those decisions independently. My hon. Friend is quite right to point that out.

Mr. Litvinenko was clearly a man under threat because of his activities. Irrespective of who carried out this murder, if that is what it was, did he at any time make a request to the Home Secretary, the security services or the police for protection? And did the Home Office at any stage inform Mr. Litvinenko that he may be under threat?

Not to my knowledge, but these are matters the details of which are covered by investigations, and it is sometimes not helpful to go into them. In terms of the specific question, I repeat—not to my knowledge.

Will the Home Secretary offer as much reassurance as possible to the hard-working staff of Barnet hospital, where the news of possible radiation contamination must obviously have caused considerable anxiety? This happens at a difficult time for that hospital’s staff, as they are already threatened with another 60,000 patients going through accident and emergency if the threatened closure of nearby Chase Farm’s accident and emergency department goes ahead.

Yes, I congratulate the staff at Barnet hospital and, indeed, UCH and the other areas where staff are contributing towards reassuring the public on this. A specialist clinic has been established, as I have mentioned, for patients reporting symptoms that could have been caused by radiation exposure. We should pay tribute to the NHS staff who are dealing with that. I know that the Secretary of State for Health, the Health Protection Agency and many of those employed in our hospitals have been working flat out to cope with the problems over the past few days.

There is a pressing and urgent issue relating to the thousands of political dissidents and exiles in London in general, whether they are of Russian origin or other. Many of them are British citizens, like Mr. Litvinenko, and some of them are my constituents. Given the fact that Britain rightly and proudly has a reputation for being a safe haven for those escaping from political persecution in exile here, will the Home Secretary urgently agree to review the status and protection of political exiles in our capital city?

We constantly review the state of our security and the protection that we can offer to all our citizens, including, obviously, those who are known to be under threat. I cannot guarantee, and nor would the House expect me to guarantee, that anyone is 100 per cent. safe at any given point in time, but we do everything that is possible. As I said earlier, if anyone believes that there is any evidence for them to fear that there is an intention to harm or to kill them, obviously we urge them to come forward as soon as possible. I have no knowledge that there has been any such information given in the recent past.

Points of Order

On a point of order, Mr. Speaker. Have you received a notification of a change of name? As you are probably aware, The Scotsman today reported that the right hon. and learned Member for North-East Fife (Sir Menzies Campbell) appears to be knighted in the House, but not knighted outside it. I wondered whether you had been informed of this.

The right hon. and learned Gentleman is knighted in the House, and that is where it stops as far as I am concerned. I have enough problems inside the House without worrying about what is going on outside it.

On a point of order, Mr. Speaker. This morning, the Defence Secretary gave a speech at Chatham House on the Government’s strategy in Iraq that went far beyond the remarks made by the Foreign Secretary at the Dispatch Box a week ago. Can you, Sir, confirm the long-standing convention that any major announcements of Government policy on a matter as important as Iraq should be made first to Parliament, where they can be properly debated as demanded by 105 Members from all parts of the House who signed the amendment on the Order Paper?

Both the Foreign Secretary and the Secretary of State for Defence made comments on this matter in the House at a time when they could have been challenged on more points of elucidation raised by Opposition Members. I am therefore satisfied that the Secretary of State for Defence acted correctly. Had it been otherwise, I would have agreed to an urgent question on the matter. I have no complaints about the Secretary of State for Defence at this stage.

Bill Presented

Justice and Security (Northern Ireland) Bill

Mr. Secretary Hain, supported by the Prime Minister, Secretary Margaret Beckett, Secretary John Reid, Secretary Des Browne, Paul Goggins and Bridget Prentice, presented a Bill to make provision about justice and security in Northern Ireland. And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed. Explanatory notes to be printed. [Bill 10].

Orders of the Day

Debate on the Address

[Sixth Day]

Order read for resuming adjourned debate on Question [15 November],

That an humble Address be presented to Her Majesty, as follows:

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament—[Alun Michael.]

Question again proposed.

Treasury and Work and Pensions

I wish to inform the House that I have selected for debate the amendment in the name of the Leader of the Opposition. Standing Order No. 33 provides that on the last day of the debate on the motion for an address to Her Majesty, the House may also vote on a second amendment selected by the Speaker. I have selected for that purpose the amendment in the name of Sir Menzies Campbell. The vote on that amendment will take place at the end of the debate after the amendment in the name of the Leader of the Opposition has been disposed of.

I beg to move, as an amendment to the Address, at the end of the Question to add:

‘but humbly regret that the Gracious Speech does not contain measures to address Britain’s declining productivity growth since 1997; deplore the absence of measures to give the UK the right skills to take advantage of new global opportunities; further regret the absence of strong and binding measures to tackle climate change and environmental degradation; condemn the absence of measures to ensure real improvements in the public services and greater value for money for taxpayers; and further regret the absence of measures in the Gracious Speech to tackle the pensions crisis to which Government policy has contributed.’.

Let me begin with a few words on the two Treasury Bills in the Queen’s Speech. Tomorrow, we debate the Investment Exchanges and Clearing Houses Bill. It is not for this House to decide who owns the London stock exchange, but it is for us to determine who regulates it. I am therefore pleased that, thanks to co-operation between us and our former Conservative colleague, the Financial Secretary, the Bill will pass through all its stages in the House tomorrow.

We also welcome the Chancellor’s admission that we need a Bill to, in the words of the Queen’s Speech,

“enhance confidence in Government statistics.”

That confidence is now non-existent, as a decade of spin and distortion has destroyed the integrity of Government information. We were sceptical when the Chancellor announced that he was going to make statistics independent. We did not believe that the man who taxes by stealth and hides debt off the Government’s balance sheet would really give up control. We were right to be sceptical, because the Bill published last week falls far short of what was promised. The Treasury claims to be establishing an independent statistics office, yet Ministers, not that independent office, will decide which statistics it can scrutinise and release. That is like putting the Sopranos in charge of the neighbourhood watch.

The Audit Commission says that the Treasury’s approach will

“only seek to generate low public trust in statistics and reinforce the perception of political interference in the production and publication of statistics.”

It is not too late for the Government to deliver what they first promised back in 1995, when the right hon. Member for Blackburn (Mr. Straw), who is now Leader of the House, spoke to the Royal Statistical Society. In a memorable speech, he said that the national statistical service

“should be placed at arms length to Ministers, on a similar basis to that of the National Audit Office, and should report principally to a powerful Committee of the Commons.”

We agree with the Leader of the House. That is what is needed, that is what the Government promised, and that is what they should deliver in the Bill.

Talking about failure to deliver, this debate is about the broader performance of the Government. Let me therefore welcome the clunking fist himself. The Prime Minister certainly has a way with an endorsement, does he not? It is amazing how, after all these years, the Chancellor still smiles as his friend gives him a hug and sticks the stiletto in.

To be fair to the Home Secretary, the Prime Minister’s spokesman went round afterwards saying that he was not necessarily backing the Chancellor. He said that “clunking” could have referred to any number of members of the Government, but let us just say that the Chancellor fits the description. Indeed, “clunking fist” is such a brilliant portrayal of the Chancellor’s methods and measures that if the Prime Minister does not mind, we shall also be using it, again and again. Our criticism of the clunking fist is not primarily about his character. We leave that to the likes of the Work and Pensions Secretary—or should I say the “soon to be out of work and collecting his pension” Secretary? I am glad that we could arrange the topics for this Queen’s Speech debate in such a way that he could be sitting here today, almost next to his friend the Chancellor.

Our criticism of the Chancellor is that he does not understand how to respond to the big changes shaping the future of our world. In an age of greater choice, he offers more overbearing control; in an age of greater freedom, he gives us more interference; and in an age of flexibility, his rigid belief in bigger government is out of date. In short, in an age that demands a light touch, he offers that clunking fist.

It was 10 years ago that the Chancellor set himself three central tasks: give Britain a more competitive economy, improve our public services and tackle entrenched poverty. On all three he has failed. Let us start with competitiveness and see what the clunking fist has done. He has hit us with higher tax and spending than Germany, when we should be sharing the proceeds of growth. He has clobbered business with £50 billion of regulation, when we should be liberating our economy to compete. He has smashed our pension system with his tax raid, when, with an ageing population, we should be encouraging people to save. Carbon emissions have risen, but the proportion of green taxes has fallen, when we should be shifting the tax burden from income to pollution.

Back in his pre-Budget report of 1998, the Chancellor described productivity growth as the

“fundamental yardstick of economic performance”.

Does he remember saying that? We do. That was the economic measure on which he wanted us to judge him. Productivity growth averaged 2.6 per cent. when he entered the Treasury, but now, as he leaves, it averages just 1.5 per cent. On his own fundamental yardstick, he has fundamentally failed.

I am grateful to the hon. Gentleman for giving way. Does he not agree that productivity growth can be a misleading statistic if taken on its own? A growing economy brings the most marginal factors of production into production, whereas a shrinking economy loses them; therefore, it is possible for an economy in recession to have higher average productivity at the margins than a growing economy. Is that not so, and why does the hon. Gentleman include that misleading quality in his amendment?

I am glad that the hon. Gentleman has confirmed that productivity growth has been disappointing. I was merely quoting the Chancellor of the Exchequer, who said in 1998 that productivity growth was a

“fundamental yardstick of economic performance”.

I was pointing out that it had fallen.

The hon. Gentleman is not the only member of the Labour party who is queuing up to criticise the Chancellor’s performance. The hon. Member for Birmingham, Edgbaston (Ms Stuart) said recently:

“We have excessive public spending, rising taxes and excessive micro-management.”

Derek Scott, the Prime Minister’s former chief economic adviser and great friend of the Chancellor, has said that there has been a

“furring up of economic arteries”—

I suppose that he is one Scot who will not be making it into the Chancellor’s Cabinet.

Now the country is living with the consequences. Unemployment is rising in Britain, when it is falling in most of our competitor countries, and real living standards throughout the country are falling. According to figures that the Government sneaked out this month, average earnings are not rising as fast as the current rate of inflation, and this is not a one-off. The Chartered Institute of Personnel and Development said last week that

“the squeeze on living standards will continue into next year.”

Falling living standards, rising unemployment, excessive micro-management and a less competitive economy—what an epitaph to the Chancellor’s decade at the Treasury.

It is Cheshire that I want to ask the hon. Gentleman about. Is he aware that in 1997, when the Conservatives lost office, the percentage of unemployment in patches of my constituency was still in the mid-teens? Is he aware that unemployment in my constituency is now around 2 per cent? Therefore, who is the failure?

I am sure that the hon. Gentleman will confirm that unemployment is now rising in Cheshire, as in the rest of the country. We have had the biggest rise in unemployment of any developed country in the world in the last year.

Let us consider the second great failure of this Chancellorship: public services. The question that haunts the Chancellor is how he could have spent so much and achieved so little. When he was shadow Chancellor, he said that the benchmark for a Government’s success is not how much they spend but how well they use their resources. Again, he has failed on his own benchmark. He has doubled the health service budget, but 60 hospitals face cutbacks, 106 community hospitals face closure and 20,000 front-line health jobs face the axe.

I note the hon. Gentleman’s comment from a sedentary position. Those are figures from the Royal College of Nursing; perhaps he disagrees with them.

I will give way to the hon. Gentleman in a moment.

The Organisation for Economic Co-operation and Development says that the effect of higher health spending is less clear in Britain. The mortality rate for cancer and heart disease is declining but, it says, not faster than it was during the 1990s. Perhaps the hon. Member for Livingston (Mr. Devine) will confirm that.

I am quoting the words of Dr. Malone, from the Royal College of Nursing, who says:

“Twelve months ago, the number of posts that were at risk of being lost was 3,000. Now that figure has ballooned to 20,000.”

I will make some progress.

On education spending, let us listen to the Select Committee on Education and Skills:

“The Government needs to take great care in making claims about the efficiency of increased investment in education…which the evidence cannot be proved to support.”

But, of course, the Chief Secretary put it best when he said bluntly that

“a lot of money has been spent but very little seems to have been achieved”.

Why is that? It is because the Chancellor broke his promise that not a penny would be spent unless it was accompanied by reform. He gave the spending Departments everything that they asked for, and got nothing in return. The Granita touch has never deserted him.

Now the Treasury is engaged in another comprehensive spending review. Let us consider some of the things that we think that the Chancellor should review. Let us review the centrepiece of this year’s Budget: what he called his pledge to raise future spending on state schools to today’s private school levels. Though cheered to the rafters by the lemmings on the Labour Benches, the Education and Skills Committee now says that the Chancellor’s Budget promise is “without substance”. The Institute for Fiscal Studies calls it “virtually meaningless”. Tackling poor education and skills is perhaps the greatest challenge facing our economy, and his policy is called “virtually meaningless”. It has gone from being a pledge to an aspiration, from a rabbit out of the hat on Budget day to a rabbit in the headlights of the spending review.

Will the hon. Gentleman confirm that, under Conservative policies, educational investment would come before tax cuts? Yes or no?

We have made it absolutely clear that we will properly fund public services, and that economic stability and investment in public services come before tax cuts.

Let us review another aspect of the Chancellor’s comprehensive spending review. I am delighted that the Home Secretary is in his place for this bit, because before he took office, the Chancellor took the extraordinary decision, a whole year before the rest of the spending review was completed, to freeze the Home Office budget in real terms. Only two years ago, the Chancellor stood at the Dispatch Box and said in his Budget statement:

“this would be exactly the wrong time, and contrary to the national interest, to freeze expenditure on the Home Office.”—[Official Report, 17 March 2004; Vol. 419, c. 333.]

Since then, we have had the London tube bombings, the foreign prisoner debacle and the admission that the Home Office is not fit for purpose. If it was the wrong time then, why is it the right time now? What could the reason possibly be for picking on the Home Secretary? I cannot imagine. He should not be freezing the Home Office budget; he should be freezing the assets of Abu Hamza instead of letting him flick through Homes and Gardens in his prison cell.

These piecemeal announcements on spending dribbled out of Budgets and pre-Budget reports—announcements that fall apart on closer examination—are the very opposite of what a comprehensive spending review was supposed to achieve. They are the opposite of what a Conservative Treasury will achieve: real value for money for the taxpayer, and government that grows more slowly than our economy. Of course, a proper comprehensive spending review would also have considered the Government’s progress on ending child poverty, which is the third issue that I want to discuss today.

No one doubts the Chancellor’s genuine desire to tackle child poverty, but surely we are entitled to ask why the number of people in severe poverty has risen by three quarters of a million under Labour. The answer is that the Chancellor has relied on just one blunt instrument: tax credits. Of course he refuses to answer any more questions on his tax credits in the House. He has gone 927 days without answering a single question on the subject. It is funny that he is always there to take the applause when he launches these schemes, and scuttles into hiding when they go wrong.

I am grateful to the hon. Gentleman. He has made great play—as the Tory party is currently doing—of wanting to tackle poverty, particularly child poverty. My constituents would be very interested in that. What possible help would the abolition of inheritance tax be to the poorest families in Britain?

Despite pressure from some of my colleagues, I am not pledging to abolish inheritance tax.

Let us continue the discussion about tax credits. Where must we turn to get Labour’s verdict on them? Not to the current Home Secretary; not to the last Home Secretary, who says he cannot work with people; no, we must turn to the Home Secretary before that, the right hon. Member for Sheffield, Brightside (Mr. Blunkett), who has just published his diaries.

I have been following the shadow Chancellor’s statements closely. He said that he would not abolish inheritance tax. Is he going to abolish capital gains tax and stamp duty on shares?

I am not going to write my Budget for 2009 in 2006, but I can tell the right hon. Gentleman that, unlike the Chancellor of the Exchequer, I will not be breaking the promises that I make in opposition.

Let us return to the last Home Secretary but one. His book is not selling as well as he hoped it would, although I bought a copy. It is ranked 1,104th by Amazon. Still, that is 78,949 places higher than another stocking-filler that has just been published, “Moving Britain Forward: Selected Speeches”, by the Chancellor of the Exchequer. [Laughter.]

Actually, I rather enjoyed this book by the last Home Secretary but one. Here is an interesting diary entry for May 2003.

“The tax credit system is a shambles—such a shambles that I've had to help out one of my constituents financially… But what else can you do when the tax credit system is such a total mess?”

There we have it: the flagship of this Government—the single policy most closely associated with the Chancellor of the Exchequer—and a former Home Secretary describes it as a shambles.

I cannot remember whether the right hon. Gentleman has published his diaries, but of course I give way to him.

I am sure that the hon. Gentleman will have his due place in them when they appear.

Yes, there were problems with the tax credit system. There are still problems with the tax credit system. But it has helped thousands of my poorest constituents to have some kind of decent income, and the hon. Gentleman’s sneering, condescending, patronising, offensive dismissal of poverty in this country is a disgrace to the House.

The right hon. Gentleman talks about being patronising!

Because of the way that they have been designed, the tax credits have undermined incentives to work. That is the finding of last month’s devastating joint study by the Institute for Fiscal Studies and the Joseph Rowntree Foundation: their report concludes that the indirect effect of the Chancellor’s policies might be to increase poverty. Such problems arise when one focuses on the symptoms, and not just the root causes: poor education, family breakdown, mental health issues.

Unlike the right hon. Member for Rotherham (Mr. MacShane), other Labour MPs are queuing up to disagree with their Government. The right hon. Member for Darlington (Mr. Milburn), who is not present for some reason, says that poverty has become more entrenched. The current Secretary of State for Education and Skills says that

“it is actually getting harder for people to escape poverty”.

That is right: after a decade of a Labour Government, a member of the Labour Cabinet admits that it is harder for people to escape poverty. What an epitaph to the life’s work of the Chancellor of the Exchequer that is—and what an indictment of his approach.

The last time we met, the Chancellor completely lost his cool in the Chamber and threw some papers at me. They were covered in handwriting and I have them with me. We sent them to a graphologist—to the principal of the London College of Graphology. I must confess that I was a bit of a sceptic about graphology, but I am impressed by the results. The graphologist says that the writer is not shy—I am sure that Members would agree with that—that the writer shows unreliable and poor judgment and was not in control of their emotions at the time of writing, and that there are signs that the writer can be evasive. It looks like the clunking fist is betrayed by his handwriting.

There is nothing that the Chancellor has been more evasive about than the coup he attempted against the Prime Minister earlier this autumn. Of course, he denies that; he wants us to believe that it was a complete coincidence that the chief assassin—the hon. Member for West Bromwich, East (Mr. Watson)—just happened to pop round to his house in Fife a couple of days earlier. He told us that all they did was sit down and watch a “Postman Pat” video together; it must have been the episode in which Pat kills the postmaster. [Interruption.] But the question that the country is asking is not: why is the Chancellor so disloyal to the Prime Minister? It is: why does he think he would be so different from the Prime Minister? [Interruption.]

The hon. Member for Glasgow, North-West (John Robertson) must be careful: he should not misbehave, as the Economic Secretary is looking for a new constituency.

Why does the Chancellor think that he would be so different from the current Prime Minister? After all, the Chancellor has been in charge of domestic policy for 10 years. The jobs that are being cut in the NHS are his cuts. The failing secondary schools are his failures. The shambolic tax credit system is his shambles. The pensions destroyed were destroyed by him. He is the clunking fist, and the country has had quite enough of the damage that he has done.

Is it not remarkable that in the Queen’s Speech debate on the economy, when we are supposed to be reviewing the economy over the past year and discussing its likely performance over the future year, the shadow Chancellor, the hon. Member for Tatton (Mr. Osborne), cannot begin to acknowledge the one central fact about British economic life: that we have had the longest period of sustained growth in the history of our country? That is something that no other country—not America, not France, not Germany—has had over the past 10 years, and it is something that no Conservative Government have ever been able to deliver. It is something that has not happened in the industrial history of our country. The shadow Chancellor would do better to quote to the House what he says to the business community when he speaks to it, which is that the Labour party has

“become in the public’s mind the party of economic competence.”

As this debate is about the economy, the shadow Chancellor should also acknowledge that not only have we had sustained growth in this country, but we have had the lowest level of inflation for 30 years, the lowest interest rates and mortgage rates—

The interest rate is 5 per cent. The hon. Gentleman might wish to stand up and tell us what were the interest rates under the last Conservative Government. If I remember rightly, the interest rate averaged 10 per cent. and it was 15 per cent. for more than one year. The average mortgage rates were 11 per cent.

Is it not time that this Chancellor took some responsibility for our failing economy? [Interruption.] Labour Members can mock, but unemployment in Shropshire has risen in the past 12 months by 36 per cent. Let us go back to 1979, when interest rates were at 22 per cent. under Labour. If we want to go back further, let us return to 1931 under Ramsay MacDonald, when interest rates were also high. When does it stop?

The hon. Gentleman talks about Britain’s failing economy. During the past year, the shadow Chancellor has said that the outlook for 2006 was gloomy and that the economy was slowing. He said that it had become the weakest in the developed world, that we were struggling to compete, and that we were “faltering”. Growth is higher than forecast—0.7 per cent. in the first, second and third quarters—and we will have growth higher than forecast this year. Indeed, while America is having to downgrade its growth estimates, Britain is seeing higher growth. The sooner the Conservative party stops talking down the British economy, which has been growing in a sustained way for the past 10 years, the better it will be for investment in this country.

If it is all going so swimmingly well, why is it reported this morning that one in five British companies is now considering relocating outside the United Kingdom because of increasingly uncompetitive taxation and new rafts of legislation?

The hon. Gentleman is reading from a survey of 89 companies. Let me tell Conservative Members what has actually happened since 1997. Some 389 companies have relocated their headquarters—national, European or global—to the United Kingdom, 56 have relocated to France, 39 have relocated to Germany and 35 have relocated to the Netherlands. Moreover, of the 389 companies coming to Britain, 30 were from Ireland. If Conservative Members really wanted to talk about the strength of the British economy, they would be saying what the right hon. Member for Wokingham (Mr. Redwood) says when he gives his presentations to the private sector. Does he not talk about “the lure” of Britain, and about Britain’s being a low-tax economy, when he gives his private presentations?

That was true, but it is no longer. Does the Chancellor accept that Ireland is now growing three times as fast because it is tax-competitive and Britain is no longer?

I would not give much for the right hon. Gentleman’s advice. At a presentation that he gave only a few months ago, he asked:

“What are the most attractive locations today?”

and spoke of

“The lure of the USA…of China…of India…of the UK.”

On the question of why companies want to come to Britain, he said:

“Places like Ireland, the UK, the USA, Hong Kong, Singapore attract because their tax rates for business are low.”

Let us be clear. The right hon. Member for Wokingham is chairman of the Conservative party’s economic competitiveness working party. He produces recommendations, including considering the use of vouchers—this is the answer to the shadow Chancellor’s point about the recommendation on poverty—in place of rights to public services. [Interruption.] I am happy to read it out to the right hon. Gentleman during the debate. Conservative Members will be very interested to learn that, at a time when we are discussing what has happened to Farepak, he has recommended that regulation for low-cost savings products should be removed if people do not want to sign up to such regulation.

The Chancellor is living in a fictitious world—he should wait to see the proper report. Of course, if people want good quality regulation, it should be there on their behalf, but what we do not want is the massive over-regulation that is now driving business out of this country.

This is a very important point, because it is about the future of the Conservative party. Did the right hon. Gentleman say, in his economic competitiveness group, that he wanted to produce plans for vouchers for public services, which the shadow Chancellor says they will not do? Did the right hon. Gentleman also say that if people wanted to sign up to no-regulation products in the financial services industry, they should be free to do so? The answer is yes. At the same time that Conservative, Liberal, nationalist and Labour Members are complaining about what has happened to Farepak, the right hon. Gentleman would remove the possibility of regulation.

Well, this is very interesting. Which part of the Conservative party shall I give way to? We have the No Turning Back group, the Cornerstone group, the Bow group and the Tory Reform group and they all have tax proposals.

The Chancellor mentioned savings products, but can he tell the House why the savings ratio has halved since he took office?

The savings ratio in the US is negative, but the economy continues to grow—[Interruption.] The hon. Gentleman has to explain to us how removing protection from savings products would in any way liberate low-income users in our country. I was right—the hon. Gentleman is a member of the Cornerstone group of the Conservative party, which wants £40 billion-worth of tax cuts. It says that that is only 4 per cent. of GDP and we should not worry about it. It is only the cost of every school in the country, but that is the policy of the Cornerstone group of the Conservative party.

Should I take the Cornerstone group, the No Turning Back group or perhaps the hon. Member for Wantage (Mr. Vaizey)—[Interruption.]

Order. I am having some difficulty in hearing the Chancellor and the debate. Perhaps the House could quieten down a little.

Given the Chancellor’s interest in the views of Back Benchers, will he confirm whether he supports the call by the right hon. Member for Darlington (Mr. Milburn) for vouchers in the NHS or the call by the right hon. Member for North Tyneside (Mr. Byers) for the abolition of inheritance tax?